Tour Diary. 01 April 2014. Day 1.
So the amazing Business Tour for startups and Happy Farm Business Incubator residents started on the 1st of April. No fools, everything is serious!
First full day in San Francisco! And Fool’s day as well!
We met outside of the hotel at 8 a.m. to take the bus to the train station. We bought a one-day pass for the CallTrain and off we went. Destination: Mountain View.
We went to Mountain View to visit Ziv Gillat’s company: Eye-Fi. Eye-Fi makes SD cards that automatically transfer your photos and videos from your camera to your smartphone or tablet. It has its own WiFi Network. So you can upload your picture to your smartphone wherever you are! It is an amazing product, and it is cool to walk around the office and hear how they started, their challenges and success. We also met Ziv’s colleague Irina, who is from Ukraine.
Ziv is not only a great entrepreneur, but also a great mentor. We sat into one of the conference rooms, and he listened to our startups and shared some advice and ideas.
After a 2 hours visit, we had to say goodbye. Ziv gave us all a Eye-Fi SD card, which we immediately tried.
After a quick lunch in Mountain View, we took the train to San Mateo, where we met Vitaly Golomb at Keen Systems. Vitaly talked to us about what Keen does and how they got to be a big as they are now. We also got the chance to speak to the head of sales, who gave some great advice.
We also met Edouard, who was talking about his startup, Rove. He shared his story and experiences with us. Always great to meet enthusiastic startupers!
Tour Diary. 02 April 2014. Day 2.
A sunny day, instead of the rain we have had since we arrived! The teams did some work, some sightseeing and had some personal meetings.
In the evening, we had a meeting with Vlad Voskresenkiy from Invisible CRM. We met with him at Igor Shoifot’s office. He explained what his company does, how it started and how he got where they were now. He also talked about living and working in the Silicon Valley and sharing his time between the US and Ukraine. He also gave some great advice about hiring and firing and about how to do marketing.
It was a very interesting meeting! Thank you, Vlad!
The teams had dinner together afterward and then went back to the hotel to get ready for a busy day tomorrow!
Good night and see you tomorrow!
Tour Diary. 03 April 2014. Day 3.
Another sunny day in San Francisco!
Our meeting with Julian Zegelman was postponed to next week, so our first meeting was with Igor Shoifot, Board Director of Happy Farm. It was a very interesting workshop. He talked about different things and gave some useful tips.
Some advice he gave was about what kind of people to look for when you go to events. He says there are three kinds of people you should try to meet. First of all investors, but also potential partners and lastly people who can help you with your distribution channel.
And his biggest advice was smile! It’s ok to smile to a stranger
After the meeting with Igor, we went and prepared for the Dinner for Investors. We had a great dinner at McCormick and Kuleto’s, a great restaurant with an amazing view over the Bay.
We were very happy to have some awesome guests joining us there for this event, among them Kaushal Chokshi from Cross Border Angels, Jim Smith from Mohr Dadivow Ventures, Victor Shaburov from Opera, Pavel Cherkashin from Vestor.in, along with some of the best Happy Farm supporters: Igor Shoifot, Sridhar Solur and Mike Sigal.
There was some music, excellent food and most important, the teams pitched, and there was a lot of networking. Undoubtedly, a lot of interesting connections and referrals were made!
Overall this was a great evening and a good preparation for Demo Day tomorrow.
Tomorrow we are going to Mountain View for a workshop with Kaushal Chokshi and in the evening we have Demo Day together with legendary 500Startups!
Follow the news!
See you tomorrow!
Tour Diary. 04 April 2014. Day 4.
Day 4! Everybody is getting used to living in San Francisco J In the morning we took the bus to the Caltrain Station and traveled down to Mountain View.
The reason for our trip to Mountain View: a meeting with the amazing Kaushal Chokshi! Kaushal is the Founder and the President of Scaale Inc. and together with his team, he welcomed us at his Mountain View office. They prepared a very interesting workshop for us.
First, Kaushal talked how he started as an entrepreneur in India, but he wanted more. He moved to London, but he wasn’t successful there at first, but he learned a lot from this experience! By 2006, he had seven successful companies, he sold them and founded Scaale Group.
Kaushal shared a lot of advice and tips about the international investment market. He says that, not every company has to aim for the global market, but you always have to know what is going on globally. So you can stay on top of your game. He also gave some advice on different options to come to North America as a startup and what the challenges are.
After Kaushal, we also had the honor to talk to his colleague, Marta Emerson, Vice President of the Scaale Group. She talked about the Cross Border Angels group who has 150 members all over the world and would love to expand to 500 investors by the end of this year.
