Search This Blog

Sunday 1 May 2011

Who is next entrepreneur?



This post is a feedback to one of my elective classes "Managing Tech For Startups" at IE Business School where I recently completed an International MBA. The class was a new elective that was introduced by our most favoured 'gadget professor' at IE Business School; Enrique Dans!

The class was organised over 12 sessions where Enrique introduced the course on the first class and got us started with the online tools in which we would share our opinion and experience with the rest of the class and of course with the online world. We were specially encouraged to blog, to tweet and to share useful links with our peers on delicious. 

The blogs have been extremly useful as it prolongs your learning even after class, it allows you to read the class takeways of your peers, which highlights things that you may have missed during the session yourself and more importantly, see different viewpoints as we all evaluate information in different ways.

Delicious, while a great tool, have never been my cop of tea as I feel that too often many of the shared links have little relevance to what you are looking for, simply because it is so easy to 'tag' any site you come across. 

We also had our own group on facebook where students were sharing links to their blogs, posted requests, shared opinions or simply stayed tuned with the rest of the class. 

The tweets were specailly interesting as it almost felt that the class was operating as much online as it it was offline. Enrique introduced the hashtag #ietechstartup which allowed us and everyone else on twitter to follow the live 'tweet discussions' during the class. 

The aim of using these tools was to uptimise the benifits of the following 11 sessions for all parties. The students, for the reasons mentioned above in addition to getting familair with digital tools that are most essential in the current business settings, the entrepreneurs who would increase their exposure on the net and of course the business school who share the same benifits as the visiting entrepreneurs. This simply illustrates how creativity is able to achieve an objective in addition to serve many different purposes all at once!

So, with these tools we started our 'real world entrepreneurship' sessions in which we had the previlidge to hear the 'inside' stories about the lives and ventures of the following successful entrepreneurs;

Julio Alonso, the founder and the CEO of Weblogs

Jorge Mota, the fundraising guru

Arrola, the founder of Coches.com 

Gabriel Aldamiz, the founder of Chicisimo

RJ Friedlander, the founder of ReviewPro

Pablo Larguia, the founder of LaRedInnova

Rodolfo Carpintie, the founder of Digital Asset Deployment

To help us understand the dynamics of an internet business, the guest speakers were all founders of online ventures. The sessions provided us with insight of how their business started, how it was financed, how it was evolved, some of the challenges they encountered, how they dealt with it and finally how entrepreneurship has effected their lives in general.

So, instead of reading Harvard business case studies about them, we actually got one step closer and had them live in our class. This allowed us to interact to the actual source itself for an immediate respond, which was truly a profound experience!

The profiles of these entrepreneurs were very different to each other, which is probably one of the misconceptions we often have about entrepreneurs and about how a 'typical profile' of an entrepreneur is or should be.

We had entrepreneurs with extremely calm personalities, who had managed to create a perfect balance between their ventures and their personal life, and then we had personalities who were so involved with their ventures and insisted that being an entrepreneur requires you to make big sacrifices and that serious compromises are inevitable.

The perception of these individuals about a life of an entrepreneur was also clearly reflected in the way they managed their ventures and also the type of the venture they were involved in.

We had the energetic individuals with a very go go attitude and whom perceived their ventures as part of their lifestyle and seemed to enjoy almost everything that it had to offer. On the other hand, we shared the experience of those who saw their entrepreneurial life as a life commitment to a goal where nothing else comes first, and in order to succeed, you must give up absolutely everything and everyone to achieve its success.

We had the risk adverse entrepreneur who started a business alongside keeping a full time job, but we also serious risk takers who gave up established and very successful careers to start a venture based on a dream...and knowing that they would generate no income for a long time to come.

Since two of our entrepreneurs were in fact also investors, we also managed to see investors under a different light, which enabled us to see things from their side of the table for once.

In those sessions, I learned to see the vulnerability of investors. Investors are often perceived as 'ATM machines', Robot like individuals who give you cash in return of the right combination of 'codes' and numbers (market analysis and income forecast) and they enter your company, take over of your dreams and treat you like an asset that simply provides an ROI. However, I was surprised to learn that this is not at all the case for all investors. 

They are often more vulnerable than we give them credit for. Specially seed capital investors as they are investing in nothing but a concept, a dream! So their decision will be based on whether they share your vision or whether they see it more as an illusion!

They evaluate the person behind the idea more than the 'right codes'. The numbers can never be perfect regardless of how well your market definition is and how every possible risk has been thought through. Simply because, firstly... it is all based on an assumption that has been made on an unknown future and there will always be a possibility of an unforeseen circumstance, which would make the whole forecast completely void.

Secondly, regardless of how perfect the plan is, it is still up to the person behind the numbers to execute the plan. Is the person committed enough? Has the person got the strength to fight during tough times? Is the person willing to take advice and change the plan if it becomes necessary? Is the person willing to build a team based on the benefits of the venture and not based on personal interests?

Evaluating an investment opportunity looks easier than it is until you actually try and see things from an investor’s point of view. I guess the first question would have to be, how much are YOU willing to invest in your vision? If you are not willing to take any risks yourself, then is the idea really worth pursuing?

One very important issue that I personally learned is the importance of valuing your equity when you use this as a form of payment in the early stages of your venture. You must ensure that the benefits you get in exchange are worth the cost in the long term.

Calculating the cost of equity in the long term by reflecting the information in your financial forecast is a good practice as it allows you to evaluate the transaction and forces you to look for alternative solutions…and preventing you from taking very expensive decisions.

This simple tip, made me rethink a partnership agreement I was considering in my own start-up. What I really would really like is; being in a position one day where I go back to the investor and thanking him for saving me from a very expensive mistake.

This and many other takeaways are valuable learnings and real life experiences that we were offered in this class. I would take these with me wherever I end up, in anticipation that they are able to help me to stay motivated in moments of inevitable frustrations in a journey of an entrepreneur.

If I ever have concerns about financing my venture, I will remember those brave entrepreneurs who went ahead and started their ventures without outside financing and still made it. When considering an investment offer in my venture, I will remember the concept of 'smart money' as well as the concept of "money is green everywhere' before making a decision.

If I am ever refused an investment, I will keep in mind that a rejection does not have to mean that the business concept is invalid, but it could simply be that its not the 'thing' for a particular investor and there WILL be an investor who simply loves your idea and would share your vision of success.

I have seen a contradicting reality to what we normally believe and that is the fact that it is possible to maintain a personal life and to be a successful entrepreneur at the same time.

My aim now is to do my best to pursue my own dream and be able to come back to the same class and share my own experiences…and actually give an insight to a life of a female entrepreneur, which can by far be different to any of the stories we heard in this class.

This blog post is dedicated to my professor Enrique Dans who truly made my experience at IE Business School one that I would forever remember and value. 

Thank you!

  

Saturday 30 April 2011

Founder of LaRedInnova.com at IE Business School

Entrepreneur session 10:

Pablo Larguia
 
“Should entrepreneurs choose their VC? BULLSHIT! Money is money… get all you can!!”
… ok, perhaps an intensification of the words Pablo actually used…but the message is the same! 

Money is green everywhere… a phenomenon that Jorge Mota, the fundraising guru totally agrees with.
But my favorite line was this one:
“Having as much money as possible is not good? What the H… of course its good to have as much of it as possible!!!”

This was the respond  to some of the tweets we had made in our previous discussions. In the session we had with Gabriel Aldamiz, the Founder of CHICISIMO,  it had been discussed that “having little money is good as it keeps you focused.”



I don't completely disagree with this view, as you really must focus to decide what to spend your money on... but, perhaps not necessarily focusing on what you actually need to do with your business.  
I shared my view on this in a previous blog post: 

“Sometimes, limited resources might make you desperate and could result in you taking the wrong decisions and giving into situations that end up distracting your initial focus. It could also limit your growth to the extent that no matter how great your idea is, it never reaches its real potential.”
So I have to admit that I'm more with Pablo on this one. If you have a plan and you know what you are doing, money surely helps. If you don't have a good execution plan, well then it makes no difference if you have or not!  So... 

....a Good idea + Brilliant team to execute the plan + More money than less to pay for a rapid growth! 

More about Pablo Larguia

An outgoing charming young man with a good sense of humor, who between six months of discussing an idea over coffee at Starbucks, planned, executed and launched his company!

Pablo is the Founder and the CEO of LaRedInnova.com  An event based conference that provides a setting for opinion leaders, governments entities, academics, investors and entrepreneurs to share experience, ideas and of course to connect.

It may sound easier than it is. However, while the concept is simple enough, it is rational to assume that it requires constant networking, constant reinvention of an attractive environment for all different participants who are all there for different interests.

At the same time, while choosing a hot theme for the event that is exciting, topic of the day and not repeated, ensuring that all key participant are sourced and are all available at the same time. This requires a lot of relationship building and possibly the reason why Pablo commented that:


“being an entrepreneur is being a sale person 24/7” 


His next event will be held in Madrid on June 2011:




Sunday 17 April 2011

Founder of Digital Asset Deployment

Entrepreneur Session 11 



 Rodolfo Carpintie

This was our last session and most certainly one of the most interesting ones. This post will be updated soon...

.

Founder of ReviewPro at IE Business School

Entrepreneur Session 9 




RJ Friedlander

A class with Enrique Dans and RJ Frielander at Managing Tech For Startups...  


The session with RJ Friedlander was a very interesting experience and he offered us a great insight to ReviewPro. However, most information were confidential so I am limited with what I can share but the key concept was about opinions on the net... 

Opinions matter! 

Consumers are no longer convinced by fancy TV advertising or full page promotions in glossy magazines. They look for transparency and for real reviews. They ask friends and peers for advice and recommendations. They search the net and are influenced by what others have said about the product or the service they are looking for. They search for the truth! 


Is this good or bad for your business? Well, this would depend on what actually is truth about your business. It is therfore very important to know what perception your consumers have of your brand and how they are experiencing your services. 


I personaly believe that the transparency is great for businesses. It allows them to get closer to their customers and actually learn from their experience and improve accordigly. 


This however requires the business to constantly being updated with what is being said about its brand and take the necessary measures when need to. It sounds more complicated than it should be. There are different tools that could be used.


Beside tools such as google alart within the google analytics tools, there are actually tools specified for different industires.


RJ Friedlander offers the solution for the hotel industry; 

The first step is to know...


The second step is to learn...


The third step is to act...


The fourth step is... to stay one step ahead...




Founder of Minube at IE Busines School


Entrepreneur session 7:



Pedro Jareño

Travel....relax and be assured that you would enjoy the experience as someone else has already done it before... 

And this is what our 7th entrepreneur in Enrique Dans's Tech For Start Up class has come up with:



Pedro Jareno has achieved to attract:

  • 1.5M users
  • 125.000 regisered users
  • 900.000 pictures posted by users
  • 200.000 real experiences that has been shared by users  
 The above has helped him to generate 2M Euros in revenue in 2010 and provide 20 jobs!

One thing I didn't fully understand was this;  Why is a site that is targeting a global reach not able to be read in English when the most spoken internet language is in fact English?



When this question was asked, Pedro commented that it is very expensive to add additional languages. First I thought that he was referring to the technology, which would make no sense. However, Enrique pointed out that community management in each language and tracking mentions on the net in any new language is part of adding an additional language. 

This makes sense. But still... I am not convinced that the necessary investment in adding the most searched language on the net is not worth the potential growth that it could provide.

I am however under the impression that Pedro Jareno knows what he is doing...

The only thing I could think of is that Pedro is aware of the growth potential in English and is postponing it until he is ready both on a technical level, sales and marketing as well the required changes in their operations. 

Furthermore, it is much easier to compete with the internet giants once you have a relatively good size user base. Hence, another reason that they may have considered could be that they are more able to grow in 'silence' without generating too much attention in the early stages of their growth, and only enter the big sea, when they are ready to 'swim along'. 

This seems to be a strategy taken by other Spanish companies, such as our previous guest speaker and the founder of Ideaista. 

So once again... the learning is that to be global you don't have to be born global!

Founder of todotaladros.com at IE Business School

Entrepreneur session 6:




Alberto Torron


It is often argued that the life of an entrepreneur is a lonely life where you have to absolutely scarify everything and everyone and only have one thing in you mind, which is your venture! 

Is it really necessary to give up everything when deciding to becoming an entrepreneur? 

According to Alberto Torron the co-founder of todotaladros.com it is not necessary to even giving up your day job!
Alberto, is still working in a demanding job with great responsibilities at the same time of managing todotaladros among a few other ventures. How does he do it? By managing a small but stable growth. 

One of the reasons for their success has been the unique customer experience that they are able to provide. An interesting thing that he mentioned was that, if a customer has any concerns, he will be contacted by the owner of the 'store' personally to rectify the issue on spot. 

This is obviously not a service that is commonly provided within the e-commerce environment and indeed not one that can be sustained if the business was to have a rapid growth.

todotaladros.com is a online ecommerce where you can purchase tools such as Drills. Starting with 5-6 Drills and selling from home, they now have over £150k worth of inventory. 

Despite being a 'part time entrepreneur', Alberto has illustrated that it pays to be one. Without disclosing any confidential information, their revenue proves that a part time venture can still make more than a full time job. 

It also shows that there is absolutely no perfect profile for an entrepreneur and that everyone and with any life preference can turn an idea into profit. 

A great fact that he share with us was the importance of the ROI when investing in SEM.  

He mentioned that it takes 300 visits to the site to make one conversion, which in this particular case is to purchase a product that costs an average of 200 Euros. So as he nicely put it "unless you want to work for google, then it makes no sense to buy AdWords costing 2euros and hope to make a profit just because of an increased traffic. 

So...the advice is to calculate your ROI in all aspects of your business...even when it comes to marketing!

A final comment... I wonder how long Alberto is able to sustain his current lifestyle of being in a full time job and running a venture that is growing. My assumptions is that he would have to choose... It would be interesting to see what he would choose... 

.

Monday 4 April 2011

Founder of Idealista at IE Business School


Entrepreneur session 5: 




Jesus Encinar 


Session 5 in Managing Tech for Startups offered an insight to one of the most successful Spanish real estate websites idealista by the founder himself Jesus Encinar who's blog also offers some interesting posts... if you can read Spanish ;-) 




Regrettably, I was flying when we had this session which meant that I had to do my own research...

Idealista was founded 11 years ago in a business environment which was already very saturated. Despite aiming for international expansion, the business was initially only implemented in the Capital of Spain. 

Having only presence in Madrid allowed the company to focus and achieve great success in this vicinity but it made it challenging to raise finance as the scalability potential was not initially appreciated by the investors. 

Nevertheless, when there is a will, there is a way... 
After being rejected by 100s of investors, Idealista finally managed to raise $6.24M (€6M) in unattributed funding on 1/1/2003, which was achieved with help from Andersen Consulting. 

Idealista has since expanded into Portugal and Italy which seems that their strategy is to initially penetrate countries that share cultural and language similarities. 

The following tables show cultural similarities between Spain, Portugal and Italy. 



Hofstede explains these differences in the following 5 main elements which are very interesting and really worth exploring when considering an international expansion.


Going back to the actual website, I must admit that I personally do not find it particularly user-friendly, but the company apparently makes great efforts and uses technology to track user experience in order to constantly improve the site accordingly. 

I cannot comment on what technology Idealista uses for this purpose, but an eye track technology is an mazing tool which allows to track and actually analyse a user's behaviour on the website. The process would require a number of different users using the site while tracking their eye focus. The system is then able to analyse preferences according to age, sex or any other relevant demographic facts. 



Another useful tool is google's site overlay which provides information about where and how often the user has clicked on different buttons/links on the site and illustrates this in percentage. 



This tool is extremely easy to set up in google analytics and is a very useful when testing the design of a new site. 

Technology aside, the success of Idealista illustrates that it is not always necessary to be 'born global' and it is still possible to establish an international presence and in a pace appropriate to the business...

Only when the business is ready to explore new markets!
.