First I’m going to introduce myself so we see what happened business ideas I have tried to build upon Then we will look at the latest one: eRepublik We will then see what makes an idea worth building on and what you need to make it succeed from the point of inception to the point where you are growing.
Who am I well I’ve been an entrepreneur for about 11 years, since I finished university at 22. Just from twitter it’s pretty easy to find out what I do and what kind of person I am (how many people here know twitter? For those who don’t know it it’s a bit like a free mass SMS service that allows you to either share info or stuff with friends or complete strangers. How many of you use Twitter? Ok well according to my twitter profile, it seems I like to dress up and throw myself out of airplanes but I prefer to do it with someone watching my back (or on my back depending on how you interpret that picture. Some people use twitter to topple governments, I use it to stay informed, get ideas and turn them into building stones for my business. If you look at my t-shirt there, you will see that it says in big letter “I failed” well that is because as Jason Calacanis a famous US internet entrepreneur (who I like quoting because he once said my last company eRepublik is brilliant and would make its investors tons of money”, something that hasn’t happened yet but working on it.) always says, “failure always precedes success”. And if you want more complete information about me you can always go to my linked in profile.
So there you have it I specialize in internet start ups and like most entrepreneurs who has a few start ups under his belts one of my past activities was going back to the beach for a few months. The reason for that is that building upon an idea is very very hard work, if failure precedes success, as I saw once Sergiu quote on twitter: the only place success precedes work is In a dictionary. Turning an idea into a valid business is extremely hard work and to succeed you need to put all the chances on your side and get all the help you can get! Oh and be persistent because you can fail, just look at my track record! …… entrepreneur: tradeok.com (FAIL), livra (PERSISTED), early team member but employee (stock options and bought many shares) lastminute.com, business angel: yesnomayB (failed), enetural, fitnesskit.com, trilulilu, these seem to bedoing well. And the idea that my team and I are turning into a business: eRepublik
Erepublik we are actors in this space
So if you were wondering were George Bush and Dick Cheney had disappeared……. They are probably giving another go at world domination in eRepublik
I’m sure even margarita there has a few Being the first helps, and that starts from even before you are born. Examples of being the first: ebay, gameforge Examples where being second is fine: how many remember friendster, how many know facebook? (But in that specific race I’m happy I made it first) Execution is everything: buiding a successful company is 10% inspiration, 90% perspiration Important is to try, swing the club if not: regrets… And then you need: skill etc… Focus, probably the n1 weak point of most Romanian internet entrepreneurs today. Also especially if you are a Romanian internet entrepreneur, having an idea that addresses the international market rather than just the local one is usually best.
- google: better search & advertising targeted to search terms (copy overture: goto.com who had a bad team), ipod: all your music anywhere, skype: free international calls to other skype users Initial idea won’t be the right one: Flickr was going to be a MMO game before there was a market for it, one of the applications allowed users to share and store pictures, users loved it team changed it, within 12 months sold to Yahoo for 40 million dollars! Right idea + bad team = fail: failure of my investment in yesnomayb is an example, I loved the technology, idea to make online dating more visual was good but founding team kept bickering about who was the boss, there was no clear CEO, direction changed all the time and lacked focus as they were running a moderately successful business at the same time. On top of that we never found the right people to run the local sites.
- A good founding team should cover at least the business side and the tech / product side for the first 18 months of the company and be ready to work for virtually no or little salary for the first 3 years. Romania has an advantage here because you can actually retain more equity and get good people on board since salaries are still quite low but someone who works for salary will never have the same motivation. _ Naïve and inexperienced an advantage: depends ideally you need a mix. You have to be naïve or a little crazy to jump out of an airplane and the same applies to turning an idea into a business at least the first time you do it. But there is no doubt that its much easier with experience. On the other hand to much experience can make you be to conservative. - What you really want is a team of smart doers that ideally can think for themselves and get things done and can put together pieces of the vision puzzle and debate what is more important. This can be employees, co-founders, your board or even external advisors but at the end of the day one person must put all this pieces into on single vision and relentlessly push it until; shared by all and that is the CEO.
Only F&F fund ideas unless: you are one of them (Jobs, Gates, Ashton Kushner, pics, George… crazy angel / co-founder)
- Twist: even the 2 hour ones, great online show for entrepreneurs, basically tons of advice online, read other entrepreneurs blogs, see how they did it With what your prototype, try to convince at least one angel to invest or to create a basic revenue stream. If you are a Romanian entrepreneur and your company is based in Bucharest, not easy. There are not many local angels and even less who know how to invest in a internet start up so supply / demand not in your favor. My advice is try to get selected in start up competitions to make the right contacts. The simple process of trying to get in will force you to prepare the right documentation and change or adapt your prototype or initial idea. - If you do all this you should at least find an angel and now you need a lawyer, because investors will want you to have a company structure that matches their expectations and if they are good they will be much smarter and better than you at getting the deal they want, because they do this all the time so you want someone who has done it before to help you out. - The timing for a public launch really depends, again you don’t always need a final product to launch publicly but you do need it to be good enough to create buzz. Built it and they will come doesn’t really work, so you will have to promote like mad. - Also this is the time to look bigger than you really are so journalists, potential investors, employees, partners take an interest in you and see you as a player. This is much more difficult than it looks and can make you look really stupid so do it carefully. For eRepublik we decided to take a stand at LeWeb, the biggest internet conference in Europe, all the key players are there and saw us and we were next to the big guys, also we had an ice story to tell having won a prize at the previous year event. So it worked but it was a gamble and it went against the next rule witch is keep costs to a minimum. And while you are at it even if you are desperate for resource to get things done, hire slowly, fire quickly.
