Managing the Tech Startups Series - No.5 Jesus Encinar

Be prepared to get your hands dirty.

On a previous post, I mentioned that rare is a project that generates enough revenue to attract VC’s. Therefore it’s somewhat unique what Greylock and Draper, Fisher and Jurvetson are doing. As they have social entrepreneurship in their portfolio.

What has that to do with “Managing the Tech Startups”? Well, as I'm are trying to find patterns and best practices, or lessons to be taught that can be applied in social-impact entrepreneurship, the visit of Jesus Encinar from idealista.com (and founder of 11870.com, TopRural, Rentalia, Rockola o AsesorSeguros) proved to be very insightful.

I’ll quote a Twitter conversation to begin with: 

•  “- @pabesteves: “Idealista.com is a perfect example of how a non-tech start-up uses tech for business. Lessons for @foodiesquare at #ietechstartup @guerson" 
• “- @alvarocasado: @pabesteves how did they do that?? #ietechstartup”

First of all, worth noting is the fact that idealista.com is an example of how non-tech start-up (offering real estate adverts is not a tech start up) used technology as a business model. But also remarkable is the value of doing “ground work”.

When most people were talking to different real estate agencies and brokers, asking for their databases and leads, Jesús and his team had a different approach. Back to basics, baby. They walked 10.000 km around Madrid, made more than 25.000 calls, spoke to more than 5.000 proprietors and were able to launch Idealista.com with 5.000 high quality listings on day one. That proves the value of “being in the trenches”. So that how they did it @alvarocasado.

Secondly, Jesus mentioned that Idealista.com was not a starter, nor number one in the market, nor two, in fact there were over twenty websites offering the same service (real estate listings). That offers another valuable insight. “Don’t be scared when you talk to VC’s; you don’t have to be the first one in the market”.

And finally the importance of having a disruptive model. Idealista.com at an initial stage decided to go niche: only Madrid, no agencies and no new apartments, on a fee & commission free model. That strategy proved to be very valuable as they could become leaders in that specific niche and scale out. See, the importance of scalability.

From the conversation with Jesus Encinar, like always here are 5 points I consider relevant either for a tech start-up or a social-entrepreneurship start-up

1. Get your hands dirty. Especially in non-tech startups (most social entrepreneurship will fall into this category more often than not) that use technology in their business model, it is important to do ground work and “to be in the trenches”.
2. You don’t have to be the first (nor number one). If you have a good business model, attractive, scalable and you are passionate about it, don’t be afraid of the VC’s. Remember coches.com? They were not the first, and are not number one, nevertheless they are growing and succeeding.
3. Be disruptive. Offer something unique, focus on the opportunities, target niche, think long-tail, anything that will make people talk about you in a good way. Make noise.
4. Keep it simple. Simplicity can be a competitive advantage. Especially when you think of user experience and business operations. Back to basics.
5. Keep a long-term focus. If that means growing from niche to niche so be it. Business model replication, perfect. Changing a mindset or a culture, go for it. Anything that you have envisioned in the long-term keep it mind, and don’t get discouraged along the way.

If you are looking for a minute by minute recap of the session you won't find in this post. For a very thorough analysis of the session with Jesus you should go here.#ietechstartup

Managing the Tech Startups Series - Social Dilemma

"Social start-ups" vs. "Social start-ups"

Upon returning from South Africa four weeks ago, many things have changed; it has been a hell of four weeks. Geopolitically Middle East is revamping and redefining; economically the world is trying its best to crawl out of the hole, there are corporate merges, new startups popping everywhere; we have earthquakes, tsunamis, nuclear meltdowns, revolutions, riots, old wars, new wars and yet, life continues every day.

And interestingly, in these modern times of almost instant news, “prosumer” wiki-content, where technology has become an enabler, and mobility + social networks had led to changes in the mindsets of people across the globe, we take too little time to value the real important things.

Through a series of really remarkable guest speakers, a group of few MBA students, we have been given the opportunity and privilege of listening first hand from the experience of a tremendous group of entrepreneurs (thanks to Enrique Dans). And it’s my firm belief that with this unique opportunity responsibility comes to share the knowledge and try to use it to better the life of people.

