good relations, a semantic e-commerce ontology was another highlight of dexa. for part one of the coverage, see here. martin hepp, bundeswehr university germany pinpointed to the lack of semantic description of products offered online. this makes search, not only in the long tail, inefficient for sellers and buyers. with good relations he offers a open source basis to tackle this. best.buy and yahoo already use good relations to make their product easier to find. enthusiastically martin hepp was evangelizing for good relations.
surprising was the lack of twitter and slideshare. only two other twitterers seemed to be posting. only one presentation can be found online. there is still a way to catch up with non-academic life by those which explore the future.
the 10th edition of the international conference on database expert systems & applications, DEXA 2009, brought four packed days with scientific tracks. though seemingly a tough topic to handle, not everyone can jump on the bandwagon of hardcore tech tracks like „evolution of query optimizations methods...“ for data grid systems of abdelkader hameurlain and the like. so let´s focus more on generic topics and start with the „frogs“.
if one would put a frog in hot water, he´d probably try to jump out. if put in a pot of cold water heated steadily he wouldn´t. although not advised to try that, alessandro acquisti from carnegie mellon university (usa) used this baseline to show recent research on privacy behaviour in the internet. working in the field of behavioural economics, he tried to find out how the arrangement of questions in surveys would influence the willingness of participants to reveal quite private information. like if people did betray an insurance or tax authorities. following the frog analogy (and thus one common design principle of survey design) people should be more willing to reveal sensitive information about themselves if the questions would steadily get more „private“. acquisti rejected this idea. so here we go, if you want sensitive information from your customers, get to the core right from the beginning.
e-commerce recommender systems have also been proven to be a hugely popular research topic. edith elking from the nanyang technology university in singapore brought up a worthy connection between elections and recommendation system. recommendation systems have the aim to provide (internet) users with proposals, best fitting to their individual preferences. by an „magic“ accumulation of crowd, social, personal,... data every user should be served with her personal best recommendation. this is a difficult task on many dimensions, like context interpretation or manipulation hardness.
for the latter, most technical scientists try to invent new „bulletproof“ recommendation systems from the scratch. on the other hand have scientists since the french revolution thought about voting systems which should find the best candidate for millions of voters, making manipulations hard, easy to use and to compute. as arrow´s theorem though states, there is no perfect voting system. based on this aspect of the talk the hypothesis can be stated, that the same will hold for recommendation systems. it seem´s though that in recommendations systems the technology seems to struggle already with simple majority voting systems.
read more on "good relations", twitter & co in the second part of the dexa coverage.
investors inject money in start.ups and they want it back. x-times in the best case, although most of the time the just loose it. so in those selected cases where a start.up works out well ,they make sure to get their money out. how they want their investment back is nailed down in the legal contracts which come along the money. every start.up should know this terms ahead of an investment. why? because otherwise they are in a game in which they do not know the rules. and that makes succeeding impossible.
this is no legal advice - as that´s the job of attorneys. rather putting legal gibberish in plain language. links are there to offer alternative explanations and resources. this post goes in line with the series "six steps to venture capital" , in particular part 5 on negotiating: in order to negotiate well, one has to know the typical terms in vc contracts. so here we go:
tagalong rights/co sale rights protection for minority shareholders. in case the majority shareholder sells his shares, the minority share holder can demand his shares to be sold on the same terms to the buyer. this avoids that e.g. a big stake of the company get´s sold off to a strategic buyer making the remaining shares de facto un-sellable=worthless. link investopedia
drag along rights protection for majority shareholder. obliges the minority shareholder to sell his shares to a buyer on the same terms as the majority shareholder. the idea is, that e.g. a one percent shareholder must not be able to block sale respectively the exit of an investor. links: investopedia, slashstar
pre- post money valuation definitions of company value. if a company is worth one million before an investment, this is the pre money value (before vc money gets invested). after a two million investment, the value increases to three millions (one million company value plus two million cash), called post money value. link investopedia, socaltech