- VC’s don’t fund ideas and don’t fund projects or features they fund companies that have a clear momentum and existing product with clear indications of success and need the funds to accelerate their growth Forget it: if not the above or one of these: (boo founders (a poet and a model, blew 120 million euros in 2 years with concorde flights and a 60 million marketing campaign: failed, spinvox founder raised 200 million euros for sending service that sends your voice messages via SMS based on voice recognition technology, in reality call center staff in some remote part of the globe: about to fail, joost founders: well they sold skipe to ebay for 5 billion $ so VC’s did think Joost would work: failing) - Lawyers will cost you this time, especially $$$$$ if you did not build your structure right, if your company is still 100% Romanian and you haven’t set up a holding company in a country that VC’s are used to, very few VC’s will accept to invest in a Romanian company, to much risk, cost and limits exit possibilities. Don’t make my mistake, speak to these guys (Biris goran) before you take the angel money and create your structure right from the beginning. - To little or to much: Usually its better and safer to raise it a little to much but if you overdo it, either you will be left with no equity or valuations will be so high that it will be very difficult to match your investor expectations (Netvibes). Having limited resources forces you to concentrate on what really is important, having a lot allows you take your time and perhaps build a better product. - Don’t raise for PR: Raising VC money is a very hard and time consuming process especially now, ours took 4 months from term sheet to close and AGF PE had already made a small investment. Expect 6 months process at least for a series A. It is also costly and will give a lot of power over your idea to someone with whom you will have to spend more years than what many weddings last nowadays. So you better get along well with your VC and share a common vision. If you don’t probably better of not raising and if you don’t need to raise, don’t.. VC priority: Also remember that your priorities and your investor’s might not always be aligned. Some VC’s might push you for growth at all cost even if that takes you away from profitability, that is because as long as you are successful they can fund you more (their job is to invest money) the problem is if you miss a step, they might make you pay dearly by funding you under very strict conditions (best scenario) or simply pull the plug and poof you failed! So make sure you choose wisely. - The growth stage is actually the hardest, assume most bad things will happen: your growth train that got you funded will collapse under you, a key employee will leave, you will loose 3 months in a dead end project, there will be tensions in the team, your idea will need to change… The important thing is that you stay focused on the bigger vision, d correct mistakes quickly so that they are not to costly and that the things you get right outweigh the things you get wrong.
At the end of the day making your idea big is likely to need VC funding so listen to what Guillaume from AGF PE has to say because all these companies exist and have made their ideas big tks toraising VC money. And remember that as long as you don’t run out of money
I landed safely. Failing doesn’t matters just the beginning, not trying is the real problem
Building upon an idea How to
Building upon an idea!
My idea today
• One of you to turn an idea into a transformative business
• Useful roadmap for building a business out of an idea
eRepublik Labs: Crafting Game Worlds
• I like games & business
• Boxed games model sucks & huge market, moving online
• I’m inexperienced enough to think I can do it better
• Found somebody who believed me & could help
50 employees, 5 million registered players and…
• Anyone can have an idea
• Being the first Helps (not always)
• But execution is everything
• Regrets = the sum of the risks you did not
• Skill, Focus, Equity (Sweat / Cash) & Luck
What problem do you solve?
• Best ideas: simple solution to large
• Often initial idea won’t be the right one
• A good team can turn that around / evolve
• Right idea + Bad team = Fail
• Co-founders key
• Start with sweat equity
• Inexperienced = advantage?
• You want smart doers
• Not to serious
• No i in Team
• CEO must drive the vision
• You will fight & split
Private Launch, Friends &
• Only F&F fund @idea stage unless:
• Launch something quickly (make it
• Get feedback, iterate, improve, validate
• No $ on marketing (thank you social tools)
• Learn! Change the idea / product if
Public Launch / Angel $
• Research online Angel list etc.
• Compete: LeWeb, TC 50, Seedcamp
• Get $ from angels or sales
• Timing for Launch : Depends
• Promote like mad, kickstarter?
• Look bigger than you are
• Be cheap & hire slowly fire quickly
Growth / VC $ / Profits
• VC $: for successful companies to grow faster
• Forget it if not the above or one of these:
• To little or to much can kill you / ego trap
• VC priority: 1> growth 2 > profits Yours:
• Harder choices, costlier mistakes, FOCUS
Want to make your idea big?
DON’T RUN OUT
LAND ON YOUR
Chairman Trilulilu, Zonga
ceo and co-founder
We are hiring
What we are doing next:
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