Venture review

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So, the course is about to end. The content was quite fun and got to learn several important things in an entrepreneur’s world. One of the course assignments was the group formation and together work on a venture project.
We all pitched different and/or similar ideas in the beginning of the course and within our formed group we later discussed that the idea “Programming for Kids” was a hot subject and could be interesting to work with.
What was the reason we picked that idea? Well, we all were familiar with programming more or less because we study ICT in Kista and have been involved with several programming courses. Programming is a complete world of its own, the thinking, the designing, the trial&error and the result of solutions etc, only the imagination is the limit what is possible to do.

But we got to think, why is programming taught mostly in universities and some high schools? Of course, some people get introduced to it like a hobby or by friends/relatives but what if it could be taught in earlier school age or by some modern medium which kids use. We knew that some schools lend iPads to kids and many of them also have their own smartphone and/or tablet. That could be a great way of reaching out to them.

After a while in the course we got to discuss with our teacher Serdar who pointed out that we must try to reach to the customers first of all before even having a clear idea in mind what the end product would be. Well pointed out, but now we must figure out what questions to ask if we do get in touch with a class relevant to our target customer age.

We knew that it would be difficult to just storm into an elementary school to see if we can ask questions about our project, and also it wouldn’t look great, storming in unannounced. Lucky for us, we got in contact with a mentor of a class of the school “Matteusskolan” where my nephew went to. That mentor looked forward of us coming and visit them, which was a great opportunity to communicate directly with our potential customers. We set up a meeting with them and got half an hour of their time to retrieve as much feedback as possible.
Questions like:

  • Does anyone know any IT-company? What these companies do?
  • Does anyone know what programming is?
  • What you can do with programming?
  • Would you like to learn programming in some way?

We tried to ask open questions so they could really answer how they wanted and not answering like we want. And also tried to ease into our idea to see if they would be interested in learning programming.

This was a class of pupils in ages ~15 so we didn’t know what to expect for answers to our questions. Only one answered to the question what programming was, “like you build a program which does something” and not one knew how to do programming or had run into it just even a little bit. To those questions we explained some simple stuff you could do, like spinning a simple wheel by your phone if it was connected to Bluetooth.
To the questions more related to our idea, they seemed to like it very much and suggested several things how to make it come true, from the aspect of being able to have it as a subject in school to other aspects like detailed how it would work and what was actually the product they would be integrating with. We knew that we had to connect with them by targeting references they knew, so we explained more practical things that could be a possible learning platform such as programming robots with their actual smartphones. We drew on their whiteboard some simple concepts of programming and they understood that since we explained it in a way we thought they understand, and not according to our standard way of learning.

The most important reference we used which they also seemed to understand the whole product as, was that the product isn’t designed to just learn them, it is designed to be fun like a game. If we want them to learn programming we must make it fun to learn and games is a great channel to reach kids. When we left, we saw how eager they were to learn/play with programming since they asked when we could publish this project and if we could come back and show them the finished product.

 

Before this meeting and when we brainstormed ideas, we weren’t sure how the end product would be like. We had some concepts but it changed a bit and became clearer after the visit.

There are companies which have many products like this. They differ all the way from just being a platform on a tablet or computer to just a hardware based or a board game without any digital influence at all.

https://www.tynker.com/

Tynker provide already control of robots and much more.

http://venturebeat.com/2014/06/03/12-games-that-teach-kids-to-code/view-all/

On venturebeat, they list several different variants of teaching kids to program. These products reach on different mediums such as web browsers on the computer and apps to iPads/iPhones. The prices differs from product to product but it is clear that the companies do have similar ways of making a profitable product, like in-app-purchases or demo&premium versions.

