Which Came First? The User or the Network?

It Takes:  “#invites/users * #acceptedinvites > 1” to Tango

Andrew Chen wrote a fascinating piece recently on habit forming feedback loops. I suggest you read it. I’ll wait.

Alright, well if you haven’t read it, Chen focuses on 3 key types of “feedback loop” that are essential to growing a social app’s user base, and subsequently increasing its value.

Here are the 3 types of feedback loops he outlines:

  1. A feedback loop that rewards content posters when they push new content into the network.

  2. A feedback loop that rewards passive content consumers with relevant and valuable content.

  3. A feedback loop that rewards (and culls) connections within the network.

Cracking the Chicken and the Egg Problem

But how did they GET THERE?

But how did they GET THERE?

As we’ve been finding a lot with our current cohort of startups, many appear to be confronted with a chicken-and-egg conundrum. Namely, they will need engaged users to create content and keep the platforms viable, and they will need content to win engaged users. This is a sticky wicket that many social and mobile platforms are currently struggling with. Which of these things comes first? And at first blush, it looks insurmountable. How do you get the equation: “#invites/users * #acceptedinvites > 1” to work when you can’t inspire users to invite friends, and you can’t inspire friends to accept the invitations?

Failing to execute a user-feedback strategy that follows Metcalf’s Law, as Chen points out, will cause the opposite effect to take place: a social network that is losing users is losing value, meaning it loses more users, and is accelerating its loss of value.

However, there is hope.

All Your Base Don’t Belong to Us

I think a fair bit of this startup anxiety about growth comes not from lack of self-confidence in the startup’s abilities, but from pride. In a world of startups where the “me too” pitches flow like Hollywood scripts, a lot of founders are probably afraid of being perceived as derivative, rather than innovative. They tend to see their potential social networks as essentially divorced from, rather than dependent on, the existing ecosystem of competitors. But that isn’t the case at all. The fact that there are 10 Million users in your product category already is a good thing, because it means there are users looking for a product like yours, and there are sure to be a fair number of people who will want the innovation you provide over an established competitor, whether it’s in price, efficiency, or a host of other areas. As we say, if you don’t have competition already, you almost certainly have no market, just a piece of technology looking for a problem.

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Tending An Unwalled Garden

So it’s important to understand, if you want to initiate feedback loops that will actually continue to grow, a number of things about your market and your target users. And it’s also important to understand how those users differentiate themselves. Luckily, most of the users a new social network would want to attract are *already* seeking the features or the community your new network would provide, and they are probably already doing what your network will allow them to do more cheaply, more quickly, or more efficiently. Your garden needs to have doors to other networks- they just need to be in the right places.

There are 3 basic types of users for a social network, one for each type of feedback loop: the content creator, the content curator, and the “lurker,” or content consumer. They’re often described as following the 1/9/90 spread, meaning that there are 9 curators for every 90 consumers, and 1 creator for every 100 total users. That means on any typical social-based app or platform, 1% of users will actively generate compelling content (hopefully), 9% will engage with that content actively (sharing, curating, editing, recommending, commenting), and 90% will view the content, and take no other actions.

Each of these user groups carries out a vital function, and their activities feed each other’s loops. Each social-based network has particular strengths. A content creator can be rewarded for the total size of her audience (Youtube profit sharing is an example of this), encouraging her to create more similar content. At the same time, viewers can be rewarded by a cornucopia of fresh content that they enjoy, presented to them every time they log in. Content curators, editors, mavens, and social butterflies, the 9% of users who can be relied on to share knowledge with others, can be rewarded in a few ways: some networks, like Facebook, reward this type of behavior with positive reinforcement: your attempts to join the conversation garner positive likes, making you feel like a content creator, without the hard work involved in actually creating the content you comment on, or share. Others reward this behavior through enhanced perception of status: followers on Twitter, or a rough prestige score, or a rank, such as those employed by some fan forums, or curation-heavy services like delicious and Scoop.It.

Keeping these three interests in balance is an important, and ongoing process. Facebook users will recall the deluge, reaching its peak around late 2012 and early 2013, of “content creators,” who were actually content curators sharing memes and jokey posts on Facebook, in an effort to drive ad-supported clicks to their sites: 9-gag, Upworthy, and others were the biggest culprits of this kind of “click-bait” exploitation of the Facebook platform. They were leveraging real content curators, the users who enjoy sharing with friends, to gain access to passive viewers. Facebook responded by raising the barriers to virality for that kind of content: stopping shallow or non-rewarding content from swamping the typical newsfeed.

Respect Your User’s Roles

It’s important to keep in mind that most of your users will not want to be active creators of content, or to take any active roles, in a social platform. A lot of founders are probably in the smaller cohort of curators and content creators, and don’t empathize with passive users. And this doesn’t just apply to startups looking to create social platforms. The ghost-town that is Google+ fell victim to a super-user mentality that was baked into its product DNA , and from which it has never recovered. When Google+ was ready to switch on for ever user, even forcing users of affiliated services to have a Google+ profile, there remained no focus on rewarding them for the types of users they were. It remained an exclusive club, that everyone was forced to attend. When Google’s attempts to enforce their own culture on their users don’t come off as corny, they seem frightening. That’s not how you want to be perceived.

Don't be *that* app

Don’t be *that* app

Instagram and Facebook both focus deeply on the rewards users get from generating content, but they don’t pester their users with reminders to use the service. Content creation is both stupidly easy, and uncannily rewarding. Others, Twitter for example, offer virtually no rewards for content creation, de-emphasizing depth of content through artificial restrictions, but focus heavily on curators, pushing their few active curators to gain followers and increase their profile, and leveraging large numbers of passive browsers to make that process rewarding. Still, Twitter allows its user-base to segment itself easily, relying on hashtags to make curating and browsing content seamless, and encouraging special interest communities to form in ways they can’t on Facebook. Interest is prioritized over relationships from user to user. The mix that you attract will be unique to your platform, but the platform should still be balanced toward the 1/9/90 paradigm, or it will likely not grow organically.

The Startup Line: Week One

Last week marked the start of the StartupYard Spring 2014 accelerator round. And it’s been a hell of a week so far.

We’ve welcomed teams from all over the world, including the US, Kosovo, Kazakhstan, Romania, Serbia, and the Czech Republic. Teams range in age from as young as 19, up to 35.

The teams are working on three mobile apps, a data mining application, an educational platform, a cloud platform for small retailers, and one search engine.

Team from Romania with mentor Ludovic Neveu.

Team from Romania with mentor Ludovic Neveu.

Petra and Petra (The Petras), the managers of TechSquare, our home, marked the occasion by arranging all 23 tables and chairs in our co-working space with a nice note and a can of Red Bull. The message was clear: let’s do this. We really appreciated the gesture, if not the caffeine hangover.

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The Teams are mostly staying all together in “The Big House,” a 4 story house near Techsquare, where the teams sleep or “collapse,” to use a more appropriate descriptor, after long days hacking away at StartupYard.

The Lion, The Pitch and the Positioning Statement

We’ve focused quite a bit in this first week on the pitches that Startup CEOs will be making to investors and potential partners 3 months from now. As we mentioned earlier, the teams had all written up positioning statements before they arrived. Most were pretty long, including features, technical details, business and marketing plans, etc. We, Cedric and I, worked with the teams in individual sessions to distill these initial drafts down into single paragraphs that average only 60 words.

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You merely adopted the dark. These hackers were born into it. Molded by it.

This has given the teams an amazing amount of focus, forcing them to very carefully define the problems they are trying to solve, and the customers they are planning to target, and how they will do this in a space they share with often more established competitors. It’s also an opportunity to start practicing their pitches, which are derived from the positioning statements they’ve formulated. In meetings with mentors, the teams have given their pitches and discussed their markets and technical challenges, and the positioning statements have given mentors a helpful sense of the context in which each team is working. As a result, the teams have all received more valuable feedback.

This Friday, the 7 CEOs from each of our startups gave their pitches in front of a crowd of techsquare denizens. It was a performance they are hopefully bound to repeat many times in the next several years. And honestly, the pitches were great. We can’t wait for you to hear them.

Justifying Your Existence

A concern from some of the teams early on, was that it wasn’t possible to distill the essence of their business plans into 60 words. Where was the profit motive? This is true. But the positioning statement is not a business plan— it’s more of an outline of a company’s mission. What is your company really all about? In what way is life on Earth better with your company in it?

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Startups need to be able to justify their own existence. And that goes beyond money.

Teams wanted their positioning statements to include business strategy especially- they wanted to talk about who their users would be *and* how those users would be monetized. Though monetization is a part of every successful business plan (it is essentially the definition of a good business plan), it is not necessarily an element of the company’s market position that needs to be defined early on. Plenty of companies that find massive monetization opportunities later on, launch without any proven sources of income.

Vasek Formanek giving an early version of is pitch, with the StartupYard positioning statement as a guide.

Josef Steinberger, from Pilsen, giving an early version of is pitch, with the StartupYard positioning statement as a guide.

We often struck on analogies in the real world. We asked teams to imagine a positioning statement or a pitch for a product like Facebook, or Youtube. Facebook and Youtube *make money* selling ads. But are they positioned as ad providers? No. They are positioned as places where people can connect and share the ideas and content that interests them. Advertising is the monetary benefit from a service that makes the world a better place (or at least a much more distracted place). But the essential market position of a Facebook, a Youtube, or even a Google, is providing a consumer facing experience, not a beneficial platform for ad-buyers. The platform is born out of the first condition: a great consumer facing experience means a great potential ad platform. Even for those startups in StartupYard who are essentially B2B concepts, it’s important to differentiate between what their products do for their clients and for users, and what those products do for the founders themselves. In terms of a company’s market position, the initial goal always has to be loftier than just making money.

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We Don’t Need No NDA

The question came from one of our startups quite early, on Day One, in fact. A team asked whether they would be signing any NDAs with our mentors. The answer is no, they won’t, but in the interest of clarity, we thought we’d make it clear what our view of NDAs or “non-disclosure agreements,” is.

A lot of startups are familiar with NDAs, and their members have probably signed one or two in their time. I’ve signed a few myself. But they aren’t worth much, particularly to a startup, for a couple of reasons I’ll lay out here.

They’re Worthless To Founders

You may have signed an NDA as an employee or contractor for a medium to large-sized company. In the context of corporate legal departments, an NDA makes a sort of sense. It is a piece of the due diligence of any company to show, through their normal procedures, that they value their proprietary information and practices, and are willing to defend them when necessary. Not to do so, in that context, would leave a larger company, and its legal officer, in danger of being found negligent, should legal action need to be taken against an employee who steals secrets, or leaks information.

On its own the NDA is not a powerful legal document that grants the company a right to control what you say, but it gives the company cover, in case an employee decides to really abuse their insider knowledge. But that arrangement is for employees and close partners, not for outsiders like investors. The only across-the-board exception to this general rule is for sensitive, one-time events like mergers or acquisitions, in which the details of the deal leaking could present major headaches for investors and companies both. In that case, NDAs are common, and not far-reaching in their scope.

All contractually obligated not to listen to your pitch

All contractually obligated not to listen to your pitch

VCs Won’t Sign Them Anyway.

And with good reason. A VC may hear 50 pitches in a week. And even if he hears only 2, there’s always a chance that your pitch, and the next company’s pitch are similar. The VC would open himself up to unnecessary risk by signing an NDA with you, if he knows that tomorrow, somebody presents him with a similar, but possibly better, idea. The value is in the team that is receiving the investment, and how they are executing their plans, not in the idea. That is virtually always the case. And VCs know this, and don’t want to be barred, possibly for life, from dealing with companies that do things similar to what your company does. By the same token, you wouldn’t want a VC to say: “I won’t invest in you because I’m afraid of legal action on the part of one of your competitors.” Does that sound fair to you?

It Makes You Look Arrogant

Contrary to most of our wishes about ourselves, our ideas are not usually all that valuable. So unless your pitch or your presentation to an investor includes earth-shattering news that simply must not be leaked for fear of some catastrophic consequence to your business (for example: you’ve invented cold-fusion, or you have created The Singularity), you’re likely to come off as an arrogant jerk for making a VC sign an NDA to hear your idea for the next Candy Crush Killer. StartupLand, however it may resemble Hollywood these days, is not dealing in tentpole movie releases, and VCs are not leaking screeners to Pirate Bay.

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Daniel Hastik of Futurelytics: “Be Free to Make Mistakes”

Daniel Hastika StartupYard mentor who will be working with our Spring 2014 teams, is a serial entrepreneur and globetrotter. When he’s not tending to one of the first Czech based hosting companies from his home in Melbourne Australia, he’s founding new companies with the help of Seedcamp and Credo Ventures. And he manages it all remotely. Quite a feat, so we caught up with Daniel last week to ask him how he manages it all.

Read more about Futureleytics on their blog, and a bit more about Daniel at hrkavarna.cz (article in Czech). 
 
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Daniel, you launched Futurelytics in 2012 through Seedcamp. Can you share a bit of your founding story with us?
The co-founders know each other from university times; we have crossed in our professional lives multiple times in various IT companies across Europe. We’ve worked together in a consultancy for retail in Czech and also as advanced analytics consultants for a Nordic company. I’ve also been managing my own company over time as one of the first web hosting businesses in The Czech Republic, and had trouble recognizing patterns in my client base (thousands of clients) and Mirek helped me to find my most promising ones and get a rid of those that just consumed support hours. We thought that might be a good product and Jan, our colleague, has helped us to foster the models and we started to realize that we could really build something out of it. We applied to Seedcamp with this idea and were chosen from among approx. 800 other companies. From that time on our lives changed.
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You’re currently based in Melbourne, but your team is in Ostrava (Czech Republic), how do you manage that kind of responsibility remotely? 
We are building Futurelytics as a global company from day one. I’ve been on the move for the last 18 years and have travelled across the world multiple times. We believe that we have the right passionate people, self-motivated and responsible in what they do. We do not over-control, and everyone is taking their own responsibility in their actions. Freedom of choice is very important for us. Some people want to work on Sundays, some during the mornings .. there’s creativity in what we do and that doesn’t come with control. This way, we can have a distributed team. I’m responsible for business, and Mirek is product centric. We are really complementary in our day-to-day tasks and we move fast. Of course we are making heavy use of various online tools like Gmail, Hangouts, Trello, Harvest …
You’ve attracted some great investors, including our own partner Credo Ventures with Ondrej Bartos. What’s been your strategy for attracting investors, and what advice would newly-minted founders most profit from, when it comes to talking to VCs and Angels for the first time? 
Any startup that wants to impress great VC investors needs to be proven and/or backed by a previous Angel-type investor, an incubator or another trustable entity (apart from a great product and scalable markets). We are proud to be a part of the Seedcamp family in that sense.
The very first investors value the founders’ attitude, the team & their vision. By default we are different. At the very beginning we didn’t even know anything about startup buzz. Investors should see that you possibly have what it takes to be a great entrepreneur. Not being afraid to fall, working on your skills, networking and being open-minded are the prerequisites of an entrepreneur. That way you can execute any idea you could have.
Futurelytics helps companies to work better with their existing customers. What are some of the ways you do that? What are some of the biggest mistakes most companies are making when it comes to working with their customer base and managing their customer data? 
We let them discover new revenue potentials from various customer segments. So called “second-best” customers seem to be the most appealing information for marketers. Driving marketing campaigns by real behavior of customers inevitably brings their increased efficiency. Starting by lowering CPC, monetizing loyal customers and not ending by customer-churn mitigation we improve the customer lifetime value from several perspectives. Putting all these contributions together brings each engaged business a significant improvement.
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What do you think are the biggest areas of near-term growth for “big data” and analytics applications? What areas of the market are really interesting to you right now? 
There are technologies in place like Hadoop or Google BigQuery that handle tremendous data volumes in real-time. The real challenge seems to be to get some new information out of patterns and consequences in the data and put them in line with business specifics. We go beyond that thinking and bring-up specific recommendations for marketing campaigns on customer segments recognized. This is called “prescriptive-analytics”. We are eager to be pioneering in this area and closely cooperate on that e.g. with Gartner or Google.
You’ve had a varied career, from studies in Portugal to work in Africa, New Zealand, Australia, the US, as well as back home in the Czech Republic. You’ve founded 3 companies, and you keep on coming up with new ideas. What specific things have you learned through these experiences that you plan to share with our latest crop of startups at StartupYard?
I wouldn’t call it a career. There’s no certain strict lined path in front of me. I follow my passion “to create” and that comes from the freedom to make mistakes. And I’m not afraid to do so again and again. If you are not afraid to learn something new, not to be constrained by the past, to admit that you “don’t know” and ask for help, then the world is yours. You can train your instincts and quickly spot opportunities where other people see only issues and problems. You stay ahead the crowd and lead the way.
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The 3 Hardest Ways to Fail as an Entrepreneur

Being a successful entrepreneur is hard on its own. So being a failing entrepreneur is harder still. But as entrepreneurs, startup founders should be prepared for failure, just as much as they should be prepared for success. Failing well, though may seem like something nobody wants to know how to do, is how an entrepreneur sets him or herself up for future successes. In a game of high risk and high reward, you lose more often than you win, so losing well is key.

Here are a few of the hardest ways to fail as an entrepreneur, and what you can do to salvage something from failure.

1. Do Everything Right, and Still Fail.

Apollo 13: Some failures you can be proud of.

Apollo 13: Some failures you can be proud of.

I was fascinated by the recent demise of Outbox, a startup that promised to digitize and streamline the postal experience in the United States. By most accounts, Outbox did everything right. They had only 2,000 paying customers in one market (Austin, Texas) at their peak, but they had enormous brand recognition in the United States, and a waiting list of 25,000 customers in several other markets, including San Francisco. The company’s original goal was to partner with the USPS, and reroute customer mail to a local warehouse, which would digitize and digitally transmit user mail via email. Important documents could then be selected for delivery.

Long story short, the USPS killed the partnership when they realized Outbox’s potential for destroying the direct mail marketing business, by unsubscribing customers from mass mailings, costing the USPS potentially millions of dollars a year. An outmoded and failing government enterprise killed a cutting edge and potentially thriving new market, to secure an already weakened profit stream. Without the partnership with the USPS, Outbox would never be able to support customer acquisition costs and improve service density to the break-even point, much less profitability.