Marta explained that most investors invest close to home; it’s easier to follow up, and then can mentor the teams better, and it’s a market they know. So why do investors choose for international companies? First of all, they might want to expand their local portfolio. Second, they might want to invest in companies based in high-growth countries with a large market so that they can have a bigger return on investment. And third, maybe they just love the fun life-style, a lot of traveling and meeting people from all over the world. Kaushal definitely enjoys this life-style!
So although it is not easy, you can attract global investment. Before you reach out to them, make sure that you plan your growth, build a great story and justify this story with numbers.
Kaushal concluded that planning milestones and clear-cut thinking is very important!
At the end Kaushal and Marta challenged the teams by asking for 3 reasons why global investors should invest in them. The teams did their best to answer and they shared their thoughts and advice.
It was an amazing workshop. We want to thank Kaushal, Marta and Manon taking the time to meet us and teach us a lot about global investment.
After this meeting we rushed back to the city. We needed to prepare for our Demo Day in Runway.
More than 100 people joined us for this event. Six Happy Farm teams pitched against 500 Startup teams! We had UDS, Concept Inbox, Melophone, Dressboom, PublicFast and LendingStars on the Happy Farm side and Shippo, Ohn Connect, VenueSpot, Pigon, Doorman and Soundbetter on the 500 Startup side.
Mike Sigal and Marvin Liao supported the teams and in the end it was too hard to decide a winner so the startups drunk the price (a bottle for Cognac from Crimea) together!
After the event there was a lot of time for networking.
A great end to the first week of our trip! We are all looking forward to more exciting meetings and visits next week!
Tour Diary. 05-06 April 2014. Day 5-6.
The weekend in San Francisco is a great opportunity to refresh brains, enjoy wonderful places and to prepare for the events and meetings for the next week. One of the brightest impressions of the weekend – visiting Coursmos, Happy Farm II Cycle resident, who now is based in the Valley.
Thank you, guys, for hospitality and tasty BBQ We are proud that our startups are growing and developing in the world’s heart of innovations. So, the weekend is over and a new busy week is waiting for us. To all who is based in the US – you are welcome to visit our next networking event – Startup Beer AprilFest
After a great weekend, everybody was ready for the new week. Some people a little more sunburned than the other…
Our first meeting of the second week was at the 500 Startups office in San Francisco. They recently opened this and are still working out of a temporary office, while they are finishing the other office. They now have their first batch of startups there.
We met with 500 Startup Venture Partner, Marvin Liao; 500 Startup Mentor and Founder and CEO of Agile Credit, Mike Sigal and Mike’ s friend Scott Rafer, who is an expert in Advertisement and Media.
Marvin first introduced 500 Startups. He talked about their accelerator program (more than 1000 applicants for 30 days!). They have eight Venture Partners and they invest in a lot of companies in the US. Mexico, Brazil and India. The would love to invest more in Europe.
After the introduction, Marvin, Mike and Scott answered all the questions the startups had for them. We talked about investments, legal issues, trends, how to get into 500 Startups etc.
Here are some interesting remarks:
On ambition: You don’t always have to compare to the big American startups. Just think about what your goal is, what you want as a revenue and try to reach that.
On raising money: Raising money from Venture Capitalist is like selling your product. It takes a lot of talking and a lot of hard work.
On trends: There are two kinds of trends: first of all external market trends (e.g. more and more people have a smartphone). These trends will stay for a while, so you can build a company around them. Trends like Bitcoin, are buzz words, all of a sudden everybody likes them. And even though virtual currency might stay around for a while, Bitcoin might not make it. For this kind of trends, it’s not always a good idea to try to chase them. Once something is a trend, it’s too late already… You will have to catch up with the companies who made it a trend and you will be too far behind.
It was a very interesting meeting, and we appreciated all the advice and ideas!
Tour Diary. 07 April 2014. Day 7.
After the meeting, we went to have lunch at one of Marvin’s favorite places “The Grove”.
In the afternoon, we had a very inspiring meeting with Shaan Puri at The Monkey Inferno. They call themselves a Startup Studio. They don’t look for startups to accelerator. They hire the people first, and the ideas come later and from the best ideas they create startups. They keep these projects at Monkey Inferno and when they get successful, they graduate and find their own office.
So they hire talented people, they get a salary and they get part of the equity in each project. Everybody is very motivated to help each other’s project out and succeed together.
Shaan gave some advice on how to come up with an idea:
- take a shower (the best ideas are developed there)
- solve your own problem (but also talk to other people about it, so you don’t get stuck in your own world)
- go to work outside of tech for a while and come back with great ideas on how to improve things)
Shaan also said it’s important to be surrounded by the right people. You should feel comfortable to share your ideas and on the same time be challenged to think further. You have to think outside the box!
