Pajama Entrepreneur

The Financial Times has an article on the growing number of startups in Europe, a region known for bureaucracy, high taxes and lack of entrepreneurial spirit, but now blessed with the arrival of . . . Seedcamp!

The FT article talks about Saul Klein, a UK-based British ven­ture capitalist and entrepreneur, who created Seedcamp (”a week-long series of masterclasses for high-technology businesses from across the European Union”). Seedcamp begins on Monday September 3 in London. The Financial Times is covering the highlights (like the Olympics). A panel of VCs has already chosen 20 companies out of 270 to participate. The list is at http://blogs.ft.com/techblog/. S0 readers of the Financial Times can follow their “progress” online. This is looking more like a Big Brother-like media stunt.

What’s the prize? Free advice! From successful entrepreneurs, professional advisers and executives from Oracle, Google, Yahoo and Microsoft. Then, the startups get to do their elevator pitch to VCs like Accel and Index. Seedcamp will choose 5 companies who will get 50,000 EUR each. Unfortunately they will have to stay in London for three more months (ouch!) and continue doing elevator pitches.

I’m sorry I can’t see the point of all this. And to associate the growing desire among Europeans to start new companies with a thing like Seedcamp is laughable.

(1) If you are a startup and need to participate in a contest to reach any of the above mentioned VCs and waste your time at the media circus studying how to be a successful entrepreneur instead of working on your product, you will not get anywhere, not with 50,000 EUR or 50 million EUR or all the advice in the world.

(2) Three months in London doing a dog-and-pony show, listening to a VC advisor tell you how you need to hire a VP of Marketing when you don’t have a launchable product yet is totally ridiculous. Waste of time.

(3) Real entrepreneurs do not think this way. They are self-driven, they experiment a lot (many of their initiatives generate results that they did not expect), they do not wait for cute little contests put on by VCs. If they manage to develop a compelling product (after experimenting, tinkering around), the VCs are banging down their door to invest.

I am certain that successful European startups - not in terms of how much VC money they manage to suck up, but in terms of how many people in their target market find their product truly useful - will not come from Seedcamp or anything like it. It’s a waste of time. Success does not always mean having 10 million customers. If you create a product or service and are targeting a small market but have 80% of that market, you are successful.

And success isn’t measured by the amount of VC money you get. In Silicon Valley circles, this is some kind of badge people are proud to wear. This is very WEIRD and it’s an attitude that has blown over across the Atlantic. Very unfortunate. There are many faux entrepreneurs running around, bragging about how much VC money they raised. But their applications suck, they flame out after one year, and nobody hears about them again. This is not what entrepreneurship is about.

So what is being an entrepreneur about?

(1) Not knowing what’s going to happen next week or next year. It’s easier to have a job with a big company or the government. Sure, there’s no job security even in Europe but it’s still hard to fire people. The good thing is if you get laid off next week from Big Co, you get unemployment insurance compensation for months, sometimes years. This is why a lot of Europeans sit on their butts working for large companies, complaining endlessly about how boring and crappy their jobs are.

(2) Lack of financing is not to blame for the absence of HUGE Internet players like Google or Amazon. What’s to blame? The absence of a HUGE integrated market where everyone speaks the same language, has the same legal and financial system. I love these articles in financial newspapers (appealing of course to financiers) where the authors complain that Europe does not have as many startups as the US because of lack of VC funding or because large financial institutions that do not appreciate cute little startups, and so on. That makes a difference in a few cases but when we are talking about numbers - large numbers of people going out to start their own tech-related business and out of those large numbers, out come a handful that are hugely successful - I am afraid we are talking more of attitude and environment, not money.

You need the large numbers of people starting new things, otherwise you don’t even get Skype, Amazon, YouTube, Facebook (developed by students by the way), Google. And as I mentioned earlier, you need a HUGE market. Skype succeeded because it developed an application that appeals to everyone from Algeria to Ghana. That’s not so easy. Most online services still rely on local markets to grow, especially the trend-of-the-moment, social networking sites.

How do you get large numbers of people throwing the dice and saying, “To heck with it, I’m going for it?”

Change in Attitude - see (1) above.

Environment - people in the US are hugely supportive of those who go out and try something new. If you sit down with friends or even strangers at a cafe, and explain to them that you are about to start a new business, that you are worried about being able to support yourself and your family, and you wonder if the new business will make money but you think you have a good shot, they will say, “Go for it, dude!”

