Archives for the month of: October, 2015

Dreamrate

We would all like to be able to spot the next big startup success before anyone else.  We could be that smart investor who gets in first and makes millions or we could sign-up as a team member or co-founder. It’s also exciting to be able to compare notes with friends about the latest cool apps. But why does it matter to founders and why should they provide valuable data to people like us?

Validation is essential at all stages – We have moved away from the days when startups emerged from stealth mode to a surprised customer base. Unless you are involved in pure research or developing deep IP you need to be sure that other people buy into what you are doing. Ratings can determine where you are in the process. Have you established problem/solution fit or are you well on the way to scaling?  It is important to know. It will determine which investors you talk to and the valuation of the business.

It’s helpful to know where you are – You often don’t know what you don’t know. A rating system can help establish the gaps you need to plug.  You may be a single founder with a cool idea. However, if you don’t have the necessary technical experience you won’t build a successful business. A rating system can provide an objective view of where you stand in the startup lifecycle and help you to address issues.

It’s tough getting discovered – You will need your startup to be discovered by investors, potential team members, the media and customers. The startup world is becoming increasingly crowded. There are millions of apps submitted to the App Store and without a objective ways of listing and rating it is impossible to be discovered.

It helps investors build portfolios – Investors need to diversify their risk. They do this by spreading their investment across a broad portfolio of companies. However, it is extremely hard for them to know which startups to invest in. Most investors will not attend generic networking events in the hope of discovering a winner. It just is not good use of their time. They will also not read unsolicited business plans from startup founders. They simply can’t see the wood for the trees and have no objective way to evaluate what’s been sent to them.

A rating system enables all interested parties to ‘discover’ the next big thing.  It allows us to categorise our database and curate deal-opportunities to investors that are interested in specific sectors or funding stages. If you would like to be discovered we would encourage you to create a startup profile on our platform. Each month we select the most promising startups to pitch at Hoxton Hotel London. We also match startups to angels or VCs depending on the funding stage.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

 

In 2012, the sentence “data is the new oil” was publicly recorded for the first time. Its attribution is not certain, but the analogy deserves some reflection and explanation. Investor Ann Winblad said “Data is just like crude. It’s valuable, but if unrefined it cannot really be used. It has to be changed into gas, plastic, chemicals, etc., to create a valuable entity that drives profitable activity; so must data be broken down, analysed for it to have value.”

As of today, a lot of companies have realised there is value in data, but not many have yet understood how to maximise this value.

Attending to a lot of industry conferences, the majority of talks are around tools and techniques where data is used to make sales increase, costs decrease, to optimize clicks… but the feeling is that we are listening to isolated examples from some business unit leads who are courageous and innovative, not manifestations of a cultural paradigm shift that companies have experienced.

Why should companies make efforts to put data at the centre of the decision making process?

Data-based decisions are better decisions. They offer deterministic expectations, they allow careful and surgical planning of resources, and they enable deep and meaningful understanding of facts. When there is a scientific model at the base of a forecast, everybody can agree on what good looks like before anything is done, with little room for people to misinterpret what a number means and what success looks like. Even an bad decision, when data-based, can be good because the error can be analyzed and avoided in the future.

A simple example: is 10M$ sales in a quarter a good result or a bad result? In a world with no deterministic expectations what would happen is probably the following:

- A salesperson would say “we did amazing, 10M$ is a 20% lift vs last year and the market is growing at 10% so we delivered over and above any reasonable expectation”

- A marketing person would say “this great result happened because of our efforts, we did great campaigns, both online and offline, making our product visible to millions and millions of people, generating 10M$ sales”

- A finance person might notice that 10M$ in sales was actually achieved with 12M$ investment thus generating a 2M$ loss so the result was not good at all

- A supply chain person might point out that the 10M$ in sales in the quarter were hard to sustain and supply is now low so the expectations for the following quarter might have to be revised down because new units have to be produced before they can be sold.

It’s all relative and, in a world like that, it is very difficult to call out what the outcome of each action really was, and what the consequences for that outcome should be.

With refined models, people can clarify, ahead of any action, how they would feel if that was the outcome, agree on what metrics define the success or failure of an initiative, and drive it with confidence.

 What should companies do to put the data at the centre of decision making? 

The key element is not tools, it is people. To harness the power of data, companies need to grow and recruit people who have particular skills. People that can: synthesise complex analyses in meaningful insights; work on large datasets using the most powerful and recent tools/techniques; ask the right questions; understand the business; who are driven by curiosity and genuine desire to understand things. I am not referring to cubicle-type data-nerd data-crunchers, I am referring to data-savvy business professionals, people that can sit at ease if front of C-level executives and have a conversation about a business issue, and then go back to their desk and figure out a way of solving that issue, using data.