The most important thing Shaan looks at when he hires people is tenacity! Very driven people with a good knowledge of their expertise.
Shaan believes that you don’t have to concentrate on making your product successful, but you should make yourself successful.
After the talk we had a tour of the beautifully designed office! After the meeting, some of the teams went to Union Square and had a brainstorm session about each other’s project, Monkey Inferno Style!
Again a great day, with a lot of great people in this great city!
Tour Diary. 08 April 2014. Day 8.
Day 8 started very early! We had to leave the hotel at 7am to go to the first event. We went to the Orrick event: ” The Fundraising Series (Part one) – Building your story”. The event started with a breakfast and some networking, and then it was time for the presentations. There were four speakers at the event: the first one, Gleen McCrae from Early Growth Financial Services talked about creating your three year financial plan; then Noah Lichtenstein from Cowboy Ventures talked about constructing your competitive value proposition. The third presentation was Stephanie Palmeri from SoftTech VC, talking about understanding your competitive landscape and the last was Niko Bonatsos with Go-To-Market Strategy.
It was a good event in a beautiful location!
In the afternoon we had a meeting with Michael Golomb, he is a successful serial entrepreneur with MBA’s from Santa Clara University and Stanford University. He now is CFO and head of the Amsterdam office of a Bitcoin company, BitFury. He is specialized in Finance & Strategy and he has a lot of great connections. The team introduced their projects to him and he gave some advice and tips.
After the meeting, some teams went to the Pier 39 to enjoy the view and some seafood. The next three days will be very busy! Meetings all day long all over the Valley!
Good night and see you tomorrow!
Tour Diary. 09 April 2014. Day 9.
In the morning we drove to San Jose for a meeting at the Ebay Inc./Paypal office. We met our friend and Paypal Developer Robert Schwentker. He runs Paypal’s Startup Blueprint Program. He invited us for the Commerce Innovation Showcase.
It starts in a living room! Michael welcomed us into this living room to introduce some new Ebay features: they have a new feed with personalized item experience and they added collections a few months, groups of items put together by users. They add a social aspect to the Ebay experience. They now have 500 million items online and they have 130 million active users (users who made a purchase in the last 10 months). Another new thing is Available Now, a one hour delivery service. It is already live in the Bay Area, New York, Dallas and Chicago. They recently acquired Shuttle, a delivery service that uses the same system as the Uber taxi service and they are starting to use them for this feature. The great thing about this feature is that they actually go to the store and buy the product. They don’t compete with local sellers, they work with them. Unlike Amazon, who is putting the local vendors out of business.
The next part of the show was the amazing shops they set up to demonstrate all the different options Paypal offers. There was a hamburger restaurant, a music shop, grocery shop, vegetable store, …
With Paypal, you can or will be able to: order your food in advance, pay from your phone, add something to your order,…. As a vendor, you can see who enters your shop, what they like and don’t like, when their last visit was. The options are endless!
After the meeting, Robert arranged some lunch for us and then we had a tour of the Paypal offices. There’s a gym, basketball court, several restaurants, free soft drinks, little turtles swimming around,… It looks like a great place to work! After this we said good bye to Robert and drove to our next meeting.
We went to Palo Alto to meet Madeline Duva, mentor of Happy Farm and of many many other startups all over Europe and the US! She gave some advice about moving to the US to develop your company. She said if your customers are in the US and your investors are here, you should move here. At Sequoia, they even put their Startups at their office, to be able to help them as much as possible.
She also talked about being a CEO. As a CEO, you have to be willing to do a bit of everything. You can’t afford to concentrate on one thing too much, even if it is what you prefer. You have to be willing to do some things you don’t like.
She also gave some advice to write summaries, for your team and also for other people : mentors, potential investors and other people who asked you to keep them up to date. The summary helps you to keep in touch with those people; helps you to keep track of what you are doing and motivates your team.
After the meeting with Madeline, we rushed back to the city for a meeting with John Gower, Happy Farm mentor and CEO of Dialect Inc. They work out of an amazing office, We Work. We first got a tour of the office and talked to Tim, the community manager. They have 500 people at the office and about 100 companies. It is not only a workspace, but also. Work community. They have lounges, kitchens and meeting spaces on each floor. They also plan events for their members. It is a beautifully designed, inspiring workplace!
Then John talked a bit about his company. They specialize in apps and digital magazines for games, music,… They are not like a normal startup as they had paying clients from the first day, but in a lot of other ways, they are like a startup, working hard to build a great company.
It was great to see John again! He always supports our teams and visits our events when we are in San Francisco.
