Archive for March, 2014

March 30, 2014

Getting to Yes

PersistenceI was reminded yesterday of a blog post that I wrote a while back about True Grit, the persistent, relentless push forward quality that I see everyday in Entrepreneurs who get it. I have been talking to some of the institutional investors who have been interested in participating in the “Alternative Asset Class” that is the name used by Banks, Pension Funds and other financial institutions if you did not know. Almost all of them ask me what is criteria for me to invest in companies, I cannot emphasize enough about the quality of Grit, someone how has the Chutzpah, the gump, the courage to boldly continue on when all the natural things begs you to stop. I really got inspired reading the latest article by Mark SusterOne of My Most Frequent Pieces of Advice: Be Politely Persistent“. I am sure there were some Entrepreneur who was being pissed off or arrogant about not getting to an yes with Mark. That happens a lot. Nice thing about Iceland is that there are not that many venture investors that you get only a few Nos :), the important thing is obviously to continue on your journey. But as Mark says in his post don’t be bitter about it or arrogant or be an a#$h%&! about it. The best way to get to a yes, is always hard work, focus on what matters and your circle of influence and move your circle of concern away from what needs to get done.

The above advice by Mark is a classic and comes at the right time, Jason Mendelson one of the Managing Directors at Foundry Group and who attended Startup Iceland last year (Have you bought your tickets yet! we are going to have a sold out event, do don’t wait till the last minute get your early bird tickets) was interviewed by about “18 ways to kill as startup: Bad Teams and Ideas, arrogance…“, do you notice the pattern? Arrogance is one of those attributes that an Entrepreneur needs to let go, you cannot be arrogant in a sphere riddled with high uncertainty and low data. You need to be positive and continue on your journey. I also like the post Brad wrote a while back about an “Entrepreneurs Math:(.9)^10=1 “, you need to be in the deterministic world and not the probabilistic one if you are an entrepreneur. If you do the odds, it will tell you how small of a chance you have for success, but that should not define how you go about doing things. You need to believe that you will succeed despite everyone showing the odds of success at your face. That is how you get to Yes! quiet, polite, persistent, relentless focus on the next step… May the force be with you!

Enhanced by Zemanta
March 28, 2014

Best of times to be an Entrepreneur and Venture Investor

marc_andreseenI cannot emphasize enough the exciting opportunities that are in front of us. In case you have not noticed, Andreessen Horowitz announced the closing of a $1.5 Billion Andreessen Horowitz Fund IV. Yes, that is a Billion. In addition to that True Ventures closed a fund for $350 Million. The announcement by a16z is what inspired me to write this blog post. Here is an excerpt from that announcement:

We believe this is an incredibly exciting time to be a technology investor. The ultimate market size that this current generation of tech companies can go after dwarfs that of previous ones.

The obvious reason for this is mobile internet penetration: We’ve gone from an internet population of 55 million users to nearly three billion, and smartphone users are expected to grow from 1.5 billion today to five billion in the coming years. The winners in tech today can become massively larger than those of previous decades because the markets they can sell into are enormous, and growing.

I believe these kinds of funds create tremendous opportunities all over the world it is not concentrated in Silicon Valley, although the bulk of the money goes into the Valley. According to the post the total amount of venture money raised by the industry is $16-$18 Billion a year, I wonder how much the investors in Iceland invest in this asset class? My educated guess would be about $20 Million in a year, yes you heard me right $20 Million that is about 0.11% of the amount invested in the US.

I believe that there is a huge opportunity to find strategic fits around the theory that a16z looks at, the broad theme is the Software is Eating the world and more recently the Full Stack development. These themes allow smaller startups to find a unique niche, create a market for that value proposition and typically get positioned to be acquired by those larger startups who are looking at the Full Stack to accelerate their development. I believe there is merit in this investment strategy and I believe Iceland can create, build and export those smaller startups. These startups do not require a lot of capital and with the current state of software and infrastructure it is easier to get to market and create value. Here is another excerpt which validates that thinking:

Yet as these markets have grown, the technology costs required to support them have fallen dramatically due to developer productivity tools and cloud-based computing. For enterprise in particular, the advent of SaaS and BYOD has expanded the market opportunity. Why? In previous tech generations, selling to an enterprise required both the support of the end-users of the application and the IT organization. The limiting factor on application deployment for enterprises was the finite capacity of the IT organization, since they would ultimately have to install, support, and manage the applications internally. With SaaS-based applications, however, individual departments within a large enterprise can find and adopt new technologies freed from the constraints of the IT organization’s support capacity.

