Israeli entrepreneur and business leader Yossi Vardi came on stage at Le Web 12 in Paris today to deliver some of his tips. Unfortunately he was a bit rushed out and didn’t have time to finish his presentation. Here are the tips I was to able to pick up as I was listening to him.
[this piece written during a blogging stint for Live.Orange.com]
Yossi Vardi What should start-ups do to succeed?
1- What it takes to succeed?
The most important factor for success is luck. People who are hard-working though are often in the best position for being able to reap the harvest of serendipity. Trying and reaching out to people increases your ability to be lucky, Vardi said.
2 – raising too much money can be toxic
Start-ups which raise too much money want to show their investors that they are using the money and they are often led to burn too much money too early and fail to make a profit
3- right size for team?
Vardi suggests that the optimal size for initiating a start-up is 3. Having only 1 is too hard and above 3 it’s too difficult to get oneself organised.
4 – a mentor is needed
A mentor is needed to help support the team and help them meet the right people Vardi went on.
5 – pivoting
Start-ups have to pivot, i.e. be able to modify the concept so that it adapts to the Market. Pivoting is important but it can also prove that the founders can’t learn from experience if they are pivoting too often. This is a double-edged sword.
6- attracting investors’ attention
Finding an introduction to the right investors is important, this is why networking is key. The is also confirming what we had witnessed in Silicon Valley last September.
There is a debate – in Israel and elsewhere – between experts about whether it’s better to do an early or late exit. When doing exits, one has to remember that one is not selling one’s company to another one, one is selling to an individual Vardi said.
As mentioned above, Yossi Vardi’s presentation was unfortunately interrupted. There a many other recommendations Vardi can deliver to entrepreneurs, we’ll probably have to wait until the 2013 edition of Le Web for us to hear the rest of the presentation and Vardi’s advice.
On day 4 of our Blogger Bus Tour, we met with Carlos Diaz, the CEO and founder of Kwarter and Guillaume de Cugis, CEO and co-founder of Scoop’it, two French entrepreneurs who left their country in order to take their venture to the next level and … change the world! (this post was originally written for the Live Orange Blog)
Kwarter, how it all started
Kwarter started off with sports. The idea is to use your mobile in order to connect and comment, hangout. There is also a gamification (see my Vlab piece on that subject) angle of using such kinds of applications while watching TV and changing the user experience: the more you engage, the more you get points and also credits and eventually, you are able to redeem your credits to get t-shirts and other freebies.
The start-up decided to tackle sports as their first topic (Fan cake, the first social game to be edited and released by Kwarter is just about that) because “just watching TV isn’t enough anymore. The trend seen in Silicon Valley is to turn each passive experience into an interactive one”. The focus is on American sports only at the moment: American Football, Hockey and Baseball … but it should be a piece of cake (sorry, I couldn’t resist it) to extend it to European preferred games such as football and handball.
[Carlos Diaz, CEO and founder of Kwarter]
Diaz, the founder of Bluekiwi Software, whom I have known for years and I was very happy to see again in San Francisco, started the company in Summer 2011 and did a quick prototype which helped him raise seed money very quickly. All this is very classic, although many start-uppers tend to forget about it; the name of the game is: prove the concept quickly, put together the technology, build the user engagement model, and find the business model … fast. Things have to go fast in the land of the Gold Rush.
a pivot around the initial business model
“The first idea was to have our own application and build traffic based on our brand. The ten next years will be about Gamification” Carlos Diaz added. In 2011 they Kwarter’s pilot was turned into a platform for other brands because they realised that they had to do this for others, not under their own brand. A few weeks later, they signed a deal with Turner and Bud Light; just that! Turner will kick-start its operation about the Baseball playoff. And we are not talking about small business but “half million dollar deals!”.
Diaz – like many others we saw in Silicon Valley – has managed to make his company pivot around its existing business model and hit the bull’s eye. Well done!
big corporations doing their shopping
“I was really amazed at the way on how large corporations were shopping for innovation in the Valley” Diaz went on. “What we do with Turner will be very disruptive: whatever you do will be displayed on the screen. For instance, as baseball players will be displayed on the screen, an overlay bubble will be shown with comments from Kwarter such as “20% of people believe this player will do a home run!” Baseball fans won’t have to wait for too long for the launch date will be October 5th, 2012.
Twitter (but not Facebook) is paying for TV channels to use its service
“So far we see the Twitter mentions on TV. But Twitter is paying broadcasters for this” Diaz said. “This is why Facebook isn’t seen on TV because Facebook refuses to pay for that kind of display”.
setting up one’s business in the Valley
Is it easy to set up a business here when one comes from Europe? “Sometimes I feel like Silicon Valley is like Disneyland” Diaz explained facetiously. “People are very naïve and they think that building a business is easy but it’s not. Just being turned down in Europe isn’t sufficient to launch a good company in the States” the French entrepreneur added.
“in 1999, Silicon Valley was a boring place!”
De Cugis said that “in 1999 and 2001 Silicon Valley was a very boring place. It all changed with Social Media, when some tech tsars became stars. It took me two years to adapt to the way of doing business here. After six months you realise that if you want to be part of this game, you can’t be part of it because you’re not part of the ecosystem and I started getting very frustrated. Then I realised all this was for real and I adapted to the way I needed to think of this as a real business. One year isn’t enough, it takes two years at least. And partnering is one thing but you need to have a good reason to come here.
living in the Valley is expensive, taxes much higher than France
“This is a difficult move” Diaz went on. “Personal life is very expensive here, even more if you have kids. A house with 2 kids costs $6,000 per month! Taxes are a lot higher than even in France. And this is because life is so expensive that people want to get very fast. This is why people want their projects to take off in such a hurry. People are very focussed on their jobs but they sort of work round the clock and have no vacations. Here there is nothing apart from tech, everyone is in high-tech. Even the salesman from the AT&T shop wants to start his own start-up”.
