“In 2015, the start-up scene in Germany has reached a new level of development.”

– Ernst & Young: Liquidity meets perspective. Venture Capital and Start-ups in Germany 2015.

Germany’s startup scene has increasingly gained momentum over the course of the last decade. Concentrated in local clusters like Berlin, Frankfurt, Munich and Karlsruhe more and more startups are being founded and funded. Especially adtech, fintech and food startups are popular, with different regional hot spots. Famous startups are for example Zalando, Delivery Hero, SoundCloud, Number26, and Freeletics.

Slowly but steadily governmental programs, big VC money and public awareness are arriving and promoting entrepreneurship. Universities increasingly offer courses on the topic and student initiatives are growing and supporting the movement “from the bottom”.

 

“[In 2015] We have seen a great number of funding rounds of EUR 10m and above with a lot of deals even exceeding EUR 50m and a considerable number of three digit EUR amounts at the upper end.”

– Ernst & Young: Liquidity meets perspective. Venture Capital and Start-ups in Germany 2015.

 

The appearance of crowdfunding platforms like StartNext  and countless startup competitions add to the growing momentum and provide platforms for young companies to get public attention and support. When it comes to student activity Germany’s biggest student entrepreneurship club, PionierGarage from Karlsruhe, just set another milestone by opening their own coworking space named Launchpad.

Together, all these initiatives achieved that entrepreneurship is a career choice that young people are aware of. The traditional German stigma towards failing is still present, but slowly eroding. And with its world class research and industry there undoubtedly exist excellent preconditions for innovation.

Within the country the capital Berlin certainly takes the most prominent role. I will not write anything about Berlin here, everybody should rather go and watch this incredibly hilarious pitch of the city:

To sum up, Germany’s startup scene might not yet be as impressive as the Silicon Valley or Israel, for example. However they are picking up the pace quickly, so there are exciting times ahead!

 

I’d like to echo the words of Annika Lidne, whom has given us a fantastic lecture about how to finance a start-up last week. It was really amazing because she gave us an overview of all the means you can use, with pros and cons, how much money you can get, why is it different in Europe and in the US especially for crowdfunding, etc. This last point sounded very interesting to me as I’ve already helped finance a cinema project on the European crowdfunding website Ulule.com last year.

But how to build a successful crowdfunding campaign?

To answer that question, I’m going to analyse the Purple® Pillow campaign, which is currently one of the most successful on Kickstarter. It has raised more than 800k$ in 11 days, and is certainly not going to stop now, as they still have 19 days left to go. The Purple Pillow is meant to be an innovative pillow that fits perfectly your neck and head to give you as much comfort as possible. The product was created by two engineers -Tony and Terry Pearce- after they’ve patented a new material called “Hyper-elastic polymer”, which makes their product unique and ingenious. So it seems quite logical that such a product can definitely succeed to raise money via Kickstarter, right? Well, it’s a bit more complicated than just that.

The first thing you should know is that this campaign is not Tony’s first try. He’s already successfully financed his previous product -an innovative mattress- thanks to Kickstarter. He is also quite active on this website  because he’s backed 5 other campaigns that were not his. These are probably some reasons why his current campaign seems to work so well. Being active on Kickstarter gives him visibility, and also makes people more likely to give him their money because they feel that he’s not only asking for money, he is also giving his own money to support the others, which makes him appear as a sympathetic and passionate entrepreneur. Also, thanks to his previous campaign, he’s built a sort of fan base, which is always good to have to start a new project, because they might be the first people interested and likely to give you money, especially if they were satisfied with your previous product. Another way to get people to see your project and be interested in it is to be presented on various social media -Twitter, Facebook, Reddit, Pinterest to name just a few and maybe the most important ones- and that’s exactly what they’re doing right now by giving the opportunity to their backers to share the campaign to others on these social media.