Enhanced by Zemanta
March 26, 2014

Meniga – A Startup Profile

Image representing Meniga as depicted in Crunc...

Image via CrunchBase

Meniga is one of the companies that came out of the financial collapse of Iceland. It is a Whitelabel Personal Finance Management software that is primarily used by banks and financial institutions to enable their end customers to better manage their finances. I have watched the company grow from strength to strength and I believe last year was huge year for them in terms of really accelerating their market access.

I am not sure if they can still be categorized as a startup, the team has grown to over 70 people if I am not wrong, with expansion into the UK Financial district, Sweden, Poland and other markets and strengthening the Icelandic core team with Kristjan Kristjanson who used to be the CEO of Innovit. I think Georg Ludviksson their CEO and experienced team has really started executing on the vacuum created by the financial collapse into the financial services industry. The financial services industry and the banking sector is actually one of the biggest buyers of technology and innovation, however since 2008, the sector has been focusing on building their base and it has created tremendous opportunities for startups to come up with innovative solutions that can be bolted on to the core service offering of the financial service sector. The team at Meniga capitalized on that and focused on the value proposition from the customers perspective and built a solution and made it mainstream.

Meniga has been the recipient of Best of the Show in Finovate 2011 and 2013. They are the leaders in the European market for Whitelabel PFM solutions and they continue to innovate and penetrate new segments within the Financial Services industry.

Enhanced by Zemanta
March 24, 2014

Two key deficits of the founder CEO…

source: GigaOm

source: GigaOm

… when compared with a professional CEO”. I had to complete the sentence because some of the founder CEO’s go on to become great CEOs but they don’t always start that way. I finished reading the book “The Hard Things about Hard Things” over the weekend and the last chapter captured the essence of where Startup Founder need help and how Andreessen Horowitz Venture firm was created to solve that. According to Ben Horowitz the two key deficits are:

  1. The CEO skill set – Managing executives, organizational design, running sales organizations and the like were all important skills that technical founders lacked.
  2. The CEO network – Professional CEOs knew lots of executives, potential customers and partners, people in the press, investors, and other important business connections. Technical founders on the other hand, knew some good engineers and how to program.

I think this is spot on in terms of the technical founders that I have worked with in the past. In addition to the above, I have seen investors who put money on technical founders with absolutely no idea of how to resolve the above two deficits and they expect magic to happen with the startup. I cannot imagine investing in a company and not knowing how I was going to help the startup founder in some tangible way to bridge the above two deficits. Ben goes on to explain the question that he and Marc Andreeseen tired to answer through their new venture Andreeseen Horowitz Ventures,

How might a venture capital firm help founder CEOs close those gaps? there is a story behind the URL as well. Go get the book, it is a must have for startup founders and investors alike.

Coming back to our small island north of the atlantic, what is lacking in Iceland is a venture firm that has the core mission of trying to solve the challenges entrepreneurs and startup founders have here in Iceland. I have written about this a while back when I had been working with the Team at CLARA.

What if a venture firm in addition to investing capital at all stages of the company development also provided the kind of mentorship that would accelerate the learning process for the founders? Also, what if the venture firm also systematize and professionalize the network and made the connections and helped build bridges from Iceland? That is exactly what Andreeseen Horowitz Ventures has done. This is not very different from what Brad Feld, Jason Mendelson, Ryan McIntyre and Seth Levin have done in Foundry Group… here is an excerpt from Foundry Group’s website:

What We Do

As true early-stage investors, we are comfortable making small seed investments (as little as $250,000 – $500,000) to help promising entrepreneurs get their ideas off the ground. We are equally comfortable participating in larger, more traditional Series A venture financing rounds. Regardless of the size of our initial investment, the size of our fund allows us to continue to support our portfolio companies through their entire financing lifecycles.

