European success that could only come from here?

Caution: excessive stereotyping in this post!

People quote Skype ad Nauseam when talking about category changing models from Europe. It’s time for the new generation to come up with businesses that actually take advantage of the unique makeup of Europe and show that we’ve got it.

I’ve been looking at the various European grant and support programs in what is called Horizon 2020, FP7, and various other names. These are EU and EC designed programs that are supposed to come up with a new mega success in Europe, or at least support regions and markets to compete on an international scale. All those programs quote the great minds, research, education, and design from Europe. And all of those programs remind us of “world beating companies such as Skype” that play to the unique abilities of Europe.

Where are the new players in that category, and why are they unique and why can they only be built here? Skype couldn’t have built in the US alone, for the simple fact that long distance phone calls were already cheap enough or free by the time it came around. Europe with its borders and the built in issues was a perfect place for Skype to emerge. MySQL and Linux were probably rooted in the strong socialist (for lack of a better, or worse, word) nature of the north, and the resulting strength of OSS there (also influenced by the strong academic and scientific education and resulting community). Betfair and it’s siblings are of course the result of strong betting/gambling cultures, especially in the UK, that are regulated out of existence in the US. H&M and Zara aren’t tech startups, but still immensely successful companies based on the design heritage in their respective cultures, much like Ikea is the result of no-nonsense design combined with wonderfully Swedish egalitarian principles of affordability (the egalitarianism is still there, not so much the affordability I might add).

What are companies that are playing to similar principles, and build their raison d’être simply on cultural, regulatory, or market realities?

Transferwise is one I’m very familiar with (Seedcamp was an early investor and I’ve spent a lot of time with Kristo and Taavet). In most markets, nobody besides marginalised minorities is even thinking about cross border financial transactions. That’s why I’m so excited about it. Oh, and Taavet was early at Skype. Go figure.

I’m sure there are more, and I’m already thinking about markets that might be unique to Europe. The nucleus for this post was Fabrice’s piece on Craigslist. They have about 90% of the classifieds market in the US (a guess), and are prohibiting a single player to take over their market. Of course, as per Fabrice’s post, the mighty will probably stumble and fall, but this is the reality today. Might this lack of a clear leader in Europe make for an opportunity to build something? Of course, Zoopla in the UK, the Scout Group in Germany, and many others have taken some of those markets, but there are many more white spots than in the US.

If you’re in Europe, and thinking of something big to build, find one of those markets where you don’t just have speed, ideas, and great execution on your side. An inherently different and hard to understand market might be the biggest moat you can build to prevent a well capitalised competitor from the US to enter your space.

If you have an idea of some of those markets, leave it in the comments, I’m excited to hear about this stuff. Or, even better, build a kick ass company and take that market for yourself and replace the same name to pop up in those policy briefings.

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Why Apple doesn’t get community

I was reading [this great post by Tom Tunguz]( on the tube and realized one thing: apple doesn’t get the ‘community’ aspect nailed in their software because they don’t have the culture and values across their customers like our other great social products do.

Reddit, tumblr, soundcloud, Instagram – all amazing social products have their own community and put an amazing amount of effort into keeping them alive and true (HT David at SC and Topher at tumblr who’ve worn the community hat proud and high).

Apple simply uses ‘social glue’ type products like twitter, Facebook, and YouTube to augment the experience of their users. They allow you to take your output back to where your friends are by some level of mostly superficial integration.

While Startups often fear Apple as a category killer (filters in the phone app? Simple video editing?), they oversee that community and a sense of belonging is a much stronger barrier to entry and mechanism of defense. Especially early on, a lot of companies fail to build a brand and sense of style that allows customers to closely identify with the product. This is a variant of lack of focus and decision taking that is prevalent in many product focused companies: my suggestion is to build a much stronger voice, _intentionally_ excluding customer groups so that your core users feel as much at home as possible, allowing you to build the social fabric that will make your community.

It also helps to not build a feature, but a business (best use of VC parlance in this post yet). Actually, building a movement or a tribe (+1 Seth Godin point) is the corollary to that in the social universe.

So, why does Apple not get this? Actually, I totally think they do. They are many times smarter than I am, and therefore have figured it out a while ago: their users are too broad, too generic, and from too many different cultures. If you build essentially 4 products (iPad, iPhone, Mac, Laptops, and add ons), you can’t start targeting your packaged software at certain groups. You need to go wide and let others take care of the community bit.

Once that is done, you can _use_ these communities by integrating (twitter, fb, YouTube) or _leapfrog_ because you have penetration of devices (see the new sharing through airdrop in iOS 7). People then use these functions as tools and infrastructure in their products and habits – making Apple much more engrained in the experience.

Being infrastructure sounds commoditized, but in the end, is the better way for Apple to deal with its multiple million users, who all care about their own communities. A classic case of ‘design is what you leave out’.

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Secret road life tips

Each year, we go on a 3 week trip with about 25 of our founders. We take them all around the US – New York, Boston, and San Francisco. The calendar is filled back to back with meetings, and we are constantly travelling.

What I learnt from the past three trips is how you travel smoothly, stay alive, and still get work done:

Travel light

Try to reduce your luggage to a minimum. This doesn’t only increase movability, it also makes dressing much faster.

  • Planning laundry in my calendar so I can take clothes for only one week (8 days to be exact)
  • Taking clothes that match each other so I can combine anything with anything
  • Have a large enough suitcase/bag so I can simply throw stuff together when I am running late or need to leave fast
  • I use this duffle bag (90 litres), my super cool backpack, and I take a small shoulder bag as an alternative for days in meetings
  • I pack items I can use for different things – running shoes that are decently stylish to wear during the day, items I can layer in the different climates

Stay Healthy

One of the obvious problems, especially when having an established workout or fitness routine at home, is sports and diet. Since I started to take this more seriously at home, I have put an effort into keeping it up on the road.

  • Get plenty of sleep. It’s the key to staying fit.
  • Use the jet lag to your advantage: I get up early and go to the hotel gym or do exercises in my room.
  • Go running or walking where you can. Take the stairs, not the elevators.
  • Avoid junk food like the plague. Anyone who knows me is aware this is my Kryptonite.
  • Eat lots of green food, and make sure you stay fuelled during the day with nuts and fruit – no candy.


Being in the action for three weeks is a lot of fun. However, just like at home, you need to make sure to unwind a little to start the next week on the road with the same energy as before.

  • Meet friends. I have amazing friends in all of the places we go to – the US trip is actually a great opportunity for me to see them.
  • Stay with friends. This is even better, especially over the weekends. Spending your waking hours with people you care about makes being away from home much easier.
  • Talk about something other than startups and tech. Give your mind a break.

Stay in touch with home

Being in a long distance relation ship from Berlin to London is terrible enough. Adding 6-9 hour of time difference to that is hard. I usually talk to Isa at least in the morning and evening, and we stay in touch during the day as well. I can deal with two weeks without seeing her that way, but 3 weeks on the road without her just make me miserable. This is the hardest part.

  • Having a smartphone and sending pictures and messages is gold.
  • I added an international voice package to my US phone. Best decision ever.

Basically, travelling and being on the road makes you vulnerable and amplifies every experience – for good and bad. In the last two weeks I have found the above to be helpful for me. I know I will be travelling more than ever this year, so I hope I can keep this up.

How do you decide on the CEO if you haven’t yet

One from the email outbox, regarding a founder who asked about focus for each cofounder, as they were feeling they were duplicating work.

My answer:

Think about the three things that are most important for your business at the moment, and where you spend the most time.

I would assume it is something like building product, fundraising/long term planning, and distribution/getting users/talking to users are your main priorities at the moment. This roughly translates into CEO, CTO, and COO. Now, fixing the exact positions and names to individuals now is probably overkill, but between those areas, try to decide who is best.

  • Who would best present the company at a conference? Who would talk to investors and sell the company best? Who would spend time hiring senior folks?
  • Who makes the best decisions about technology and product? Who is the best coder? Who understands implications of big product and technology decisions best?
  • Who understands the user psychology best? Who figures out the smartest way to get more users?

On top of these – who enjoys doing what?

Now, you might not know all the answers to these questions, but try turning them around. That means, think about who is most likely to be better at it that the others. Think about which parts of these questions who would like to know more about, learn more about, and be good at.

You can still change the exact area of focus later, but these three things are what needs to get done first. Thus, picking the best for each area is key. You will still need to find a good way of dividing decision power, but having each area with one of you as the “Chief Of” will be very helpful.

What’s cool with the kids these days?

I sat near a young family on my flight to Berlin last week, and was able to listen in on a very interesting conversation on what’s currently cool with ~16 year olds.

I heard a lot about various apps, learned a lot about fashion, and was able to confirm the my suspicion that headphones are definitely a more important device of differentiation than various phone brands or operating systems. Here are some tidbits I caught:

What is the right phone?