anti dilution provision/clause protection for investor. forces the transfer of shares from the initial shareholder to the investor in case the value of a firm decreases in the period after the investment. if an investor a puts 1 million in a company which was worth 10 millions (before his investment = pre money) he will get 10% of the shares and the company value increases to 11 millions (post money). now assume there is another investment round with investor b only willing to invest 1 million at a company valuation of 6 million. this will trigger the anti dilution clause, as the company value decreased from 11 million to 6 (=down round). in this case investor a will demand shares form the initial shareholder in order to be compensated for the devaluation. e.g. increase his shareholding such that (after the investment of investor b) he will finally hold 15,71% of the shares (0,1571*7=1,1). links vcexperts, investopedia
(full) ratchet protection of investors. typically a performance depended anti dilution provision which (completely) compensates an investor for the devaluation of his shares (see above) as agreed goals are not met. e.g. an investor injects money in company according to milestones, like sales revenues. if milestones are not met – thus leading to a lower company valuation - the initial shareholders loose shares to the investors. link vcexperts
earnout protects buyers, brings upside for sellers. the final price of a company depends on the performance within a time period after the transaction. buyers of a company pay a base price for the takeover of a company. if e.g. in a period of one year after the buying the company outperforms its profits, the sellers gain a premium. link investopedia
exit preference / participating preferred stock protects investor. in case of a company sale, money gets first distributed to the investor and the remains to the initial shareholder. the method of distribution can vary widely. one way would be as follows. A company gets sold 5 years after the investment of 1 million for 50% of the shares. of the exit proceeds of 5 millions the investor gets the initially invested 1 million. then he takes the interest rate of 15% per year for his invested money (around 1 million), leaving 3 millions. having 50% of the shares he takes another 1,5 millions, leading to a total of 3,5 million (3,5x or 28% per year). the remaining 1,5 millions go to the initial shareholder. link wikipedia
pay to play protects new investors. In case of a new investment round, the former investors/shareholders only keep special rights, if they participate in the financing. special rights can be e.g. nomination rights for the advisory boards, anti dilution protections, or exit preferences. this clause intends to motivate old investors to support the company if further financing is required. also the governance is simplified, as old special rights get successively removed in new financings round. links altassets, wikipedia
so much about legal stuff. no reason to let it come in-between the core business and the product. just one thing to look after and to get done right.
a great location, a huge crowd of around 150 and a multitude of sessions made the barcamp vienna 2009 a thriving event. so lets have some blog-blinks on the event.
organized tightly from beginning to end, leaving out the intro round of the participants as well as not discussing the sessions took out part of the barcamp essence. the same goes for the general call to blog about it. let´s have that next time. participating day one of barcamp, those were the highlights:
freewave presented their wlan concept. the session was on the line between marketing pitch and sharing their motivations and experiences. their engagement to protect users against the ever growing data collection lust of public authorities impressed. that smart phones already account for 40% of traffic on their hotspots and they expect 50% throughout the year as well.
the cloud made it possible for dctp.tv to bring 21 years of tv shows online. at 10% of the costs of a conventional (=buy hardware) solution. fabian topfstedt held a interesting session on this project.
the media watch on climate change project of module university, the thank worthy host of the barcamp, show the next step of data monitoring and analysis. the origins of academic research are still dominant. see also the idiom project. there is also their start.up "weblyzard" to monetize their work, which is in strong need of a internet strategy makeover though.
the jolicloud session of alexander kirk showed a visionary approach on netbook os. jolicloud= nebook oriented os=classic os+socially enriched. e.g. one sees which apps one´s netbook peers installed and proposes to do the same. looks promising.
more pictures of the barcamp can be found at the start.upICT flickr stream. finally the top quotes of the barcamp: "....die usa ist ein problem..."/ „..the u.s. are a problem...“. totally taken out of context. and finally "mein rechner hat keine windows taste!" / „my computer does not have a windows key!“. cu at the next barcamp!
start.ups compete all the time. for customers, money, press attention, employees. how to win such competitions was in the spotlight at the opening event of the mini seedcamp laibach.
the most minimalistic approach for a successful pitch is to a) show your product, then b) show your google analytics metrics and finish by c) shutting up. then wait for questions from the audience. to be clear, this also means d) not to talk about technology and e) all the rest.
this is the essence of the introductory talk of dragos ilinca from ubervu, 2008 winner of seedcamp on “how to win seedcamp” and other pitches.
