Austria. Wien. Pioneers Festival 2013.
Wien is an imperial city with incredible public organization and finesse. From the US to India, entrepreneurs, investors, speakers, press and mentors, more than 3 000 people, called this intriguing city ‘home’ for short-yet-unforgettable 3 days. Life feels good in Wien. Europe has been developing a startup culture for some time, and events like Pioneers Festival build and strengthen ties and synergies between growing startup hubs such as London, Berlin, Tel Aviv and Lisbon.
This year’s edition was a huge success. It featured a couple of startup competitions, lectures, interviews, brainstorming sessions, pitch-and-feedback, workshops, networking, gourmet meals, startup showcasing and live music. A unique chance to see, listen and network with high-profile CEOs and top managers from inspiring and solid organizations (Evernote, Shazam, Parse, SocialCam, JustinTV, Kickstarter, Peeble, SoundCloud, Ideo, Seedcamp, Sequoia Capital, 500 Startups, Y Combinator, Techcrunch and many, many others). Entrepreneurs who have ‘walked the walk’, invested 3 days, only to share their own experiences, paths and provide unique insights to aspiring youngsters.
Ted Sheridan wrote a poem called “The More We Learn, The Less We Know For Sure”. Pioneers taught me a lot; it taught me lessons I was sure I already knew. The following list of insights is targeted at under-30 CEOs who want to excel, to be better every single day and are willing to take the next step. Be bold to rediscover what you thought was common sense, challenge the sexiness of Daft Punk Startups (funny Dave McClure’s expression to characterize today’s lean startup model) and develop real businesses. Let’s pioneer it!
1. The business world is not a zero sum world.
Phil Libin, Evernote’s CEO, gave a lecture and an on-stage Meet&Greet session on the first conference day. He shared his view on an entrepreneur’s ultimate goal – to build a 100-year company. Challenging common sense, he suggested aspirants not to, and I repeat, not to plan an exit strategy. Instead, start building a company to which you would dedicate your life to. Furthermore, he discussed the benefits of having offices based in different continents, as diversity would contribute in a number of tangible and intangible ways to your firm’s success. One particularly interesting thing really resonated with me, though. Think about sports. In a game between the Lakers and the Clippers, there can only be one winner. Usually the Lakers. In basic accounting, credit and debit have to be equal. Across all accounts. Well, financial institutions prefer to hold debt, the toxicer, the better. In the business world, however, reality is different. With Facebook’s success, Myspace, Frindster, Orkut, Hi5 (and many others) declined and became marginal players. The beauty of it is that Facebook’s valuation and value added to customers is a zillion times bigger than the loss of value of all the others combined. Disruption is not a zero sum reality. There can exist more than one winner, and sometimes, 2>1+1. Sorry Beyoncé.
2. Startup’s path is long. And curvy. And steep. It is not always sexy.
Shazam’s CEO, Chris Barton, is amazing. On the “Academy” stage, more focused on upcoming startups and entrepreneurs, Chris openly talked about Shazam’s first years as a company and gave credible pieces of advice to aspiring youngsters. Carefully build your team. Do not pick a team, build a team. Search for complementary skills and personalities, and early on, build a true startup culture. Openness, trust, respect and dedication are as important as hard skills. Commit to innovation, even if you are 5-10 years ahead of common people’s time. Shazam originally worked on feature-phones, as a pay-by-call service, and had to create the technology to identify tracks, convince labels to provide track lists, negotiate contracts with carriers, set up servers and backend technology, and focus on the consumer. So, do not let yourself be demotivated by great challenges, yet embrace them. Even if you have to create an entirely new technology and tackle two of the most powerful industries in the world. Shazam! It will seem as a magic trick.
3. You don’t need the VC model, build a product.
Michael Seibel, Justin.tv’s co-founder and CEO, Socialcam’s co-founder and CEO and Y Combinator’s part-time partner participated in Q&A sessions with Parse’s co-founder, Tikhon Bernstam, as well as in many other events throughout the festival. He demystified the urgency and imperative of VC funding. An entrepreneur should rather focus in the product, improving it, enlarging the user base, getting paid by customers and mastering the business model. He also alerted to the fact that not every company is suited to receive VC capital, and most startups are better-off without the pressure and corporate culture that always comes with such dollars. Keep control of your startup, develop the product, get costumers, and, at one point in time, VCs will chase you. Let them walk into your office, and show you how interested they are. Not the other way around.
4. “Scalable, cash-flow profitable, customer acquisition.” (Yes, it is a quote)
Dave McClure, founder of 500 Startups had a lot of different opportunities to influence audiences, being present in most stages, multiple times throughout the Festival. He brought the practical American-mindset and the can-do-will-do-get-out-of-my-way-please mentality that often lacks to European entrepreneurs. Energized and criticized pitches, stating that startups should engage the audience, be bold, ready to answer any question and well-prepared. He professed the importance of marketing, customer acquisition, web and mobile marketing over hard-skills on engineering software. In the past 5 to 10 years, tech giants have built, developed and released an enormous set of tools that empower startups to build their own software without reinventing the wheel. Today, servers, hosting space, payment methods, etc. are essentially free to the end user. “You are midgets on the shoulders of giants”, he said. Having an easy to use, well designed product is the least you can do: the starting point to startup. The challenge today is to master customer acquisition. Customer acquisition is the process where you spend money (or/and other resources) to get traffic into your website or store. This process has a price-tag, whether it is SEO optimization, blogging, Facebook ads or sponsored parties. On the other hand, customers generate revenue. Customers buy your product, produce free marketing, generate traffic, etc. If you master this process, and manage to spend less money acquiring (not improving your product) customers than the revenue they will generate, you are on the golden path. After perfecting this process, your startup just needs money to scale. Period. You will survive.
Pioneers Festival was a huge event, and I am already waiting for next year’s edition. The startup competition had a really good winner, BabyWatch, and competitors. A lot of other projects got unique opportunities to brainstorm with other entrepreneurs, investors and mentors. Workshops were truly useful and in the after-parties everyone had a blast. However, this is not the way I measure success. The true impact of Pioneers is not about those 3 days, the knowledge preached nor even the wonderful connections you have made. The true impact starts today. And tomorrow. And the next day. It is related to the startups, businesses and partnerships that are built and will impact the world 2 or 3 years from now. It is a dynamic, ever-changing reality, that started on that event, but that can only achieve its true potential in the future. And future is bright.
I encourage you to be practical and take a serious approach on your startup. You might be sitting right on top of a profitable business, so stop desiring a hundred-billion-dollar-Facebook-kind-of-company and a life path as in The Social Networking. Like Sinatra, do it your way and develop a product or service that some (or even a few) customers value (and pay for).
Do comment below or reach me @francicocabral if you want to discuss ideas, build on this insights, ask for startup advice or get in touch with anyone that attended the Festival. Let’s pioneer it!
Francisco Cabral is a co-founder of the Lisbon-native location-based social network startup hinow, Marketing Trainee at PepsiCo, student of Management at NOVA School of Business & Economics and Vice-President of Kairos Society in Portugal.
Image Credit: João Pinheiro