I think there are a lot of people who think like Marc. Jason Fried of 37signals for example dedicated a whole chapter in his book Getting Real on this. In his case, he writes, a lot of people supposedly have accused him of not wanting to take his successful company to the next level by taking in investments. Among other reasons, he wanted to remain small and independent. To this date, this strategy has not harmed his company and 37signal runs a successful global service for thousands of companies.

It will often be difficult for a start-up, though, to remain completely independent from investors. ‘Your own thing’ would need to run very lean, maybe make money from the beginning or at least hit break-even quite early. Most importantly, it must remain small or scale with reinvesting its profits. This is a very difficult task, especially when you get a lot of traction. Let’s assume you’re doing something at the right time, which nobody has thought of before and which nobody can offer in short-term. The whole world will turn to you. Your servers will heat up. In that very moment, it will take a lot of guts not to take VC money to scale ‘your own thing’ up to a global level while maintain to ensure high quality. In case you manage to cope with demand in that situation, you’ll join Mark, Sergei and Bill for lunch I suppose!

There are these beautiful unique global successes, which were not acquired by a Fortune 500 company. Facebook, Groupon and Twitter turned down large sums from Google and others. But even the one-and-only Facebook took in Microsoft’s money back in 2007, because they were burning too much cash. If your start-up rockets through the roof (and I hope it will), you will find yourself listening to a VC while Agent Smith mumbles back in your head: “You hear that Mr. Anderson?… That is the sound of inevitability…” You will partially give away independence. At the same time, this is a huge opportunity for ‘your own thing’.

Is it wrong to sell?

Marc’s point mainly addresses the fact that some entrepreneurs sell their start-ups to large corporations knowing that their services or products will suffer from these acquisitions. New processes and new decision-makers change it to the worse, Marc thinks. And he has a point. There are many cases that confirm this. Does this mean that it is irresponsible when an entrepreneur sells his company? Is it all about money?

I totally understand anyone who shares Marc’s view. It is definitely true that a lot of founders of start-ups dream about becoming as successful as Google, Skype, or Facebook. But that does not mean they do it just for the money. Surely everybody works towards a better standard of living. And becoming a billionaire is alluring, but also very, very unlikely. And they know that.

If it is not about money, then why is everybody in the start-up world talking about exits? Founders are drilled to know their exit strategy, because every angel investor, VC, and even other entrepreneurs will ask them about it. ‘Your exit’ is an incremental part of the company’s strategy and you have to think it through. One could not call himself a businessman if he did not consider probable business paths – for the well-being of the company, of course. Most likely your path will lead to an investment, maybe it will lead to an acquisition, and sometimes it is best to just continue to excel on your own. In a very competitive environment, the right partnership can help you to execute your strategy, too. But even that creates some dependency. Last but not least, it can happen that the company changes to the extent that the founder does not fit in anymore. What happens then? Acting responsibly does not necessarily mean to stick with your firm. If selling is the best thing for your company, I say do it.

Always chasing the next big thing

Once you sold your company, what happens next? Even if you have to stay with the large corporation for some time, you eventually will move on at some point. Is that a bad thing? Does that mean you have abandoned your baby? I cannot let go of the thought that most entrepreneurs walk through this world with open eyes, constantly thinking of new ways to solve their own or other people’s problems. Guy Kawasaki clearly advises entrepreneurs to undo something wrong. While brilliant people who haven’t tasted the world of entrepreneurship still think about ‘at what point do you start your own company?’ an entrepreneur would just go for it. Most likely a venture will not become the next Facebook. And many people know that. This might be a reason why a lot of people do not take the leap into the world of entrepreneurship. As far as a significant part of entrepreneurs is concerned (count me in here as well), many have understood that a company does not gain its one-billion-dollar valuation from the idea or its early-stage technology break-through. It derives from a smart execution over several years and with the help of internal and external resources, including customers, partners, and investors. These entrepreneurs are not in for fun, they will dedicate their all to assure that the start-up becomes a success.

When your baby is able to walk on its own, can you turn away from it and pursue your next endeavor? Is it curiosity for the next big thing that chases you?

Evan Williams, co-founder of Blogger (sold to Google) and co-founder of Twitter, published a blogpost last week, in which he announced that it is time for his next thing. He stayed with both companies for more than five years and I think he can proudly say that he shaped both start-ups long enough to move on. Contrary to Williams, Bill Gates remained with Microsoft all his life. Larry Ellison did not sell Oracle and has not turned to a new endeavor. But many others did. Some companies were not harmed (like Skype), some were (and we forgot about their names).

