Wednesday, February 28, 2007

First meeting of OpenCoffee Club

It's happening tomorrow in London from 10-12 in Starbucks inside Esprit, which is at 178-182 Regent St.

Thanks to everyone for your great comments and positive feedback so far.

There seems to be an interesting crowd coming along tomorrow from VCs & investors like Nic (Esprit Capital - not fashion), Avid (Accel), Robin (TAG) to entrepreneurs like Michael (Firebox, MindCandy), Phil (Crowdstorm, Kelkoo UK), Judith (Second Chance Tuesday), Richard & Damon (Zebtab), James (Studentbeans), Joel (Messagr) and the recently funded Walid (TrustedPlaces) as well as Sam Sethi, folks from Skype and top-notch developers.

We don't really know what to expect, but it's exciting that people are coming along and we'll have a chance to meet and chat about whatever is on people's minds.

Separately we have OpenCoffee Clubs popping up in Ireland and Croatia - plus I'm really excited to be working with Brad Feld (Mobius) who will be hosting a club in Colorado and helping me spread the word among the VC blogging community on his Feedburner network.

We'll be pulling together a wiki in the coming weeks - and already some great people have registered ( and, kindly offering to donate time and energy into helping to foster the community. I've registered and .org - so anyone who's interested in helping out and pulling OpenCoffee resources together, please let me know.

Looking forward to seeing people tomorrow and helping to grow the OpenCoffee movement.

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Saturday, February 24, 2007

Ben's presentation on VC Funding at FOWA

Ryan Carson and many others were real fans of Ben's presentation on VC funding at FOWA - even one of the Slideshare founders loved it :)

So thanks to Ben, here it is:

There's no doubt the process of getting funding (from anyone, let alone VCs) can be pretty complicated and nontransparent, but this is a great presentation which really cuts to the chase and explains the basics.

Fred Destin and Nic Brisbourne in the UK and Brad Feld, David Hornick and Fred Wilson in the US also do a great job on their blogs of making VC more accessible. There is also a new resource worth checking out calling Startupping.

Having been an entrepreneur who raised money from VCs at Firefly and Lovefilm and an angel investor backing entrepreneurs (Spotrunner, Daylife, Moo, Mindcandy etc) in both the US and Europe and now that I'm working with a VC firm, I completely agree with Ben's view that VC funding may not right for every business but where it makes sense it can make a big difference.

If you have any questions on funding, please post comments and if I know I'll answer and if not I'll try get you answers. If you're an entrepreneur in London come along to an OpenCoffee club or start one locally and try persuade your local VCs to come along and see what they're missing :)

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Friday, February 23, 2007

OpenCoffee Club

What is it?
This is an attempt to establish recognized, open and regular meeting places where entrepreneurs can meet with investors (and anyone else who fancies coming along) in a totally informal setting.

The key is a regular place and a regular time - it's not important who comes along, some days it might be no one - just that people know if they want to meet, this is the time and this is the place.

We want to create some density for people -- a few places where people know they can meet or bump into others.

Something that can be replicated anywhere else at little or no cost -- though we do want to build a list of all the places (wiki to come) where entrepreneurs can meet and know people might be around for them to talk with.

Where and when is it?
The first one will be held every Thursday morning from 10-12 starting from March 1, 2007.

I'll be there every week so if you want to drop by and chat - or just share the wifi - I'd love to see you.

I will be at the Starbucks inside Espirit which is at 178-182 Regent Street.

Who's invited?

Anyone. This is not about meeting me (or anyone else in particular), hopefully it's about giving people focussed times and places where they can hang out and connect with others -- not locked inside an office or at a private members club.

Well, one of the things I've heard repeatedly over the last few weeks is:
  1. investors are inaccessible
  2. entrepreneurs need regular physical space to meet, not just each other but also also network with investors and corporates
I totally agree with point 1-- we all get an enormous amount from informal contact.

What I don't agree with is the idea that the space should be permanent, owned or closed (private office or members club) -- I should be able to go to cities all over the world and know which places (and at what times) I'm most likely to meet other entrepreneurs.

There are thousands of public places with cheap wifi (check out Skype Zones or FON).

What can you do?
If you're an investor or entrepreneur, start and promote your own OpenCoffee Club location -- please let me know so we can maintain a list (again: wiki will follow soon).

If you're in London on a Thursday morning come along and hang out from 10-12 to Starbucks on Regent St.

Hope to see some of you next week, feel free to e-mail me [saul at klein dot name] or a leave comment if you fancy coming along.

Thanks are due...
To Ryan Carson and the team, who put on FOWA in London this week- they are really trying to inspire the startup developer culture and did a great job with their event bringing an excellent group of people together from across Europe. They even tempted some stars from the over the ocean to join us like Bradley Horowitz, Tara Hunt (who really opened my eyes to the ideas behind BarCamp) and Kevin Rose.

To Sam Sethi and Mike Butcher, who are doing a phenomenal job getting people in London and the UK talking about startups and at who's breakfast this morning this idea germinated. Robert Loch is also really bringing people in London together with his Internet People dinners.

To the very excellent Michael Arrington who introduced me to Reshma Sohoni at 3i who I know is going to start the second OpenCoffee Club on her side of London.

To the ever inspirational Scott Heiferman, one of the smartest brains on the web and the man behind - as well as game changing businesses like itraffic and fotolog.

To my very good friend Danny, who is letting me out the Starbucks is hidden upstairs inside Espirit, it pretty big, almost unused and it's been a secret meeting place for him for way too long :)

To my wife - our family's OpenCoffee Club pioneer.

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Wednesday, February 21, 2007

edgeio lets anyone be craigslist

There's a good post from Dan Farber pointing out the disruptive potential behind edgeio's marketplace platform which has just gone into beta.

Keith and his team at edgeio (disclosure: I am a small investor through TAG) are really doing some creative things with listings and changing the way publishers of all sizes can generate revenue from classified advertising online.

For more on the product, see an interview with product manager John Dowd on Scoble's Podshow.

edgeio is really challenging the traditional destination model for listings business and I think offering services to publishers has real promise. Publishers, both big and small are looking for support in helping generate more traffic, inventory and revenue.

I still feel that LinkExchange was one of the great pioneer's in this space, in fact it looks the model is re-emerging in South East Asia.

Google's AdSense clearly put publisher services on the map and doing $1.2bn in Q4 '06 ad revenue is certainly not shabby in terms of showing the potential for this space - AdSense already accounts fro 37% of Google's revenue.

Now there is a whole new generation of companies offering amazing services to publishers, some of the more interesting at the moment include: Daylife (contextual inventory, disclosure: I'm also an invetsor through TAG), edgeio (classifieds) and AdBrite (text ads). Of course PayPal and Google Checkout are extending the offer from to commerce as well - more on that later.

Watch this space, as the web disaggregates more and more networks (or platforms) which serve the increasingly interesting long-tail as well as the Alexa Top 1-10k will become more and more important.

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Monday, February 19, 2007

Processing feedback on Y Europe

Thanks to everyone so far who has commented on last week's post on why Europe can seed great startups in the coming years.

There has been a really encouraging response so far: not only in the really thoughtful comments people have left but also in the e-mails that I've been sent.

I'm delighted that people feel this is an issue we need to be addressing and are keen to participate.

As suspected a few issues have kept on surfacing:
  • crisis of confidence - fear of taking risks, fear of failure
  • inferiority complex - the Silicon Valley shadow looms large and long
  • lack of dense networks - for hiring, funding or just bouncing around ideas
A few things I want to be clear on so far:
  • we don't have a name yet for what we'll be doing (thanks to Phil and Sam for suggestions, keep them coming)
  • we're not planning an incubator (i'm really not convinced that's the right model) -- right now we're just starting a conversation and finding out what people need and want to help them succeed
  • we do want to gather people together in the summer to get the ball rolling
There has been a lot of quality thinking on this issue for some time now (see a great post from last year by Gabor) and what's clear is that there is no silver bullet.

Let me repeat, I'm still not sure the YCombinator model is right for where we are in Europe - it might be part of the solution. But now we're talking, I know we'll find the right approach (maybe approaches) that will work for us.

I still think better education, awareness and transparency of information on how companies are built, funded and exited is one of the biggest issues. If you want to find out more about funding and you're at FOWA, you should stop by and hear Ben Holmes' presentation on Tuesday.

We simply do not have enough experience in Europe yet of building great early stage businesses - but it's happening and there are more and more knowledgeable people around (entrepreneurs, investors, service providers etc) to ask questions and find answers.

So let's keep asking questions -- or start asking them at least -- and please keep the comments coming.

If you want to discuss this in person, I'll be at FOWA tomorrow and speaking on a panel at lunchtime on Wednesday wiht my friends Richard from Moo and Tariq from Netvibes. Looking forward to seeing you there or online.

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Saturday, February 17, 2007

Bio [June 09 semi-update]


Now based in London, Saul is a Partner at Index Ventures. He is also a Founding Partner of The Accelerator Group (TAG), as well as the founder of OpenCoffee Club and Seedcamp.

Saul joined Index as a Partner in February 2007, having worked with the Index team as a founder (Video Island), an exec (Skype) and as a co-investor (Moo, Mind Candy,, Stardoll, Netlog). He now serves on the boards of MyHeritage, Glassesdirect, Songkick, Alertme and Lovefilm.

Until September 2007 he remained an advisor to Skype, where he had served as a member of the executive team from 2005 through the acqusition by eBay, running global marketing and eCommerce.

TAG is an active seed investor, which Saul runs with Robin, his father.

TAG works closely with top-tier investment partners across Europe and in the US to provide seed stage entrepreneurs with the active support, critical connections and access to capital they need to build ambitious global digital businesses. Some of TAG's investments include:, Daylife, Moo, Wonga, Stardoll, Imagini, Zoopla, Fizzback, Dopplr, Fotonauts, OpenX, Slideshare, Zemanta, Twitterfeed and Tweetdeck.

He also serves on the board of directors of, a non-profit based in Washington DC and South Africa focused on shaping actionable global policy to drive the adoption of ICT in developing countries.

Saul has recently been honoured by the World Technology Network 2006 award for Marketing Communications, he also has written a regular column on New Media for The Guardian.

Before joining Skype, Saul was the Co-Founder & CEO of Lovefilm International (previously Video Island)

Lovefilm International (previously Video Island) manages Europe's largest online DVD rental services with over 1m subscribers in the UK, Sweden, Norway, Denmark and Germany. Services are delivered directly through it's own brand Lovefilm as well as through a fully integrated platform for leading national brands such as Tesco and easyGroup.

Since its commercial launch in September 2003, Video Island has raised nearly $30m from top-tier venture capital firms Index Ventures, Balderton Capital and DFJ Esprit.

Prior to establishing TAG, Saul was Group Program Manager for Web Platform Services at Microsoft.

At Microsoft, Saul managed the strategy, service definition and roll-out for the Microsoft Passport which now has over 300m subscribers and is at the centre of their .net strategy, as well as driving the $250m acquisition of Link Exchange to accelerate Microsoft's entry into the small business web services market.

In addition, working with the COO, he was also responsible for leading Microsoft's company-wide privacy initiatives, including developing the role of Chief Privacy Officer. Saul managed Microsoft’s relationships with TrustE, Better Business Bureau, the US Federal Trade Commission, US Commerce Department and Online Privacy Alliance, as well as the leading the development of the Microsoft Privacy Wizard for small businesses and Microsoft's relationship with the World Wide Web Consortium (W3C) on the implementation of the ground-breaking Platform for Privacy Preferences (P3P) technology standard. He is a founding member of TrustE and served on their Board of Directors.

From February 1996 to their acquisition by Microsoft in April 1998, Saul was SVP, Brand & Strategy at Firefly Network.

At Firefly, Saul had overall responsibility for managing marketing, business development and communications, growing Firefly into one of the Web's most recognized brands with over 3m members and 50 customers including Yahoo!, Barnes & Noble, Merrill Lynch, Ziff-Davis, Reuters and Launch.

Saul also oversaw the successful market release of three versions of Firefly’s award-winning advanced personalization software, as well leading Firefly's pioneering P3P and ICE Internet standards initiatives with Microsoft, Netscape, Oracle, Procter & Gamble and Mastercard. Advertising Age recognized him in 1996 as one of their Top 25 Digital Marketers.

Before joining Firefly, Saul was Director of Digital Communications at Ogilvy & Mather Worldwide.

At Ogilvy & Mather, working closely with the CEO, Mindshare, the Chairman, Ogilvy EMEA and the CFO at Ogilvy, Saul established and managed their digital media and e-branding business, working to develop award-winning integrated branding, marketing & media strategies for Guinness, Ford, Unilever, Argos and IBM, as well as launching the UK’s first secure e-commerce platform in partnership with Barclays Bank, and managing Ogilvy & Mather's relationships with the MIT Media Lab, and ICM.

From 1992 to 1994, Saul was at The Telegraph Group in London, where he was responsible for developing the group's electronic publishing strategy and co-founding The Electronic Telegraph, the world's first daily newspaper on the Internet as well as founding Fantasy Football, which added over 1m new readers to the marketing database in its first year of operation and was awarded the Grand Prix of Grand Prix for the best newspaper promotion of the last 30 years.

Selected Articles & Publications:

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Friday, February 16, 2007

Y Europe can seed growth of its new stars

Europe has so far under-delivered in terms of globally successful technology startups.

But we're starting to turn a corner in Europe as we start to leverage some of our emerging assets. We've always had great talent (especially in academia & research institutions), but now we also successful entrepreneurial role models, sophisticated early-stage financing and the ability to start and test businesses at low-cost as well.

We should stop worrying about why we're not Silicon Valley and start thinking about what we can do with the great advantages we have. So this is really a call to arms: for first-time European entrepreneurs to let us know what they need to improve their chances of global success and for serial entrepreneurs and investors to figure out how we can better support the best ideas and talent.

We have a real chance to improve how we find, develop and accelerate the growth of our best European ideas - we need to work together to figure it out.

London's emerging young entrepreneurial scene
This issue has really come into focus for me as I've started to spend time with some of the rare people who are coming straight out of university to start Internet businesses. Some are staying in the UK and some have headed off to Silicon Valley - but I've been really impressed by the appetite for building startups by this group drawn primarily from Oxford and Imperial universities.

For the London startup community, Imperial and its talent pool must be one of our best hidden secrets. It's rated 1st in Europe and 4th in the world for technology by the Times Higher Education Supplement. Imperial's Computer Science department has around 600 undergrads and 400 PhDs, so it's great to see some of these people begin to start companies. In fact the student body has created Imperial Entrepreneurs (disclosure: I'm one of the founding patrons) to help potential student entrepreneurs reach out to London's established entrepreneurial and venture community to kick start opportunities.

How they've been doing it in the New World
Here in the old world, this is new news but in the US of course this is an old story. Schools like Stanford, MIT and Berkeley have long been known for producing great teams who come straight out of school and start significant businesses.

In fact in the last five years, this phenomenon has spread beyond this technical trio to encompass even liberal arts schools like Harvard (Facebook) and the amazing alumni like Scott Banister and Max Levchin of University of Illinois at Urbana-Champaign who have been behind great businesses in the last 10 years (LinkExchange, Ironport, Overture, PayPal and Slide).

Stanford with Google and Yahoo! to its name is the benchmark by which all other schools are measured. At Stanford, talented students not only have a faculty that encourages innovation, but of course they have Sand Hill Rd (and developed angel networks) on their doorstep for funding plus an MBA program and hundreds of technology businesses in the area to draw from for hiring.

These networks become self-perpetuating and are replicate anywhere. Silicon Valley is unlikely to ever be equaled as a magnet for innovation unless something very fundamental changes, but there is no reason why London in particular and Europe in general can't start to really compete in the creation of global success stories.

So how can Europe start to compete?
  1. Availability of Talent

    Europe has incredible depth and breadth of talent. Skype is perhaps one of Europe's first global Internet success stories and it has exposed me to some of the most amazing developers and product people working in technology today -- these are people who are from Estonia, Denmark, Russia and Sweden.

    We think of these markets (like India) as being a source of cheap talent, but this misses the point entirely - this talent is world-class. Check out the stats on Topcoder and you'll see that Russia, Poland not just holding their own with the US but ahead in competitions - and Ukraine and Slovakia not far behind. Given the web was developed at CERN and some of the great successes of the open source market like Linux and mySQL were both born in Europe we shouldn't be surprised.

    Somehow we have persuaded ourselves in Europe that the US has all the talent, but if you look at the chart from Eurostat below you'll see that in 10 European countries including Lithuania, Ireland, Belgium and Switzerland have more science & technology graduates per head of population than in the US.

    Now of course you need more than just great engineers, mathematicians or biologists to make great disruptive companies but this mix and diversity of talent is actually something where London and many other major European cities are blessed. There are plenty of experienced commercial marketers, product managers and financial types around to help build out a business once it starts to take hold.

    Critically, we still don't have a deep pool of experienced startup talent in Europe, but one positive from the bubble of the late 90s is that it bloodied a generation of employees who know what it's like to ride the roller coaster of success and failure in a startup. Of course Silicon Valley and Boston has several generations of this kind of employee but tasting and learning from startup failure (as well as success) is something which Europe needs more time and experience to compete.

    Many would argue Europe also needs a major change of attitude (and possibly legislation) here. Failure or bankruptcy is not culturally accepted in Europe, but if we want to encourage the abundance of talent to start and join early-stage companies trying to change the world, we need to accept there will be many many more flops than hits.

    If we want European talent to stop feeling disheartened and start saying "I don't have to go to Silicon Valley to do this", we need to support failure and encourage people to take the risks you need to think and succeed big.

  2. Sophisticated Funding

    A major part of supporting success or failure is funding. Library House have just conducted some very interesting research which breaks down venture capital investment into geographic clusters which takes an analysis of the US market beyond the national level. In this view, California and Boston are way ahead of the game but the UK is #3 worldwide in terms of investment.

    Funding is only one piece of the jigsaw. It's not just the access to capital, but it's access to investors who have ambitions to build big global businesses, not just local players.

    Ambitious entrepreneurs have been educated to believe that you need to have a US investor to build a global business, but there is certainly a much more developed and competitive market for backing European entrepreneurs today than there was even 5 years ago. When I started Video Island (now Lovefilm International) in 2002, there were very few Silicon Valley style, top-tier VCs ( Index and Benchmark) willing to back consumer Internet businesses but now there are several in the game (including Accel and Atlas). These established firms and very strong local players like Mangrove, Northzone (Scandinavia), Gemini (Israel), Wellington (Germany) and others, are all looking for and prepared to back teams that want to take on and change the world.

    There are also now a significant network of serial seed-investors and entrepreneurs - who are lending both their capital and experience to build and back European start-ups. These include Niklas Zennstrom (FON), Martin Varvasky (Netvibes), Stefan Glanzer (, Pierre Chappaz (Netvibes, Wikio), the Samwers (Hitflip, Wunderloop), Simon Murdoch (Lovefilm, Viagogo), Klaus Hommels (Stardoll, OpenBC) and Brent Hoberman (WAYN, Moveme). At TAG alone, we have invested in around 10 European start-ups in the last four years.

    There has been quite an active discussion recently about the funding gap for European start-ups, but in funding terms, I don't think there has been a better time to get a start-up funded in Europe. Index has just closed a €350m fund.

  3. Role Models & Ecosystem

    The same can be said for the availability of both companies and people are can provide role models to first time entrepreneurs about what can be done.

    Larry & Sergey at Google and Jerry & David at Yahoo! needed there to have been Jobs & Wozniak at Apple or Gates & Allen at Microsoft. In Europe, we are only just beginning to recognize that if Niklas & Janus can do it with Skype, then why not others?

    Why not indeed. There is nowhere near as many examples of people creating global technology businesses in Europe as in the US, but you just need a few examples. Skype was a watershed moment in how European entrepreneurs can think about their potential, both in terms of exit and global footprint (only around 20% of the business comes from the US).

    We now have several businesses born in Europe that have the potential to make a global impact and they are spread across the Continent: including (London), Netvibes (Paris), Habbo (Helsinki), FON (Madrid), Skype (Tallin & London) and Rebtel & Stardoll (Stockholm). We also have a generation of second and third time entrepreneurs who are not only helping to seed the next generation but are also now focussed on building their own new businesses.

    There is also now a growing ecosystem of support services -- lawyers, communication agencies and recruiters -- that have experience working with startups and helping them scale.

  4. Globalization

    Perhaps one of the key factors that is swinging into Europe's favour is the changing dynamics of the Internet and globalization. Ten years ago, in fact even five, you could not consider building a global technology business without starting in the US but that is not true today.

    The Internet outside the US is bigger than the inside and that trend is only accelerating. Google, eBay and Yahoo all know this and the fact that YouTube is already over 65% international in less than two years from launch shows that the US in no longer an island.

    Against many important measures -- broadband penetration, % online advertising spend and mobile phone adoption -- the US is no longer the world's most important market. This is not for one minute to say that the US shouldn't part a major part of every ambitious startup's plans but if for example you want to be in the market with the largest share of online advertising as part of the marketing mix, you want to be in the UK.

    Skype again is a great case study of a business that did well to look East before it looked West. Today Asia is a major part of its community and several developing country markets like Poland, Brazil and Turkey are very significant as well. European companies are ideally placed to take advantages of these globalizing trends and not just because of their location.

    Location is important, but in this case, an attitude which is attuned to being open to other cultures is actually more important. No European market is big enough to sustain a single-market player, so no ambitious European technology business thinks either single geography or language. Where Netflix could create a major player by thinking US only, that is not an option for Lovefilm. If you start your business in Tel Aviv, Stockholm or Tallin you can bet you're thinking from day 1 about how you can take your products to a global market - if you start your business in Palo Alto, international is probably an after thought.

  5. Start Up Costs

    Open source technologies have evolved to a level of maturity and popularity that if you are a talented developer with a great idea for an Internet application your only really significant costs are your time. Amazon's web services have even started to push bandwidth and storage into an area of affordability.

    The barriers are now incredibly low for creating software applications which you can get out onto the Web, expose to a global audience, get feedback and iterate.

    Starting small doesn't mean that you're not going to need funding to hire and scale up if you have a real business to pursue, but what it does mean is that you can find out very quickly and cheaply if your idea has traction. There is a big difference between an idea (which is easy to discard) and a business that has taken on people, costs and commitments (which is very hard to discard both rationally and emotionally).

    We have a great opportunity today to test more ideas, which we can do very quickly and cheaply, and start businesses which have a better chance of succeeding.
So what can we do about it?

Well, not surprisingly there are already some models looking to help encourage young talent to start businesses in the US like YCombinator startup schools in Boston & San Francisco and the new Techstar summer program in Boulder.

Both these models are similar in terms of their approach:
  • invite smart first-time entrepreneurs to apply for an intensive course on developing their idea into a business
  • surround them with experienced entrepreneurs and investors who have been their before
  • invest small amounts of capital ($5-15K) to take small equity stakes (5-10%) in a limited number of the entrepreneurs
  • support these entrepreneurs for a limited period (say 3 months) on site in SF, Boston or Boulder
  • give the successful teams the chance to pitch to VCs and experienced investors
If you agree with some of the success factors above, there is a lot to like about these approaches: they are open to anyone, they give people access to experienced role models and an ecosystem of support from entrepreneurs and investors.

What I really like about YCombinator though is the focus they have on the developer, especially young developers. Paul Graham writes really eloquently about today's hackers being like the Renaissance artists of our generation. The democratization of the tools needed to create great software means that anyone with the talent and an idea can try to start a business. The same will become true for the creative arts and is to some extent already the case on YouTube and Amie Street but for now the focus should be on the hacker and the giving talented software developers the chance to turn their ideas into businesses.

I think Paul Graham has it right. Not every great hacker will be able to create a business, but today's world gives them a better than average chance and giving them access to the right support networks, advice and capital is the right way to do it.

The jury is still out in terms of the commercial payback of the YCombinator crop but I think regardless of how many businesses come out and get funded, acquired or become sustainable - the educational benefit that accrues to talent from the support they receive and the networks they form is the biggest payoff. It's basically a cheap and very compressed MBA, because anyone who has done a startup knows, you only learn by doing and making mistakes.

We can do this. We should take this model
(perhaps with Paul Graham to help!) and make it work for Europe -- I suspect it needs significant tweaking and I've seen some interesting riffs on the model starting to emerge, but it's really a service for the entrepreneurs - so you should let us know.

Seeding Europe's Potential

We compete with the rest of the world in being able to leverage open source and the growing ubiquity of the Internet.

But in Europe we now have some advantages of our own:
  • world-class talent within the EU and in our orbit including Israel, Russia and South Africa
  • proportionally more 20-29 year old science & technology graduates in 10 European countries than the US
  • available startup capital like never before and experienced investors keen to back daring ideas to create global businesses
  • a generation of experienced European entrepreneurs ready to offer a support network
  • successful role model companies in capitals across Europe
  • cultures that are attuned to thinking global and acting local
So what next? This summer we will aim to bring together some of Europe's best entrepreneurs and investors to start supporting and seeding talented developers who have ideas that they think they can turn into world beating businesses.

Right now, I've love your feedback.

Let me know;
  • what you think,
  • who you'd want to be involved,
  • how we should go about finding the right talent,
  • who should we be telling about it,
  • how should the model work best,
  • if your an entrepreneur what you would need,
You might feel it's a bit of a cop out having this be a conversation, rather than locked down and launched but I think that the conversation in Europe is maybe as important and getting a seed-camp off the ground.

(Note: thanks to everyone who gave great comments on this tirade and to Sam Sethi for a great title)

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Thursday, February 15, 2007

Joining Index Ventures

Today it was announced that I joined Index Ventures as a Venture Partner and even though it has been rumored otherwise, I'm still delighted to remain involved with Skype and PayPal doing some strategic projects.

I’m really excited to be working with Index - and not just because they've just announced a new €350m fund. I've known and respected Danny since Firefly, Netscape and Link Exchange, Microsoft days. Subsequently I've had the good fortune to work with the Index team as entrepreneur (Video Island), exec (Skype) and co-investor (Moo, Stardoll etc)

I'm also really excited to be working in Europe (see previous post).
European funds are finally being recognized as some of the top-rated globally - and Index is seen as one of the best. Europe is also finally developing the talent, role models and infrastructure to compete globally, in fact some of the most innovative entrepreneurs and ideas are coming out of Europe now, especially the Nordics and Eastern Europe.

A lot of people have asked me why I didn’t just stay an active angel when TAG has made over ten investments in early stage investments over the last few years - including Daylife, edgeio, Spotrunner and Stardoll. Angels play a vital role for many successful start ups but I can’t name one company that hit it big globally on angel money alone. Times are good now, but when the going gets tough, growing companies need experienced and connected partners to help navigate global competition.

If you’re thinking of starting a company or have an idea and don’t know where to start, please feel free to contact me [saul at indexventures dot com] or leave a comment on the blog.

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Tuesday, February 13, 2007

Reasons to be Cheerful

There's been a lot of interesting talk in the blogosphere about location and innovation the last few days.

Started by a NYT article, followed by Om (who is travelling in India, so clearly open to the world outside the Valley) and now carried forward by Read/Write Web.

Actually think Fred Wilson has the most straightforward take on it all.

There is no doubt as Fred said that Silicon Valley is the mother-of-all startup hubs and an important place to be seen and heard, but that doesn;t mean you have to start there. What's interesting today is not where you start, but where you end up -- and most successful start-ups end up connected to Silicon Valley in some way.

There are great arguments for Europe becoming a centre for innovation, some of which have been put forward in these pieces and some which have been countered in others.

I spoke to Kulver and his co-founder at Boso before they went to the States and I really think they had solid reasons for being excited to go. They seem to be getting some real benefits and he's right that Silicon Valley offers much better chances of just falling into things and running into people who can help a venture.

This is why it is so important to work with someone who can make these connections happen instantly because they understand what the business needs and know exactly who to connect entrepreneurs with. There are very few people who appreciate the need for this much less have the ability to do it.

If a talented entrepreneur works with the right kind of partners to help build a business based in Europe but focused on a global opportunity, the result can be very powerful - witness Skype, mySQL, Sulake, Netvibes and to name a few.

A really smart post points out though while Silicon Valley may ace everyone in commercializing innovation, the rest of the world is an amazing petri dish for discovering great ideas:

Mobility - Korea, Japan, Taiwan, Finland lead in devices and applications

Enterprise Software - lots of new thinking - "open source" oriented from Scandinaviaand some of the emerging E. European countries

Vertical BPO - lots of neat stuff going on in India - analytical, bio tech and number of financial services processes

Security technologies - Israel

Alternative Fuels - Brazil, China - necessity more than global opportunity has fueled a lot of research and innovation

Global Markets - while most of India and China's products are aimed at the west, and not really "innovation", many in those countries are looking at their own challenges - "bottom of pyramid" opportunities and those of fragmented, multi-ethnic markets. Those solutions will be just as attractive in the west.

Public Policy - It is always invigorating to visit Singapore and Dubai. These city states, disproportionate to their size, have a history of attracting innovative companies and experimenting with business practices and policy issues.
There's a lot more to be said on this topic -- in fact the its going on apace at Vecosys -- having seen innovation and startups up close both in Europe and the States, I'm looking forward to seeing the conversation evolve.

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Thursday, February 08, 2007 signs deal with Warner Music Group

Congrats to who just announced its first content agreement with a major label.

The deal will let's rapidly growing community have access to Warner's amazing roster of artists through their free streaming radio service and tee up a premium subscription radio service. is growing like crazy, with over 15m monthly active users now experiencing the joys of discovering new music through the recommendations of other community members. Making it easy for people to access major label content will only make the service more valuable to its users and easier for labels to promote both new and catalogue product to consumers - so great news for everyone.

This service is particularly close to my heart (and not just because I am a small investor) as I've been dabbling in the entertainment recommendations space for over ten years now.

First with Firefly, where we launched the web's first music recommendation service (later sold to Launch, now Yahoo Music) and then again with Video Island (now Lovefilm) where we applied similar principles to movie recommendations to build Europe's largest online DVD rental service.

There is no doubt that at Firefly we were way too early and the Internet was too immature a medium for the real power of recommendations to take off, but in the last ten years both Amazon and Netflix have done an amazing job popularizing collaborative filtering and making recommendations a central plank of consumer discovery.

Amazon has elevated the application of datamining to help consumers decide what products to buy to an art form. Netflix values the approach so much it's offered a $1m prize to anyone who can improve their approach to movie discovery.

More often than not the weapons of datamining have been wielded by companies on behalf of companies - they mined to see how to sell more. Companies in the future will put these weapons to work for consumers. is at one of the new businesses at the vanguard of taking discovery to the next level.

One thing which is particularly nice about their approach is the fact that through their scrobbling software (which attaches to your media player), they make it so easy for you to contribute to and benefit from the rest of the community.

We wrestled with the earliest applications of social information filtering at Firefly and one of the big challenges was always about how to best motivate explicit (ie. a rating) and weight implicit (ie. an observed behaviour) data. There is no doubt implicit data collection is much easier on the user, it takes no time, all you have to do is agree to be observed and feel comfortable that in return your information will get great value and your privacy will be protected. Nic Brisbourne has an interesting post on this subject. works because people trust the service to watch what they are listening to they get discover new things -- clearly this works beautifully with music, but there is no doubt with the emergence of other digitally based services we will see more and more of this paradigm. My old friend Seth Goldtsein, as usual, is really pushing the envelope here with his work on Attention Trust and Roots Market.
side note: another cool thing about is their integration with Skype. All the communications service (Skype, Google, AIM, Yahoo! and Messenger) are now opening up to 3rd parties here are going to be amazing opportunities to build great application on top of platforms which come with presence, contacts, voice, IM and video built in. What an amazing platform for new applications to be built around.
Like with, obviously this can work with people's explicit knowledge with video (think where Joost can go) and it is already working to some degree without people's knowledge in online advertising and the current vogue for behavioural targeting.

We are scratching the surface of how we will be able to leverage the computational power now available to us for the analysis of vast swathes of comples data to benefit consumers and help them improve their decisions. One of the best examples of a service helping people make better decisions through the application of hard core math and computation is Farecast -- delivering an amazingly valuable view of airfare information to help people decide when to buy tickets.

Congratulations to for showing the tip-of-the-iceberg to 15m people. I'm looking forward to seeing what's next.

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Monday, February 05, 2007

Supporting Grassroots Entrepreneurs

Kiva and the people behind it is one of those concepts that you have to give a standing ovation to. This is an amazing organization which is using the power of the web to match entrepreneurs in developing countries directly to micro-finance.

What a brilliant concept and such a vivid reminder that entrepreneurs come in all shapes and sizes.

Check it out and start funding some people across the world who are really getting their hands dirty.

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Sunday, February 04, 2007

Extate is quietly developing a great property service

There are a rash of new competitors in the UK property search space, looking to offer consumers a better experience than the existing portals like Rightmove.

The most interesting seems to be Extate, primarily becuase of the quality of the customer experience in terms of freshness, accuracy, navigability and product innovation - in addition to the standard Google Maps mashup, they also make great use of RSS, Skype integration and are smart enough in their crawling to derive useful semantics like tags (ie. garden, fireplace, etc) and price per sq ft.

Extate are also interesting because the team comes staright out of Imperial and it greats to see young entrepreneurs starting businesses in London straight out of college - it's about time :)

One good example of how their serach knocks the socks off the competition is their ability to allow you to search by street.

Click on the images below to try searching for "Englands Lane, first on Extate:

and on Rightmove - the incumbent 800 pound gorilla - nothing....

and on Nestoria - a new player in the UK, a copy and paste of Trulia in the US - nothing....

Extate has a long way to go in developing their business, but they have one thing really going for them right now -- a great product and a clar desire to innovate rather than copy and paste.

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Moo hooks up with Bebo

Moo is making great strides signing up some of the hottest brands on the web and really exciting people about their first product - MiniCards.

Bebo has just joined Flickr and Skype in offering Moo's MiniCards to help their customers take the online world offline. Watch out for more in the future, but for now, check out Bebo.

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Geni is really amazing

Ok, so once every few years a killer application comes along which makes you think within the first few minutes of using it - "why didn't I think of that?"

Although we've seen variations of this theme before with GenesReunited having some success in the UK, Geni, is an incredibly addictive and viral service which has the potential to back into Facebook, LinkedIn and Amazon WishList territory - at least.

It was launched in the last few weeks by David Sacks (formerly of PayPal) and funded by Founders Fund (formerly of PayPal) is one of these.

An hour later I was still happily entering information about me, my family and our relatives -- beautiful, they get you to do the data entry and you love it :)

Congratulations to the team behind this, although there are some bugs and clearly a wealth of new features which will be coming along, this is a great start. So good in fact, it seems the servers were in meltdown in week one.

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Friday, February 02, 2007

Walt Mossberg's great review of Netvibes

You can't get a better endorsement that this from Mr Mossberg - Netvibes is on a roll.

The Economist also wrote a great piece today.

It took some time for me to use it instead of My Yahoo!, which had me enthralled for over 10 years but Netvibes is so simple and easy to use I've been hooked for over a year now.

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