Efforts to solve some of the issues that affect people (e.g.ducation, improving housing, ending hunger, curing diseases and lifting people out of poverty) in the most challenging parts of the world are critical. Those who venture are special and indispensible. Sadly, by design, they are seen as philanthropic options.
 

Colors app. They got $ 41-million dollars from Sequia Capital. They are a “social start –up” based on the premise their app builds a platform for sharing photos with anyone that has the app within a radius of 150-feet. It’s fine, kudos to Color Labs Inc. But the sad part is that “social start – up” will remain a term for geeky (side note: I'm quite geeky) technological innovation, rather than social-minded innovators working to solve issues of the world.

Yet after hearing the likes of Julio Alonso, Iñaki Arrola and Gabriel Aldamiz-echevarría, all successful entrepreneurs but most importantly, conscious leaders, I have the impression that valuable lessons can be taught to “social start – up’s" (please read: social impact entrepreneurship).

The issue of scale and funding

Scalability is the name of the game. Investors will be looking for realistic business plans that scale up. And since all funds like to support specific projects (based on scope and mission) rather than organizational structure, it is important to create business plans that consider the development of organizational capacity. Thus scalable. 

Social impact entrepreneurship needs to learn from tech start-ups. Rare is a project that generates enough revenue to attract VC’s. Odd case: Greylock and Draper, Fisher and Jurvetson that have social entrepreneurship in their portfolio. Or the likes of Ashoka and Tshikululu.

So there’s the first lesson that real "social startups" like Enke and Emzingo should learn from the best practices in tech startups. Build business models that scale and are for profit.

Managing the Tech Startups Series - No.4 Gabriel Aldamiz-echevarría

Make noise. Make more noise. C’mon more noise! When you are an entrepreneur loudness and being talked about is better than being secretive (not in all cases, so don’t start attacking). But it makes sense right? You want to be known, you want to be talked about. (Specially a social entrepreneur, you want brand awareness)

Gabriel Aldamiz-echevarría is in that for sure. He is the founder, with his wife (you see, it is important to have the support of your family they can even provide the idea) of Chicisimo.com.

And as a seasoned entrepreneur (Saktec Robotics and Strands) now he is leveraging all that knowledge, experience, expertise and contacts in order to grow with Chicisimo. (A brief side note: What is Chicisimo? Well it is a social platform dedicated to fashion. That’s it. Trés Chic! right? chic-isimo. It allows women share their own personal styles, brands, colors and styles. And obviously others can discover them, interact, and use as reference). 

The importance of making noise? Chicisimo has managed to be talked about in the Wall Street Journal, Vogue, TechCrunch, TheNextWeb (talking about the business model), ModaES (talking about chicisimo.pl and chicisimo.de) EliteChoice (talking about the value of insights for the fashion industry), EU-Startups (talking also about the new domains in Germany and Poland) among many others.  And once you start the noise you should go louder.

Well, from that conversation with Gabriel Aldamiz-echevarría here are 5 points I consider relevant either for a tech start-up or a social-entrepreneurship start-up:

1. Understand your business. Being cash strapped forces you to understand your business. You have to be very mindful of the resource allocation. They are scarce.
2. Jorge Mata also mentioned it. Scalability is the name of the game. Investors are looking for growth opportunities. And Gabriel stressed it: “You can have thousand ideas but you need one that scales.”
3. Appreciate the value of a community. Belong to a community. When you start a company, as an entrepreneur, most likely you’ll be on your own. So find a community to surround yourself with.
4. Dig deep into your contacts. Networking can be used both to leverage your name or as a competitive advantage. Be careful and respectful with your contacts, nourish the relationship, and understand your audience.
5. Empathy. This relates to the two previous points (and posts with Julio and Iñaki). A community involves everyone (family, friends, acquaintances, potential investors, mentor, etc) seek for their support; and in order to do that, develop enough empathy to know their interests, motivations and tune your message accordingly.

Business as usual, here are two post that I like from the session with Gabriel: one from Fabio Gastaldi and one from Radek Jezbera. Plus Enrique Dans' post.

Managing the Tech Startups Series - No.3 Iñaki Arrola p. II

What about entrepreneurial experience? On part one, there was a question on the air “Maybe Guerson, Sammy, Daniel, Jacobo and Martin can share what they are experiencing now (or fairly recently) in terms of work-life balance".

Iñaki Arrola starts on his blog post: “¿Para qué quieres ser emprendedor? ¿Quieres ser Mark Zuckerberg? ¿Y quieres serlo por crear un Facebook o por la vida de su fundador? “// since he hasn’t replied about translating his post, I’m just going to translate this bit: “What you want to be an entrepreneur for? You want to be Mark Zuckerberg? And you want to be like him to create a Facebook or because of his (Mark Zuckerberg) life?”

Well, Iñaki is an entrepreneur to be happy. That’s what he loves to do. And he has the mental strength and determination (plus support from his loved ones: spouse, friends & family) to pursuit, relentlessly, success each and every day.

“Nobody is thinking about the users” - Iñaki recognized. And once an opportunity aroused, Iñaki decided to solve a problem. Premise: Offer to the customers with coches.com, an easy, reliable (trust is a must) and clean way to quote a car online. Don’t you worry about doing some similar to what is already out there, many times (more often than not) there’s nothing new under the sun. And it’s just a matter of exploring opportunities.

Coches.com might be a follower (for the time being, I'm sure they’ll be leaders in a future) in terms of market share or traffic within their sector, but they are a bench mark (a poster child if you will) in terms of finding opportunities and giving the customers what they want.

For what it is worth, I have to say Iñaki has succeeded so far because he is doing two things, all entrepreneurs should learn from. First of all, he has the ability to transmit a dream, and in doing so he investing in persons and talent (not a project) creating a fun place to work. Money isn’t everything, there’s passion & fun (ask Julio Alonso). And secondly, he has learnt the importance of having a healthy work – life balance; that has kept him “grounded”, focused and human. But most importantly: happy. And that is the way an entrepreneur should be in order to convey a dream.

Well, from that conversation with Iñaki Arrola here are 5 points I consider relevant either for a tech start-up or a social-entrepreneurship start-up

1. Gauge right-timing. Remember: “Luck is when preparation meets opportunity” (still don’t know who said it) Focus on the opportunities, not the problems ahead, and be prepared to use those opportunities.
2. Have a healthy work life balance. Again: “When embarking in a startup it is very important to have the support of your family and closest people. Otherwise it’s twice as hard.” 
3. Money isn’t everything. Hum? Interesting, and I hope people understand the importance of this. You are investing in people, their dreams and their passions. 
4. Reputation is critical. Trust takes a lot to build and can easily be destroyed, so offer value and content. For coches.com that means verifying each and every car, and offering a clean, transparent UX (user experience) website. For an NGO it means being coherent.
5. Be happy. That is the bottom line. That will make you wake up every single day with a purpose.

¿Do you want to be Mark Zuckerberg?

PS. Here is Iñaki's account of the session. How cool is that!

Managing the Tech Startups Series - No.2 Jorge Mata

Well, well, well. Here we are again., the infamous"Managing the Tech Startup series". This entry might be a little different because it is written at two different times and then all mashed up. The first part was written on the AVE on the way to Valencia (Friday), and the second part after an interesting session with Jorge Mata (Tuesday).

Who is Jorge Mata? slight cough, according to some "a professional fundraiser" a potential investor, but he calls himself a successful entrepreneur.  (Just added: Daniel Couto offers a very comprehensive look of Jorge Mata’s profile in his blog)

In this session we discussed various aspects of fund-raising. From entrepreneurship and watermelons (yes, the fruit); luncheons with wine and tapas, or (warning, stereotype coming) sandwiches & a coke Palo Alto-style (for the record, Nicolai enjoys nice luncheons and he's American); cultural & ego clashes; the importance of foodiesquare.com on our lives; to the relevance of tuning your message to suit your investor. Jorge was very keen to stress out the importance of building trust & reputation with your investor, using pertinent and timely communication. And that money is always green.

Well, from that conversation with Jorge Mata here are 5 points I consider relevant either for a tech start-up or a social-entrepreneurship for-profit start-up.