Now that people are looking at you, you have to prove that you are reliable, that you can be trusted, so they will be more likely to help you finance your stuff. The way they do that is that they show they are really involved in their project. They communicate a lot, and especially they notice when a certain goal has been reached, and they don’t forget to thank all the people who support them, always with humour. They also have created a website, so people can learn more about the founders and their products. This is very important to provide enough information to people, so they can learn who you are, why you do what you’re doing. People get attached to people and especially for this kind of campaign, I think it’s really important to be liked be people because it is an quite intimate way to get financing. That’s why it’s better when people are emotionally involved with the product and with the founders.

Finally, this campaign has another huge asset -and it is my personal favourite- that is their presentation video. I highly recommend that you have a look at it because it is flawless quality-wise in my opinion, and they’ve put a lot of humour in it, that makes it is fresh and funny to watch. I feel like they really know how to advertise their product, and they make their campaign more human by being funny and showing that they’re really involved in what they do (you can actually see the two co-founders in the video.)

So what can you learn from crowdfunding websites ?

Studying crowdfunding campaigns may allow you to get amazing marketing ideas to sell your project. You can also learn a lot of stuff, how people interact on this kind of websites, how to get them to be interested in your idea, what kind of compensations you should offer to people who agree to give you their money, etc. But of course in the end, learning by doing is probably the best you can do to finally build a successful crowdfunding campaign.

And last but not least, looking at trending crowdfunding projects is also a great way to catch a glimpse of what may come in our lives in a close future, and it can be really exciting in my opinion. I remember when I first saw the Oculus Rift campaign on Kickstarter, which is a Virtual Reality headset. I was amazed by all the possibilities of such a device. It was only about two years ago and now these devices are really starting to become common products, especially in video games. I can’t wait to see if the Purple Pillow is able to make a breakthrough in the pillow market after its successful campaign, it could be really funny.

Here is an article which has inspired me to write this blog post. It gives you 10 tips about how to build successful crowdfunding campaigns, and I think it can be good to keep that in mind if you ever want to finance your own project this way.

Here is the link to the founders website, check it out.

Thank you for reading my post. Feel free to comment if you’ve already had an experience with crowdfunding, I’d really like to hear about it. See you next time!

On Thursday, Wesley and I went to a meetup at the “Innovator’s Book Club”. The club meets once a month to discuss a book about any topic remotely connected to innovation and entrepreneurship. This meeting took place in the marvelous old rooms of one of the most famous co-working spaces of Stockholm, namely Knackeriet. It won a price as the best co-working space in Stockholm a couple of years back and has a really unique atmosphere.

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The chosen book for this month was: ”Zero to One: Notes on Start Ups, or How to Build the Future” by Peter Thiel. Peter Thiel is famous for being one of the co-founders of PayPal and the first outside investor at Facebook. Today he is one of the most renowned Venture Capitalists in the Silicon Valley.

“This book is about the questions you must ask and answer to succeed in the business of doing new things: what follows is not a manual or a record of knowledge but an exercise in thinking. Because that is what a startup has to do: question received ideas and rethink business from scratch.”

– Peter Thiel in “Zero to One”

While the book itself was a quite interesting read we especially enjoyed the discussion and reflection about it in the group. It was great to hear different opinions about the topics at hand, like monopoly vs. perfect competition and the future development of artificial intelligence.

Next months book will be Start with Why: How Great Leaders Inspire Everyone to Take Action by Simon Sinek. It promises to be another eyeopening read! If interested, feel free to check out the upcoming events here.

 

This is a short story illustrating how networking is so far the most powerful tool to progress I have encountered.

Recently we had a guest speaker in our entrepreneurship class (ME2603) and she mentioned the SUP46 Startup Café as a good place to connect with people. Since I was looking for startup events to attend and also for feedback for my venture idea I decided to follow my own advice and just “be present” there. (Check out the article here)

Putting yourself out there

When I entered the café it was rather empty and i took a quick look around before chatting up someone standing at a table. It turned out, that this person was Lana Kaupuza, the receptionist of SUP46. I explained to her the reason for my presence: to collect feedback and find people who might help me with the development of a prototype for my venture idea, the Sound Hub. (See the website here)

After explaining the idea to her she started coming up with very useful feedback and ideas for improving the business model. She also gave me several tips on how to proceed, which events and institutions to go to and even gave me a tour of the SUP46 office.