 

We understand that programming is an important subject which need to reach out to more people all the time. Nowadays E-sport is almost as popular as every other sport and that area of game-programming is as well as other areas of programming becoming more and more popular. EA’s CEO states in this article that game industry is growing even more.

http://venturebeat.com/2016/05/10/ea-ceo-andrew-wilson-sees-the-game-industry-growing-stronger-next-year/

 

 

BOOTSTRAPPING YOUR STARTUP – Stockholm Entrepreneurs – 26th April

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The day after my class (Technology Innovation Entrepreneurship at KTH) visited the Epicenter, I and other two classmates went to the event “Bootstrapping your Startup” hosted there. So, in this post, I am going to tell you about this experience.

bootstrapping your startup (2)

The aim of the event was to provide the audience with experiences and advices of three startuppers who decided to bootstrap their startups rather than ask for financing from VCs or other institutions. We can define the bootstrapping technique with the following sentences: “an individual is said to be boot strapping when he or she attempts to found and build a company from personal finances or from the operating revenues of the new company”. Thus, when speaking about this kind of startups we do not refer to future unicorns, but companies that has to monetize earlier in order to grow.

Peter Russo led the event and acted as a sort of interviewer and presenter; he founded several Startups and now he is involved in the no-profit business, thus he talked also about his own experience sometimes. The interviewed startuppers were three young guys:

  • Fritjof Andersson (Founder and CEO, RelationDesk.com),
  • Therése Gedda (Founder and CEO at 30minMBA)
  • Andreas Andersson (Founder and CEO of DMG Education).

The discussion started with Fritjof, Therése and Andreas talking about their businesses, the first two RelationDesk.com and 30minMBA operate in the B2B business while DMG Education is in the B2C business. Here a brief description of what they do:

  • RelationDesk.com is an online platform to manage customer relationships through the different social media.
  • 30minMBA supports people in developing their business skills when it fits them with leading business concepts based on great books in audio and text on your mobile.
  • DMG Education is an online music school.

In speaking about their first steps they gave some interesting information such as the no salary time, DMG Education was the one with the longest period with no salary that last for one and a half year. When you decide to bootstrap your company, you need to be profitable in a rather short time and thus saving on your salary is quite “mandatory”.

Each of the startuppers focused on something different and repeated it many times during the event. I think it is what they retained their success factor. Fritjof spoke about the importance of finding people, as both resources and customers, to build and develop a network. In particular he spoke about the method used by him of speaking directly with them. Thus, he exhorted the audience to participate more to startup events where it is easier to find the right resources interested in what are you doing. While Andreas continually repeated the importance for its company of Facebook ADS in bringing people to the platform. He did not know anything about it, thus it had to learn. This to say that when you decide to bootstrap it is more needed an enlarged knowledge rather than a specific knowledge of a selected discipline, and to highlight the importance of learning to use new and different tools by yourself. Instead, Therése focused on the role of a common culture in the company and talked about her case to show us an example of how to create it. In particular, she told us that when you cannot reward people through high salaries the climate on the job could fill the gap.

bootstrapping your startup (2)

Later Peter Russo asked about the main tools used by them and if they have any suggestions. Therése replied and cited Dropbox, Buffer, Wilu, and when asked by the audience about cheap accounting tools she suggested Fortknox and Bilogram. Since the audience asked about free tools Therése said that sometimes it could be better to pay some services, because it is fundamental to choose what to outsource and what to do by yourself, even if you are bootstrapping. In particular, it is important to focus on the startup’s core business.

Then they spoke about the choice of having or not an office. While in Fritjof opinion, it is needed to separate personal life and work, Therése simply said that in her point of view the important thing is that the resources can work where they are more productive, also at home if it is the case.

Andreas touched the argument of prioritizing the resources to success and being efficient. Thus, Peter asked them about which is the most crucial resource in their opinion. Fritjof did not need time to think about it and promptly replied the “time”, how to spend your own time without wasting it in doing activities that do not add value or that it is better someone else does. While, again, Therése talked about company’s culture, she also mentioned that a common well defined culture has to be taken into account overall in the recruiting process.

Later Peter Russo moved the discussion to the lean argument: how to be lean, and what they mean with the word lean. Therése cited side thinking and talked about developing together with the clients. Fritjofsaid the same thing enhancing the importance of speaking with the customers before and during product development to better understand how to meet their needs. Thus, he suggested again to use private meetings and, as he said before, to set these meetings during events.

A guy from the audience asked about marketing tools. Andreas said their first growth was mainly coming from Facebook ADS, but that now their best advertising is to add value and use the students as promoter of their services. While Therése used a cheaper way, like simple stickers at events in which their potential customers could be interested about.

Peter Russo later touched the argument about how to convince people to work for you and from the audience someone asked about payment with shares. Fritjof said that the main problem about this way of paying resources are the taxes. Indeed they are not the same in every country, and in Sweden they are too high (70% confronted to 15% in the USA). Secondly, he said you should consider that it will be a long marriage, thus it is important you are sure they are the right people. Then, to reply to Peter question, they all mentioned paying people with “freedom”, “having fun” and other small things that create a nice job climate.

The climate at the event was really informal and relaxed, it was like meeting together speaking and sharing our expertise. I appreciated the fact that the audience was quite active and diversified: there were people of each age, who already started their business and who was interested in doing it with completely different backgrounds. The audience really guided the discussion together with Peter Russo, and this was the aspect that more I enjoyed there.

Entrepreneurship: Stockholm vs Singapore

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I was not aware that Stockholm was such a vibrant hub for entrepreneurship until I started my exchange study here, when I saw all sorts of technological start-up companies located in Kista paving their way to the future. “Between 2005 and 2012 alone, 6.5% of the world’s billion dollar exits were from companies that had come from Sweden” (Virgin, 2016). There are a couple of reasons that makes Stockholm such an entrepreneurial hub in the Nordic area or even in the Europe.

 

Thanks to the Swedish government’s heavy investment into IT infrastructure in the 1990s, Sweden has the first-class high-speed Internet. The government also grants tax deduction for people buying a computer, which is why the state has such a high computer ownership rate. This has help “equip Swedes with the physical tools and digital savvy to become a national of technological disruptors and a country of ready consumers”. Apart from that, the wide ownership of digital device has created a culture of open access and entrepreneurship collaboration (Davidson, 2015).

 

On the other hand, Sweden has the one of the best social welfare system in the world, which lessens the risk of business failure for entrepreneurs. Research has shown that the more welfare the government provides, the higher their people’s entrepreneurial spirit (Lee, 2016). This is because with a good welfare system to ensure your living, you are much safer to take risk and run a start-up company.

 

Singapore, the country where I have my undergraduate education, is also the biggest entrepreneurial hub in Asia. According to the Economist, Singapore is the “world’s most tightly packed entrepreneurial ecosystem” (Teng, 2016). It is a bit interesting to compare these two entrepreneurial hubs, given that they are a bit similar to some extent. For example, the populations for both Sweden and Singapore are small. Sweden has a population of nearly 9.6 million while Singapore has a population of 5.4 million (Lee, 2016). A small population imposes limit not only on the size of the market but also the pool of talent. Unlike Silicon Valley where it can have a large population in the United States to support its market and talent base, tech start-up companies have to think globally in order to grow and thrive. Fortunately due to the economic tie within the European Union and Asean countries, it is relatively easy for tech start-ups to expend their business to other neighboring countries.

 

To nurture a climate conducive to start-up companies, Singapore government has a portfolio of grants and schemes to give funding and capital to start-up eligible companies, apart from its efforts to attract foreign investors to invest in Singapore start-ups. I am not sure how the government here in Stockholm helps cultivates a start-up climate, but I think the Singapore government has really done a good job in this area. In addition, educational institutions in Singapore have been tightly involved into the entrepreneurial ecosystem. A lot of schools have courses and oversea programs in entrepreneurship, as well as incubation centers for students to kick off their business.

 

I am more than happy if you guys could share your insights about the start-up culture in Stockholm or any other places around the world with me.

 

References:

Virgin. (2016). The world’s best start-up hubs: Stockholm, Sweden. Retrieved from https://www.virgin.com/entrepreneur/the-worlds-best-start-up-hubs-stockholm-sweden

Teng, A. (2016, Jan 16). Starting up: The rise of the Singaporean entrepreneur. Retrieved from http://www.channelnewsasia.com/news/business/singapore/starting-up-the-rise-of/2431670.html

Davidson, L. (2015, Jun 28). How Sweden became the startup capital of Europe. The Telegraph. Retrieved from http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/11689464/How-Sweden-became-the-startup-capital-of-Europe.html

Lee, T. (2016, Feb 20). For Singapore to reinvent itself, it needs to take lessons from Sweden. Tech In Asia. Retrieved from https://www.techinasia.com/singapore-sweden-tech-scene

Freemium, is it really a revenue model or just a marketing strategy?