a crowd of 50 people was gathering together for the pre-opening of the laibach mini seedcamp 2008 at kiberpipa. spreading out all over Europe, this was the 6th out of 7 mini-seedcamps taking place all over Europe, from paris to ljubljana.
having lost count of all the pitches held around the world, be it 20 or 50, dragos was blunt in what to expect from venture capital. “90 percent of the start.ups fail, most do not fit into the venture capital criteria."..."start.ups not solving a critical problem will get no funding!"
the same holds for those which don not know why customers will spend money for their products or do not have an excellent team. those things sound common. still, most start.ups do not practice it in real life.
thanks to the folks from kiberpipa , there is a complete video coverage of the opening event:
ahead of the upcoming in depth coverage of the mini seedcamp laibach, let the pictures talk. feel free to use the pictures, all under creative commons attribution-sharealike.
this the 2nd part of the interview with christopher clay.f ounder of soup.io. where christopher sees the need for new start.ups and if austria is a good location to start are in the center of part 2. if you missed the 1st part of the interview, look here.
christopher, which areas do you find most in need for new start.ups? translations services are in need. translation is annoying us right now, the work flow of translating takes a lot of time. that´s a problem of all european [internet] start.ups. it is an opportunity for a start.up if you can double your market with being available on more markets, it is worth money for them. however, i do not want to say too much right now on that. actually good opportunities are found by doing your first start.up. you itch on a certain problem, you feel the pain and then you can go after it.
you have successfully won yeurope and seedcamp and those investors are now holding 43.3% of the company. what can start.ups expect from such incubators, what not? their main idea is that they give you just enough money to work on your product for three month without having to worry about living expenses. it makes a difference if can do a project in your spare time or just focus on it. with seedcamp it was more about introductions. at seedcamp week we got to talk so many people. industry icons like the founders of bebo, photolog, last.fm, mysql and skype. venture capitalists like holtzbrinck or accel ventures of which you normally you would not even get a meeting with. seedcamp was putting you in front of all this people with initial credibility. seedcamp funds project further along then yeurope. it is like a compressed version of silicon valley in one week.
also there is the network of relations you build up. although you meet 100 people in one week and you can not remember all of them, you clearly can get in touch with them afterwards. if i would have a new idea, i could call to get some feedback.
what you do not get is solutions and answers. you get contacts, inspiration, what worked for others and feedback. but nobody will tell you what will work for you, no one will tell you how to get rich. it does not work like this. no one knows your product like you do.
soup.io is working in a crowded space. which three things did you do, to position yourself to become a seedcamp finalist? at soup we want to give average people their space online. other then sites likes friendfeed, it is the user which is in front, not friendfeed. it is the one place you can put on your business card.
you spend a lot of time in uk and u.s./bay area. what´s your thoughts on start.ups in austria vs. europe vs. us? austrians mainly did not understand what we did, which is probably why we did not find investment here. london was much more open to new ideas, and not just wanting to copy what was successful elsewhere [like germany].
in the u.s. it is just a hugely different scale. in silicon valley there are events where hundreds of people working on start.ups meet every day. so while the spirit is similar to london, the scale is still a difference. people in the u.s. did not stop to believe in start.ups while in europe it got even worse. in the u.s. they see the cheap valuations of start.ups as opportunity.
what are your 3 recommendations for new upcoming founders? first thing is to select your idea to found a start.up on a clear understanding on how to earn money. secondly apply to start.up competitions like seedcamp if you are in europe. and finally, like already mentioned choose your location wisely.
stay tuned for more interviews with innovative start.ups, right here, on the start.upICT blog.
good relations, a semantic e-commerce ontology was another highlight of dexa. for part one of the coverage, see here. martin hepp, bundeswehr university germany pinpointed to the lack of semantic description of products offered online. this makes search, not only in the long tail, inefficient for sellers and buyers. with good relations he offers a open source basis to tackle this. best.buy and yahoo already use good relations to make their product easier to find. enthusiastically martin hepp was evangelizing for good relations.![Reblog this post [with Zemanta]](http://img.zemanta.com/reblog_a.png?x-id=f56cd8fd-960d-4221-b807-da557ccd90b4)
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