Only an insider can answer, if selling is good or at least not bad for a company. I can understand everybody who moves on, because he or she cannot stop trying to undo something wrong in this world. I doubt it is the money that propels these people. Salaries in the start-up world are just too low. Now, if you should read this and you have not only been working on your own thing for many years, but have also turned it into a profitable business, you have my full respect. Keep the good work up! Live up to your own dreams. Nevertheless, do not forget possible exit strategies and do not shut your eyes to the fact that investment and acquisition can, at some point, become a logical decision for you and your company.

Time did not stand still

After a hard time in the first half of 2009, we experienced that the economy and corporate investments in software picked up again after summer. Sales cycles seemed to become shorter and old ‘pre-crisis’ leads could be re-activated. This trend continued towards end of 2009 and we were happy to see several large companies going live. Hence, we had a great, busy start into 2010.

No need to say that time did not stand still for other start-ups either. I was happy to see several ventures raising funds, launching products or simply being successful and taking off. I hope this will continue in 2010 along with global economic growth.

Amazing Travel

The year 2010 began personally with an amazing travel experience. The highlight of my trip was definitely my trip to Iran. There were so many breath-taking moments, which I surely will not forget: I met liberal, conservative, and religious people. I spend hours looking at the beautiful cultural heritage in Persepolis, Isfahan and Shiraz. Travelling to Teheran, I passed the internationally discussed nuclear power plants (not taking pictures). I had inspiring talks with young and elder Iranians about their history and their future. Have a look at my blog posts here (in German).

Singaporean Entrepreneurs

I arrived here a month ago. So far, I have met several promising ventures (also thanks to Sandbox). I will keep an eye on the Singaporean start-up cluster for sure and keep you posted with interesting insights.

I hope, my offline time is over as far as this blog is concerned. If you have any suggestions for posts, please send me an email.

Congratulations, Wuala, on 100 million files and on a new office!

We also moved offices this week. Luckily, we only moved one floor downstairs (this is our incubator). Still, it is always a disruptive moment for the team – packing, throwing things away and seeing the place you’ve spent so many hours totally empty; at the same time it is exciting to move in at the new place, with more or less a clean desk. Besides this and the view from your window not much changes for a web start-up. Your computer is still the same. Everything should be running the same way. Moving offices is a good moment to move on and to implement new processes, new structures and new habits. This is just psychology, this is how we act.

Wuala is doing really good, as far as I can assess. It was a nice coffee break this morning. Thanks for having me and I hope you enjoyed the Grittibänz. Have fun working in this spacious, great office. We’re staying tuned what interesting products you’ve got in your pipeline!

Pictures by Wuala, click here for more

Swiss Federal Statistics Office, Eurostat,  Comparis, Net-Metrix, Wemf, Public Data

Some cherry-picks:

(Switzerland has approximately 7.5 million people)

Print media
71.1% read newspapers

10.0% watch tv for at least 3 hours a day

Web media
0.56% watch television online once a week

20.5% download music online

Social Media

20.2% use instant messaging

0.1% use twitter

51.0% have a profile on a social network

21.3% are on Facebook

Mobile

13.0% own a mobile gaming console

4.0% connect to internet with a mobile phone

Love

31.9% have searched for a partner online

14.3% have met their current partner online

More stats

General statistics

70.1% send email

32.9% have not bought anything online ever

25.2% read news online

0.31% buy online once / twice a week

Communication

15.6% use printed phone directories at least 1 a month

15.0% dispose their old mobile phones in an environmentally responible manner

12.6% have no mobile phone

10.7% use VoIP at least once a week

0.88% pay more than 100 CHF a month for their mobile usage

0.75% never text messages

0.60% have an iPhone

Entertainment

82.2% have a photo camera

63.2% have a digital camera

34.0% have an mp3-player

33.8% have an analogue camera

24.4% have a film camera

0.94% make their buy decision on electronic devices based on their children’s decision

0.60% listen to music on their mobile phone daily

Websites / Applications

44.9% google

12.6% search with search.ch

0.1% use twitter

Internet connection

83.3% have an internet access at home

79.7% use the internet

60.3% use the internet daily

40.4% have wi-fi infrastructure at home

33.5% have a broadband internet-access

Media

71.1% read newspapers

10.0% watch tv for at least 3 hours daily

Source: Sonntagszeitung 20.09.2009

The Awards Night will be held on July 9th in London. 400 start-ups from Europe and EMEA were voted on by users and 19 experts. Among the 400 entrants, there were several Swiss startups, namely Amazee, Doodle, NewsCred, RouteRank, Poken, Wuala, Zattoo and Kooaba as well as the Swiss Venture Fund Index Ventures and three start-ups with Swiss co-founders, precisely Amiando, Busuu, Kyte.