The right people will drive a cultural change. The right people will refuse to pull data all day, it’s a repetitive job and depletes smart people in a very short time frame. The right people want to have a part in the decision making process, want to have a seat at the table and want to be listened to. These people will prove the value they add and this will slowly cause their business partners to ask for a data-savvy person to be involved in decision making, because it is not just about the data, it’s about the opinion, the insight and the point of view on it.

Ultimately, companies and leaders need to take firm action on the setup of their organisation, understanding that a hierarchical tweak simply won’t do the job. The person in charge of data should sit at C-level to ensure their involvement in every aspect of the company life, to guarantee neutrality and support to the ultimate decision maker, the CEO.

Why now? 

The pace at which data is generated today is massive, far too high for any manual process to keep pace. Companies need to have the courage to reinvent their processes around the opportunities offered by data-based automation and decision making, to let go of the practice of controlling every step of the user/customer experience and let algorithms do the job. Data-based decisions can, in fact, be automated on the basis of the desired goal and the people in the company should focus on managing the process that gives the desired output, and not on managing each step of the generation of that output. Machine learning has made this possible, new frontiers of personalization are now common practice in several technology companies and allow them to design experiences around each individual customer they have. Not to mention predictive analytics and behavioral models, which are helping companies shape strategies every day more customized and fragmented.

This is the full meaning of customer-centricity and the benefits for managing a company in this way are huge. P&Ls can be broken down to the level of marketing and sales channels, to initiative level, and ultimately to the level of each customer, allowing unprecedented transparency and accountability for each investment that is made. The P&L today can evolve from a huge averaged collection of inefficiencies that, at high level, compensate each other, into the sum of highly optimized micro-P&Ls that, when combined, show a much better company. It is no longer the “consequence” of a fiscal year, it can become the “cause of it, a tool to drive decisions every single day.

If this sounds familiar it is because it is, the data revolution and the industrial revolution are based on the same principle: automation and scalability. The industrial revolution was about addressing the issues of mass production of goods in an automated and scalable way, via mechanical and physical processes and the full control over each step of the production process. The data revolution is about addressing the issue of mass communication and distribution, via computational and mathematical processes, with control limited to input and output variables and trust in algorithms and models.

It is a deep cultural change, in most cases it means letting go of consolidated (and sometimes very effective, in the old world) ways of working, but I view this as a necessary evolution that companies who want to thrive in this day and age should have the courage to make.

This blogpost is written by Davide Cervellin, who is the Head of Analytics for Merchant Development at eBay. With more than 10 years of experience in roles across Finance, Analytics, Business Development and Ecommerce, he is now responsible for analyses related to business-to-consumer sales on the European eBay marketplaces sites. Prior to this he was responsible for the definition of the global strategy for online B2C sales at Pirelli Tyres and for Analytics and Performance Management at Vodafone. 

Attend Data-Centric Decision Making: The Ebay Approach (Workshop) on 29.10 

baby unicornAngel investors are often cautious about diving in too early when it comes to investing in early stage tech startups.  They argue that it is highly risky and that there is little quantitative data on which to judge performance. Of course this is correct but does the situation get any more favourable if you leave participation until later? We all know that even VCs have a poor record of picking winners. Surely it is better to make a larger number of smaller bets at early stage than risky larger amounts on later rounds when the valuations are poorer and you have less influence? Here are a few reasons for getting in early;

You can cherry-pick the best opportunities

In the current frothy market there is strong competition for VC ready startups.  However, at seed stage, there is the possibility of spotting a gem. Admittedly it takes more work and you may want build a relationship before committing but you can construct a portfolio of startups that play to your personal strengths and experience. I would advise networking like crazy in your designated sector, learn whats attracting VC investment and get in before the rest.

You can influence the outcomes

If you are first in, you can have a strong influence on the strategic outcomes of the startup that you invest in. You will want to pick strong founders in industry sectors where you have previous knowledge and contacts. You can build a powerful relationship in an advisory role and take away some of the burden from the founder in building the first full funding round. You can also bring the benefit of your experience and help the founder attract other investors.

You get a better valuation 

Clearly the earlier you invest the more favourable the valuation you will secure. This has the advantage that you will be able to construct a portfolio in which you hold equity in a great number of startups with higher equity share. The diversification of your portfolio is an essential part of achieving a higher return on your investment. If you spot opportunities early enough you will find that quite small individual investments can have a major impact.

I would advise founders to start building their funding rounds, bottom up, from very early in their startup lifecycle. They should identify smart investors who are able to add value during the early days and later bring in other investors to construct the full seed round. Most founders fail to realise that they will need a lead investor anyway. It is better for both parties to build the relationship early to obtain maximum benefit.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

 

The startup eco-system has always been about concentrating resources around great founders. First it was Silicon Valley followed by around-about 20 other cities across the globe. It was then realised that this was not enough and we saw a proliferation of accelerators, some stretching out to the developing economies. These individual ‘dots’ are vitally important to the health of the global startup scene. The next phase is to join the dots and it will be the internet that enables this.

Silicon Valley gave us all an insight to the model needed to create successful startups. The Valley concentrated resources within a few hours drive of Sand Hill Road where the VCs were based.  Investors could keep an eye on their portfolio companies, which were formed by founders from Stanford and Berkeley universities. The Valley acted as a magnet for talent from across the globe and sucked in resources from other economies.

Other cities such as New York, London and Tel Aviv sought to copy the formula and tech tech clusters were formed. Silicon Valley was still dominant and often pulled in mature startups for funding.  This situation has been a great benefit to The Valley but has drawn resources away from other centres.

Accelerators, are effectively micro-clusters.  They concentrate resources around specific startups, wherever they are formed.  An accelerator run in, say Nairobi, can attract the best local talent and give them the support they need. They can attract investors and mentors from across the globe.

Now platforms such as Dreamstake are joining the dots. Accelerators, angel networks, co-working spaces and a whole bunch of other initiatives are looking to deliver support and funding to startups wherever they are. They provide a useful concentration of resources but often lack the capital they need to fund the startups on their programmes.

The internet allows us to identify the best founder talent wherever it is and deliver resources on a global basis. This creates a meritocracy where location is no longer the only determinant of success. For the first time in history, a brilliant founder in Africa, can access the support needed to build a global business. This will go a long way to reducing poverty in many parts of the world.

Blog by Paul Dowling – Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.

It is true, that these days with enough patience you can learn absolutely any business skill online or offline, but where to find workshops for internet startups that’d be of great value for time and money?

There are all sort of online and offline workshops for internet startups and digital entrepreneurs, offered by ed tech (educational technology) startups and some very established players. I would like to highlight a couple of sources that I still myself, if I need to quickly freshen up my skills.

General Assembly London. Originally out of New York, these guys are now also fully established in London. You can attend all sort of useful sessions for technology entrepreneurs to learn skills from coding to growth hacking. Their prices start from about 15GBP per one session. You can also attend their full time courses over several weeks and become a certificated professional i.e. User Experience or Programming.

Coursera. Wanna learn from a Yale professor about financial markets or discover recent case studies in business analytics with Accenture? No problem, you can now do it online from your sofa for a very affordable price or sometimes even free. This company has international universities on board producing their online workshops, many of which are not only useful for digital businesses, but will help to build any professional skills.

LinkdIn’s Lynda.comOnline learning portal Lynda has been acquired by linkedin this past spring and is slowly becoming a well established online destination for anyone incl. digital and technology entrepreneurs wishing to polish their business skills and set up business online incl.  coding, online marketing , design, video etc. Their subscription model is very affordable for anyone and their range of online workshops is very wide with tutors from all countries and backgrounds.

Digital Business Academy is pretty much the  new offer from the British Government, which is trying really hard to support internet startups and digital entrepreneurs. They have a full range of online tutorials about how to start a business online. The great thing about it is that it is not only free but also produced mostly by established entrepreneurs from the tech industry. Seems that they know what they are talking about and have great case studies and practical examples.

Dreamstake Academy - we have been running free workshops for tech entrepreneurs and digital startups for three years. Since then we have had a chance to learn what are the most important and valuable for our entrepreneurs.  It is a free non-profit project and we now have some of the best tutors from all over Europe supporting us. We run up to 4 workshops for entrepreneurs per day with subjects including anything from Business Model Canvas to VC and angel funding for early stage tech businesses. You can become a member and sign up here.

Blog by Marina Atarova, Co-Founder of Dreamstake  the world’s first tech startup platform to match founders with the most appropriate investors using a unique startup rating system. This allows entrepreneurs and investors to monitor startup progress and inject capital and support when most needed. Startup founders can create profiles on the platform and get direct introductions to investors. We are constantly looking for great early stage tech startups. Investors please contact [email protected]

We have also recently launched an exclusive tech angel investment club in partnership with The Hoxton. HoxTech Angels will run invitation only angel investment evenings every month.