Try this in Europe. You will get 101 reasons why you shouldn’t.

But it’s changing.

Ten years ago, I’d say you would get the 101 reasons all the time. Today, you’d get it 50% of the time. Why? Because a new generation of Europeans has grown up who are used to: (a) working on temp contracts, (b) seeing their parents laid off time and time again, (c) independence (traveling around, having their own money at a young age, valuing other things than security).

They realize that having a job in a big company is a joke. You are not supposed to take it seriously, except as a way to get training and new skills. For them, Dilbert is very real: the stupid, nasty managers who get promoted year after year, the idiotic company mission statements, the pretense around loyalty, the face time nonsense (showing up in the office just to show you are there, not to do real work because your manager is a control-freak who wants to see his staff present all the time, like an Army commander who oversees his troops).

In the technology business, it’s never been easier or cheaper to start something new. You don’t have to launch a new product or online application. You can also be a very good web designer, programmer, etc. with your own business — that’s also entrepreneurship, but it’s yours, you are not working for an evil boss. You don’t need VC funding. Office space, if you need it, is cheap. You can also work from home because broadband in Europe is super cheap. You can source help from countries like India or the Philippines or Roumania, if necessary. Countries like France and the Netherlands have made it more fiscally attractive and much easier (from a paperwork point of view) to start a company. There’s a growing network of tech startups in every country (and across Europe) so you won’t feel lonely.

Entrepreneurship is about having a more profound vision of what your life should be. You have one life on this earth and it is very precious. Do you want to waste it sitting around with Dilbert and his office mates complaining about the pointy-haired boss? Or do you want an interesting life?

You don’t need Seedcamp for this!

Stylefeeder.com is the latest personal online shopping site that allows you to bookmark items you like (an iPhone, Gucci shoes, Dior bag), find “style twins” (people who share your taste), get product recommendations specific to your taste and solicit advice from others in the community about items you are thinking of buying. It’s a social network and bookmarking site around shopping that tries to match people’s tastes. Stylefeeder makes money by taking a cut on purchases made via your recommendations.

I signed up for a Stylefeeder account and found it very easy and fun to use. The best way to make use of Stylefeeder is to install a browser plug-in button so that whenever you find an item in an online shop, you can simply add it to your Stylefeeder list.

For example, you go to a store, click on an item, click the Stylefeeder button to add to your Stylefeed. A box pops up that allows you to pick the photo you want associated with the item and to edit any information about it. Click “add” and that’s it. You can also edit to add tags to the item, and add it to any groups that you have joined in the Stylefeeder community.

Stylefeeder is like Kaboodle, the other social shopping site that’s been around for a while and has a larger audience. Kaboodle describes itself as “social shopping community where people discover, recommend and share products. Kaboodle’s powerful shopping tools allow people to organize their shopping through lists, discover new things from people with similar style, get discounts on popular products and find best prices. At the heart of Kaboodle is a fun and engaging community of people who love to shop.”

Both sites encourage users to make lists of favorites, to tag items, create or join groups, make recommendations, rate items, etc. Kaboodle was recently sold to Hearst Magazines. The rumored price is $40 million (Kaboodle raised $5 million in VC funding).

I like Stylefeeder more than Kaboodle because Stylefeeder looks better and is easier to use. It’s less cluttered, more “Web 2.0″. Stylefeeder also lets you place widgets on your blog, website, Friendster and MySpace pages, and it has a Facebook application. But Kaboodle has the advantage in terms of the size of the community so if you are looking to join a group of beauty junkies who have already posted a lot of items, Kaboodle is better . . . for now.

There is such a demand for online sites that do taste search, not just for shopping, but also for travel, entertainment, eating out, and home decor. I expect Stylefeeder to attract a large audience very quickly.

Stylefeeder and Kaboodle founders motivated by similar problem: finding things that match their taste

The similarities between Stylefeeder and Kaboodle extend also to the founders. Both sites were started by couples who had difficulty shopping for things online to decorate their homes. In the case of Stylefeeder, she couldn’t find decent lighting in the US (see http://www.stylefeeder.com/about.html). Kaboodle’s About page says the founders were remodeling their home and couldn’t find products that matched their tastes.