Dad asked daughter (16ish) if she was happy with her new Android phone. Her answer was delivered in typical Dad, you bore me and you know nothing: “seriously, nobody cares if its android or apple. You and your apple things, dad!” Dad wanted to know more what people use, and the answer was that the poor (sic) kids in class had an iPhone touch, and most others had one of the relatively large android phones. And it didn’t really matter because Skype was on all anyways.

Skype groups are big

This pushed the conversation to Skype – Mum didn’t know Skype was on phones now too. Obviously “Mum, because you don’t know anything about computers”. The more interesting bit was that the group of friends in question would use Skype groups for most conversations, and getting into the right groups was the thing to be worried about. Access to and control of these groups is apparently tightly guarded and the origin of a lot of mobbing and clique behaviour. Interesting.

Whatsapp and Bbm are for nerds and the rich kids btw. Who by now are, “like, so acting like its cool but its not. It doesn’t even have good apps”.


A large part of the conversation was about fashion and the necessary brands to wear. One thing than stood out to me was the fact that this girl spoke about the actual SKU and color names of items – “I really just need the dirty melee grey workout sweater by American Apparel” (I made that name up). Kind of freaky.

Kids will be kids

Overall, the one thing that did not change since I was 16 (not very long ago, really), is the cliquey behaviour of youth, and the incredible importance of segmenting oneself into a certain niche. Getting accepted and being in the right group is the number one thing kids seem to think about.

If you are interested in these kinds of thoughts, check out Josh Miller’s article. Much more in depth than this rambling…

Using big data for investment decisions

“For instance, we often ask startups for their analytics logins during due diligence and compare what we find there to patterns from our successful investments. This morning we will be meeting to discuss how to systematize this effort and support it with some actual technology so that we can more easily discover and track new companies.”

This is from a post by Albert Weissman on how USV uses analytics techniques to decide on investments. Go ahead and read the whole thing.

500 startups use a similar philosophy: using data on their portfolio companies, especially the early investments, to figure out in which ones to follow on/double down in. Here’s an interesting Post Dave wrote about it.

I like the way both 500startups and USV think about it. In my opinion it is incredibly valuable to use in the series A/B stages of investing, when early patterns are arising. While it can sound like “hey, we just look at the data”, the actual implementation depends extremely deeply on the experience of the team (where, obviously, nobody needs to worry about USV or 500). You need a lot of insight into the data to decide what the patterns and developments actually mean.

In the end, the question is if it will allow you to avoid more type 1 or type 2 errors, i/e. does it serve to avoid investing in the wrong ones, or to avoid missing the right ones? As the usual tricky questions like access to deal flow, ability to join rounds, etc. still apply, this is probably an approach that is most useful for well connected and already successful investors.

Sorry mate, no silver bullets.

Growth is hard.

In the past weeks, one topic came up again and again, in scarily similar situations and conversations. My job puts me in touch with hundreds of early stage (and I mean early) companies and their founders. Usually these guys haven’t started a company before, and also haven’t spent too much time in product focused companies or successful startups. That is what makes most of them so hungry, ambitious, and driven: the belief in being able to do better and faster than others.

Now, this belief doesn’t stop or go away with most entrepreneurs, but it is usually very soon accompanied by either an unstoppable drive to just DO SOMETHING or an insatiable hunger to learn and find out how to actually be better and faster. These two extremes are obviously healthy for neither founder nor startup success, and thus hopefully mitigated by advice or exhaustion.

This is why my position is great: I can see, analyse and share insight from over 70 portfolio companies, and of course also from the more than 200 companies per year that come to our events. My observation is that at one point the above will happen: either the decision to double down, or to learn the shit out of best practices that can help pave the way out of startup stalemate.

The single most important observation for founders usually comes after they have launched the first version of their product: It is crazy hard to get distribution, i.e. large scale adaption for your product. A lot of teams then start looking exhaustively for the one silver bullet that will save them. This is usually an attempt to:

  • get covered on Techcrunch or another blog they read themselves
  • get a celebrity user (in recent times, celebrity user-investor)
  • publish an infographic
  • start posting to HN/Reddit/Twitter/etc about their startups

Obviously, none of these work.

To quote my math teacher from high school: “It’s not supposed to be easy. You guys are smart.”

That’s why Growth Hacking is the new cool. With the lean startup methodology, there is now a somewhat scientific method to building product. Growth Hacking takes care of the next step – or is supposed to find at least some copper bullets.

(BTW, not everybody thinks so)

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