A couple of years ago, it would have been impossible to build an electronic device from scratch in just three days – or at least it felt that way. Nowadays, this is a reality. In fact, it happens all over the world, all the time. Thanks to 3D printers, CNC machines, cheap and easy-to-use solutions like the Arduino, the Raspberry Pi or the Intel© Galileo, plus the availability of inexpensive sensors, people can transform their ideas into smart, connected products – working prototypes – all in a matter of hours. “IoT is at a tipping point right now – idea, product and market are closer together than ever. All you need is smart people with ideas,” says Philip Moynagh, Intel’s senior vice president regarding the Internet of Things. Ideas and smart people we found at the Hardware Hackathon in Dublin.
Kathleen Fritzsche is co-founder and head of marketing at Accelerate Stuttgart and StartUp Stuttgart, the entrepreneurial community for the Neckar Valley and Baden-Wuerttemberg regions in Germany. She has been captivated by the startup community since attending the first Startup Weekend in Stuttgart in 2010.
The brief, structured presentation of your business concept – the so-called “elevator pitch” – is a central element in garnering acceptance and enthusiasm for your business idea.
An elevator pitch can last anywhere from 30 seconds to five minutes depending on the situation. A key factor? Make sure you have thoroughly thought through the ins and outs of your idea before presenting it to larger audiences or potential capital investors. Initial feedback from your personal network and people who know your industry is incredibly valuable. These kinds of connections bring in new perspectives and helpful hints. The best thing to move you forward is critical thinking and shedding light on potential weaknesses early on. More…
Fundraising is a magic concept for every entrepreneur. It describes a difficult and tedious procedure of raising money to develop a venture and support all growth stages.If you ask me about that, after raising two rounds so far for my startup from six different investors (and hopefully more…), I would say that your initial objective should be bootstrapping and not fundraising. This will give you self-confidence, focus and will push you to the limits to finish your MVP (Minimum Viable Product) in order to get feedback and your first pilot customers. Fundraising is a tedious and time-consuming operation that eats your time as a co-founder from other important tasks, such as product validation and initial customer acquisition.
Fundraising comes after you have a prototype that can be used for customer feedback and can validate a business/revenue model, according to the LEAN approach. The initial money you will be asking for, from angel investors or early stage VCs, should go to one important objective: scaling up!
In every fundraising pitch, what should be stressed is not the technology, which already exists out there, but rather how the product or service can be scaled up as fast as possible and how it will follow a specific go-to-market strategy, already defined by your team.
An investor is not looking at the present, but the future. He uses your pitch and product to project his personal portfolio investment life-cycle, analyzes the risk of its current investment portfolio, calculates some financial and investment metrics and makes decisions based on that. So what you need is a good story to simply describe your idea, a well differentiated product with some initial customer contracts, a good emerging market that will help you evolve and take a good market share, and a pretty straightforward go-to-market plan to scale up your product quickly and efficiently.
When we feel ready to go for a fundraising campaign for our startup, we should be ready to justify and present the above arguments. In general, fundraising takes a lot of time from the co-founders, so we have to be sure that our product and progress are not left behind. The CTO should have a dedicated team to move on with development in a semi-automated way. Continuous progress is another key that we have to show to our potential investors. Investors and VCs always evaluate progress and milestones as a part of a continuous startup assessment.
The Intelen story so far…
Intelen started fundraising back in 2009, after winning its first international recognition in the Guidewire Innovate!100 Contest as a finalist. After that, some more international awards came up in 2010 for Intelen’s innovative prototype product on energy analytics and social game mechanics for energy efficiency (Red Herring Global, silicon valley launch, OECD eco-innovation, Siemens World Smart Grid Innovation Contest, etc).
This opened many potential doors and gave Intelen publicity and credibility for its innovative methods; but this also created many expectations and put pressure on the whole team to finalize the products, start acquiring customers, form a high level advisory board and produce a great success story for the fundraising. International recognitions and innovation prizes do not give you funding or money and do not create revenues. Happy customers do…! But, they create expectations you have to meet, and you have to continuously prove your point of differentiation and your will to succeed to people and potential investors. This is what Intelen did and still does, after two seed rounds. Create a success story and show people your agility and fast progress. Then, prove that you have an extremely well differentiated product, acquire satisfied customers, and as soon as your team progresses you are another step closer to success!
In general, when we fundraise we should:
1. Have a 1-2 page executive summary for the investors and a good financial projection (in the seed stage) 1-year ahead. No need for a big business plan, nobody is going to read it.
