The European Startup Revolution Ivo Špigel the European Startup Revolution Copyright © Ivo Špigel, 2015
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The European Startup Revolution Ivo Špigel The European Startup Revolution Copyright © Ivo Špigel, 2015. All rights reserved Published by Fores, Zagreb Publishing partner Tech.eu Cover design Dada Špigel Copy editing Alexander D. Hoyt Interview transcriptions Dunja Odobašić Vacula, Mirjana Markić Layout and printing ArTresor naklada, Zagreb ISBN 978-953-58822-0-6 A CIP catalogue record for this book is available from the National and University Library in Zagreb under the number 000919312. For Dada and Fran – my gurus Contents Foreword to The European Startup Revolution 9 Introduction 13 1 Zemanta Boštjan Špetič and Andraž Tori 17 2 Seesmic, LeWeb Loic Le Meur 33 3 FanDuel Lesley & Nigel Eccles 49 4 Atlas Ventures, Accel Partners Fred Destin 61 5 Skimlinks Alicia Navarro 73 6 Playfish, EA, Super Evil Megacorp Kristian Segerstrale 87 7 Last.fm, Passion Capital Stefan Glänzer 103 8 Rebate Networks Michael Brehm 123 9 Dailymotion Cedric Tournay 135 10 PriceMinister, Rakuten, Kernel Investissements Pierre Kosciusko-Morizet 157 5 THE EUROPEAN STARTUP REVOLUTION 11 GetJar, Nextury Ventures Ilja Laurs 173 12 Seedcamp Reshma Sohoni and Carlos Eduardo Espinal 195 13 Seedcamp, Index Ventures, The Accelerator Group Saul Klein 211 14 Supercell Ilkka Paananen 233 15 LundXY Morten Lund 257 16 Mendeley Victor Henning 275 17 Prezi Adam Somlai-Fischer and Peter Halacsy 295 18 SoundCloud Alexander Ljung 311 19 500 Startups Dave McClure 323 20 Deezer, Plizy, StreamNation Jonathan Benassaya 347 21 Business Model Generation Alexander Osterwalder 369 22 Fon Martin Varsavsky 383 6 Contents 23 Techstars London Jon Bradford 393 24 Huddle, SoftTech VC Andy McLoughlin 407 25 Nordeus Branko Milutinović 429 26 TransferWise Taavet Hinrikus 453 27 Rimac Automobili Mate Rimac 463 28 Iskon, MicroBlink, PhotoMath Damir Sabol 475 Acknowledgments 489 Contributors who funded The European Startup Revolution 493 7 Foreword to The European Startup Revolution By Robin Wauters, editor-in-chief, Tech.eu Watching the European technology startup ecosystem develop for the past decade or so that I’ve been blogging has been nothing short of fascinating. From covering a handful of industry giants such as Nokia and SAP and a few outstanding startups here and there, we have come to a moment in time when it has become downright challenging to merely keep track of everything that’s happening across Europe even with a staff of experienced, full-time journalists. Both anecdotally and factually, we are observing an ongoing maturation – and transformation – of the European technology industry that is bound to have a ripple effect on a global scale. For some regions in Europe, this advancement isn’t measured in the number of tech “unicorns” they produce every year, or in the number of euros raised (or returned to investors) by its homegrown startups, but in the gradual shift to a cultivation of entrepreneurship and the laying of the foundations needed to build healthy ecosystems on top of. Simultaneously, certain European hubs have already birthed global category leaders (Skype and Spotify as the most commonly cited examples), and there’s a whole new generation of founders working hard at building lasting, impactful technology companies in a variety of fields. Certain European tech stars are able to do this even without trying to “make it” in huge markets such as the US and China; cases in point include companies such as Rocket Internet, BlaBlaCar, Fon, Zalando, Truecaller and many more. More will also follow in their footsteps; some of them will undoubtedly fail, but others are bound to thrive. Relevant statistics and research – even the conservative kind – show almost all numbers going up and to the right. In nearly all corners of Europe, we are witnessing a gradual, sometimes even linear, increase in the number of first-time entrepreneurs, capital invested in startups across all stages, valuations, funds raised by venture capitalists and private equity firms investing in tech, exits, average ICT spending, involvement from large corporations and policymakers – the list goes on. Europe is hardly the only region in the world where we can see that evolution, and to believe that the numbers are going to keep ballooning every year is to believe 9 THE EUROPEAN STARTUP REVOLUTION in a pipe dream. In fact, some observers argue that Europe is growing too slowly vis-à-vis other regions. To wit, it cannot be denied that the largest, most talked about and arguably most innovative Internet companies in the world are not, in fact, European. From Google, Amazon, Facebook, Tencent and Alibaba to the “new” generation of mega- companies such as Uber, Airbnb, Tesla and Dropbox, casual observers would conclude that Europe is incapable of producing such juggernauts. This is not as far from the truth as some would like to believe. The gap is real and demonstrable, and the