1. Ego matters. Entrepreneurship is a matter of ego in the end. Either making a lot of money, or doing something people will talk about or change things. Achtung! Social entrepreneurs: “business angels” also look to satisfy their “do-good” ego. For-profits are a not a fad.
2. First valuation is critical. It is very important to have a correct first valuation when you are looking to sell the company. You don’t want to sell cheap or sell a “big chunk” & end up working for $500,000 nothing.
3. Look for synergies. Have your ego in-check. Yes, your ego is important but sometimes you have to put it aside and find synergies, partnerships and bring people on-board that will add expertise., knowledge and reputation. Leverage your relationships. Bring “gray hairs” to the table.
4. Scalability is the name of the game. Investors are looking for growth opportunities. And in the words of Jorge: “I don’t want ideas to invest, I’m looking for companies to invest”. 
5. Learn how to gauge right-timing. A classmate (if someone knows who was, please let me know) wrote: “Luck is when preparation meets opportunity”. Well, in that sense Jorge said: “if a VC asks for your money it’s not a good sign. You are looking for a partner willing to take the risk”. So don’t rush things!

This post is dedicated to my South African friends of Enke: Make your mark

Managing the Tech Startups Series - No.1 Julio Alonso

Last week I began a temporary series in this blog called “Managing the Tech Startups”. All these lectures are very interesting, especially to entrepreneurs and geeks “techies” (I’m both) but I see an opportunity in trying to link all this knowledge to the social entrepreneurship sphere.

As our first guest speaker we had Julio Alonso, an avid blogger and currently CEO & founder of Weblogs SL, the leader company of weblogs in Europe and Latin America.

We discussed several topics including: bootstrapping (Bootstrapping Your Startup), the use and value of analytic (e.g. Julio uses real-time information using Google Docs and Google Analytics; Enrique Dans offers a complete summary – in Spanish though) and how the commercial side of blogging works (Jacobo Molins discusses more about professional blogging and fundamental differences with magazines in his blog). A catch phrase in the session was: “turn parachuters into church-goers”. 

Well, from that conversation with Julio Alonso here are 5 points I consider relevant either for a tech start-up or a social-entrepreneurship for-profit start-up.

1. Realize that there’s a shift on the way your consumers engage with the web. (Blogging has a future? There’s a whole discussion about it out there, so make your own conclusions. “"It always has been an embarrassing word," The Awl's Choire Sicha said. "First it was embarrassing because bloggers were these dirty, horrible people, and then it was embarrassing because our grandmas have blogs, God bless them.") 
2. You better have support from your family. When embarking in a startup it is very important to have the support of your family and closest people. Otherwise it’s twice as hard. 
3. Money isn’t everything. In that sense I’d like to add: three factors lead to better performance and personal satisfaction: autonomy, mastery, and purpose. Your staff better be passionate about what they are doing. 
4. Your target audience is no geographically constrained. In this day & age your target audience potential donor can be anywhere. The barrier is language. 
5. Reputation is critical. Don’t abuse your consumers. Trust takes a lot to build and can easily be destroyed, so offer value and content. (e.g potential donors, they need to believe the organization is doing excellent, transparent, trustworthy work, and that it will continue to do so).

There are some unanswered questions (Guerson Meyer has some interesting ones) but evidently there was not enough time (for foodiesquare.com it was really worthwhile LOL) so I’ll post them here:

 - with the incorporation of new reader technology (e.g. iPad) can blogs benefit to enrich their content?
 - as people spend more time on social platforms,what efforts is Weblog currently undertaking to deviate traffic to their blogs?

Deconstructing The Social Enterprise Dilemma

 
“Globally social enterprise has grown from sporadic innovation in isolated organisations to a recognised cutting-edge field with its own body of knowledge and best practices”. 


Follow my Enke friend Tafirei Mangezi's take on a HBR article "Can you help Solve these Social Entrepreneurs Challenges?"

Preparing for the Social Enterprise World Forum this year in Johannesburg. "The discussions around enterprise development and social entrepreneurship haven’t  been nearly as accessible as they could be, so how bout challenging all these so called big thinkers to simplify the message for the masses." Follow the link...