Stylefeeder’s founder goes into his obsession with taste search, finding whom to trust when it comes to restaurant reviews, etc. (http://blog.tech.stylefeeder.com/).

Businessweek has posted a long article on how technology has changed the way people work on a daily basis, how goods are produced and services delivered. Laptops, the Blackberry, the iPhone, Skype, instant messaging, cheap data storage, broadband and video conferencing have allowed people to work remotely. The article fails to note, however, how large numbers of people have managed to never work for a boss again — entrepreneurs who start their own businesses precisely because the cost of setting up a business is much lower and they can now serve clients around the world.

If I were to write a piece on this new way of working, I would call it “The End of Office Politics” and talk about the freedom that people have working for themselves.

Mashable has just created a Web 2.o marketplace for entrepreneurs who want to find software developers, sell or buy companies, provide development services, etc. Mashable was inspired by the recent trend of companies listing themselves for sale on eBay but apparently, they claim they got more leads from Mashable. Among the categories are websites for sale (and wanted), jobs available (and wanted) Facebook development services, software providers, etc.

Anyone who lists within 48 hours (starting August 14, 2007 — 03:15 AM PDT) gets a free listing. Mashable is thinking of charging $120 per month for listings but they’re open to other suggestions. 

Go to the Mashable Web 2.0 marketplace: http://market.mashable.com/ 

iPhone hacked, takes European SIM card: “The Sim-Clone hack enables people to use all the functionality of an iPhone in Europe, with both incoming and outgoing calls, as well as SMS and edge internet.” Everyone knows it was just a matter of time before someone hacked the iPhone to allow consumer choice.

Real businesses make money: there are too many startups relying on the M&A market (also known as the flipmeat business model) to save their butts from extinction. Instead of developing truly useful applications, they simply copy others before them, implement a few minor changes, raise some money and hope that someone (e.g. Yahoo) will buy them. The problem is there are not that many acquirors, so what do they do while they are burning cash?

China bashing is very popular these days and the mainstream media know it. Yesterday, I read an article about California banning ginger imported from China because they use illegal pesticides. Today the toy industry gets its turn in the spotlight with an article on shoddy Chinese toys but at least this one focuses the blame on the toy companies’ failure to monitor quality. Read this thread on the Consumerist about toys containing lead. China is not the only source of junk like this and the focus on China is unfair.

The European Union has strict food laws, but it has seen a lot of food scandals. Has everyone forgotten about the dioxin chickens from Belgium only a few years ago? What about the dangers of beef? BSE anyone? Suddenly that disappeared from the news.

There’s never been a time when the food supply or the goods being sold were 100% safe. Never. It’s much more difficult to monitor and regulate the food supply today because of globalization. Our food, toys, clothes, computers, phones, furniture and nearly everything we buy comes not just from another country but from different countries (think of components of a phone made in different places). It is impossible for one regulatory agency to monitor all that.

With regard to food, why not try to eat locally grown produce? Everyone’s into being green these days. Transporting food thousands of miles to your grocery is hardly green. Of course, there is no guarantee that your local produce has not been sprayed with illegal pesticides, but it’s much easier to monitor locally grown food. But even that’s not 100% safe. E-coli bacteria was found in Northern California spinach just a few months ago.

For entrepreneurs who source their goods from different places, the burden of monitoring quality and labor conditions (you don’t want your products associated with slave labor) is very high. Many complain, “We can’t afford it.” But I say: can you afford NOT to?

Marc Andreessen has posted an excellent piece on why not to do a startup, part one of his series on his guide to startups. The stress, hiring and firing people, the hours, battling with co-founders and investors can drain the joy out of even the most devoted entrepreneur. But, I am an optimist and I think that working for other people especially in a large company is worse option. What do the words “success” or “failure” mean? Whatever you want them to mean.

For me, working for someone else is just not the way to spend my life. People think they have all the time in the world. They live their lives as if they have 10 lifetimes. Marc mentions in his blog post why one should do a startup: control your destiny, have an impact on the world, create your ideal work environment and have a chance to make money. Of those reasons, controlling your destiny is the most important one for me.

I stopped working for big companies because I was unhappy always working on other people’s projects. I decided I wanted to bring to fruition all those ideas burbling in my head. I wanted to work on MY projects during the little time I have on this earth.

The pains that Marc mentions in his blog post are so minor compared to the awfulness of working for someone else.