In addition to providing the necessary venture capital to get a company up and running, we are committed to leveraging our experience in starting and growing companies, our expertise in the technology industry, and our network of relationships to help great entrepreneurs turn great ideas into great companies.

How We Do It

We believe that success comes from building a collaborative and supportive relationship between Foundry Group and the entrepreneurs and executives in whom we invest. Having walked the proverbial mile in the entrepreneur’s shoes, we understand where we can add value—such as helping build out a management team, thinking through strategic business development and growth opportunities, or providing advice on exit strategies—and we aren’t afraid to roll up our sleeves and get our hands dirty.

Rest assured, however, that we also know the difference between being value-added investors and being micro-managing investors. As venture capitalists, we believe our role is to identify, help build and support the team that will make our companies successful, not to run those companies ourselves.

We also believe that, in early-stage investing, it is critical we maintain a direct relationship between our entrepreneurs and our managing directors, rather than using junior professionals to manage the work load. Foundry Group’s team structure, fund size, and investment process have been intentionally created to ensure this philosophy guides our interactions with all of our investments.

In most cases, Foundry Group will be the first institutional investor in the companies that we back. Because of our active engagement with our companies, we typically will take a correspondingly substantial ownership position in our investments and will join as a member of the company’s board of directors.

We recognize that sometimes the best ideas aren’t ones that generate broad investor consensus. Though we are happy to co-invest with other venture firms as part of a syndicate, we look to our own evaluation and interpretation of an entrepreneur, a market opportunity and a company’s prospects to guide our investment decisions. As a result, we view ourselves as “syndication agnostic” and are entirely comfortable investing in an early-stage company as its sole investor rather than seeking the validation of co-investors.

Would it not be great if we could combine the Andreeseen Horowitz and Foundry Group’s “How we do it” philosophy and have that firm based in Iceland to invest in Icelandic Startups? If you have read this far then it is not difficult for you to connect the dots… :) keep watching this space for more news on this.

Enhanced by Zemanta
March 18, 2014

Iceland Buzzing

Image Source: Iurie Belegurschi Photography

Image Source: Iurie Belegurschi Photography

It was a great surprise and boost to the local startup community yesterday. Gunnar Holmsteinn, the Co-Founder and CEO of CLARA is returning from Silicon Valley to Iceland to join the ultra popular game company Plain Vanilla Games as their COO. It is a great testament to the positive startup environment in Iceland. I am thrilled to have Gunni back and all the connections that he has made in the valley and how that can really help the local entrepreneurial community. The news is in Icelandic. I think it is what I had hoped for would happen, every Icelander that I know wants to come back to Iceland. I have a theory about it but I won’t bore you with that.

I remember the first meetings that I had with Entrepreneurs in 2009, right after the financial collapse, there was a lot of hesitation, fear, anxiety and lack of self confidence. Gunni and his team were the total opposite to that. They believed in what they were building and that is what prompted me to work with them and invest in CLARA. Roll back to 2014, the situation could not be more buzzing and different… everyone is interested in looking at Startups and Entrepreneurship. I want to throw a word of caution, I wrote about it yesterday as well. The mechanics of building a company is always the same, build your core team, find your product/service to market fit, build a marketing and sales strategy and execute, execute, execute and scale the revenue, the team and the business. Of course it sounds simple and common sense but common sense is never common practice. The road is littered with dead entrepreneurs and lost dreams, but that does not mean one does not dream or want to be an entrepreneur. I tend to take the middle ground, extremes are not good. Any community needs to have a vibrant startup community where entrepreneurship is encouraged, failure is accepted and anyone who wants to take a chance and live their dream should feel confident in doing that. My vision has always been that, a vibrant and inviting startup community already exists in Iceland but it is not obvious to everyone. We need to water it, weed it and give it space to grow. No one can predict the future, but we all can do the right thing as a community to continue to nurture it.