Scoop’it, from Toulouse to the Valley
Scoopit also went to NYC and hesitated between NYC and Silicon Valley. In NYC, the tech scene is competing with a lot of other things though. “If you go to the local Starbuck’s there, there are few chances that you will bump into a tech entrepreneur” De Cugis explained. “Here it’s a small city, there are only 700,000 inhabitants. You could go to a meet-up every night. And all that happens in Soma, you don’t even need to drive up to Silicon Valley.
setting up your business in Paris is a mistake
Although many would disagree, Diaz declared that “founding your start-up in Paris is a mistake, unless you are into Fashion or if you want to become a leader in your own country. All successful French start-ups (e.g. Meetic, Priceminister,…) aren’t known by anybody here. In order to do something to change the world, to be a game changer, one has to have a large market to start with” Diaz contended.
changing the world is hard
Yet, changing the world is hard… even in the Silicon Valley, and if believing in one’s dreams is important, one needs to avoid pulling the wool over one’s eyes. This, in a nutshell is what I withdrew from that passionate exposé by Carlos and Guillaume.
On 3 June 2010 we had the opportunity to meet with some very important figures of the Silicon Valley in Menlo Park California. We had indeed a meeting with the people from Arista, and namely Jayshree Ullal a former Cisco top executive who is leading the new company.
If we add to describe ourselves, Ullal says, we could say that “Arista means ‘the best’ in Greek!”. This is raisin the bar rather high but Ullal and team are seasoned and well respected specialists in the area, and therefore one understands quickly that this is not yet another start-up. The foundation of the company is based on the principle that cloud networking is different from enterprise networking. The company was founded in 2004 and took 4 years to develop the software, in essence an extensive operating system called IOS which is, according to its authors “the first time purpose-built software developer data centres”.
The closest competitor of EOS is NSOS from Cisco which is fact not really similar. Products started shipping on the second half of 2008; throughout the following 6 quarters, the company has amassed a vast number of customers. Arista representatives are saying that “[they] are adding a customer a day except weekends!” At the moment, the customer base is made of 300 customers who “came in even before a marketing plan was in place”.
Not a “rocky start-up”
This, Arista, is above all an experienced start-up versus a “rocky start-up” to put it in the words of Jayshree Ullal. Here, we mean serious business. It already has over 100 employees and most of its customers are coming to them rather than the other way round. Arista is basing its strategy on the fact that it can deliver innovation more swiftly than behemoths like Cisco, HP and the like. This is what made it possible for the company to receive Interop awards in 2010. “Arista is only focusing on the data centre, and is not doing enterprise networking” adds Ullal. This is why she pursues, they are “ahead of anyone else”.
In a nutshell, Arista is proposing better performance, (up to 5 times better) for 1/10th of the power and half of the footprint in the data centre. In essence, the company is proposing to improve data centres not just from a performance point of view but also from the Green-IT point of view and this is their main selling point.
Interview of Jayshree Ullal
In the following interview, Jayshree Ullal describes what the company is doing, its main selling points and its particular track record with regard to the investment finance industry for which she will give examples and facts and figures
I have just come back from a week spent in the Silicon Valley, during which I was
able to have meetings – as
part of a press tour – with various start-ups in the areas of IT infrastructure,
software , storage area networks to name but a few of the subjects that were tackled
during that trip. Beyond the various interviews and discussions that we had with
leading entrepreneurs in the Bay area, I have tried to highlight the eight points
which, at this very moment and in my opinion, are making the Silicon Valley stand
out from the rest of the world in terms of high-tech innovation; here they are:
above all, the Silicon Valley is about a state of mind in sync with entrepreneurship; the whole Valley is resonating with the desire to foster free enterprise and innovate,
secondly, there is the possibility for such entrepreneurs to find easy money and the real ecosystem to launch new ideas and new services,
thirdly, swiftness of action, which enables a new high-tech venture to be set up in something like 3 months or even less,
fourthly, the strength of the Silicon Valley is in the software, what ever the application concerned, even in the infrastructure business. We have indeed seen several start-ups work up to 4 years in order to develop a new operating system and therefore try and get a leg up in competition,
fifthly, a true myth, which enables the Silicon Valley to live on, despite the current credit crunch and the crisis that everyone has been through,
the sixth characteristic of the Bay area is private money, often coming from families or entrepreneurs (not VCs) who have succeeded; ethnic funds are also involved significantly (Indian and Chinese mainly),
the seventh reason is a sense of a global perspective, whereby Silicon Valley entrepreneurs are thinking global even before the opportunity arises to launch beyond their local markets,
lastly, the intensive use of offshoring for software developments, with unlikely countries like France being used as cheap alternatives to Bay area developers (a junior php developer in the silicon valley is paid $60,000
to 80,000 a year, a senior developer $120,000 to $150,000 per annum).
As a conclusion, it’s not just one reason that makes the Silicon Valley different from what is seen elsewhere, often copied and rarely matched, even in the United States. This region is really a maelstrom of innovation and entrepreneurship.
note: picture Yann A Gourvennec, Orange Business Services: the photo was taken at the plug and play tech centre in Sunnyvale.