2. Have a good pitch deck to present: focus on scaling up and go-to-market strategies and use your success story!
3. Organize your development and company progress well: the co-founders will be very busy with fundraising.
4. Demonstrate agility and the will to go global: present contracts and initial satisfied customers. Also use this feedback to adapt your price models. This will give you good and accurate financial projections.
Be ready to meet any expectations you create around you and to work hard in order to prove that you can evolve, learn, adapt and stay agile!
Located in Israel, buymystartup is a marketplace for buying and selling startup companies, products and technologies. Michael Lugassy is the founder of the platform and has been passionate about Web and IT development for many years.
Janina Benz: When I stumbled over buymystartup, it made me curious to know more about the participating startups and potential buyers. Could you explain your business model to our readers in a bit more detail?
Michael Lugassy: Simply put, we let entrepreneurs list their startup company, product or technology for free. They only pay a 1.9% finder’s fee if we get them a buyer. After initial submission and careful consideration, we follow up with some questions and start sourcing for deals through various networks. Some startups get spotlighted on our blog and social streams.
JB: How did you come up with the idea?
ML: Being more of a builder-entrepreneur than a seller-entrepreneur, I’ve always been drawn to developing new technology rather than marketing it. I ended up with a bunch of fully functional products lying around, but no one to push them forward. Some products were missing that final touch, some were selling nicely but could benefit from a greater sales force. Having used and witnessed the popularity of flippa.com and angel.co, I thought why not develop a marketplace for entrepreneurs just like me.
JB: Have you closed any deals yet?
ML: We are going to announce our first ever sale really soon!
JB: How many people are working with you on buymystartup?
ML: The people working on leads include the very best of my 400 close friends, as well as thousands of their contacts.
JB: What is your strategy for gaining awareness in the startup scene?
ML: Get enough entrepreneurs on board to list their companies, which now means going door-to-door and helping them submit. List only products with viable technology or teams to keep standards high. Use proceeds from sales to reach more entrepreneurs in more places, rinse and repeat.
JB: I assume it’s very hard to get potential buyers on board. Are you well connected to investors or buyers? What kinds of interested parties are potential buyers – big companies or private individuals?
ML: Actually, buyers that look for teams to soft-land or acqui-hire are pretty known and accessible (Luma Partners). The tricky part, we’ve learned, is to get entrepreneurs convinced and prepared for sale. We try to encourage them to speak openly about what is still missing and get the right price tag. Most of the time, they will be bought for who they are – the product itself is just the shop window.
JB: Israel is famous for its entrepreneurial spirit and IT startups. In your opinion, is it easier to found a company in Israel and to scale than it is in Europe?
ML: I think so. Israel is well developed, but too small to run any kind of scalable business on its own. This makes entrepreneurs think global from day one, and avoid the temptation to try to (eventually) stay local. The startup community here is extremely friendly, ridiculously close-by and very approachable. Israeli entrepreneurs who have “made it” to key positions become ambassadors and fuel our success further.
JB: How well is the Israeli startup scene connected with investors from Europe or the US?
ML: There’s an obvious Americanization not only in the startup scene, but also well beyond. Israeli entrepreneurs feel much more “at home” speaking to an American counterpart than a European. UK-based companies, investors and private individuals seem more open in terms of cultural sensitivity and accessibility . Not sure about other countries, but various initiatives such as CODE_n could probably help change that.
Thomas Ohr is the founder and editor of EU-Startups, an online magazine covering European startups. He started the project in 2010 due to his passion for startups and his excitement for Europe’s future. Since EU-Startups is still a hobby, he works in the marketing department of a German media company. Thomas Ohr works and lives in Freiburg, Germany.
Janina Benz: What is EU-Startups, and what inspired you to start it?
Thomas Ohr: EU-Startups is an online magazine covering Internet and mobile startups out of the European Union and the European continent. Aside from our focus on young companies, we also profile established firms or publish other news out of the tech space that has a commercial or cultural impact on European startups. Our vision is to connect the European startup scene and to encourage entrepreneurship within Europe.
JB: Over the last few years, how have people’s ambitions changed in regards to founding a business?
TO: More and more European entrepreneurs have realized the opportunity to create products not just for their home market, but for international markets. This is an important step which will lead to us soon seeing more and more European startups that succeed on a global scale.
Patxi Echeveste, founder of Wattio, is a serial entrepreneur in the fields of green energy and energy efficiency. He believes that generating green energy is less interesting than conserving it, because the greenest energy is the one that is not used. He launched his first company, a solar company, at the age of 25, right after completing a masters in Economics Engineering. Now aged 33, his second company is aimed at turning normal houses into SmartHomes with Wattio, a powerful, flexible and cost-effective solution.