I was very happy to see now some many of these companies still in the running after the vote. They are represented in 6 out of 14 categories. Being among the top five and therefore nominated for the Europas is a fantastic accomplishment. Congratulations!

Here are the nominees:

Nominated for Best Application or Service

Nominated for Best Bootstrapped Startup

Nominated for Best Social Innovation

Nominated for Best Cleantech / Environmental Startup

Website: www.routerank.com

Nominated for Best European / Real World Gadget

Nominated for Best Investor

from Lift Conference on Vimeo.

This was the Keynote speech at Lift France 09 by Gunter Pauli. The title of his speech was “Changing the Planet”. He’s some inspiring thoughts about entrepreneurship, sustainability, and market insufficiencies.

Here some on-the-go statements I really liked!

If you give a man a fish, you will feed him for a day; if you teach him how to fish, he will overfish.

A business man, who pollutes the environment and claims afterwards that he will pollute less, is given an award. There is a double-morale in business.

Biodegradable soap was not sustanable because it fostered the destruction of the rainforest; collateral damage is always tolerated in business; back to the need for ethics.

Every natural system works with what is locally available.

Nature would teach an MBA under the premise: “invest less to gain more” or “substitute something with nothing”; improve higher material efficiency to do more with less; we should stop accepting inefficiencies.

Nature makes polymeres by aminoacids. The bees, the ants, the spiders, they know how to do that. They’ve been doing it for about 70-80 million years. They have a little bit of experience. We forget that we are a recent arrival on Earth. We still havent figured out well how to do it. That’s why we still make a lot of mistakes.

Does someone know the following people personally? This my personal wish list of people, who I would like to meet once in my lifetime. I know, I know, I am dreaming. Since these meetings are unlikely to happen, I also present you some questions, I would like to ask them.

On Public Relations

“Sir Richard Branson, on the latest picture of you I’ve seen you wakeboarding with a naked model on your back.  Have you always followed the advice of PR people or did they adopt your style? When did someone recommend for the first time that you should change your company name? To what extend should someone listen to PR people?”

On Governmental Policies

“Mr Vijay Mallya, your airline is still restricted to the domestic market, but you must order planes long ahead of time. I guess the ordered A380 are not to fly from Mumbai to Delhi. You’ve created a prestigious airline in India, elected to be one of the 6 best airlines in the world. Can the Indian government deny you international expansion at all? What would you do, if they did?”

On Global Expansion

“Sir Li Ka-Shing, Hong Kong has been exposed to the global economy for much longer than most countries. At what point of your career did you start to think globally? If you have thought in a global context right from the start, how did you focus on domestic business without losing the global context?”

On Economic Downturns

“Mr Stelios Haji-Ioannou, flying on an airplane was a luxurious good decades ago. Nowadays competition is mainly played out by price (with some exceptions) and at very small margins. How do you strategically prepare for the next economic downturn, which will arrive around 2014?”

On Sleepless Nights

“William Henry Gates III, working for The Bill and Melinda Gates Foundation, I suppose you are as busy as you were at Microsoft. Do you wake up happier in the morning or do you have sleepless night due to the pain and poverty you now see every day?”

On Family Businesses

Mr Lakshmi Mittal, at which point of your long career did your family business turn into a global company? Was it the right decision to own your own steel company before returning to your family’s business?

On Being the Backbone

Miroslava Vavrinec-Federer, you’ve been handling the business related issues for Roger for several years and his success on court has turned into a large business with many counterparts. When you decided to organize Roger’s business off court, what were your major reasons? Giving Roger the time to focus on the game? Not giving away control to an external management? Or any other? How do you feel about your decision? What are your reasons now?

On Secrets

Dietrich Mateschitz, when I drink RedBull in South-East Asia, I usually try the original recipe Krating Daeng. I prefer RedBull, though. If your PR people wouldn’t be listening: which factor was the most important for RedBull’s success? Changes in the formula, rumours about health issues, great marketing, or crazy people jumping down hills with your logo on their back? Supposing you will say ‘a combination of all’, do you think Krating Daeng would still be sold in SEA only, if you didn’t buy the international licensing rights?

On life

Ingvar Kamprad, reading your biography, I learn that you’ve been diligent and cost-conscious; everyday you were the first person in the office. Being a billionaire, you still live a normal life in Switzerland. You own a small house and an old car. Will you leave it at changing the furniture industry or also change the world with your Stichting INGKA Foundation? What are you going to do with all this money? Are you a modern Robin Hood?