I believe we are under-investing in the Startup Community in Iceland as a society. I would be exaggerating if I guessed we are investing probably $50 million/year on startups. It is probably a fraction of that. I believe there are a number of opportunities that exist in Iceland like Clara, GreenQloud, QuizUp, Meniga, GuideToIceland, reKode/Skema, apon etc The trick is to enable these kinds of businesses to graduate from one stage to the other and again, this is no rocket science invest time, money and mentoring to help entrepreneurs as a community.

Are there challenges with regard to Capital Controls, the Currency, High Interest Rates, Political turmoil? Yes Euro! No Euro Debate? sure… all those things have nothing to do with building a startup community. If this was easy everyone would do it, I believe we in Iceland have the right amount of pain and the necessary raw ingredients to actually make it.

Enhanced by Zemanta
March 17, 2014

Investor, Founders and the journey of building companies

Image representing Steve Jobs as depicted in C...

Image via CrunchBase

The last 6 years, I have been breathing EntrepreneurshipStartups and Venture Investing. I have more or less confronted most of the pitfalls that you read about in blogs and books about entrepreneurship or startups. I have been focusing a lot about the Principles of Leadership and Win-Win agreements for a specific reason, I have realized that when investors are involved the bargaining and or negotiation capacity of the Startup Founders gets rather skewed. I have seen time and time again, founders getting marginalized to a point where it makes no meaningful sense for the founders to participate in the painful journey of building companies. I have tried my best to stick to my mission which is to help Entrepreneurs and stand on their side when it comes to building their startup irrespective of the role I play. I meet many investors who have had some success in some investments and they try to invest in Startups and they start thinking that they are more important than the founders of the startup. I wrote about this a couple of weeks back. The best way to the poor house is getting into investing in Startups and ventures where the investor adds no tangible value other than money. There is a better and easier way to lose money than this route.

I was reading a post by Hunter Walk titled “You’re either venture-backed or a lifestyle business: a big lie“, here is an excerpt from the post

What I want to focus on instead is our proclivity as an industry to demean these smaller companies as “lifestyle businesses,” which suggests an easy path, a coasting team, the four hour work week. Bullshit. These companies represent the majority of entrepreneurs across the US and should be celebrated. The profitable seventeen person company with an enterprise value of $20 million, 90% owned by its founder? That’s awesome even if you’ll never read about them in TechCrunch.

I vote for building companies the above way than raising money from anyone. The challenge every entrepreneur has is the cost benefit analysis of raising money vs bootstrapping. My advice has always been if you can bootstrap a business that you own 100% just do that. You are in charge of your destiny, you don’t have to answer to anyone other than your customers and team.

I have seen startups where the founders have been sidelined for some professional manager, I think that is a wrong approach, typically suggested by “investors”. When you look at tech companies that have endured the test of time, Apple, Microsoft, Google, Amazon, HP, Cisco etc all these companies had their founders playing a key role in the development of the company through thick and thin. And then we have other examples where companies that just flounder once the founders step aside Dell, and Yahoo come to mind. The jury is still out on Facebook, Twitter etc My belief is that Founders need to play a meaningful role in the building of the company that they founded. In addition, the investors who are “feeders” and not “leaders” need to support and help the entrepreneur in making the company really reach its true potential. Too many times I see investors and the Board of Directors act like they know it all and make dramatic decisions that at best are compromises and at worst Lose-Lose outcomes, rather than building a culture of Win-Win and really focusing on building a Win-Win company.

There was an important post by Fred Wilson titled “Founders and CEO” and there is a quote that really resonates with me:

One thing I know is companies are better off when their founders remain involved in the business, even if they are not the right person to run it. That is not always possible and sometimes a scenario like what happened to Steve Jobs plays out. But it’s not the ideal way to resolve these conflicts.

I believe the ideal way to resolve conflicts is to search for the 3rd alternative, it is not your way or my way, it is our way which is better than anything either of us have come up together. The power of Synergy where 1+1 = 100 or 1000 or 10000. How sweet it is to be part of those discussions…

Enhanced by Zemanta
March 15, 2014

Leadership and Courage

CaptainkirkAs I wrote in my previous blog post, I have been glued to the book “The Hard Thing about Hard Things” and watched the following video where Mark Suster interviews Ben Horowitz in Startup Grind. It is a great interview and I would highly encourage everyone who is a startup founder, CEO or investor to watch it.

