interview with Andraž Tori of zemanta: part 2/2

this is the second part of the interview with Andraž Tori of zemanta. the first part can be found here.

Andraž, what does seedcamp and pitching mean for your company?

pitching is a fabulous experience of explaining your idea and trying to inspire other people. pitching is one of the best things, when you have a start.up.

seedcamp was a great experience, because it gives start.ups a chance. that's very important for early stage start.ups. having the possibility to present your idea to somebody that matters can help you to move your idea forward.

seedcamp was a very fortunate event as the timing was exactly right for us. this is the part of the start.up life that you can not plan for. you need to work hard as hell, but at the end you also need to have a bit of luck.

you have already left some tracks in your personal career, informatics olympiad medal winner, co-founder, open source developer and now zemanta. what`s next?

well [laughing], i do like to do cool stuff that interests me, that helps people and has some impact on the world. that's what i am going to do for a long time. but first and foremost we have to make zemanta a big success.

bostjan spetic and your are the founders of zemanta. ales septic, the ceo of your company was not among the founders. how was it to have a non-founder becoming the ceo?
it is an interesting experience. we already worked with ales before and we rely on the good sides of everybody in the team. handing over control was not really a big topic, as we were always running the company very consensually. there is always disagreement about certain topics but it is important to find a proper consensus and then honour the decisions.

semantic technologies are hard to tackle. how do you trade between a very domain specific vs. a more generic approach for your product?
we started with a very generic approach from the beginning. it is just now that we start to add specific things that are required for special areas of application. that is not the usual thinking but that helped us.

anything else you would like to talk recommend new start.ups for the beginning?
be very clear from the beginning of what kind of value you provide and to whom.

the other thing is, just do it. it is not perfect in the first iteration ever. just put something out, see what others say and how they use it. learn on that and create a new thing. it is not a bad thing to be wrong sometimes. then go ahead and improve – you sometimes fail and you just improve again.
that is probably what we haven't still completely consumed from the silicon valley type of entrepreneurship [in Europe]. failing is just part of succeeding. failure is still a failure but it is not the end of the world. it is as good experience to learn and do it better next time.

Related articles by Zemanta

• @ Future of Web Apps: What's great about London, by Huddle
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• Is it still a good time to invest on the web?

interview with Andraž Tori of zemanta: part 1/2

inspired by jessica livingston´s highly recommended book, founders at work, interviews with local start.ups will become part of the regular start.up blog entries. the interviews will be split up in two parts. while the first will focus on general start.up topics, the second will look deeper into the company in focus.

the first company in line is zemanta. founded by Andraž Tori and Boštjan Špetič, zemata provides an intelligent blog extension which automatically generates context sensitive proposals for pictures, links & tags. their firefox plug in can be downloaded here. a live demo can be tried here. winning seedcamp brought zemanta wide media attention as well as reputable vc funding. the interview took place at this year's web2.0expo berlin with Andraž Tori.

Andraž, tell me about the (three) most exciting things about start.ing up your company?
first it was really exciting to see that we had something not many people in the world were doing. the second great thing was winning seedcamp. this was a big achievement, since there are not many start.ups in slovenia.
finally it is great to do stuff that usually can only be done in silicon valley. to do something which is really for the whole world and to see that we here in europe are on the same level [as silicon valley]. that is exciting.

what about the most unfortunate things about start.ing up?
we did not have any big misfortunes. there were hard bits, like getting calls in the middle of the night, when the service [of zemanta] went down and not getting to sleep all the night fixing stuff.

on the business side there are long negotiations about funding. you are of course not happy with all the conditions you get.

there are times when it is hard and tiresome. it is exciting, but not just fun.

what are your lessons learned until now about technology?
prepare to re-do things. you will create solutions to problems, learn that you misjudged things and rebuild. and you have to listen to other people. the collective intelligence of people is always better then a single mind. one has to be persisted and stubborn, but just in the right amount.

when you hear the words "exit" and "shut down", what comes to your mind?
that's t the life of a start.up.

how do handle private life vs. work?
i put a lot of myself in zemanta, but i enjoy it. you have to observe and listen to yourself. when you are over-investing yourself just step back a little. sometimes you have to push to the maximum, but you can not always work in that mode.

this was the fist part of the interview with Andraž Tori. stay tuned for the 2nd part, where a closer look on zemanta will be taken.