While talking to other people and collecting feedback on my venture idea I ended up helping some people from a start-up called “Nosto” in the presentation room to set up their Background screen for an event they would host that evening.

When I articulated to Lana how happy i was to get to meet all these interesting people and getting all this positive feedback she said something that stuck with me:

“There is really just two things that we have control over: Attendance and Attitude”

Networking Success

Shortly after leaving the building I started getting invitations to several Facebook chats…

Turns out Lana had asked on her Facebook if anyone was interested in helping with a project including electronics and Bluetooth and then connected anyone interested with me.

Me with my new partner

Me with my new partner

From one of these chats emerged a meeting with a guy named Shehryar Khan, a software developer at Ericsson. We met today in the Startup Café and had a quick chat about where I was going with the project and how it could be realized before he agreed to help me with the development of a prototype using an Arduino Development Kit.

This result was beyond by wildest expectations and I’m very excited to see the further development.

What can you take from this post?

  1. It’s proof that simply showing up at the right place and talking to many people can yield great results.
  2. It shows the power of networking and creating the kind of connections with people that make them happy to help you.
  3. If you feel like getting ahead with your project, but there is no start-up event happening at the moment; just got to the Startup Café at SUP46, you wont regret it!
Broccoli soup at Startup Cefé

Broccoli soup at Startup Café

PS: The Startup Café also offers very tasty food.

Everyone has most likely seen the program called Draknästet (If you’re not from Sweden then it is probably called something else in your country). It is a program where entrepreneurs can present their idea or prototype to inventors, and tell them how much capital they need in order to accomplish their idea. If the idea is good, then the inventor will be willing to invest otherwise not.

One of the prototypes that were presented on the show, and caught my attention, was Mollii. It is an elektrodress that enables stiff and aching musmolli2cles to relax. Electrical stimulation is used to reduce the tension in muscles, as well as spasm. The electrodress is used by people with stroke, brain damage, etc [1]. In the first part of the episode (you can find the link down below) you will see a little girl that, after using the elektrodress, has got the ability of moving her legs and doesn’t need to inject any medication any longer.

Personally, I find it immensely fascinating how a dress, like Mollii, can enable people to walk and move more freely and with a more relaxed manner. And there should be more products like this out on the market but more entrepreneurs need to get out there and show their prototypes.

 

Here is the link to the episode when Mollii was presented:

Part 1: https://www.youtube.com/watch?v=AwoMXhdI4kw

Part 2: https://www.youtube.com/watch?v=yRHh1mMgB1o

 

Here is the link to their website: http://inerventions.se/

 

These types of products makes me even more motivated to one day innovate a product that will help people to either have the ability to walk, drink or eat. Basically some of the things that people take for granted. However, as a medical engineer I haven’t had that much of courses in management or entrepreneurship and, thus, this is the reason to why I am currently taking the course in Entrepreneurship at KTH.

 

[1] http://inerventions.se/produkt/

Picture taken from: http://www.kth.se/en/aktuellt/nyheter/suited-for-treatment-of-brain-damage-1.421729

Thinking of innovation gives me thoughts about developing new products or services based on recent inventions or discoveries. Unfortunately that makes one forget about other opportunities to innovate something old that already exists on a “mature” market like developing new ways to offer, manufacture or advertise an ancient product. That kind of innovation is something that Mackmyra, a Swedish brand of whiskey has developed and based their business model on. The company is blooming and is noted on OMX Large cap and has today a stock market value of 105 MSEK. The business model is “low tech” but still pretty innovative in my opinion…

The company offers whiskey slightly above the price of an average bottle of “water of life” to customers sold in stores and they also sell larger amounts of whiskey in casks to restaurants and bars. BUT, the innovative side of Mackmyra is that they offer undeveloped whiskey in casks to private customers, which means that anyone can buy their own barrel of whiskey and have it aged in Mackmyras storage until it is finished i.e. aged correctly. In this way they differ from other liquor companies on the Swedish market because of their way of selling a product. This could be a great business opportunity as they offer a product combined with a service that provides great customer value. This makes the product much more of an experience as you get the benefits of being a whiskey maker without having to invest a lot of money. -You get to choose the characteristics of your whiskey, you will own the product during the time its aging and you will be able to treat yourself and your friends with hopefully great whiskey when the time is ready. This is an innovative approach of selling whiskey and I’m not sure if this is innovation in its true form, but since it is revolutionizing for the Swedish whiskey industry I would at least say that this business model really is innovative.

Do you have any examples of something similar in terms of ideas and innovation for traditional markets, or do you oppose my opinion regarding the innovativeness of Mackmyra..?

You might think that entrepreneurship was born in the times of the industrial revolution. It is true that the word entrepreneur was coined in the sixteenth century, but we see that the concept of entrepreneurship arose long before the birth of Christ. Sometime in second millennium BC, between the rivers of Euphrates and Tigris, in the Assyrian and Neo-Babylonian civilizations, enterprises were born.

The city of Babylon was in great need of entrepreneurs, because it was not rich in natural resources. The word for these Mesopotamian entrepreneurs, or merchants, was tamkarum. They wanted to create an export surplus of metalwork and textiles to obtain raw material as metal, stone and other that there was not much of in the south of Mesopotamia.

800px-tablet_of_shamash_relief
The ancient Assyrians and Babylonians were famous for their knowledge in astronomy, but they were hard-working entrepreneurs too.

Assyriologists have in recent years found what they call temples of enterprise. The temples of Babylon were owned by rich families. But these temples, and its’ big land, lacked workers and animals to make it really productive. The solution was to lease out the fields and workshops to farmers. In exchange for producing textile, beer or other products for export, these farmers were given a payment in either cash or goods.

The entrepreneurs were much respected in Mesopotamia. The term tamkarum often meant some form of connection to the temples. Most of them belonged to an upper class family. But just as today being an entrepreneur meant taking risks. Some succeeded, some did not.

It is not uncommon that economic historians cite the terms of commercial lending that existed in Babylon. People often wrote contracts and had a profit-sharing agreement. Here is where the Code of Hammurabi comes in to the picture. Paragraph 100 explains the procedure between a merchant and his trading agent:

“If a merchant gives silver to a trading agent for conducting business transactions and sends him off on a business trip…[and] if he should realize [a profit] where he went, he shall calculate the total interest, per transaction and time elapsed, on as much silver as he took, and he shall satisfy his merchant.”

hammurabi_code
Hammurabi’s laws were more than just the well-known “an eye for an eye”.

Later on, Greece and Rome took many of these concepts when building their own enterprises.


Further reading: The Invention of Enterprise: Entrepreneurship from Ancient Mesopotamia to Modern Times by David S. Landes, Joel Mokyr & William J. Baumol.

I’m sure that many of you have your websites which you usually browse around on to waste time waiting for a class to start, the train come or just for the day to end. One website that I myself visit rather often because of boredom is based on an idea that other people have ideas, but a lack of financial support. I’m sure that many of you have stumbled upon this before but for you who have not, -The idea is called crowdfunding and the website in particular is www.kickstarter.com

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A newly created idea which has not yet reached the market and has not been presented to investors can be a delicate resource of the innovator, and makes him/her in a position to decide how the next steps for this business possibility will act out. Will the idea need financial support and do you need strategic help to get started? If the innovator has a smaller idea which most likely is too small to attract investors or if one just do not want any engagement from large companies, banks or powerful people there is a different way to raise money to your idea, – crowdfunding. The number of successfully funded projects, only through Kickstarter has now reached over 100 000 and the total amount of money funded to all these projects is today 2.27 BILLION dollars (https://www.kickstarter.com/help/stats). The numbers are impressive, but if you had a really great idea, would you share it with others and use Kickstarter for financial support?

Lets say that you have invented something that you really believe in and that hopefully will revolutionize a whole market. –Would you use Kickstarter or any other crowdfunding community? Probably not, because an idea good enough will most likely attract venture capitalist firms or business angels, that hopefully will serve you with great advice and a lot of money. One problem here is that the entrepreneur need to know how to contact and approach these investors to inquire about financial support and help. If one completely lack information or ambitions to reach out to investors, then crowdfunding probably can appear as a good idea.