challenges ahead are clear and undeniable. The devices we use to connect to the Internet – and the operating systems at the heart of them – are decidedly not designed or made in Europe, even if many of the innovations that made them possible were developed here. It is highly unlikely that European companies will be able to displace the Apples, Microsofts and Samsungs in this world and I would argue that the sooner we come to grips with this reality, the better. And yet the data shows that Silicon Valley or even the US is no longer the only place where the mammoths of the technology world are being created or grown. Tomorrow’s Internet giants may come from places like San Francisco or Boston, but there will be many more coming from places like China, India, Southeast Asia and, indeed, London and Berlin – just to name a few. While it may not yet be true that great companies can come from anywhere on the planet, we are definitely moving into that direction – and Europe will not be left behind. It is often said that Europeans are bad at celebrating successes, and that some are even unwilling to. An oft-heard refrain tells us we need more role models in Europe to learn from and to light the path for upcoming entrepreneurs. The reality is that Europe is fragmented in more ways than one, making it difficult for successful entrepreneurs to break out of their home countries and gain status as role models on a European scale. That doesn’t mean they aren’t there – it just means they’re not as visible as they probably should be. This is one of the reasons The European Startup Revolution is more than just a good read, or a collection of stories worth reading. As the saying goes, the whole is greater than the sum of its parts. I believe it is vital to periodically shine a light on Europe’s movers and shakers, the people from all corners of the region who are building, investing in or otherwise betting on the technology companies we will be writing about – and learning from – long after this book is published. 10 Foreword to The European Startup Revolution Ivo’s book offers a rare glimpse into some of the brightest minds in European tech, from successful entrepreneurs such as Ilkka Paananen (Supercell), Martin Varsavsky (FON) and Alexander Ljung (SoundCloud) to savvy financiers like Saul Klein (Index Ventures, Seedcamp and The Accelerator Group), Fred Destin (Atlas Venture, Accel Partners) and Dave McClure (500 Startups). It’s not a revolution unless it gets chronicled, and what better way to do that than to interview some of the captains of the European technology industry? There are many exciting things being dreamed up and built around the world, and Ivo’s book offers a front row seat to the extraordinary women and men who are making an impact on business and society from all corners of Europe. 11 Introduction There was a decidedly Dickensian air about the streets of London in April of 2009. Across the pond, Lehman Brothers had collapsed only a few months earlier, a vivid symbol of the financial crisis that had started in the United States and now seemed to be tearing apart the very fabric of the global economy. Walking around the British metropolis, one could almost taste the gloom and doom. “Budget to reveal bleak picture for UK” proclaimed the Financial Times. “DT shock prompts fresh telecom doubts” read another headline for the day. I was in London for a seriously boring tech conference organized by Open Text, a large Canadian software company serving buttoned-up corporate customers, known by very few outside of the world of enterprise IT. I decided to drop by another event while I was there. As I walked into the elegant, wood-panelled Jarvis Auditorium of the Royal Institute of British Architects, I might as well have been beamed up to another world by the organizer and host, an energetic fellow by the name of Mike Butcher. Mike is editor-at-large at TechCrunch, a leading online publication covering technology and start-ups. The conference was called GeeknRolla. The difference between the energy and optimism inside the venue and the bleak atmosphere outside was nothing short of dizzying. The Jarvis room was on fire on that early spring day in London. One by one, entrepreneurs and investors talked about their companies, their investments and their dreams. After each presentation, loud rock and roll music blared as Mike announced the next speaker. A great, fun video, produced by Inmaculada Martínez, featured startup founders from all over Europe jumping about and playing air guitars, symbolizing the energy and optimism of the startup world. Lesley Eccles was there, delivering a passionate, TED-like speech about Hubdub, the company she had founded with her husband Nigel. Beautiful images of their home town of Edinburgh provided a backdrop as Lesley spoke of the hopes they had for their project and how important it was for them to keep the company headquarters in Scotland, even though all of their customers, each and every one of them, were in the United States.