

The European Startup Ecosystem is Entering Puberty - theoneill
http://davidlanger.co.uk/2008/04/12/european-ecosystem-is-entering-puberty/

======
madmotive
Excellent post.

I particularly hope the predication about SeedCamp comes true. It really does
need to become more like YC if it's going to have as big an impact.
Alternatively they could start again from scratch and keep it much simpler.

It seems to me that SeedCamp's biggest problem might be that there are so many
people involved. Committees of even the brightest people are good at making ok
decisions but rarely take the risk of making brilliant decisions.

~~~
apexauk
I was discussing Seedcamp the other night.. the issue is (and here's why I
think YC has it spot-on) at the micro-seed-funding stage (which it is, exactly
like YC) the most important thing is the idea/product/demo. Whereas YC has
teams working flat-out under extreme pressure to actually _produce_ something
in so many weeks, Seedcamp was much more "let's cover all the
bases..marketing, finance, biz-dev..". At the micro-seed level it should be at
least 80% product/polishing the idea - this is what's most important to get to
the next stage, after all!

~~~
flipbrad
that's an easy comment to make that very much fits the zeitgeist, but some
sort of cynicism is required. If we're wrong on this, and 'build it and the
money will come' strategies fail, then we're definitely setting ourselves up
for a boom+bust that's going to be painful for all.

The cynicism is that, in addition to suiting startups that haven't got the
intellectual capital required to think about a sustainable business strategy
as they head into business, it also very much suits YC's approach (see below),
which might explain why, as a meme, it's so pervasive!

The YC-like approach could be caricatured as 'shotgun' - throw a load of
startups at a wall (boost their launch) and see what sticks (in terms of
adoption); but if the rest, which don't show immediate adoption, get neglected
by YC-like investors-mentor hybrids too soon, they won't pick up the
transferable business skills that would serve them for a lifetime. Putting
your hands into a launch-focused incubator is risky, from the startup's
perspective.

YC, as first on the scene, has many 'value-added' factors (mainly PR-based)
that make this risk worth taking; but copycats don't deliver these (e.g. a
great network, great reputation with potential series A investors, media rep,
etc). In that light, copycats may actually be more beneficial to the startup
scene if they alter their strategy relative to YC to deliver different value-
addeds, as Seedcamp does. Probably not worth pooh-pooing them without thinking
a bit further, just in case we are letting a damaging meme spread too far
without challenge.

The key is to make sure both launch-drive and business training/mentorship are
provided in equal amounts - the order in which they come can be debated, and
is the nub of the seedcamp vs. YC debate; but let's make sure the complexity
of what YC offers comes across - it's not just launch drive and that's not the
only important thing in seed stage investment. Long term, that could be very
damaging for YC copycats that don't have as clear an idea of what's needed

~~~
apexauk
Sorry, missed this and couldn't let it go.. :)

"Putting your hands into a launch-focused incubator is risky, from the
startup's perspective."

This risk is what...that you might launch?

~~~
flipbrad
that you might be becoming a good product manager and developed, but not a
good businessman. likewise, that the product is great but totally
unsustainable without an artificial support machine. Too many of those around,
and the web sphere risks another bubble and burst, causing outright misery and
a swing of the pendulum too far the other way (impossible to find even seed
money, let alone serious investment, even if you DO have a sensible,
sustainable business)

~~~
apexauk
Seed funding schemes (YC, Seedcamp) are not about training people per-se.
They're not about making people _become_ good product managers or good
businesspeople. (although obviously people on these schemes are going to
require some of these skills going in, and hopefully improve them along the
way)

If you want to become a good product manager, you have to build something,
watch how people use it, and adapt it to reflect your findings. Iterate. To do
this, you need to "launch" in some form - and get users.

If you want to become a good businessperson, you can take an idea/product and
go with it for real. But if you have no product, you're playing with an empty
hand - you can't tell what people's reactions to it will be, you can't demo it
to investors, there's too many unknowns. Enter the idea of spending 3 months
building a v1. For this you need an engineering team (could be just you, or
one other person). This engineering team needs to eat for that 3 months -
enter the idea of micro-seed-funding-whatever you want to call it.

A product that comes out of this process that is great but unsustainable will
die because of lack of money, or get further funding. Any "bubble" would be
caused by later-stage investors investing in unworkable businesses. A company
that has used a small amount of early funding to build a demo/v1 is going to
be much easier to understand by subsequent investors, hence micro-seed funding
arguably helps to _avoid_ bubble-syndrome, not cause it.

------
jgrahamc
Pity to ignore SV VCs who have London offices. I worked with Accel when I was
in California and they have a well established London office:
<http://accel.com/people/index.php?group_id=122000>

~~~
langer
yep, totally agree - i coulda mentioned them (and benchmark/balderton) along
with index. accel seem to be much more confident than the london-only vcs.

~~~
jgrahamc
Bruce Golden who runs the London Accel office is someone I know very well (he
was on the board of one of my companies) and I think the team there does 'get
it' with regards to Europe and they have a large fund and the experience of
seeing what worked in SV.

------
rguzman
Could Madrid become the "valley" of Europe?

Erepublik and Fon are both based in madrid. I imagine there are others? Does
anybody know?

<http://erepublik.com> [http://www.techcrunch.com/2008/04/12/erepublik-
combines-mmog...](http://www.techcrunch.com/2008/04/12/erepublik-combines-
mmog-and-social-networking/)

<http://fon.com> <http://en.wikipedia.org/wiki/FON>

~~~
mcxx
I don't think there will be a "valley" in Europe, ever. There will be
different independent places, startup hubs, all across Europe, London being
one of them.

------
apexauk
provocative..but he's right. not going to be quick nor easy, but here in
Europe we're comin' atcha!