In the evening, a few of the teams went to a network event organized by PeopleConnect.
A great day: amazing visit to Paypal, interesting talk with Madeline and inspiring meeting with John!
Tour Diary. 10 April 2014. Day 10.
Day 10 started with a visit to Stanford! What a beautiful campus! It is an incredibly inspiring place!
We went to meet Nikkie from the Stanford Technology Ventures Program. They organize all kinds or courses and lectures for their students. They have great lectures with amazing founders. They also arrange internships for their students where they go and work in startup companies, next to the CEO to see how it works. The founders of Instagram studied at Stanford and the founder of Yahoo too, he had built a building in Stanford, as thank for his amazing time there. It is overall known that Stanford students are a good match for entrepreneurs. It was nice to talk to Nikkie and get to know some more details about how they support students to become entrepreneurs.
After our talk with Nikkie, we walked around the campus, visited the famous bookstore and looked at the biking students, great buildings, palmtrees and green lawns!
After this meeting, we went to Venrock for a meeting with Steve Goldberg. He started as an hardware engineer, then worked as a manager, then was VP of engineering, then four times CEO of different companies and then he ended up at Venrock.
The startups did an elevator pitch for Steve and then he told us a bit about Venrock. Venrock started as a family business. The Rockefellers family was one of the richest families in the world in the twenties. But he wasn’t a very nice guy… His son felt bad for his dad’s behaviour and he started giving money away to business: the start of early stage venture capitalism.
In 1969, it became Venrock, and until 1995 it only used the family money. After that, they had some limited partners who also invested and now they are completely independent from the family. They have about 120 active companies. They invested in Apple, Cloudfair, Castlight,… They invest for one third in health care and for two thirds in other spheres.
It is really hard to get Series A and B investments. If you look at the years 2000 until 2010, the average return was negative. There were more than 1000 venture funds, now things call down a bit, and some companies are doing great.
Some of the superhot markets now are internet security, consumer software and hardware (but it’s hard to make money here…)
The general idea on Sand Hill Road (where most of the VCs have their office) is go big or go home! So before you talk to a VC, you should think about what that means for your company.
The most important things the investors look at are the team (you need relevant experience), having a clear view of the market and have a great execution plan! No one can predict the future, but your plan has to make sense. It doesn’t matter what the numbers are, but they have to make sense. And of course, traction and customer validation is very important!
He also explained that when a VC says no, it often has nothing to do with you and your company. He might just have signed a deal, he might have a competing company in his portfolio, he might be at the end of a fund or he might have a bad history with your market.
Venrock invests about $20M in each company (not all at the start), they have 35 to 40 companies per fund. Steve sees 10 companies a week, so about 500 a year and he only does about one deal/year! All 15 partners have to agree to sign a deal. They are very hands-on. They are active in the board of all their companies and stay with the company forever. They never take more than 20% in a company. Steve says: “There’s no piece of the pie if there is no pie.”
After the meeting with Steve, we had our Beerparty in Mountain View. There was beer, food, music and lots of networking! Happy Farm mentors, Oded Hermoni and Artem Gassan joined us and a lot of other amazing guests! It was a nice end of the day. Photo’s follow soon!
Tour Diary. 11 April 2014. Day 11.
Day 11, the last official day of the program! And an exciting one! We are going back to Mountain View, to the 500 Startups office there. We have a meeting with Dave McClure, a celebrity in the startup world!
Dave welcomed us and told us the office is quite empty today, but on Monday 30 teams are starting their accelerator program at the office. Ten of these teams are international. 500 Startups already invested $70 million dollars in about 700 startups, 50% through the accelerator program and 50% through seed investment. They only did a few investments in later stage rounds.
Off all the 500 Startups portfolio companies, about 1/3 raised more than one million, 1/3 raised less than one million and 1/3 didn’t raise any money. Ten to twenty percent of the startups that go through the accelerator program survive and 30% of the companies that get seed investment become successful. Investing in Startups is definitely challenging!
Investing internationally is more challenging because there is less capital available for later rounds and there is less of an exit atmosphere. But anyway, 500 Startups invested in about 200 international companies already.
Then we had a little tour of the office. The views are amazing!
Sasha now works for DFJ Aurora. The DFJ fund still exists but Tim Draper is now concentrating on Draper’s University.
Then she gave some advice about pitching! You need to be able to explain yourself in a few sentences. The teams did elevator pitches and Sasha gave advice. She also gave a short elevator pitch about what she does: she helps people who know what they are doing and can do what they planned to do!
A great last meeting of this trip!
The teams all come back with a lot of new experience, new contacts and a lot of new ideas about what to do next with their projects.
Thank you for your attention all these days!