What you Can Learn From It

What killed Outbox was more than a structural problem. On the surface, the cycle they faced looked a lot like Pets.com, a popular, attractive, effective business from the consumer point of view, that just happened to cost the company more and more money, the more customers it managed to gain. But this failure was not founded on the idiocy that defined the rise and fall of Pets.com. Rather, Outbox made smart and effective investments into technology, a complex backend that worked well, and a level customer service that won them a lot of affection from customers. They did most things right, but it just turned out that doing most things right wasn’t enough to make money, or even to get back the investments they’d made.

The post office has been around for 300 years in the US, and so they were late by a few centuries. Even a vastly superior product has a hard time competing with that kind of a lead to market. But the founders of Outbox can leverage these innovations, and pivot towards a more profitable vertical, which is what they intend to do. If you’ve done everything right, you’ve put in the hours, and you’ve treated customers with respect and caring, and built a product that works well, it can’t ever be a complete failure. There will always be something in it that is of value. Possibly far more than you would ever have anticipated. Sometimes a product or service is just way ahead of its time- but the knowledge and connections gained, even in this failure, may well lead to something even better.

2. Do Everything Wrong

 

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As Paul Graham of Y-Combinator is fond of saying, most often, an idea that seems bad is actually a bad idea, or even if it is good, it may be fundamentally unworkable as a business. Or it may be impossible to grow. It’s the black swan, the idea that can work as a growing product and as a sustained business, that VCs look for, and that startups try to become. Because the best startups are ideas that seem bad, and are actually brilliant. Dropbox entered a geeky, techy marketplace, and delivered a product that my mom uses. Facebook entered a marketplace in which Myspace predominated, and beat them by being *less edgy*. WhatsApp was acquired for 11 figures for its take on an app that has been around since before smartphones. Those all seemed like loser ideas at the time, but there was something about each of them that just worked, from their marketing, to their backend, to their core concepts. They appealed on some level that allowed them to ignite and grow in a way that all their competitors failed to do.

But most of the time, perhaps 99% of the time, entrepreneurs will be involved in “all their competitors” and not in the one app in 100 that makes it to a massive acquisition or an IPO. Everyone here at StartupYard has been involved in one of these types of failures. The idea is good, but it depends too much on a community that doesn’t exist. Or the community exists, but no amount of pivoting seems to open a sizable, sustainable revenue stream. Or, after funding has come and gone, it’s found that the increase in size and revenue has still not yielded a profitable business.

What You Can Learn From It

Learning how to walk away from this kind of experience is painful. Especially when you’ve created a product that thousands of people really do use and love. But if you can’t make the business profitable, and you can’t make the business grow and open up new opportunities for profit, then you’re losing. No matter how slowly, you’ll still lose. So moving on and licking your wounds is an important lesson that most of us have to learn at one time or another- rather to own up to these mistakes and miscalculations as soon as possible, and move on with your knowledge and experience to something that has a chance at changing the world.

3. Cheat, and Fail

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Cutting corners and massaging the truth are attractive options for any startup with big ideas and not-quite-big-enough results. “Fake it till you make it,” is a truism among startups, but that’s a mentality more than a license to bend the truth.

Most of us have lied at one time or another, either to get a job, or to keep it, to get something we thought we deserved, or to keep from losing something we really didn’t. Very often, these little lies don’t come back to haunt us.

Colors is a great example of a startup’s chickens coming home to roost. Having pitched a totally unproven technology with a poor UI and poor user statistics for $41 Million in silicon valley, Color was in deep trouble two years later. Court cases and allegations later revealed a history of poor management and alleged fraud against employees. It bears repeating, now and always, that a high valuation for a startup does not make its founders rich. If anything, it has to potential for exploding a bubble, if there is one. if a company is based on lies and innuendo instead of fundamentals, eventually everyone will realize this. Unless you’re Frank Underwood  in House of Cards of course. In which case, this never happened.

What You Can Learn From It

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But if you actually intend to achieve the success you would like, you should expect that everything you say will, at one time or another, be scrutinized. Whether it’s embellishing your own resume, like Yahoo’s Scott Thompson, or lying about your metrics, to telling your investors that you’ve made more progress than you really have, the truth will eventually out. So cheating early is a guarantee of problems down the line.

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StartupYard Welcomes 2 more Czech Teams to the 2014 Accelerator

As we recently announced, 6+ teams have been invited to take part in the 2014 Accelerator at StartupYard. While this year marked a change, in that StartupYard opened its doors to teams from all over Europe, we still had an enormous amount of interest from within The Czech Republic. And not surprisingly, this is where we found some incredibly promising projects and teams. Here are 2 more of them:

How did you find out about StartpYard, and why did you decide to apply?

Pavel Nemec

Team From: Czech Republic

Project Area: News, Social Media

I’m in touch with a friend of mine who was in StartupYard last year, they created a site for babysitting – Hlidacky.cz. He told me how exciting it was being in this 3 month acceleration program. When I had this idea about our project, I knew that technical realization would be very difficult, because it requires us to collect a lot of data. When I read an article about StartupYard 2014 and its focus on big data and analytics I knew immediately that we had to take this chance and apply. 

  

Václav Formánek

Team From: Czech Republic

Project Area: Gamification/Education

As we are startup from the Czech republic, I think, we know all accelerators from here. There are not so many:) StartupYard combines three things we need very much – very good mentorship, contacts and money. Offices in Techsquare are a great bonus.

 

What attracted you to the idea of an accelerator, rather than bootstrapping or other sources of income (going directly to investors, crowd funding, etc)?

 Meeting a lot of creative and experienced people from business. Our team is open minded so we are hungry for new ideas and advice from experienced entrepreneurs. I think this experience could push us to the next level not only as a startup but also in our mindset. Being exposed to so many mentors and people from business can give you something you can’t learn at school or in a library. Also having the opportunity to meet data scientists from companies like Seznam, GoodData or IBM and talking with them about our project is just great and we are looking forward to it. 

