
Big Lessons from HackFwd - BerislavLopac
http://hackfwd.com/kthxbai
======
jgrahamc
"European Geeks Are As Talented As American Ones. Innovative thinking is not
the natural birthright of US-born coders alone."

Wow. It required starting an entire incubator to realize that? Given the
number of European born innovators in the US it should have been obvious that
being European itself is not a hindrance. If they'd looked to Y Combinator
that would have noticed Paul Graham's heritage; they might also have noticed
Paul Graham residence.

"3\. We Underestimated The Bureaucracy. We all knew that bureaucracy in some
European states, and across Europe was high."

See above.

~~~
jamesmcbennett
Interesting case study of a company that was a leading trophy company in the
US in the 70's or 80's that had a model that worked. They had a single
production location that shipped nationally across the United States.

They thought they could do the same in Europe, immediately running into
problems as they quickly found they would need a distributor in each country
which would take a rather large chunk out of their margin. They still
proceeded and found that everyone had different tastes, the Italian's liked
something flamboyant, the French preferred something classy, the English
wanted something Iconic and the German's wanted something Minimalist. In the
US, everyone wanted the same thing. In short, the company went bankrupt in
both regions due to the errors made in Europe.

There are language differences, cultural differences, tax and regulation
differences, additional costs of multiple companies to be setup during
expansion and the list keeps going on. Startups stuggle to scale in Europe for
very clear reasons, it's much harder to do so. With a small team and little
resources, a company can address the entire United States, in Europe they
simply can't (of course there are a few lucky exceptions).

So as a European, what has Europe needed for the last two decades to be
competitive? Quite obviously, it is to level the playing field and remove
those barriers to zero. Until that happens, European Startups will never be
able to scale to the size or with the speed of their US competitors. While I
think European founders are as smart as American founders, by the points
above, does that even matter?

Easier translation such as [http://www.reverbeo.com](http://www.reverbeo.com)
(Friends of mine) will take care of the language barriers on web businesses.
Higher levels of customisation on both software and hardware will take care of
the stylisic differences. But the regulation challenges require EU
intervention and we've been waiting a long time for them to do anything.

~~~
jamesmcbennett
Also HackFwd have an awesome public set of videos from their events. I really
hope they keep them online! [http://hackfwd.com/pmm/](http://hackfwd.com/pmm/)

My favourites are by Tom Hulme, Rob Fitzpatrick, Mikko Jarvenpaa, Paulina
Bozek, Mike Butcher and Florian Heinemann.

------
tosh
I did not expect this news.

When I first heard about HackFWD I thought it was the ideal program to join.
They were well positioned as accelerator program specifically looking,
optimized & engineered for techies.

I was not part of their program but in the last few years I learned to know a
bunch of the HackFWD mentors and met a few teams that went through the program
and only heard the best about it. So I was curiously following what they did
and also encouraged a bunch of teams I met to apply at HackFWD if they fit
their profile.

I still believe that their hypothesis to focus on technical founders is very
smart for an accelerator program (it is way easier to teach marketing &
business skills to engineers than the other way round). Also the better you
can specify your target audience/hypothesis the better you can focus and build
an environment around it and it felt like they did a great job there (even
when they ultimately hit some (european) barriers that were hard to overcome).

On top of that (besides their focused hypothesis) Europe has an amazing pool
of brilliant engineers that at the same time lack a bit of the business
savviness if you compare them to founders in the US. So it's not only a great
global strategy, I believe it especially works well for the local (european)
environment, same with having Germany as the base rather than the UK.

HackFWD also reminded me a lot of philosophically aligned efforts like Fred
Wilson's MBA mondays, what Google Ventures do with their lab and 500Startups
with their amazing mentoring program/bootcamp on UX and distribution.

We ourselves (Blossom.io) ultimately were lucky to get into Seedcamp (one of
the leading european accelerator programs) and we're very grateful for all
their support but it is sad to see another bright star of the european scene
gone.

Hat tip to Lars for sharing his thoughts and lessons learned. The great thing
about building an environment/a community is that even if you 'fail' you leave
something that lives on, and it definitely touched/helped/accelerated a lot of
people in the european startup scene that certainly will continue to leave a
trail and go on to do great things.

Would love to hear from others who were more tightly involved with HackFWD.

 _bow_

------
ig1
While most of these seem reasonable learnings, some of them still show major
holes in understanding. For instance:

    
    
       "Within the first couple of years, we realized that, 
        on average, any exit required between 5 and 7 years 
        to be worthwhile, longer than the average time we’d 
        hoped and planned for. This stands in sharp contrast
        to the US, where exits commonly happen within a year 
        due to talent acquisition hires."
    

Even a decade ago anyone could tell you that an startup will typically take 7+
years to IPO or make a decent size trade exits (Seven year is the generally
accepted median time to exit for a US VC funded startup). They seem to be
confusing "real" exits with talent acquisitions, most talent acquisitions
rarely involve a significant amount of money being returned to investor.
Almost never at the 10x+ levels that most funds are looking for.

Also missing from the discussion is the fact that they took a massive 27% in
equity for a tiny investment which meant that many talented founders wouldn't
even consider touching it. As the accelerator market has become more
competitive taking that kind of equity is unviable even for below-average
startups.

~~~
jackgavigan
> ..they took a massive 27% in equity for a tiny investment...

Their website implies - at
[http://hackfwd.com/dilution](http://hackfwd.com/dilution) \- that they invest
a substantial amount, ranging from €91,000 for a single founder to €191,000
for three founders (although another document -
[http://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e8...](http://hackfwd.s3.amazonaws.com/system/documents/4bd586/e2e8b66c7c32000034/hackfwd_offering_overview_final.pdf)
\- says that they invest "up to" these amounts).

It would be interesting to hear from some actual HackFWD alumni how much they
actually invested.

EDIT: If they did actually invest those amounts, taking 27% in equity would
not be unreasonable. If, however, they were invoking the "up to" qualifier and
offering to invest much smaller amounts in return for the same amount of
equity, then that would raise a question mark.

~~~
mikk0j
It wasn't "up to". It was those amounts stated in the docs, using only the
number of founders (from one to three) as the proxy.

~~~
michuk
Just as Mikko hinted, most startups took 191k for 27% of shares. The thing to
remember is that HackFwd gets diluted in next rounds together with the
founders, there are no anti-dilution clauses in Geek Agreement (which is
public, btw).

------
speedracr
To be frank, I don't share the excitement (or now sadness about loss) either:

    
    
      I was hoping it would set an example for the European ecosystem (...)
     but [we] decided to join another incubator instead.
    
      We ourselves ultimately were lucky to get into Seedcamp
    

That's 2 for 2 against HackFWD - apparently, the setup wasn't as great as the
marketing made it look?

    
    
      (it is way easier to teach marketing & business skills 
      to engineers than the other way round)
    

Looking at the HackFWD companies, that doesn't seem to apply with the
broadness that the statement suggests. Could it be that someone who actually
went through the steps (Paul Graham, developer - built, founded and exited
Viaweb) is in a better position to pass on knowledge on that than someone who
didn't (Lars Hinrichs, business guy - hired developers, founded and excited
Xing)?

While I find the passion, generosity and appetite for risk behind HackFWD more
than commendable: it looks like it would have taken a larger vision (possibly
even larger & more costly than YC) to carry a tech-focused EU incubator
forward. I understand that the decision to cut losses is probably the right
one, but if he's unwilling to stick it out for 5-7+ years - YC was started in
March 2005! -, maybe he shouldn't have started HackFWD in the first place. The
way it stands now, the one who benefited most seems to have been Lars through
publicity and reputation (cf. European Commission etc.)

------
drivingsouth
Proof that hype alone doesn't cut it. HackFwd was one of the coolest kids in
the block with enough press and attention.

I'd suggest 2 more why's:

1) Consumer Web is very difficult in Europe. It requires scale and scale isn't
as easily achievable than in the US

2) Because of 1) Dev-centric teams only don't make the cut. In Europe more
than in the US. Devs can make good CEO's but teams need more on the biz dev
level

~~~
michuk
Actually half of HackFwd companies are tools for businesses or SaaS platforms,
not straight-to consumer apps.

@michuk

------
michuk
HackFwd was the best thing that happened to us on our entrepreneurial road so
far. The ability to meet and network with Europe's top entrepreneurs,
investors and jounalists, the ongoing support from the staff and the general
coolness of the programme and the people is what shaped me as a doer.

The programme was not without its flaws. Yes, the amount of stock HackFwd took
was significant, and the communication between everyone involved could have
been better between the Build events, but overall I cannot imagine a better
place to start my first business than here and I'm very sad other young
entrepreneurs won't be able to experience this anymore.

Europe is losing one of their best startup schools and I can't see on the
horizon anything that will replace it anytime soon. Let's just hope TechStars
grows outside of London and Seedcamp gets even bigger, or maybe someone some
time will try to create a new geek-friendly accellerator machine without
making the same mistakes. Fingers crossed!

@michuk

------
al_
Great article. I'm very surprised and disappointed by this news. I was hoping
it would set an example for the European ecosystem. We actually got accepted
into their program but decided to join another incubator instead. The amount
of equity they would take upfront was quite big if I remember well.

------
yvoschaap2
Who has insights on any of these HackFwd companies (YieldKit , Cobook,
Infogr.am, Watchlater, To Be Honest, Outlander Studios, Filmaster, BeamApp ,
Sharypic, Starforce Delta, Dropify, Telety.pe , FlockOfBirds , Visualnest )
and is genuinely excited?

~~~
michuk
Infogr.am, Watchlater and Cobook have amazing consumer traction and will
definitely be great exits for HackFwd in a couple of years. Some other
companies like Yieldkit or my own Filmaster.TV have pivoted towards a b2b
model and generate proper revenue in their niche (we help cinema exhibitors
and television providers learn about their customers tastes, personalize
marketing communication and grow their audience). Others like Visualnest and
BeamApp are fascinating pieces of technology still looking for the right
application. I believe only FlockOfBirds has officially closed down.

If you have specific questions about any of the startups, let me know, I'll be
happy to help.

@michuk

~~~
FlockOfBirds
As for FlockOfBirds, we had to pull our app from the App Store due to the rate
limit changes in the Twitter API v1.1. However the company still exists, and
we are planning a come back for next year.

------
k7d
HackFwd was one of the rare accelerators that was actually pushing the
envelope instead of being copycats. Besides they had another rare trait in
this space - integrity and deep commitment to companies they fund (disclaimer
- I'm the founder of one of those companies).

------
FlockOfBirds
My project FlockOfBirds has been funded by HackFwd. I would not have missed it
for the world – if I could turn back time and make the decision again, I would
do it again. Lars, thanks for everything!