Janina Benz:What makes Wattio different than other smart home systems?
Patxi Echeveste: Wattio brings you a complete solution for saving energy and managing your home in a smarter way: we master software, firmware, and hardware to make your life greener and easier. It is extremely easy, secure, flexible, scalable, open, cost effective, and cool.
JB: What’s been your biggest challenge so far?
PE: This project has taken four years of hard R&D work in order to bring a complete solution for SmartHomes to you all. But, honestly, the big challenge now is to place it in the market, and to catch the attention of the media!
JB: You’ve just launched a fundraising campaign on Indiegogo. Why did you decide to raise money through a crowdfunding platform?
PE: We wanted to recruit a unique user base. This community will be our little treasure and we want to grow with it. We will take care of their problems and love their feedback. You know, taking care of the environment and the people we love is a big task—that’s why we need this community. Of course, supporters will get great benefits.
JB: What do you plan to do with the money that you raise?
PE: The more you support us, the more products and solutions we can offer you. Apart from the electricity and comfort system, we will offer solutions in the security and health fields as well. And of course, the platform will be continuously improving and growing.
JB: Aside from contributing, how else can people get involved?
PE: Ask folks to spread the word and make some noise about our campaign! Use the Indiegogo sharing tools, get one of our running t-shirts. We will be always grateful.
JB: Thanks, and good luck!
Editor’s Note: We’ll be featuring some of our finalists on the blog in the weeks leading up to and after CeBIT, but their participation has no bearing on the contest results
Entrepreneur Ridha Azaiz is the founder of SOLARBRUSH, a robot designed to clean solar panels. Although Ridha is having a very busy day at CeBIT, he took 5 minutes to answer our questions. In his interview, the CODE_n finalist introduces SOLARBRUSH and speaks about what being a young entrepreneur means.
To listen to the interview, please click here.
Jennifer Indovina is a cleantech entrepreneur, political energy advisor, and TED Fellow who is currently working to spread energy efficiency initiatives worldwide. Jennifer is the CEO and Co-Founder of Tenrehte Technologies, Inc., a cleantech company that produces wireless consumer electronics products. Tenrehte’s first product is the PICOwattTM Smart Plug, an energy-saving outlet adapter that gives you remote control over the power your devices consume. The PICOwattTM Smart Plug has received international recognition, winning the 2010 Best of CES Green Product Award, as well as being featured in the New York Times, Popular Science Magazine, Treehugger.com, and BusinessWeek. Jen’s latest TED talk, Eliminating Power Poverty, can be viewed online.
Janina Benz: Tell us about your company, Tenrehte.
Jennifer Indovina: Tenrehte is a cleantech electronics company. We make energy monitoring and control products that save buildings energy. We launched the company with our first product, the award winning PICOwatt Smart Plug, at the 2010 Consumer Electronics Show, and we’ve been moving full steam ahead ever since.
JB: In 2010, you were selected as a finalist in the Best Young Entrepreneur category for the Stevie Awards for Women in Business. In your opinion, what is the most important characteristic to becoming a successful entrepreneur?
JI: Self-awareness. I think the reason why it is so rare for an entrepreneur to be part of the right team, have the right product, and find the right market at the same time, is because the leader is not self-aware. It takes more than just a strong personality to deal with the startup environment: you also have to be passionate, fair, loyal, hardworking, and honest—first and foremost, with yourself.
JB: Do you think that entrepreneurs are born or made?
JI: I think it’s both. My family has the entrepreneurial spirit; my grandfather and father were both self-starters who were a part of their own startup companies. However, I also feel that I have been made into the entrepreneur I am today by my experiences. I have experienced triumph, failure, being powerless, being powerful, and feeling truly grateful for certain customers. Only because of these experiences do I feel worthy enough to call myself an entrepreneur.
JB: When working as Director of Marketing for Vivace Semiconductor, you led international teams based in the US, South Korea, and China. How did working with an international team change your process?
JI: Working with international teams at such a young age taught me how to blend into environments, to respect differences, and how to communicate effectively—the ultimate entrepreneur’s toolbox, if you ask me.
JB: What are your big expectations for CeBIT?
JI: CeBIT is the most incredible mix of international businesses; I expect this show will introduce incredible new opportunities. I am just so excited to spread the PICOwatt love all over the world.
Editor’s Note: We’ll be featuring some of our finalists on the blog in the weeks leading up to CeBIT, but their participation has no bearing on the contest results