Actually, we started our project more than two years ago, so we have already tried all of these sources. We started as a kind of crowdsourcing project with more than 100 contributors – developers, designers and authors of educational content, who invested their time to the project. Then we realized that it is very ineffective to manage so many coworkers, so some of us became founders and we have started to work as a smaller team and pay ourselves for work. We have already had appointments with potential investors, but we have had different visions, so we didn´t come to an agreement..

How is your team preparing for StartupYard?

We are preparing UX and the core of our application and of course validating the whole concept and target market. Also studying technology which could we now use thanks to StartupYard and companies supporting its program this year. From a logistical point of view, we are restricting all our other activities and responsibilities, so we would be able to make the most from these three months.

I definitely want to improve my English :).

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How did your team come together? How did you meet your cofounders?

Well it was 3 years ago, when I decided that I would spend one semester studying abroad as an Erasmus student. I sat on the bus in Prague and in that bus which was headed to France was my co-founder. It was really an accident that we met there and that we went to the same city. We became friends and we stayed in touch even after this Erasmus experience. So when I had the idea of this whole project I knew immediately that he is the right person.

 Ondřej (CTO) and me (CEO), we have been best friends for more than 13 years. We have discussed the vision of our product with hundreds of different people. Most of them liked it a lot. More than 100 people have been somehow participating in development of our project. The ones who remain, are the toughest ones.

Where do you see yourself and your company in 5 years after StartupYard?

We hope that the problem which we are solving will be associated with the name of our application. We want stable user community which we are going to listen and react to their needs. We would like to spread world wide and not only to English speaking audience which is our target market now. We want our application to be available in all platforms and all smart devices which will be here in 5 years.

If I look in the list of our planned features and ideas, I think we have plans for more than 5 years from now.

We would like our platform to be the best and most popular place where people can use gamification to share their knowledge. We would like it to run as sustainable as possible, so we can move to other projects, where we will use gamification and data analysis to make the world a little better place.

 What are you looking forward to most in Prague, both in the accelerator, and in the city? What are you nervous about?

We are both from Czech Republic so our excitement is more about acceleration process itself. 🙂 We are looking for meeting interesting experienced and creative people from business. I can’t say that we are nervous, we are just excited and we are looking forward for this life experience.

 All of us have been living in Prague for a long time. We are really looking forward to meeting great mentors and other teams.

How old are the members of your team, and what are their levels of education and professional experience?

I’m 25 years old and I have masters degree in computer science at Masaryk University. My studies were more focused on the theoretical part of computer science. Now I’m studying physics as a PhD student. Even though I love theory I also had plenty of working experience during my studies. The most exciting thing for me is the logic and algorithms behind this project. The other founder is 25 years old too and he is studying at the Czech Technical University in Prague. He is passionate about programming and he’s been developing websites since high school. The area in which he specializes is UX design and delivering the content to end users.

 Vašek, CEO, 27,  I will get my Master degree in International Politics and Diplomacy (University od Economics in Prague) in few weeks, I have a Bachelor degree in International Trade.  Since 2002 I have created, developed and succesfully finished many different projects in education (www.educon.cz/) and gaming, I am author of two theatre plays, and director of the documentary “Slumdog 50 cent.  I was one of the founders of NGO “Stop tunelům”, which achieved significant success in decreasing corruption in Usti nad Labem.

Ondřej, CTO,  29,  Master degree in IT (Czech Technical University in Prague) For more than two years (2011 – 2013) he participated in developing of groundbreaking education game called “Czechoslovakia 1938 – 1989” as a backend developer. Before that, he worked in Czech consultation and technology company Trask solutions for five years, where he achieved Senior java developer position.

Petr, 35, High school (High school of Art and Graphic in Jihlava) . Petr has been working as a freelance graphic and UX designer since 2005.

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Meet StartupYard’s New Teams

Meet 2 More of Our Incoming Teams

We closed our application process earlier this month, and we’re excited to announce that we have invited 6 teams to join the next round of acceleration, beginning in April 2014. 

As we mentioned last week, 6+ teams have been accepted and invited to Prague. We’ve collected their answers to our “getting to know you” questionnaire, and we’re sharing those answers here.

Teams to join StartupYard range from cloud based consumer services, location based mobile apps, and news aggregators, to search engines and data mining tools. The breadth of these projects is tremendous, and the potential we see in these teams, as well as their ideas, is really exciting.

How did you find out about StartpYard, and why did you decide to apply?

Václav Formánek

Team From: Czech Republic

Project Area: Gamification/Education

Nikola Todorovic

Team From: Serbia

Project Area: Cloud Based Consumer Service 

As we are startup from the Czech republic, I think, we know all accelerators from here. There are not so many:) StartupYard combines three things we need very much – very good mentorship, contacts and money. Offices in Techsquare are a great bonus.  

Well, I think I saw the StartupYard application on f6.com first. But also saw a post about you on netocratic.com. I have been in Prague two years ago for a couple of days and instantly fell in love with the city. This is one of the most beautiful cities in Europe and I’ve been in many countries and cities in Europe. I had a thought back then that it would be great to live here for awhile. So when I saw this application I googled around to find out more about the program and accelerator in general and I loved what I read. So here we are…

What attracted you to the idea of an accelerator, rather than bootstrapping or other sources of income (going directly to investors, crowd funding, etc)?

Actually, we started our project more than two years ago, so we have already tried all of these sources. We started as a kind of crowdsourcing project with more than 100 contributors – developers, designers and authors of educational content, who invested their time to the project. Then we realized that it is very ineffective to manage so many coworkers, so some of us became founders and we have started to work as a smaller team and pay ourselves for work. We have already had appointments with potential investors, but we have had different visions, so we didn´t come to an agreement.

Bootstrapping is fine. But you simply have to commit yourself full time to some project to try to make some business out of it. And if you get some investment you get the opportunity to do so. By joining accelerator you get some initial funding and a chance to use full potential that one good accelerator offers – access to mentors, a wide range of investors and so on… By bootstraping you do things slower and by accelerator much faster and the speed is of great importance.

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How did your team come together? How did you meet your cofounders?

Ondřej (CTO) and me (CEO), we have been best friends for more than 13 years. We have discussed the vision of our product with hundreds of different people. Most of them liked it a lot. More than 100 people have been somehow participating in development of our project. The ones who remain, are the toughest ones.

Svetislav and I studied the same faculty in Serbia. It is practically the best school for learning software development in Serbia. And Marko, the third cofounder worked as a designer on some projects with Svetislav for one company.

Where do you see yourself and your company in 5 years after StartupYard?

If I look in the list of our planned features and ideas, I think we have plans for more than 5 years from now.

We would like our platform to be the best and most popular place where people can use gamification to share their knowledge. We would like it to run as sustainable as possible, so we can move to other projects, where we will use gamification and data analysis to make the world a little better place.

We want to build a global, successful company. We believe we entered a great and prospective market, the numbers are great and if we do our job in the best possible way then that goal is achievable.

 What are you looking forward to most in Prague, both in the accelerator, and in the city? What are you nervous about?

All of us have been living in Prague for a long time. We are really looking forward to meeting great mentors and other teams.

The city is wonderful as I said and it would be a great pleasure to live in it. Also, we are great beer lovers and Czech beers are one of the best in the world. We can’t wait to try them all 🙂 But also we have to think about our company primarily so the focus is on the business. We are hoping that we can get the most out of this program, to meet great people who can help us build great company and of course, raise more money at the end of the program. We are not nervous – we are excited.

How old are the members of your team, and what are their levels of education and professional experience?

Vašek, CEO, 27,  I will get my Master degree in International Politics and Diplomacy (University od Economics in Prague) in few weeks, I have a Bachelor degree in International Trade.  Since 2002 I have created, developed and succesfully finished many different projects in education (www.educon.cz/) and gaming, I am author of two theatre plays, and director of the documentary “Slumdog 50 cent.  I was one of the founders of NGO “Stop tunelům”, which achieved significant success in decreasing corruption in Usti nad Labem.

Ondřej, CTO,  29,  Master degree in IT (Czech Technical University in Prague) For more than two years (2011 – 2013) he participated in developing of groundbreaking education game called “Czechoslovakia 1938 – 1989” as a backend developer. Before that, he worked in Czech consultation and technology company Trask solutions for five years, where he achieved Senior java developer position.

Petr, 35, High school (High school of Art and Graphic in Jihlava) . Petr has been working as a freelance graphic and UX designer since 2005.

27, 29, 30 years old chaps – I think the best age for starting a company. Svetislav and I each have 5 years of experience building various database applications, web applications, mobile applications and Marko has more then 5 years experience in designing for web and mobile applications. Svetislav and I also have a master degree in Electrical Engineering.

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6+ Teams, and We’re Off and Running

Our Teams Are On Their Way

We closed our application process earlier this month, and we’re excited to announce that we have invited 6 teams to join the next round of acceleration, beginning in April 2014. 

While we work to hammer out the details, and set a finalized schedule for the teams, we’re proud to announce that we have nearly 100 mentors who are interested in contributing to the accelerator this round. Aside from representatives of Credo Ventures, Seznam, and Synot, StartupYard accelerator teams will be taking advantage of perks from StartupYard partners like Microsoft, IBM, and Amazon.

Teams to join StartupYard range from cloud based consumer services, location based mobile apps, and news aggregators, to search engines and data mining tools. The breadth of these projects is tremendous, and the potential we see in these teams, as well as their ideas, is really exciting.

We sent out a questionnaire to our confirmed teams, and here are a selection of our initial responses. We’ll post a more comprehensive set of responses when we’ve heard from all the teams.

How did you find out about StartpYard, and why did you decide to apply?

Mergim Cahani 

Team From: Kosovo 

Project Area: Search

Alin Stanescu

Team From: Romania

Project Area: Location Based App

During my studies in NY I had two roommates, one from Prague and the other from Slovakia. Through them I had an opportunity to meet someone at Credo Ventures. That is how StartupYard was recommended to me. After I reviewed what StartupYard was looking for this year, and what the opportunities and offers were, it was difficult not to inquire further. Considering that Seznam is a partner at StartupYard also played a big role.

We found out about StartupYard from the http://f6s.com platform. After seeing the name pop-
up on the website and seeing that the accelerator is opening its doors, we made a Google search about the program. We loved what we found out about the experience that you guys offer and decided to apply and hope for the best.

What attracted you to the idea of an accelerator, rather than bootstrapping or other sources of income (going directly to investors, crowd funding, etc)?

Cahani

First it was people involved in the StartupYard, including management and mentors. Their experience and impact in the startup community is remarkable, and I cannot wait to meet them. Access to data and staff from Seznam was an excellent attraction (as it relates directly to what we do).

Stanescu: 

The idea of an accelerator sounds as an amazing experience where you can develop your idea in a professional environment, specially designed in boosting your team and the product or service you offer to the market. The mentorship is much more valuable than the money we can receive, that’s one of the most important factors to us.We value experience more than receiving a lot of money and having little experience in what to do next. 

What are you doing to prepare yourself for the accelerator?

Cahani:

There are a few things. Moving logistics is one of them, albeit the easy one. The difficult part is, as we are meeting with the team members, trying to decide how to organize our work and time between Prague and our offices as effective and as efficient as possible. 

Stanescu:

We are currently improving the mobile/web app that we already own and preparing a new UX for the whole concept that we want to work on.We validated the the whole product, our users, our customers want the amazing stuff that my team can build ! 

How did your team come together? How did you meet your cofounders?

Cahani:

I grew up with one co-founder starting from elementary education and throughout high school, and we were roommates during my first year of college. The other team member, was colleague that I meet while teaching computer science at a university. Also, there are a few exceptional students of ours who we have invited to become part of the team.

Stanescu:

We met during the 1st edition of the Startup Weekend that was held here in Cluj-
Napoca, Romania. We were attracted by the idea of entrepreneurship in the IT field and wanted We met during the 1st to know if we can meet other like-minded people who share the same interest as we did. Fortunately we found what would be the future team of evolso and start building the project.

Where do you see yourself and your company in 5 years after StartupYard?

Cahani

I see the company being the leader in our targeted market, and in such time frame, also a profit generating company. I proudly see myself part of it.

Stanescu

In 5 years? We see ourselves spread worldwide with a number of 10 mil. – 50 mil. Downloads on the app markets and the business blooming like never before and still dedicating our time in listening to our users and customers and building exactly what they would use.

 What are you looking forward to most in Prague, both in the accelerator, and in the city? What are you nervous about?

Cahani

Meeting the people who run StartupYard, Mentors, Investors, and people from Seznam. Then, meeting and networking with other startups. Finally, verifying that Prague is as beautiful, great, and opportunistic as my ex roommate claimed it to be; if not, he owns me a three course meal. I am nervous about getting the product to prime-time come the end of the program. We already have an alpha version, but the competitors are very strong, and we need to prove that our product can add more value and meets the demand in our target market. This is a challenge that we have accepted and ready to face, but nonetheless it does make me nervous.

Stanescu

We are looking forward for the amazing experience the people from Prague can offer us during the accelerator program. We want to build,test and monetize the product while staying there and we will do our best to make that happen. As for the city itself, Prague is a wonderful city that hasits mysteries that we want to discover 🙂

How old are the members of your team, and what are their levels of education and professional experience?

Cahani:

The leading team, with business and/or technical background, are on average 30 years young. Each have a master’s degree in their respective area, one has two masters, and another one is a recent PhD. Average experience is around 10 years. The rest of the team, where most are part of the company since the beginning, who also have equity, are on average 23 years old. Little experience with big ambitions and indisputable talent. We have some coding wizards in our team. Worth mentioning one example: a year and a half ago, one was not aware of the “Hello World,” a few months back he wrote its own, fairly acceptable, algorithm on keyword-based document summarization. Granted, he always was great at Math. The intersection of experience from academia, industry, knowledge of the market, and willingness to continuously learn, makes us a competitive team.

Stanescu:

The members of my team are between 22 and 26 years old and the professional background they have is in a perfect harmony with what a successful project with need. Marketing,Sales,Web development, UX design, Design, Mobile development,Business,SEO this is some of the experience my team has, while knowing how to act inside a team while helping eachother with different problems that could occur. They are awesome and they deserve to be noticed in the world for their capabilities and their desire to succeed.

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Hacking the Startup Life: 5 Must Do (Alternative) Things in Prague

In a few months, StartupYard teams will descend on Prague for what will hopefully be the most productive three months of their relatively young lives. And while running and growing a startup is serious business, there’s a good reason we’re in Prague, and it’s because we freaking love it here. In terms of tourism, Prague ranks highly with travelers, and according to this nifty database, it stacks up well in terms of cost of living against virtually any other technology hub, ranking just above Kiev (94% as expensive), in terms of price index (for comparison, London is 181% more expensive, while San Francisco is 118% more expensive).

Adding to that, our StartupYard teams will be living on our dime while they’re here. We’re covering the rent, so they can focus on what matters: the startups they will dedicate their time to growing with us.

But it’s not just about how far a Euro (or a Czech Crown), can go in this city. It’s about what you can do here that you can’t do anywhere else. While we won’t pretend not to be biased, we can say with no hint of prevarication that Prague is an awesome place to live, even if it’s only for 3 months. Here are 5 things teams must try while they’re here:

1. The Prague Beer Festival

Prague’s pubs are great, and it’s a time of great change and exciting innovation in Prague’s beer culture. But still, unless you know the city well, you’re likely to find your choices at the average Prague pub to be somewhat limited, and uninspiring. Boring pilsners and ordinary lagers are the order of the day for most Czech beer drinkers (sorry, but that’s a fact), and though Czech beer can’t be reproached for it’s quality, it can be lacking in imagination.

But not to fear. The innovative spirit of Prague has inspired a host of mold-breakers in the past decade, and today, the Prague Beer Festival is a showcase of some incredible brewing talent. Locals will lift their noses at the prices (a scandalous €1.64 for a half liter, or €3.28 for a premium selection), but the selection of adventurous, fresh, and delicious beers, as well as the… appealing style of service, will convince more visitors that it’s time to start shopping for a home in Prague.

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Highlights

Traditional costumes, live bands, huge selection of beers and excellent Czech cuisine, a party atmosphere and excellent prices. There’s also a great system here where you buy tokens (called Tolars) at the entrance, and pay for your food and drinks without ever needing to worry about making change.

2. Indoor Skydiving

Prague is home to the only wind tunnel with a circular glass enclosure in the world. That means that with no preparation other than a short briefing with a flight instructor, you can safely simulate a free-fall skydive in a chamber nearly 5 meters wide, and 14 meters high.

Highlights

200km/h winds, inside a tube = fun. Need we say more?

3. The Dox Gallery

The Dox Center looks a lot like startup fairyland. If you dream of the kinds of offices you might design when you go IPO and rake in your huge valuation, it may be just the place to visit. Built on the premises of an old factory in a traditionally industrial sector of the city, Holešovice, the center’s gallery is home to iconoclastic, ironic, and challenging exhibitions like Pharmotopia, an Zone in Motion. It’s a space that will be sure to fire your imagination.

When you’ve been sitting at your keyboard for one too many hours, peel yourself away from your startup to get some inspiration, and browse the design shop for some desktop ornaments.

Highlights

Weird cool architecture, and minimalist design blends the old with the new, waking up the senses and awakening fresh new ideas. Also, there’s a café.

4. Go Blind for a Day

 

I met this really cute girl at a pitch black restaurant.

No, seriously. This is a good idea. Following a fashion introduced in the late 90s, Pod Kridlem Noci offers a pitch black dining experience, in case you’ve ever wondered what it might be like to socialize and dine in a world with absolutely no light.

If dining in pitch black isn’t enough of the blind experience for one day, you can add a visit to the “invisible exhibition,” a sort of museum that simulates the experience of blindness with a set of exercises in a pitch black environment, forcing you to use your senses to tell what’s going on around you, and to navigate an unknown terrain. Again, for programmers and startupers, it can be important to get new perspectives, so opening yourself up to a totally new way of interacting may inspire new thoughts and ideas, taking you out of tunnel thinking and lifting barriers to creativity. Seen in that way, activities like these are a must for a startup accelerator team.

Highlights

None. You won’t be able to see them anyway.

5. Disco Boats, Pub Crawls, and General Mayhem

 

We’d be kidding ourselves if we didn’t mention the reasons so many young people come to Prague in the first place. The accelerator is a place to work, but we won’t deny that Prague itself is a playground of sorts. When you aren’t coding your fingers to the bone, you have our permission to let loose a little bit, and enjoy some of Prague’s nighttime offerings like:

The Party Boat

Pretty much exactly what it sounds like, I can’t say personally that the Party Boat is exactly my thing. But then, when I first moved to Prague at 23 years of age, it was exactly the kind of thing I wanted to try. And if you’re not old and married (and therefore proudly boring), then this might be just the ticket for a night’s relaxation. The party boat follows a traditional pub-crawlish structure, only with a boat added: drink a lot, get on a boat where you drink a lot, get off the boat and go to a club where you drink a lot.

If that sounds like your thing, then you’ve got far more energy -and less sensitive ears- than I do, and you’ll be in good company.

Pub Crawls and General Mayhem

There are a mess of these sorts of outings in Prague, and they generally attract the 18-25 crowd of Erasmus students and tourists. Again, expect heavy drinking and a fair amount of incoherent yelling. As a self-described local, I’m not actually allowed to like the idea of pub crawls, as they are boisterous and annoying, and full of young people having the time of their lives. Old boring married people don’t publicly endorse these kinds of shenanigans, but between you and me, if you’re under 25, this is the sort of thing you’ll hate yourself for doing the next day, but thank yourself for doing 10 years from now. So maybe you should do it. I won’t tell anyone.

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StartupYard Mentor Bogomil Shopov Talks “Growth Hacking” and Open Source

Bogomil Shopov is a well known open-source developer and renowned growth hacker. He is an active speaker in open-source circles, and a contributor to various projects, including Firefox.
 
Follow him on Twitter @bogomep for valuable updates on the world of Bogo.

WIll you tell us a little bit about your career?

I started my career a long time ago. My first job was, behold … a sheppard! I was at school and I needed money. Believe it or not I have learned a lot from my first job 🙂

After that I used to sell small goods, and when I finished high school I joined the Bulgarian Army.  I spent 5 years in intelligence doing some secret military stuff. After 5 years I realized I needed a change and in order to escape the army’s stupidity, I decided to pursue my dream – to work in IT. If you go through my resume you will find a lot of things – I used to work as a programmer, web architect, IT manager, Product and Project Manager, Open Source consultant, community manager, marketeer. I’ve spend the last 6 years working on startups.  Now I am a “growth hacker” – the only definition that combines all skills I’ve gathered in my entire career … and I am happy! Also I am a Pirate! My signature is on the establishment act of Pirate Parties International.

Bogomil Shopov: Avowed Pirate.

Bogomil Shopov: Avowed Pirate.

You’re interested in open source, and you work part time on Mozilla’s Firefox. What drew you to that project, and open source work in general?

That’s an easy one. I like freedom and I like sharing. At first I started to share my code with other people and then I started to show others how and why to do it. The open source and free software movements are “guilty” of some of the most successful software projects, including the Internet. I contribute also to the Open Data initiative for  opening all government data to the public. Talking about freedom, I even ran for European parliament with the idea to fight for our digital rights and I am proud that I helped the stopping of Sarkozy’s “three strikes” (the EU version of the law). Also I am mentioned in Wikileaks for that. As I said before I like freedom and sharing.

Why did you campaign for MP fall short?

People in Bulgaria were not ready to think deeper about digital rights and green way of living. Those concepts were new to them and that’s why we got so low results.

Ever think of running again?

No, because I think there is a way to do useful work outside of the parliament and to achieve my goals.

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You describe yourself as a “growth hacker.” What does growth hacking mean to you in today’s terms?

It seems there are a lot definitions of the term. I personally prefer this one: A growth hacker is a rare combination: someone with the right marketing and technical skills who can come up with clever marketing hacks and also track their results.

[This is the main topic of Bogomil’s upcoming StartupYard workshop for members of the accelerator]

You’ve been working for a couple of years in education technology. What are some of the unique challenges and opportunities in that field?

The Internet is an open book – you can take whatever you want, but you can also write and contribute. Using the internet for teaching and studying – it’s more than required now. There is huge knowledge collected and if you are a smart teacher you will know how to use it. The challenge is, well, to convince the rest of the teachers that using modern educational technologies is a must.

We worked together as a marketing team for a year, and one of your strengths is email marketing. Is email marketing more or less relevant today than before the rise of social media?

Email marketing never dies. This is the most used channel and it will remain like that for years to come for sure. If you are using it wisely you can get a lot from it. I know a company that used to send millions of e-mails almost every week, without any effect and after changing the strategy with more precise segmentation, A/B/C/D testing and adopting some anti-spam techniques the miracle happened – it works.

Email marketing is not just pushing the “Send” button. I’d love to write a blog post to share more thoughts on that, because is one of my favourite things to talk about.

What about social media? What are some of the common mistakes that people tend to make when trying to leverage social media channels into growth?

I love social media. I love creating experiments on social media as well (do not google me!).

The biggest mistake that most of the companies do is to do everything they can to get more followers. What? Yes! I know a lot of companies, even here in the Czech Republic, whose goal for their social media effort is to have new followers every day and to have more than others.

Well this is not so bad, but this is just step 0 – the work begins after that. You have to talk with your followers, you have to keep them entertained and engaged and you have to give them something they need, not just boring sales messages.

The social media channel is like every other channel – if you use it the smart way – you will get a lot from it.

What can StartupYard teams expect to learn from your input, and what do you hope to gain from mentoring  StartupYard startups?

I will hold a workshop in April about, well, growth hacking. I will show the startups how they can use tools and ideas to find their first clients, how to nurture them, so they can buy again. How to do testing for their ideas and concepts, how to track everything and how to use the data to take business decisions.

Also I will show some growth hacking examples, that they can start using on the next day. Also I will spend some time talking about Behavioral Economics from the Marketing Point of View.

But most of the time there will be discussion, because I don’t believe in workshops where one man does all the talking and the rest of the audience is thinking about something else. We will talk together and grow together.

You can catch Bogo at the Bulgaria Web Summit 2014, and at his upcoming Growth Hacking workshop

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