Another reason that I see the crowdfunding solution as suitable could be if it is used as a marketing trick, so one idea can gain attention from the existing web traffic on the website itself (in this case www.kickstarter.com) without the need of creating a popular website or social media account of its own. But this could also be an issue as I feel that many inventions asking for funding could benefit from a more serious approach. Appearing on kickstarter, just a click away from the opportunity to fund “naptuckets: the world first pants designed for napping”or “Erotic colouring books for adults” could exclude more traditional and serious investors

My impression is that crowdfunding is not for everyone, but could be an easy way to gain financial support for a fun or interesting idea at start and there is always an opportunity to move on to more serious discussions with possible investors when you already know that there is a market for your idea. The idea in itself is very interesting and it has really gotten my attention since I visit the website every once in while to look for exciting ideas or outrageous inventions. So if you are a disbeliever of the crowdfunding phenomenon, just give it a chance and at least visit www.kickstarter.com and help an entrepreneur with funding or just get some inspiration from other ambitious persons!

 

Disclaimer: I’m not affiliated with kickstarter or the naptuckets…

This morning, I attended a start-up event called Fuck Up Morning Stockholm III. At first, I was surprised by the choice of name for the event but later I found out that it was named like that because the road to become an entrepreneur is never a smooth journey; there are full of obstacles and failures, or you can call them ‘fucked up’ moments. This event was getting increasingly popular and it is the third time of having such talk. For today’s talk, there are 3 guest speakers invited to share their experiences:

  1. Andreas Vural – Happy Plugs

When he first started the Happy Plugs, he just wanted to solve the problem of tangled ear-phones. He then searched for the perfect material and eventually built Happy Plugs. A few key take-aways from his entrepreneurship journey:

  • Do not be afraid to start your business because of financial issues. There are always sources of fundings to look for if you indeed want to look for it.
  • In order to expand globally, you first need to establish your brand in a single country. After it is successful in one country, you can leverage on that and try to expand your brand.

After that he ended his presentation with an inspiring quote “Try and fail but never fail to try”.

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  1. Emilia De Poret – Singer, Author and Entrepreneur

IMG_8648The second guest speaker was a very passionate woman who has went through several obstacles in her life but managed to turn over a new leaf. The first stumbling block that she encountered was when she was 23 years old when she was fired from her recording company. At that point, she felt that she was a complete failure and she locked herself in her room for almost 2 weeks. Since that day on, she made a promise to herself that she wanted to be in control of herself; she did not want to be hired by anyone and that’s how she becomes an entrepreneur. If she had not experienced being fired, she would not be the successful woman she is today. The following is a few tips that she shared with the audiences:

  • In life, you are presented with a lot of opportunities but you need to learn how to prioritize and learn to say no. By saying no, it does not mean that you are rejecting the opportunity, but it means that you are making yourself to commit to an opportunity.
  • When you feel like you are at the lowest point of your life, you need to gather your strength and pull yourself out of the pithole. Believe that you can do it and keep trying again.
  • To find a suitable partner for your start-up, sometimes you don’t need to look too far away. It can be strangers in the plane, your familyyou’re your relatives. Go out and connect to people more.
  1. Peder- Tech enthusiast, Boka bord

IMG_8650Since his study at Uppsala University, he knew that he was really interested in technology field. He began working at Nord Net, a Swedish online trading application. He shared a few lessons that he learnt based on his experiences:

  • Do not ever attempt to do a lot of things at the same time. Focus on one and make it happen. He made the mistake of doing at least 7 things at the same time and resulted into lack of focus.
  • Rather than focusing on trying to get investors, try to utilize bootstrapping and focus more on building your idea and product.

He ended his presentation by giving us a quote that we must remind ourselves constantly: “Believe that you yourself are capable of doing so much more than you think.”

photo_2016-05-17_23-34-51

 

 

 

 

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.