startupweek2011: the four winners

the startupweek 2011 - a new startup conference including a startup competition held in vienna - had four winners: the conference hosts, the startup region vienna, mysugr & mysugr. and this is why.

for the first time ever a significant startup-conference was organized this very week (3. - 7. oct. 2011) in vienna. besides the startup competitions at leweb and europas the startupweek left a serious mark in the european internet startup scene.

empowered by the success of their startuplive events, the conference organizer STARTeurope , supported by initial factor, mixed four ingredients for their success. their very own entrepreneurial spirit, the professional network of inital factor with the announcement of their new fund speedinvest & the involvement of techcrunchUK, aka mike butcher (find his coverage here).

being overbooked with max. 1.300 paritcipants allowed, including 100 speakers, 500 startup applications with 50 invited startups from all over europe, STARTeurope delivered a professional managed conference.  the cross over of the monarchy style location with the future of european internet startups just added to the success.

while vienna is recognized for the quality of living, it does not have  the label as being a startup city -  like london, paris or berlin. quite to the contrary, there are some austrian startups which stated in private discussions, that they should have started their business directly in london and not in vienna/austria. one main reason being the lack of venture capital funding.

luckily for the growing vienna startup scene, speedinvest offeres now a initial funding source. one must not overlook though, that follow up investments will still require the startups to look abroad. with only one local private early-stage investor, startups in vienna do face a local monopoly. thanks to the mobility of new startups like egoarchive, which recently moved to copenhagen, this can be only considered as a problem for those not willing to follow the money. 

therefore combining quality of living, a growing ecosystems of startups with new funding possibilites, vienna just upgraded itself in the european startup landscape.

and then there is mysugr. their startup idea born out of their own personal experience with diabetes, the founders frank westermann and fredrik debong (also co-founder of STARTeurope) won the hearts and the wits of the jury and the audience. 

mysugr makes logging the daily diet easy and provides help for the diabetic on how to manage his daily nutrition with the help of their mobile app. unlike competitors like "on track diabetes" the app and the services around are a "medical device" grade. mysugr is in alpha mode, but take applications here. see also a video where fredrik explains what mysugr does here.

so why is mysugr a two time winner? 

not because they won both prices (€30.000, 3 weeks in silicon valley) of the startup competition. not because the rocked the audience to standing ovations including a champaign shower for mike butcher - the outstanding host of the startup competition finale. 

but (one) because the showed that it is worth to bring one´s very own startup idea to live and fight it through. and (secondly) for the exposure they generated by inspiring the audience & the jury at the pitching competition. this will turbo-boost them in their next steps towards customers, investors and industry cooperations. 

while the future of mysugr looks promising many challenges lay ahead of them. the same holds for the startupweek2012, as the organizers set their own bars high. being a startup by themselves, that will however only encourage them to make it even better in 2012.   

how to finance your (startup) dream

ideas on how to finance your startup dreams, proposed at the barcamp vienna 2010.

how to finance your (startup) dream

View more presentations from hannes.a.schwetz.

"rutschgefahr!" founders terms in german venture capital contracts

multiple liquidation preferences, full ratchets and founders warranties are on the rise on the german startup market. the positions for founders and new investors in new financing rounds get worse in 2010, as a bearish venture capital (vc) market dictates tougher conditions.

in order to avoid "rutschgefahr", german for slip hazard, when negotiating an investment round, read on to get the facts right.

a recent study of the german "mlawgroup" on "vc deal terms report 2010" (german only) gives quantitative insights into an often less transparent market. take the waring, plenty of numbers coming up - plenty of facts to get the own expectations right.

the study is based on feedback on 30 seed fundings, 36 series a and 16 series b rounds. the german "high tech gründerfonds" was taking the lead with 27 investments of 66 early rounds, thus making it the first address for young german startups.

so what to expect as a founder team, when sitting down with investors?

founder vesting is dominant, in 73% of the seed investments. vesting periods are between two to four years. allowances on the vesting are the minority with just 40% of the deals for only 25% of the founders shares.

good leaver/bad leaver clauses gain 18%, up from 32 to 50% of the investments. most good leavers can expect to gain a fair valuation of their shares (73%, up from 49%) though.
venture capitals seek for preferential rights in 78% of their investments. simple (1x) liquidation preferences are seemingly unavoidable in the seed stage (73%), while multiple preferences (2x) are a minority with only 7%. 20 percent of the feedback forms contained no answer on that question though.

exit preferences are common (53%) with an average of 5% interest p.a. on capital invested (8% last year) , although a maximum of 20% was reported.

while founders warranties remain an imperative (95%), pay to play seems to become a scare species. no seed round saw such rulings, series a rounds just in 23% of the cases.
non compete clauses for founders are enforced in 100% of the seed and in 75% of the a rounds with average durations of 2 years. on average founders get a half year salary in return.

anti dilution provisions are either weighted averages (51%) or full ratchets (35%), with a clear rise in the latter.

mlawgroups commented the tightening of conditions for founders as questionable. they could not understand how the worsening positions of the founders could help to prepare the founders (and existing investors) well for exits. for a law firm, this is a rather strong statement.

so much on the numbers. good thing with the study is, that it provides a useful basis to get one own´s negotiation aims right.

read more on general terms & conditions of vc contracts in "legal gibberish of investors in plain english" and in the series "six steps to venture capital".

"get a free portrait!" & more practical guerilla marketing examples

marketing budgets are a scare resource for every startup. finding innovative ways to reach more customers with less money therefore is key. "guerilla marketing", a concept introduced by conrad levinson in 1985 can be one answer.

wikipedia describles guerilla marketing as "...an unconventional system of promotions that relies on time, energy and imagination rather than a big marketing budget." so much about the theory, but how to put that in practice? let´s have a look at three recent examples.

the first one is from the last barcamp vienna 2010 (thanks to the organizers rolf & max and the sponsors by the way!). when everyone was invited to post their proposed sessions, young photographer christian lendl put up the following "portrait photo for a link for a link" to his homepage.

by spending one hour of his time, he reached around 60 barcampers, almost a third of the attendants. now for marketers, that is a extremely good conversion rate! 60 people remember his name and will put links on their blogs, so his own website will rise in the search rankings, without one euro spend on adwords.

what about riding on the hype wave of someone else, to gain customer attention?
in this case it was the company ifixyouri using the apple ipone 4 hype to demonstrate their dedication towards their business: repairing iphones. the upcoming ihpone is supposed to use a 30 times more flexible front cover then used in the iphone 3gs and should therefore be less prone to breaking. at their company blog they published a post "iphone 4 glass - will it break?" to check that out. so they took a new iphone 4 an threw it on the floor. the glass broke at the third try.
disproving the impression the one could get from apple´s presentation, that the new glass would be much more durable, brought them plenty of attention. cost? approximately 30-40 us$ (they sell the iphoen 4 glass repair for 69 us$, so their actual costs will be much lower).


considering the ranking on techmeme and the respective discussion following, that was much more attention time then they would get for 40 us$ worth of printing standard marketing folders. p.s. that they maybe got inspired by "will it blend" does not make this guerilla marketing any less effective.

let´s move on to a third example, graffiti style guerilla marketing. regardless if one considers graffiti as art or daub, they are everywhere and the are a provocative in every way. using graffiti in the public space form marketing purposes remains illegal though(at least here in austria).
although sometimes graffiti are used without raising too much attention of the city authorities, this example of using graffiti style advertisement of telering, a local austrian mobile phone network operator, did not go unnoticed.
as telering was not allowed to spray the advertising message all over vienna the just thought different. why spraying colour on those walls which is forbidden when you can clean the walls - which is perfectly legal? so they did some selective cleaning, whileprotecting a dirty brick wall by a stencil. and that was the result:

again, the cost of the idea and "cleaning" their message on the walls showed true guerilla spirit and was in perfect relation to the attention gained.
that were three examples of great creative approaches to marketing. so what´s the guerilla marketing campaign for your start.up?
p.s. if the guerilla style sounds interesting, why not checking out another idea of conrad levinson´s book "guerilla marketing": "5 words to describe your business".

interview with thomas r. koll about his photostre.am project

photostre.am is a portfolio service for photographers using flickr. recently i had the opportunity to interview the creator of photostre.am, thomas r. koll.

every photographer wanting to present her photo work without using technical skills while remaining on flickr at the same time is in the target audience. no double uploading necessary.

photostre.am is jumping right into a crowded market. competing with hosting one´s own website, using widely available templates, specialised services for photographers or with services form fluidr, viewbook, pullfolio, deviantart or alternative approaches like flickroom, using adobe air.

at the barcamp 2010 in vienna, i had the opportunity to sit together with thomas for a founders interview about his motivations behind the project. (photo by thomas r. koll, view his photostre.am here)

start.up: thomas, what´s motivating you to work on photostre.am?
thomas: to learn, that´s my top motivation. and the pleasure to interact with users of photostre.am.

start.up: what are the most difficult things working on photostre.am?
thomas: photostre.am is taking a lot of time and therefore competing with the "bread" jobs i have to do in order to make a living. being a one-man show, it is furthermore tricky to cover areas like interface design, which is an art by itself. finally to prioritize features is always a challenge.

start.up: how will you make money with your service?
thomas: through pro accounts and a white label b2b service. pro accounts will cost between 10 to 300 euros, depending on the features. compared with creating one´s own portfolio websites, that is rather valuable.

start.up: what would you recommend new startups, considering that you are already work on this project for around one and a half year?
thomas: first, make your to-do lists and prioritize in order to focus. secondly, choose your "bread" jobs - which finance your startup project - based on how much money you can earn on them.

start.up: finally, what´s the technical background, behind photostre.am?
thomas: i am using rails3, mongo db - which has nice horizontal scaling, two virtual servers - one for the app, one for the database and rackspace cloud.

start.up: thomas, thank you for the interview.

private vs. comany live and more, interview with flimmit, part 2

this is part 2 of the interview with the austrian film search and download portal flimmit. if you missed part 1, it´s worth checking out. read on how setting up a company affects the private life of founders and what the flimmit founders karin, walter and ulrich would recommend to founders of new startups.

how to handle private life vs. work? 

work is private life and private life is work for a start. there is no real private life when realising your dream. the business is with you at all times, after the office, in the evening, at night, during sport, when seeing the family – always. our secret is not to see it as a burden but as a thing one loves to do.

see an animation from the beginning of flimmit:



what does pitching mean for your company?

pitching is a chance to move on. it is the thing to get the message across. karin haager: “i hated it in the beginning, but i really love doing it now. it demands constant practice, practice, practice - the more the better. the most difficult for me was to do a pitch for training reasons in front of my own company colleagues, but it’s one of the best ways to get settled for the real thing.”

you have already left some tracks in your personal careers, e.g. karin and ulrich, you have been film producers for six years, working on 20 projects. walter is a helicopter pilot. now you are start.up founders. what`s next?


we have a bucket list of things we still want to realise in our lives. however, now it’s all about movies! and we are aiming to keep it that way for a while.

how do you handle working with those „big“ film industry guys which try to stay in business by suing their customers?


no fear from the “big guys”. if you got something good, take a chance. and flimmit’s offer is a good alternative and a chance even for the “big guys”. plus we don’t criminalise our customers.



what are the three most important things to gain visitors on your site?

billy wilder once said: “a good movie needs three things: a good book, a good book and a good book.” the thing flimmit needs is permanent seo, seo and seo (editors note: search engine optimization). on top of that strategic cooperations with websites and word of mouth and our site gets rolling.



anything else you would like to talk recommend new start.ups for the beginning?

gang on in there and believe in your dreams. find good friends that you can work with. and always keep your eyes and ears open and take other people’s advice. finally react quickly (editors note to market and costomer feedback) and just do it! 


interview with flimmit - the austrian film search and download startup

legal film downloads in europe are a mess. therefore film search is broken too. the austrian startup flimmit is out to fix that. not having one legal framework like in the u.s., the european "rights" marked for film is hyperfragmented. first steps for a common legal framework are only in their beginnings. therefore just to google a film one wants to watch is nearly pointless. because finding the film of choice on a u.k. video download portal will lead to nowhere, as they will not have the distribution rights for austria.

find another search example in the demo video from flimmit:




flimmit searches and finds, lets mention "legal" again, content. so does it work? searching for "lord of the rings" there is a full-size feedback. download and buying possibilities, best prices, reviews, trailers and more. same goes for more recent productions, like avatar. just the recommendations leave room for improvement.

what drives the three founders of flimmit, karin haager (cfo), walter huber (cto) and ulrich müller-uri (ceo) to fix the broken film search and download business? (founders photos © flimmit 2009, photographs by lisi navajas)

i tried to find that out in a recent interview with them. as with the interviews with andraz tori from zemanta or christoper clay from soup, it is split up in two parts. read on the find out more on the startup in this part 1, on how to gain traffic and more in the upcoming part 2. so lets jump right into the interview:

tell me about the (three) most exiting things about starting up your company?

starting a new business is all about making your own ideas come to life. an innovation that first pops up in your head and then materialises into ones own company is a great for oneself and the self esteem. to inspire people with your idea and see the results when finally the thing gets going is important as well. 
 


what about the (three) most unfortunate things about starting up?
 

constant worries about financing and a possible lack of money are tough on the way to success. that leads to sleepless nights. what really got us up in sheer shock was the up and then arising fear that the innovation we have brought to the market is not unique anymore – that someone else has just done the same thing.


what are your lessons learned until now about tech/people/market/sales (choose what you prefer)?


people: it takes ages to find the right people to work with and it is a tough task to have them stay with you, above all due to lack of funds in the start up phase.
market: we have learned that customers / users never do anything because of good will. they want a benefit when using your product or service.
sales: the most important lesson learned for us: never trust sales forecasts!


when you hear the words "exit" and "shut down", what comes to your mind?


the term “exit” mostly appears in a conversation with possible financers. we do not yet think about an “exit” so far but we can talk about that in a few years time.
shut down means disaster, a sheer horror scenario. on the other hand when founding your own business you always have to calculate with a possible shut down. but isn’t that the essence of a start up: to always have the motivation to go that one step further?

to find out how the founders handle private vs. company life and more, read on in the upcoming part 2 of the interview.