And so forth…

• Muhammad Yunus – on emerging countries
  
• Kofi Annan – on friendship
  
• Al Gore – on the environment
  
• Thomas L. Friedman – on world economy
  
• Jeremy Rifkin – on renewable energies
  
• Samih Sawiris – on tourism and the rich
  
• Hans Küng – on world religions
• Ananda Krishnan – on trade
• Robert Kuok – on Asia
• Mikhail Fridman – on the energy business
• Warren Buffet – on emerging countries
  
• Stephen Hawking – on the universe

Clear and simple

One of the most difficult tasks is to formulate YOUR MESSAGE. It must be clear. It must be simple. I’m not the founder of hyzloo. Still, it took me also a lot of time to find the right words for our business too. I experienced the above-mentioned situation many times. No matter what you do, no matter how simple your business is, you need to re-think your message again and again.

Business angels and investors are bright people. So are other entrepreneurs and potential clients you meet. This is not about intelligence, this is about memory and attention. You have more or less 5 seconds to convince others. That’s it. Our brain efficiently selects and stores information that seems to be necessary to survive. How many business ideas would you remember after 20 presentations? Right, the one you understood right away.

What about your brand? Become a Master.

If your message is clear and simple, it is easy for every one’s memory to link your message with your company name. It might be better NOT to name your company hyzloo (except you’re a web 5.0 rocket-science algorith venture, whose product no one would understand anyway). No seriously, the best case is, if people know what you do by reading your company name. At least, it should be easy for each one’s memory to link your message with the name of the company.

Do a self check. What belt have you mastered with your message?

White Belt: People are interested in what you say.

Yellow Belt: People want to know more about it.

Orange Belt: Your message is short and easy to understand.

Green Belt: Your company name tells people exactly what you do.

Blue Belt: Two months later, people still remember.

Red Belt: People love your product and come back again.

Brown Belt: People recommend it to others – and it’s easy to explain.

Black Belt: Everytime they could need your product, they have you top of mind.

Most probably you don’t know the following brands. In my opinion, they are masters:

Supertext - we write, edit, and revise your text

Eat – order food online

Routerank – the fastes and cheapest way from A to B

What about famous brands?

The masters:

Facebook, iPhone, Salesforce

Facebook, Apple and Salesforce have mastered the art of transposition. Their brand / product name IS the message. For example the iPhone. No explanation needed. “Wow, a Phone by Apple. I want this.”

Brand names that need some explanation:

Wikipedia, Twitter, Digg, Flickr

Some brands like Wikipedia, Twitter and Digg have a catchy name.  They describe their business model and that makes it easy to remember – be it fast encyclopedical information, be it tweats from the roofs, or be it digged out articles from the web-swamp.

A: “Flickr? What do you do again?”

B : “We store those photos online that you would like to share with others.”

A: “Ah, thanks.”

Brand names that really needed explanation:

Craigslist, Hulu

It’s easy to critize branding, I know. I wanted to show that there are many other reasons beside branding that influence your success. All famous brands above have done well in telling their message. Flickr is easy to understand and has a useful interface. Craigslist is simple at its best and has be spread by the word-of-mouth. Hulu offers famous series for free … and on-demand … and its legal. How nice! An easy message.

Lesson learned from the brands above? Your brand name is not crucial. Talking to investors, customers, and media, be sure your telling a clear and simple message. The easier it is for somebody else to understand your message, the more likely they will tell other people – especially the media .

If you’re asking these questions as a father-to-be, I suppose it’s too late to pull back. As an entrepreneur-to-be your live is still a bit more maneuverable. Last Friday, I had the pleasure to speak in front of a group of exchange students about entrepreneurship and our company Cassiber. Nextech Venture, a venture fund in early-stage healthcare, and Télésonique, a Swiss telecommunication operator, presented as well. During the Q&A sessions and the subsequent panel discussion, the students’ questions remembered me of the time when we started.

I’ve put together a list of useful links and advices you might find interesting.

Let me know, if you want to read more about a specific point:

When is the right time to start?

Sometimes it’s just time to decide: “yes, we’ll do it.” However, you should be very sure of what you do before you quit your job or invest any money. My advice is: try to find a way to have a second income at the beginning. This way, you’ll have the possibility to think over your idea again and again. Talk to potential customers. Program a mock-up and organize some product testing. Work this way as long as possible. This way you’ll be asking yourself dozens of questions all day and work all night. Eventually you’ll know two things: am I made for entrepreneurship? Will they like my product (and pay for it)?

Do I really need to write a business plan?