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Recently, while completing the Individual homework for the Technology based entrepreneurship class, one question kept popping up in my mind. Is the freemium model really a revenue model or just a marketing strategy?

According to Alexander Osterwalder & Yves Pigneur, Business Model Generation : A Handbook for Visionaries, Game Changers, and Challengers, the term “freemium” was coined by Jarid Lukin and popularized by venture capitalist Fred Wilson on his blog. It stands for business models, mainly Web-based, that blend free basic services with paid premium services. The freemium model is characterized by a large user base benefiting from a free, no-strings-attached offer. Most of these users never become paying customers; only a small portion, usually less than 10 percent of all users, subscribe to the paid premium services.

Now as I was doing the assignment, my focus was on the Internet software and services industry and for the question, “What companies are most likely to disappear in the nearest future within that industry?” I noticed that most of the companies at risk of failure had one thing in common, freemium as a revenue model.

For example, one at risk company I identified was Evernote – a service that lets you take notes of everything, which in my opinion has lost it’s focus. Instead of focusing on its core note-taking product and on converting users to the paid service, they instead spent more time pumping out new releases that often don’t live up to expectations in order to gain as much interaction with potential paying users. Freemium will widen your customer segment, potentially leading to a flood, but if your customer and business development strategy aren’t guiding your existing customers to premium users with little or no customer acquisition costs, you simply have a disaster of support, hosting, and frustration costs for customers that don’t want to upgrade. Another company I found that could be at risk is Spotify, simply because in this generation where we are not willing to pay market value for music, I won’t lie I am also among these stubborn few, pushing a customer up to a premium subscription takes an extraordinary amount of intimate knowledge about their behaviour and incentives, let alone who that customer is out of the different personas you could be targeting. Hopefully in the future generations, people will be more willing to pay for music, who knows…

Another company is Flickr – a platform for sharing photos and videos which was already acquired back in 2005 for around $25 million by Yahoo, I know Flickr can’t be compared to the unicorns mentioned above, but this is just another example to prove my point. Now Yahoo is trying to sell it off again, the photo service that was once poised to take on the the world has now become an afterthought. This one’s main problem I believe is because they sold out to Yahoo, which didn’t share the same vision as the original founders of the photo sharing service. On acquisition, the Flickr team was forced to focus on integration, not innovation. All Yahoo cared about was the database its users had built and tagged, it didn’t care about the community that had created it and like I said before about how knowing your customer is key to higher conversion rates, this was just another recipe for disaster.

I could go on and on with examples of companies struggling with the freemium model but the question still remains, is it really a revenue model or just a marketing strategy? Successful companies like MailChimp – a mailing list service, were around for 10 years before they launched a free plan. Essentially, freemium didn’t lead them to being a good business. Being a good business drove them to freemium.

With that thought, what do you think, revenue model or just marketing strategy?

A journey from Fintech to Crowd Funding : Learnings of the day #1

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I had a very interesting day on May 2nd, 2016 being part of two very good lectures. The first one was a lunch lecture by one of the project managers of Cinnober at the kista campus of Stockholm University (If you haven’t already been there do check it out .. they have a pretty cool campus!) .The second lecture was on Crowd funding during the class.

IMG_20160502_124627

Having had an interesting perspective on the finance industry and also on crowd funding, I thought some my learnings could be useful to everyone and hence this blog. (I hope others can contribute to something similar where they can post some of their learnings which could be useful to others)

IMG_20160502_121518

Cinnober is a really interesting fintech(financial technology) company with headquarters here in Stockholm. Technology is something that is really influencing the finance industry and making it more efficient. They offer customized trading systems and financial software systems to several stock exchanges around the world. After a quick introduction to the Fintech industry, the presentation moved towards the work culture in the company and what it takes to be a good project manager? Being an aspiring project manager myself and some one with no full time work experience, I found these learnings very helpful :

  1. The company culture was really flexible and not as structured as in many firms in the United States. She was very proud of the fact that their employees don’t really have ‘Long titles on their business cards’
  1. I got a good idea of the role of a project manager as compared to a developer. As a developer, you are pretty much focused on one task or working on a single aspect of the project and you are only worried about getting the task done. However, the role of a project manager is a bit more critical in not just getting the things done but also understanding the customer perception of your product/project and then managing your developers to deliver the product that can match the customer expectations.
  1. ‘Understanding the customers’ and ‘meeting up to their expectations’ are the prime focus for any project manager and I could finally relate this to a lot of lectures taught by Serdar on this topic

Lastly, Cinnober also has openings for master thesis/internships, so interested people do get in touch!

The second lecture today was on crowd funding by Michael Gromek. Being one of the few researchers currently in this field, i was able to get an in-depth view into the world of crowd funding. Some of the key learnings for me were :

  1. How not to pitch on crowd funding websites?(Choosing the right content, context for the pitch video)
  2. Lack of government regulations in crowd funding websites? (Especially with regards to who is responsible if a campaign fails or if the funding is misused)
  3. The various kinds of investors in different kinds of crowd funding(Reward based, Equity based, Loan based etc)
  4. Choosing the right crowd funding platform/website with the best fit to the product
  5. A lot of focus in today’s startups is on their products and not so much on their teams (You should also mention about the skills that your team possess/ the achievements that they previously have and why you team is the best fit to release this product/service)
  6. Evaluating you firm properly especially when mentioning your value to VC’s?(Being precise always helps.. ‘We value our firm at $76,000’ as compared to ‘We value it as a million dollar firm’)
  7. The startup financial cycle : when a startup moves on from reward based crowd funding to equity based crowd funding to finally loan based crowd funding?(Rewward based crowd funding is great way to evaluate product/service and see if people are actually interested in it! )
  8. How to avoid the ‘but’ aspect especially when talking to VC’s? (Ex: I had a great startup idea ‘but’ I could not push through because of my studies :: You can re-phrase it to ‘I have a great startup idea and if you can give me a thousand dollars then I can finish my studies this year and work full time on the product’)

All in all a great day of learning and also a lot of fun!

Entrepreneurial day 2016 – Excellent experience

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I want to share with you my expereince at the Entrepreneurial day in Nymble with the aim that will be an inspiration for someone.

This startups event takes place every year in Nymble, usually in March. It is an event for students who are thinking about starting their own business or develop a new business idea.  I knew about this event casually by distribution of pamphlets. A posteriori, I can say I am glad of being there.
In particular, the core of the event took place in one day when in the morning I took place to two workshops and after that I have been in the fair of startups with the opportunity to know a lot of persons with a string entrepreneurial spirit.

The first workshop I attended was “Dirty Secrets of Negotiation and Presenting yourself” held by a Professional from SSES. She expressed her thoughts on how to present your business idea to the investors in order to convince them. The main suggestion was thinking out of the box and being as less obvious as possible. Also, she recommended to use in a proper way gestures and body language so as to attract the audience and obtain their concentration. I really appreciated this workshop as I believe it was highly useful to enhance my entrepreneurial personality.

The second workshop was focused on the business model formulation. Most notably, the lecturer explains us how to prepare a business model canvas in order to present our ideas in the 9 building blocks. She told us about the startup opportunity of the Venture Cap guaranteeing an award of 250000 SEK. To be honest, I have to say I appreciated more the first workshop as it was more interactive and because capability of the lecturer to capture the attention of the students.

After the second workshop I have been in the fair knowing about 26 new startups! In particular, I had a good conversation with the guys of Shipwallet, SKM and Weld. 

Entrepreneurial Day 2016

The first one, Shipwallet, is a startup with the purpose of disrupte the shipping industry making the process lean and more transparent. I met the responsible of the market, Fredrik Schöön, to whom I expressed my willingness to have an internship in the startup.
SKM (Serial Key Manager) is a system ideated by Artem los. It allows to solve many problems for the developers that have to deal with the serial keys very frequently. The founder come up with this idea after being frustrated by other licensing systems that were difficult to use and quite expensive. he is the only who is working on the startups at the moment. I expressed my will to help him as a business developer and eventually in the future we will meet again to discuss in detail this possibilty.
However, the startup I had more contacts is Weld and thus I think it is opportune to open another post related only on this argument.