Correct me if I am wrong but you have visited Slovakia several times. What comes to your mind when we say Slovak startup ecosystem?
I would say I meet such a great willingness to do something in the startup area. I meet so many people that have this ambition of contributing and doing something with meaning in the startup area.
Your opening keynote´s theme was “Building global brands”. What do you think is the right way to build a global brand from Slovakia or CEE? What is crucial?
There are two things I would point out. First, if your ambition is to be a global brand you have to be born global. So from day one the startup has to focus on a global market. I personally don´t have much interest in companies that want to start in Slovakia then want to move to Czech Republic, maybe to Germany afterwards. Those kinds of companies are not my cup of tea.
And the other thing that I am preaching to my entrepreneurs is: don´t ask for marketing money to expand your market. With marketing money you can buy any number of users. If that´s the way you are going to expand it will never work. You have to crack the code on how to get virality into your brand. Like Vivino, the company I advised Creandum fund to invest in: someone at restaurant table takes out the smartphone, takes the picture of the wine and then the others ask “What are you doing” and he shows them. Suddenly the other people have downloaded the app. That´s what we call virality.
If you don´t advise your entrepreneurs to ask for money for marketing, what is the advice? To ask money for what?
To ask money for two things. First, building your product. When I see a startup and I am an early stage investor there is one thing I know: the product the entrepreneur is showing me is not the product that´s going to fly out on the market. He needs money to develop the product.
The other main thing is to build the team. Most of all I want to see entrepreneurs showing what I call “recruitment power”. They need to prove to me that they are able to build a group of people around themselves that actually are better qualified, at least in certain areas.
As General Partner you have been Board member of several startups. What are the most common challenges startups face in their growth phase?
It´s actually sort of same thing I just mentioned. It is recruitment. It is the capacity to attract the right kind of people to help expand the case to the next funding round.
And of course it is also a challenge to find the right “go-to-market” model, the right business model. We have experienced with most of our companies that they needed to be able to experiment with the business model before they really found out how to make it a great venture.
The opening panel´s title was West meets East in VC. What do you think are the binding points of CEE and Western VCs and where do you see differences?
I must say I never talk about Western and Eastern Europe. I talk about Europe as one market and it´s not so that people in Slovakia or Bratislava are operating in a different market than other entrepreneurs in Europe. They are exactly the same market. They are competing for the same money. At least when you come out on public funding. So for me it´s one market.
But of course some areas are more developed than others. I am based in Stockholm, a highly vibrant startup community, close to the level of London or Berlin. There is no London or Berlin or Stockholm in Slovakia but the distance to these centres is not so far that Slovak companies cannot interact with the rockstars from these cities.
When we talk about Slovakia, any startup, product or service that comes to your mind?
Of course the flying car, Aeromobil. There are some startups that have been on my mind for years but first of all there is this amazing entrepreneur. He never gives up. He has the determination that he could make anything fly and now he is going to make his car fly. I am not sure that I would invest in the case but I never forget about it and I will never forget about the entrepreneur. So congratulations, Slovakia! It´s a great case anyway and I hope to see many more crazy people like him.
How many investments have you done in CEE?
Last one. In your keynote, you have mentioned that in five years you don´t see any banks or insurance companies on the market. What makes you make that conclusion?
That was maybe too rough. What I said or at least what I meant to say was that I think 50% – and it´s estimate of course – of the established banks and insurance companies in Europe will be gone in the next five years. I think there will be a serious shakeout among the corporations. And this will happen because of all these startups now slicing bit by bit off the attractive market that these corporations have been able to keep for themselves for too long time.
Now really the last one. You are a fan of Vivino app. What is your favourite wine?
My favourite wine is a wine called Prieure Lichine from Bordeaux.
Photo: UpVenture Conference