Hell yeah! This way you’ll have to bring your thoughts down to paper. Don’t write more than 20 pages. The less pages you need to describe your business in details, the better. In addition to that, a business plan helps you to realign your short-term actions wiith your long-term strategy.

How can I find funding?

Firstly, I would talk to your friends and tell them about your idea. I guess, they will challenge it again (which is not bad). Afterwards you should ask them if they know an investor. This way, I am sure, you’ll get introduced with some businessmen who will listen to your elevator pitch. You won’t be successful the first time. But the more you pitch the better you get. Start reasearching  professional investors and contact them. You’ll most probably have to hand in a powerpoint presentation with a few slides. If you get invited, they’re interested in what you’re planning to do. So be passionate, know your figures, know your estimations and assumptions. Good luck!

How much money will I need to run my business?

There are several ways without spending too much on marketing your product. Try to spend your money wisely until you get the first revenues in. Think about it: the less money you spend and bring your product to market, the less money you will need in total (and the less shares you need to give away at a first instance). You don’t need to go global within the first months . As soon as you proof that your product is a bestseller, you’ll find enough money to expand your business for sure. Until then, keep it simple and cost-effective.

You’re ready? Hesitating?

It’s like becoming a parent: there are a lot of books you can read. You’ll talk alot to your (business) partner about it. Everybody around you gets excited. You’ll love to buy the (un)necessary stuff to start off. You can try to be as well-prepared as possible, but eventually you’ll have to give it a try.

Now, why don’t you start with this great speech of Guy Kawasaki. He’s talking about the core thoughts you should go through yourseld before starting a venture:

Some good articles:

- When is the right time to start a business?

- Quitting your job for a start-up?

And two must-reads by Guy Kawasaki:

success = product x marketing

There are three forces, that influence a business idea:

Market: who will eventually buy your product and generate revenue? Why should they? What is their additional benefit, if they use your product (and not the competitors’)? Ask yourself: what are their needs?

Technology: this is the way you’re solving a problem or how you’re creating a value. How much does this solution fulfill their needs?  The amount is their benefit. Now, is your idea really adding a benefit to your customers?

Strategy: how will you get into the market? Is your solution simple enough that customers will buy/use it immediately after they’ve seen it? Maybe you’re stimulating a need that the customer doesn’t know yet. You would need to give it away for free to have a focus group, who will spread the word to others. Or you might need to evangelize and tell everyone about your great new prototype and convince them of its benefits. There are dozens of ways to get into the market.

Failing to handle one of these forces will cause you to fail. Strategy is important for your business to survive. The other two are crucial for your succes: “success = product x marketing”. This means, you’ll be better off, if you have a good product and if you talk about it! Microsoft talks a lot about Vista, but the product is not that convincing (my view). Roger Federer is a great player, but seldom talks about it. Both Microsoft and Federer are only successful, because they are so briliant with the one multiplier that they bail-out the other. Are you as brilliant as Roger?

If you really create something meaningful, people will like it. They will talk about it. They’ll even do the marketing for you. But you must talk about it too! If you put your energy into marketing as well, you’ll accelerate the process. So tell me, what do you do?

“Create meaning”

Guy Kawasaki puts it right in his speech about “The Art of the Start”:

Now as a venture capitalist I can tell you, that we meet many times the entrepreneurs and they come in an think they are saying, what we want to hear, which is we want to make money. We believe, that with our P2P optimized Google adwords brand new model collecting millions of eyeballs, we can quickly flip this company and sell it to Google or Yahoo or Apple or Microsoft. If not, if they don’t take us off the market in 18 months, we will go public.

When we hear that, it’s so depressing, because I figured out that companies that are successful, they start out to make meaning, not to make money. [...]

If you make meaning, you will make money.

Getting back to my question at the beginning of this post, I want to ask you again. Which reaction to an idea is more promising:

• I think if we do it this way, it might add additional benefit to our potential customers.
• Heureka! Halleluia! Wow, why has nobody else thought of this before?

The first is looking for money. The second creates meaning (at least for you and that’s the start). If your customers also show the same reaction. Go for it and enjoy!

Two examples:

In my opinion, one of the best examples for this is Doodle:

It’s simple and easy scheduling: Doodle makes it easy to find a date and time for a group event. The Swiss start-up was created to solve the founder’s own need to schedule events with his friends. He set up such a neat and user-friendly solution that even my dad uses day by day.

Another start-up that creates meaning is smartfish. Smartfish is a new concept of airplane design to make flying safer and less fuel-consuming. The venture hasn’t taken off yet. Maybe the industry prevents this start-up from getting into the market. I don’t know. However, in times of global warming, I think it’s meaningful to look for more ecological ways to fly: