Την προηγούμενη Παρασκευή, 3 νέα κεφάλαια επιχειρηματικών συμμετοχών με αποκλειστική στόχευση σε εταιρείες τεχνολογίας παρουσιάστηκαν στα πλαίσια της 51ης αθηναϊκής συνάντησης Open Coffee. Ακολουθεί το βίντεο και οι παρουσιάσεις των ομιλιών.
Open Coffee Athens XXVI – the minutes
SocialWhale is a Twitter interface/client which started 8 months ago intending to cover the needs of more advanced users who consider Twitter to be somewhat lacking in features. It initially combined existing services built on top of Twitter into a single service and later tried to evolve into a ‘real-time social media client’. SocialWhale also intends to aggregate the use of five main social networks (while more are to be added later).
It’s important to note that SocialWhale has not gotten any marketing promotion as such – it has become known via world of mouth and the Greek social media and remains still closed as a service – but out of those who have access (~500 people) approximately 10% visit the site every day which may be not so bad for a team of 4 full-time developers, plus some part-time designers.
According to SocialWhale it’s too early to start talking about business plans but they aim to generate profit by offering premium services for social media professionals and in the future an API (which is operational even now albeit without documentation – please contact the team to experiment with it). An investment has already been made, at 60% of the planned development. When 100% of the development is accomplished they will start implementing their monetisation models. In addition to this, a desktop client and an iPhone app are coming up too in the next couple of months.
Invitations may still be available here.
viva is the innovative part of the 45-people strong company Realize. It started back in 2005 with the successful free-internet service enhanced with offering SMS and songs. 801 Phone followed in 2006 which was also a success (used by over 350000 households in Greece) – it was essentially an initial version of a VoIP package. Following these packages the infrastructure used for these 2 services had to be used in something new when they became commodity – enter vivanumbers. The basic offering consists of a Greek unique number that can receive calls via your mobile, your office number and your home or a combination of them as well as handle faxes. It is all configurable online and an account can be started entirely on the web while the number from an existing provider can be carried over too.
The guys behind viva managed to keep a broad target group for their service – essentially addressing the entire internet user base – by practically limiting pricing packages to the phrase “1 euro per month” and as such vivanumbers relies heavily in a micropayments system. According to it, user money is collected in a virtual wallet from a bank transfer, a credit card, paypal or a ‘dropcharge’ phonecall which can then be spent in a number of simple services they offer (fax2mail, VoIP, music, sms, etc). Perhaps the most innovative aspect of their infrastructure is that more of these virtual currency points are offered to users who introduce their friends to the service. It is using this method that they have soft launched their product with blogs, forums, social media and an AdWords campaign. Interestingly, this billing/micropayments functionality will soon be offered to third parties too.
Mindworks started as an advertising company back in 2003 with a few thousand euros of starting capital. In 2005 they decided to focus in search marketing – cutting about 90% of their income which up until then also involved website building, print layout etc. Really early they started blogging and that helped them get known in the market and in essence ‘train’ it and create their niche. At the end of 2006, they managed having a Google-qualified individual among their ranks while in mid-2008 they become a Google qualified company with – among others – a 100K budget in 3 months. Then came the Silver Effie Award in a very difficult to win competition and soon after that ATCom buyed them. Mindworks is currently offering SEO, Paid Search Marketing, Usability Studies and Web Analytics. The lessons they learned can be summarised in the following list:
- Build a team you can trust
- Do not underestimate marketing
- Make friends (e.g. via blogging) – even with competitors
- Mind the cashflow gap
- Make the right deal when getting funded – it’s not about the money (e.g. how well you can communicate with the buyers, customer exchange, etc)
- Work-life balance
OpenCoffee XXV – the minutes
(photo by penlix)
Favit is yet another startup which is here to address the problem of information overload. They do this combining a number of techniques but their core idea lies in collecting all news sources the user might need at a single point so that the information comes to the user rather the other way round. That’s why allegedly Favit is superior to other services like Google Reader because it allows integrations of multiple services. They also have some other interesting features such as allowing users to import sources of interest not by adding links but just keywords – in their native language. The interface is not just text based – you can also view news in images. You can also search the news sources you are following and the results appear in reverse chronological order. Hiding, liking and voting capabilities are also available and they feed learning algorithms that improve the user experience further while another central concept is that of groups of people from which you can learn and also push news to.
When it comes to the Bulgarian startup scene where Favit originates from it is still nascent – most investing is in non-IT-related projects – and OpenCoffee-like events are quite rare too. To get started, Favit contacted a 40M Bulgarian fund specialising in IT and got funded to do localisation in order to ensure easy usage by simple humans and not just geeks. Interestingly, they secured that funding with not much more than the idea and at the very early stage it was pushed forward by a single, non-IT person – which is quite unorthodox. What is also intriguing is that the Machine Learning alogorithms are drawn from another company of the fund which also plans to setup a datacentre and generally create a ecosystem of mutually helped companies.
Pragmaticomm was founded in 2005, is now employing 8 people across 4 countries and is operating in the field of Voice over IP which has recently seen huge growth due to the advent of phone applications (iPhone, Android etc). MvoIP is their flagship product and it is already a mature application that offers transparent, telco-independent communication. MvoIP basically offers free calls across the world between MvoIP users and ~10 times cheaper prices when talking to non-MvoIP users (incl. landlines). Compared to the first competitor that comes to mind – Skype – their difference is that they are open-source and use a different technology (they are SIP-based instead of Jabber-based) thus offering another type of product in an attempt to get their share of the market.
Its main features are ease of use, ubuiquitus availability, good integration with the mobile device and has a good quality of services due to its maturity. On the downside, no encryption is implemented (although they are planning to include it soon) and voice continuity when going from wireless to GSM and back is not in place either.
Their business model is another difference with Skype – they are offering B2B services: they are providing a VoIP services bundle to providers who in turn sell it to the end-user. Currently, they have secured a major customer in Vyke which uses their technology while at the same time they are planning to port their application to the iPhone.
Joomlaworks started as a group of freelancers who back in 2006 turned their expertise with Joomla CMS to a startup. It was as ‘simple’ as seeing a gap in the market of Joomla extensions and decided to take the plunge and start a company.
Six people are working now in joomlaworks.gr and have created 16 free GPL extensions and 3 commercial ones (available for a life-time fee). They boast 2M+ downloads in 3 years (out of 150M websites running Joomla in total – not a small fraction). They run 7 content websites, 2 community websites and 8 demo websites in order to have a strong presence in the community – and they attribute to that presence their achievement of including 7 of their apps in the Top-100 Joomla directory. This is their company’s core philosophy: make a few excellent apps and release them for free to attract attention and users – which can then be converted to customers who will buy the premium apps. As programmers the philosophy (of the Greek part of their company at least) is to create websites for customers but they also give back to the developers’ community. In other words, they leverage the community for help but also are there to return the favour.
So far they have established a good and steady revenue allowing them to experiment with further business models and create new products. Their main experimental product-to-come is K2 which is currently free and combines the best bits of existing CMS packages like WordPress. Their other product is TemplateWorks – i.e. creating templates for Joomla initially for free to attract attention and hopefully later for a fee. Also, it’s in their plans to enable the creation of video platforms as well as even more interestingly a web service that will enable Joomla extensions to operate in other CMSs in order to go over the strict Joomla borders.
OpenCoffee XXIII – the minutes
Alex Kombogiannis and Giorgos Kontos of mpgreek presented their company and how it started in 2004 without any VC funding. They launched from Astoria, NY in 2005, and in the first four months they had managed to earn 30K USD. One of the first problems they encountered is that labels didn’t even know back then what ‘mp3 download’ means but meeting the right (i.e. open-minded) managers, having a ready product and making payments always on time (which created trust) helped. Their traffic picked up mainly via whitelabel and co-branding and lots of work later, in 2007 they started selling ads, opened offices in Athens and had revenues greater than 850k – but even then VC funding was out of their reach. Eventually in 2008 the deal with internetq was signed however. internetq is a 1200 sms campaigns/year company with offices in 8 countries, strong mobile partrnerships with major telcos and an overall strong presence in the sector.
According to mpgreek the greek market has many difficulties: it is small, there are no resources for new entrepreneurs, the regulation is not beneficial and cash flow remains a problem. VCs are very few and not specialised for our market and on top of that it’s hard to find good managers. On the other hand, exactly because the market is small it’s easy to dominate even if mildly succesful and it’s easy to navigate. Furthermore, localisation is easy (ideas can be transferred from abroad with minimum tweaking) and labor costs are low as such somehow offsetting the market’s drawbacks. Overall, it’s hard to get acquired in Greece but not impossible – you have to find the right relation (as internetq and mpgreek did)
Dave Krupinski of care.com shared the wisdom he has gathered regarding fundraising and how VCs operate. Firstly, he made clear that out of all the business plans reviewed only <1% of them are funded. Of that, approximately 40% fail, 40% break-even and 20% yield high returns (10 times). Apart from that, what’s common for all VCs is that they are accountable to their investors too and want to invest in good teams and good track records. All VCs will be interested to know whether the proposed business model has been tested and will require a solid exit strategy. However, not all VCs are the same. They differ on what they invest on (companies in beta, companies that have just launched, companies with set customer-base etc). Some may want a controlling stake, while other won’t. They may also differ by industry, by stage of development, by the amount of investment, the frequency of investment and the level of involvement, support and advice they provide. For example, early stage investors tend to locate near their investments.
Sokratis Papafloratos of trustedplaces.com presented his company which started off at 2006 and has raised 1M so far. The company employs 8 people currently in London and Tel-Aviv. It’s about providing local search based on your friends – “social networking with a purpose” as Sokratis accurately pointed out. Their business model is based on offering to companies a number of packages: a free one where they can take control of their profile, receive notifications and apply some basic edits and two premium packages with which they can enhance their profile and drive traffic to their business using ads and geo ads. Apart from ads they include local sales and licensing (leasing of their platform/content). For more details be sure to catch the upcoming video of the trustedplacs story.
George Tziralis ended the night by presenting the OpenFund. After a brief introduction about the long road that the OpenCoffee has come (2 years, 40 events, 130 speeches, 100s of participants) and the current situation in our industry in Greece academically (1.7% hold MSc or PhD, #1 in EU students abroad, top in scientists and engineers) and community-wise (startups exist, they are able to succeed and there is interest and potential), he announced OpenFund which aims to cover the two missing pieces of funding and support that could turn the situation around. By providing seed capital, monitoring and advice to the best five companies selected for ‘incubation’ in four months cycles we believe that we will take the first few steps of tapping the untouched potential of this community. The whole effort has been fortunate enough to start off with the good news of Piraeus Bank commiting 250K of anchor investment. More details regarding the exact process and the offer are to be found in the official OpenFund site where also all questions will be gradually answered.
OpenCoffee XXII – the minutes
Plexscape consists of two applications – the Plex.Earth and Plex.Mark! tools which enable mosaic creation and coordinates transformation for AutoCAD using the Google Earth platform. Basically this startup allows you to identify a plot of land on Google Earth given an AutoCAD file of the area, gather all the required images and create a mosaic. It’s a project aimed at engineers, research programs and environmental scientists with little competition (primarily by AutoCAD itself which also offers an extension with similar but buggy functionality). Plexscape is approximately three months old and is already looking for partners to develop and promote the product. Its main use lies in identifying whether changes in the physical space has been correctly reproduced on the blueprints given that Google images for Greece are relatively recent (2006-2008). The business model is based on a subscription fee and has already resulted in some customers.
skroutzstore – an offshoot of skroutz – offers the tools to quickly create an online store: there’s a 1′ signup and within 10′ you can be receiving product requests. Their niche market is about aiming for Greek e-shops and making the store creation simple and without many options to decide on (although it is customisable to some extent). Payments are handled via credit card and all bank and courier related processes are streamlined by the store to alleviate the user. All issues that such a stand-alone site has to face are compressed in one fee. As such site creation and hosting costs, certification, maintenance, updates to the platform (as well as some price reductions in skroutz.gr) are all offered to the user for a range of flat fees (in contrast to a percent of exchange which introduces maintenance overheads). They soon plan to introduce an API to allow users to export and most importantly import products massively using an Excel or CSV form – and even to connect the platform with an ERP (which sounds like an all-around neat idea).
Rate Solutions is an Estonian company with a social network which is localised in every country it’s implemented on with wraia.gr being our local version. The concept involves having a centralised platform (ensuring all countries run the same social network basically) while the databases are local (to ensure responses’ speed) and the interface localised of course. Half the Estonian population uses the service in Estonia while half the site was sold in the largest telecom in Estonia. Rate Solutions are behind the top social networks in many European and Asian countries. In Greece they have achieved 325K average daily page views and 30K users. The main target group is ages between 16 and 27 and the mentality is more centred in user profiles rather than the social aspect and friends. Their revenue model is 30% advertising and 70% micropayments (in exchange for virtual gifts, a rating system, customised backgrounds etc) which are done via credit card and SMS which results in a revenue of 4$/user/year on average. The global empire is maintained by just 8 programmers, 2 designers, 5 expansion people and 20-30 country managers. παλιοίφίλοι.gr is also launching in Greece in August (and they are looking for partner).
feeds2.0 is one of the very early Web 2.0 startups – having started at 2006. It’s a Google Reader look-alike but before Google Reader came about (only bloglines was around then). Feeds2.0 has some cool features that actually work such as learning from user behaviour, auto-tagging of articles and grouping of articles by subject among others. Their business model is based on advertising including personalised ads, delivery of RSS in the entreprise and delivery of RSS to the mobile. Having started at 2004, development took place throughout 2005 and it was presented at Innovate!Europe (the European version of DEMO) at 2006. That resulted in lots of promotion and additionally their business plan was awarded at the 8th VC Forum in Athens. Despite the promotion, the good business model and the working idea, still Feeds2.0 managed to generate no income. The reasons are that apparently Greek VCs like to give awards but not capital; no VC contacted feeds2.0 after the 8th VC Forum. Also, European and US VCs give no money abroad – for example, Saul Klein asked them to relocate to the UK in order to move from running ‘a project’ to creating a business. Other reasons also were important such as that too many resources were spent on traveling for promotion and negotiating deals that never happened. Currently feeds2.0 is trying to take the technology and apply it to another platform: the blogosphere for sentiment analysis, in a corporate environment, in music suggestions in your mobile etc.
odesk is well-known as one of the top employment services for online collaboration for employers and employees. Its innovation lies in that it allows sending snapshots of the employees desktop to the employer at random intervals so that the work progress can be monitored. That allows for charging by the hour and guaranteeing that a worker gets paid – advantages not existing in the competition at least when the company appeared. odesk launched in 2003 and in 2008 grossed 30M (3M profit), while in 2009 it is looking to double it. Although initially it took them 4 months to develop a working prototype 5 months later they had just 2 customers and that was it. The break came when a simple Google AdWords campaign attracted many small enterprises as customers to odesk. Although that indicated a revenue stream, funding was still sorely needed. After many failed attempts, a VC showed their idea to a staffing entrepreneur – who liked it and the VC decided to invest. Currently, they have 200K registered users (and that so far has landed them to be 2nd in terms of market share.) who have formed an open and transparent marketplace so that free-market forces can take over with odesk limiting its mediation and instead becoming just the enabler of the platform. America, India, Russia and Ukraine are top for workforce while in Greece they have very few members as employees and no employers. Their business model is based on claiming 10% of wages between contractors and by basically avoiding any other interference with them.
Open Coffee Athens XXI – the minutes
moviepeak is a company providing satellite telecommunication services since 2003. Their track record includes bringing the Greek national channels via satellite TV to US and their current product is none other than video on demand via satellite. They did a soft launch in February 2009 and they aim to center the service around the user (as they should). The point is for the customer to have immediate access to the content and only pay for what they actually watch – there are to be no added extra costs. The way it works there are constantly 200 films received in the customer’s hardware along with a summary, film details and a trailer at no cost. It has all the familiar DVD functionalities and a relatively easy to use interface (which also comes in Greek) – although my first impression was that the initial setup might not be straightforward. The films are auto-updated via satellite – every week 10 old films leave while 10 new arrive. Their prices vary from 3 to 1 euro depending on popularity while the cost of the hardware is approx. 200 euros. The film arrives in 1′ or so when authorised via the local ISP or a customer sent SMS and is available for 24 hrs. Moviepeak has agreements with most major studios (e.g. Warner, UIP etc) and as such their niche is blockbusters exclusively: they package all ‘current’ films of major studios also taking into account the Greek market. Other than the obvious B2C revenue stream they allow for separate B2B deals available for hotels and other similar businesses.
Total Eclipse is one of the few if not the only casual games company in Greece. They have managed to secure funding from RealArcade and their niche is casual gamers. The casual gamer profile means basically people of ages 35+ and mostly women (74%) – based on international statistics. Casual gaming is a cross platform industry including PCs, Macs but also the Wii and the iPhone and of course social networks. The current pricing of casual games is approx. 20 euros while such productions cost more than 100.000 USD to make.
Total Eclipse started of as a two-brothers company back in 2004 when the market was still relatively easier to enter. Now times are harder and only 1 out of 4 games is accepted in distribution portals. Their company has released four games so far, two of which were self-funded and the other 2 were funded by RealArcade. I particularly liked their goal of embedding the company’s identity on every game as a means to make their brand known and recognisable. Their latest release, Clockwork Man launched 2 weeks ago and we were proud to hear the exclusive announcement that in all likelihood a sequel is coming up. They make basically PC based games although they aim to release for Macs and the iPhone soon. RealArcade handles all the publishing and delivering of their games to a large number of portals where they are showcased to a significant audience. All of the development happens in Greece (Thessaloniki) with some freelancing from Hungary and USA. Currently, and with the clockwork man’s success behind them they are looking for more staff (developers, graphic artists and others) so if you always wanted to work making games visit their site and make them a call.
TANEO is an organisation aiming to fund companies and Nikos Haritakis, its CEO spoke about their latest activity: they help organise the 10th VC Forum coming up in 16-17 June. This is a two day event in which the first day Greek investors and businessmen talk about the market while the second day investores have private discussions on particular business plans submitted by entrepreneurs looking to be funded. Currently TANEO controls 150 million euros of state-related funds which have been matched by another 150 million of private funds. Although so far they have aimed for relatively mature companies (business models of magnitudes 300-500K euros) they plan to put aside approx 20M euros for startups similar to those that can come out of OpenCoffee. There is no lower limit in investments – just an upper limit of 2.5M per year. Their criteria of investment are rather subjective as ‘venture capital is not objective’ and ‘if we like the idea, we like the people’. Other than that they are more interested in small cycle investments which would ensure going through the funding process with an entrepreneur completely rather than investing in longer duration projects. So it’s as simple as that if you want your idea to get funded they are a straightforward option: just give them a call and arrange a meeting with them.
upstream is a mobile marketing company which has been around since 2001 and has actually been funded by TANEO managed to be making a 40m euros turnover this year. They have offices around the world and their main products are related to SMS services, mobile interaction with radio and TV and so on. They are an early player in this particular market and they have managed to secure as customers some major mobile network operators abroad. An element of their strategy worth considering is that they succeeded in making a marketing vehicle out of bundling together gaming, gambling and promotion in a single platform: their mobile products. Although their idea could in principle be easily reproduced as admitted by their CEO, the company’s expertise, connections and current funding allow them to stay ahead of any competition that may try to arise – either in Greece where they started from or abroad.