Related articles by Zemanta

• Seedcamp '08 finalists announced
• Reuters: Refresh and fresh funds for Zemanta
• Zemanta

"preparing the battleground ", part 3 of the series: six steps to venture capital

this is the 3nd part of the "six steps to venture capital" guide, where the systematic approach to get venture capital for a start.ups is discussed.

after the motivation got sorted out in step 1 and in step 2 the a-b list of potential investors (part 1, part 2) got started, it is time to "prepare the battleground".

it would not be wise, to contact the top 3 vc on the a-b list to start with. even after the excitement of achieving a list after quite some work, this would be a bad thing to do. first, because the potentially best investors should be kept for later, when a routine in pitching was developed. secondly because what would happen if a contacted (still potential) investor directly calls back and ask for the executive summary and you do not have one yet? and no, sending out something that was just compiled in a couple of hours, is not a good idea. not even for the bottom three vc from your a-b list.

following the advise of general sun zi (read more about sun zi, moltke & douglas adams für start.ups here) you should only go into a battle when you know that you will win. therefore preparation before contacting future financiers is key. there are four things that have to be in place:
1) investor picht slides (30-20-10),
2) an executive summary (2 pages, includes financials),
3) business plan (20 pages total, including all attatchments & 1 page financial summary),
4) references.
the best way now is to work through the list top - down.

plan to spend around one week on preparing your investor presentation and executive summary. follow 30 (minimum font size) - 20 (time of presentation) - 10 (number of slides) guideline from guy kawasaki. stick to this rule, do not try to improve it, it only reduces the chances of funding.
use the following headlines, kawasaki again: 1) problem, 2) solution, 3) business model, 4) underlying magic, 5) marketing and sales, 6) competition, 7) projections, 8) team & 9) status & time line.

the structure is the same for the investor presentation as well as for executive summary. for more details, read "the art of the start", or "reality check" from guy kawasaki.
the executive summary shall not succeed more then two pages. and that includes a summary of the financials (projections for revenues, number of customers contracts, personnel & other costs, number of employees, total cash requirements, sources of funds).

focusing that much requires a clear focus of the aim of the start.up and how to achieve it. if two pages are not enough, more thoughts have to be spent on the start.up.

based on the presentation and executive summary the business plan can be compiled. sticking to a readable 20 pages is key again. no vc will read a 60 page manifesto. after the focusing work was done in the executive summary, filling in the prosa can be done in 2 days. if not, going back to thinking for the exec. summary is imminent.

having followed the chronological order of the "battleground" preparation it is time to think about the start.up's references.
first, who can be the references? choose from former employers, colleagues which already made it, customers, former investors, well connected lawyers, reputable professors. whoever can give valuable, connected reference can make sense. a similar procedure as compiling the a-b list can be applied. not everyone which is known by the members of the start.up is a valuable reference for potential investors though.
as the executive summary is ready by now, it will be easier to get 2-3 references on board, using the key pitch topics is the thoroughly prepared "ammunition" at hand.

being prepared with all the materials required and the investor targets identified, it is time for approaching the investors. this will be the next part of the series, six steps to venture capital.

recommendation: while preparing the a-b vc list, create 1) pitch slides (30-20-10), 2) an executive summary (2 pages including financials), , 3) business plan (20 pages total, attachments & 1 page financial summary included), 4) prepare 2 to 3 references.

six steps to venture capital: part 2.2/6 fund selection

this is the 2nd part of the "six steps to venture capital" guide, where the systematic approach to get venture capital money for start.ups is discussed.

part 1 covered "motivation" and can be found here. part 2 deals with the selection of potential funds. the fist section covered fund selection according to investment period, geography and focus. to complete the criteria, let's look at the remaining important criteria:

4) experience
does the potential investor understand your technology, your business model, your market? or would an investment be the “pilot-investment” for a fund e.g. in semantic technologies? if so, a lot of missionary work has to be done with the investor (so b-list). not too much support market and business wise can be expected after investment as well.
smart money, as often described when talking about venture capital, which means that on top of the money from the investor comes a lot of business contacts or business advices, is often promised but seldom delivered. check with reference calls.

on a daily business, it is not “the fund” though, which a start.up is going to interact after investment. it will be a partner and an investment manager. so besides valuing their investment history and their personal background (technology or finance, entrepreneur or big corporate, number of successful relevant exits), it is absolutely necessary, to be able to consider the gut-feeling after a first meeting with them. A start.up should ask themselves the questions: do we like this person? can we work with her also in hard times? If not, then even a otherwise perfect match is useless (lower b-list).

5) cash available for investment
finding out how much cash a fund can invest is vital. if a start.up requires 2 million € and that is all the money a fund has left, that’ b-list of even worse. regular start.ups need more money then they expect, often twice as much as projected. if the fund which did the first investment can not put in additional money the start.up might run out of cash maybe just three month before taking off. finding a new investor without the first round investor putting any additional cash on the table will be very difficult (this is often seen as: the first investor does not believe in the company any more).

6) fund exit horizon
when will the fund close? some funds run for 10 years, some are evergreens.
A ten year fund invests for five years and spends the next five to sell his investments. at the end of the 10th year, the fund has to pay the money to his investors. evergreen have no determined duration. And are therefore a-list candidates. Other funds within their investment period as well.

7) references.
references are important. venture funds will check the references of their potential project – so should start.ups. fund recommendations from fellow entrepreneurs, reference contacts given by funds and even cold calls are possible. only funds with three positive references make it on an a-list place.

recommendation: prepare ranking “a-b list” of potential funds according to 1) investment period, 2) geography, 3) focus, 4) experience, 5) cash available for investment, 6) fund exit horizon and 7) references.

coming up in the next step of "six steps to venture capital" is all about preparing the "battleground".

web2expo berlin start-up lessions review by fabian topfstedt

fabian topfstedt, freelance developer and start.up co-founder just recently posted his impressions from this year's web2.0expo berlin.

fabian attended business as well as developer tracks and especially for the latter, takes a closer look at rest, oath and the like. to read the full story, visit his website webiste.

the most important thing besides all the inputs from the conference fabinan concludes - after all and never to be forgotten - is to "Have fun!".

moo, fat free sites and user action: best of web2.0 epxo berlin 2008 part 2

after pitchcamp and yossi vardi at this year‘s edition of web2.0expo berlin, moo, user interfaces and user action through design conclude the best of show sessions.

let's start with number three:

3)moo
stefan magdalinksi, cto of moo allowed open insights into the challenges of building moo. two years after starting, with a team of 30, they are shipping to around 187 countries worldwide.

How we made MOO

View SlideShare presentation or Upload your own. (tags: web2 scaling)

starting their business just before amazon web services surfaced, they build their own infrastructure. to transfer their infrastructure now to s3 would be to complex and thanks to the fact, that storage costs decrease faster then their data growth, costs are kept under control. they use virtually hosted squid caching proxies for $100 per month to speed up u.s. site access.

„ajax is great, but breaks ability to test“ according to mr. magdalinksi. in order to maintain to keep their website up and running when introducing new funcionalites, the developed around 400 rollout test, using watir.

business wise, they share 15 percent of their revenue with they affiliates. marketing analysis is mostly done by looking at actual user behavior. user feedback is currently managed by a mix of self made solutions of salesforce. and while the implementation of salesforece took just two hours and only costs a few hundred dollars a year. the „web 0,5“ style interface slows down customer service.

delivering physical products to the customers is the core challenge of moo. an overall of two percent of shipments get lost on the post. surprisingly canada hast the most unreliable postal system overall. developing the plastic cardholders proved to be one of the big challenges: designed in europe, produced in china, the first shipping of card holders did not meet the quality requirements. coordinating all the production process proved to be more time consuming then expected.

best of show number 4 goes to:

4) mobile user interfaces
creating specialized mobile user interfaces, presented by brian suda, maxed out the capacity of the room.

phrasing the term „fat free sites“ for mobile web sites, he showed why list views can be 2-3 times more efficient in terms of number clicks necessary then drop down menues.

that power user „fat free“ interfaces prefer to have everything on one screen, in order to reduce search times.

Creating a Specialized Mobile UI

View SlideShare presentation or Upload your own. (tags: web2expoeu08 ui)

this leads to the last best of show session of this year's web2.0 expo berlin.

5) user action

„User: Action! Leading Users to Action Through Design“ of solana crawford brought not only a driving speaker but a welcomed step away from the tech driven sessions.
her key messages were a) to know your goals - your audience - the action you want users to take on your site and b) realize the power of coulors - shapes - screen layouts.

User: Action! Leading Users to Action Through Design: a presentation by Solana Crawford at O\'Reilly Media Web 2.0 Conference ,Berlin 2008

View SlideShare presentation or Upload your own. (tags: interface user)

so much from this year's web2.0 expo berlin. a experience hopefully to be repeated next year.

how to turn-off investors and what business plans & sausages have in common: best of web2.0 expo belin 2008

the second incarnation of o‘ reillys web2.0 conference took place at the bcc - well placed at the center of berlin, next to alexanderplatz.

the new location was a welcomed change to last years 60ies-bunker style berliner messe facilites like a „community lounge“ promoted interaction between attendees and with last year‘s food problems solved people were happy to focus on the topics at hand.

besides the „big pictures“ keynotes for tim o‘ reilly, john lily (mozilla), martin varsavsky (fon) et al., the show brought a wide range of in depth topics , ranging from business to marketing and design to development.

the collective presentations of the show can be found on slideshare, respectively on the conference website . going through the (until now) uploaded 42 presentations on slideshare is too much noise, so let‘s setup up best of the show. start with the five best events of the show:

1) pitch camp
pitch camp was a driving event. 12 companies were selected to pitch for two minutes each, in front of a 200+ crowd and a grand jury (ranging from techcrunch and venturebeart to accel and index ventures, see here).

the short intro giving on the art of pitching can be reduced to 3 points:
1) clear view of business
this is necessary to be able to communicate the start.up (business objectives, market segments, problems solved)
2) understand your audience and what they care about
who are they, what do they want, why would they care about you.
3) build 3 month, 9-12 mont and long term business objective

there were book recommendations as well, crossing the chasm (again!) & blue ocean strategy, chan kim, renee mauborgne, understand the problems of your market.

also interesting to note were comments by the jury what turns them OFF, when the listen to pitches.

investors

• lack of ambition displayed
• lack of character and leadership
• homework not done (not knowing the background of people start.ups pitch to, not done the business metrics, not having market figures, competitor ignorance, lack of execution plan, ...)
• lack of understanding potential customers, investors, partners

media

• old stories
• no potential to bring journalist on techmeme/digg for x weeks
• clones of anything
• no magic sauce begin

potential partners

• telling the potential partner how cool the start.up is
• not telling or not being able to tell what the partner will exactly (=cash) gain from partnership, when and how.
• unfulfillable expectations from partners (like: just put my link on the google landing page...“)

how to get in contact?

• through references
• email (keep it short, send a compelling 2 sentence pitching email)

not just also judging on the start.ups at pitch camp but also discussing on stage was:

2) keynote speaker yossi vardi

being a serial entrepreneur himself and a rather successful venture capitalists, yossi vardi gave some interesting statements at the discussion with tim o‘ reilly.
that at the end of the days successful vc just have luck, is quite a open statement.
also that it is very important to check the vc a start.up is interested in. is he friendly? do entrepreneurs work repeatedly with him?
and that business plans and sausages have one thing in common: only people who do not know how they are made eat them.

this made the 2nd of the best web2.0expo berlin events. read more about moo, user interfaces and user action through design in the 2nd part of the upcoming web2.0expo roundup.