One of the things that Ben talks about which I very strongly subscribe to in Startup Founders is the ability of Leadership and Courage. It seems a little touchy feely thing but IMHO this is the most important trait, technical skills you can learn, management skills again can be learnt, leadership skills not that obvious and it takes a lot of practice and mentoring and the more you get to do it the more it demands of you. I have written a lot about Leadership because I believe very strongly that Leadership is the X Factor of Entrepreneurship and if you can couple that with Courage to take bold decision and “Go where no-one has gone before” you have Captain Kirk like leadership. Remember that Courage is not absence of fear, but it is action to do the right thing despite fear. I have walked the path of startup founders in the last 5 years, I seen a lot of challenges that faces a startup and the teams that comprise a startup. The one single thread that keeps everything together is the trait of Leadership and Courage. Cultivate those traits, become obsessed with it and learn everything there is to learn about it, if you are an Entrepreneur or a Startup Founder.

Many of us included yours truly believed that courage is going into battle, but it is far from it. Courage is having the self awareness to ask for input from your friends and co-founder and your team. Courage is being vulnerable to the team with the notion that you don’t have all the answers. Courage is confronting your co-founder or Startup founder when she is going off the rails to give feedback and bring her back to reality. Courage is raising a red flag when whole team is telling lies and courage is raising the mirror and showing the entire team when politics starts trumping hard work, diligence and doing the right thing. These are hard things to do in a team environment. You need to factor the maturity, experience and the leadership capacity within the team to really push the agenda. Once again, I feel validated that my emphasis on leadership around building a leadership culture at all levels in the teams that I work with is the right principle. It may not seem obvious but it always pays rich dividends.

I am starting to watch the entire Star Trek Series starting from the first episode, as I believe Captain Kirk personifies a certain aspect of leadership and courage that is needed in a Startup Founder and Entrepreneur.

Enhanced by Zemanta
March 14, 2014

The Hard Thing About Hard Things

the_hard_thing_about_hard_things__building_a_business_when_there_are_no_easy_answers__ben_horowitz__9780062273208__amazon-com__booksIf you have not seen the recommendation by Brad Feld and Fred Wilson to get the book “The Hard Thing About Hard Things: Building a Business When There Are No Easy Answers” by Ben Horowitz. Here are some exerpts that should motivate you to read the book. I have referred to Ben’s blog a number of times in my blog posts. I think Ben writes from his heart and it shows. I am about halfway through the book and I have to say I am hooked and I keep thinking about the book despite all the other things that I doing.

I have to say the best chapter in the book so far has been Chapter 5 – Take Care of the People, the products, and the profits – in that order. This chapter really resonated with me as I have been given feedback that I spend too much time taking care of the people, it was great to get some validation for my beliefs. There is a reason why I write a lot more about Leadership and Team Development in this blog because I feel we seem to have forgotten that a Company or a Startup or a Service is nothing but a collection of people and if the empathy, their dreams, trust, relationship and love is lost between the team member all other things fail. Here is an excerpt from the book

My old boss Jim Barksdale was fond of saying, “We take care of the people, the products, and the profits – in that order.” It’s a simple saying, but it’s deep. “Taking care of the people” is the most difficult of the three by far and if you don’t do it, the other two won’t matter. Taking care of the people means that your company is a good place to work. Most workplaces are far from good. As organizations grow large, important work go unnoticed, the hardest workers can get passed over by the best politicians, and bureaucratic processes can choke out the creativity and remove all the joy.

When everything went wrong from the dot-com crash to NASDAQ threatening to delist the company, the thing that saved us were the techniques developed in this chapter. If your company is a good place to work, you too may live long enough to find your glory.

Are you intrigued to read the rest of the chapter? I was and I am reading it as I type this. Go and get the book! it would be the best thing you did.

Enhanced by Zemanta
March 11, 2014

Startup Edmonton

I was invited  by the Canadian Ambassador to Iceland Ambassador Stewart Wheeler to give a talk about Startup Iceland to the Business Delegation from Edmonton, Canada. Icelandair is now connecting Iceland to the region of Alberta Canada by flying to Edmonton 5 days a week. Here is the article of the new flight connection between Iceland and Edmonton. It was great to meet the business, government and institutional leaders led by Brad Ferguson the President and CEO of Edmonton Economic Development Corporation. brad-42

I was inspired and excited to hear about the burgeoning Startup Community in Edmonton, aptly called Startup Edmonton led by Ken Bautista. There were a number of discussions around how to get the Startup Communities in Iceland and Edmonton connected. I invited the entire delegation and any entrepreneur from Edmonton who wants to visit Iceland to participate in Startup Iceland 2014. I was really inspired to hear the support from the delegation that they were going to sponsor some young entrepreneurs to come to Iceland and participate in the event. I am really humbled and motivated when I see true leadership shown by the Feeders of the Startup Communities. I showed the video of StartupVille created by Kauffman Foundation and narrated by Brad Feld, it is such a pleasure to see organisations, city administration and governmental organisations that understand the role of helping Entrepreneurs to take a chance and to go live their dream… that is how communities are built. Remember every city was once a startup.

Image representing Startup Edmonton as depicte...

Image via CrunchBase

Startup Edmonton looks like an awesome startup community with the right kind of leadership and following the Boulder Thesis. Check out the video and description on the front page of Startup Edmonton,

A home for hackers, artists and entrepreneurs

A place to work + create »
Become a member and have a place to work, collaborate and create alongside other founders, artists and technologists.

A place to learn + inspire »
Sparking conversation and interaction between entrepreneurs, developers, designers, creatives and leaders.

A place for community »
A community hub where ideas and people collide through meetups, events, and programs.

I love it. It started as a grass root initiative, the City and other feeders provided the workspace and funding so Hackers, Artists and Entrepreneurs can collide and create things. It is a great initiative and I am pretty sure the startup community there is buzzing. I cannot wait to take the Icelandair flight to visit the community and see how they are doing things.

Enhanced by Zemanta
March 10, 2014

Doertocracy – Startup Iceland 2014 Hackathon

T.A. McCan Entrepreneur

T.A. McCan Entrepreneur

For those who have been reading my blog post, it should come as no surprise that I am a big fan of Hackathons. The reason I like them is that it is built on the premise of Doertocracy, watch this video where Brad explains what this is…

Every Startup Iceland event we have had a weekend of Hackathon, I have received feedback that goes from “it is a joke” to “this is awesome!”. A lot of that has got to do with participation, promotion and positioning. We have had spotty participation and we have not done a good job of promoting the event clearly and for that matter positioning why we do it. So, here is the skinny on what we host hackathons, it is a perfect place to try something based on a theme. This year’s theme for Startup Iceland is all the new platforms that are disrupting even the traditional startups platforms for example Mobile Technology, Wearable, Flyable, Driveable and 3D Printing. I am excited to say that this year’s Startup Iceland is going to be biased towards Doertocracy, we want to do something with this notion of starting up.

Kio Stark - Photo Credit  Bre Pettis

Kio Stark – Photo Credit Bre Pettis

The last 2 year has been about Building Sustainable/Antifragile Startup Ecosystems, the broad theme stays as a constant but I want to create some momentum to push ourselves towards some action. That is why I am excited to get Bre Pettis, Kio Stark, Jenny Lawton and a number of other speakers like T.A. McCann to come to Iceland and tell us their stories on how they DID something. If you always wanted to hack at creating something now there are tools and instruments and instructions that will enable you to get started. Hackathons are a great way to time-box and build something of value. I know there is somethings lost in translation especially in Iceland, the most popular “breakathons” that are conducted in Reykjavik University is base on breaking into Operating Systems and the organizers of that put on a good show and I have seen overcrowded class rooms watching people break into each others systems. When I refer to hackathons I mean this

to create, to add, to build things of value.

Enhanced by Zemanta

Get every new post delivered to your Inbox.

Join 3,812 other followers

%d bloggers like this: