Articles Dragos Novac

What to expect when pitching European VCs

If you’re in the United States and you’re sending your pitch deck to investors, you can expect about 50 percent of your views to come in just the first nine days. You’ll also hit 75 percent of your visits in just over a month, which is very much in line with the 11-15 week average window.

Sending out your pitch deck in Europe, you can expect to wait over two weeks (15 days) for the first 50 percent of your visits. And you’ll likely wait nearly two months (53 days) for 75 percent of your visits.

There are a lot of reasons for the discrepancies. It could be that your potential investors are more spread out. We also don’t see the same level of urgency in EU funding rounds as we often see in the U.S.

About European tech media business.

As I have built and sold a media company in a different life, media industry is a subject close and dear to my heart. I find it fascinating to follow how the companies, small and big, new and old, are still struggling to adapt and figure out a sustainable business way.

In the European tech media - the English speaking one - we’re seeing a transitional phase from ad-based, optimized-for-traffic media rooms to a leaner, based on a subscription model, thinking. Add into the mix the multi-language and 27-country fragmentation of the market and you have a difficult business problem to solve and market to conquer.

On one end, there are providers such as EU-Startups and, mainly acting as aggregators of press releases given away for free as *media* and making money from either selling reports or events. also has a soft sub model, charging for a more complete aggregation sent by email, I would be surprised if it has more than a few thousand subscribers though.

On a higher end, there is, subsidized by FT, aiming to create quality content which it still gives away for free. Still waiting to see where it is going, as there is no free lunch and quite curious whether reaching breakeven will justify keeping up the pace of writing great content.

But this positioning buys them a good brand building process in the market, helpful when and if they will start monetizing the content. Still think they are searching for their North Pole, but it is an exploratory process, there is no recipe on how to do it right, just gut feeling and experiments, and in Europe a rather singular model on this vertical.

Notably, FT also acquired TNW last year, which owns one of the better tech events from Europe. There are obvious synergies and a bigger picture in place (FT’s mother company has a similar strategy in Asia) but also rather disparate expensive efforts at a cost of focus - probably it makes sense to cross sell and bundle in one or more packages, together with FT’s proposition. We will see rather soon, creating great content is expensive and not really sustainable if you just want to live off of selling it.

There’s also Techcrunch, which has a good brand name backed by veteran journalists, and more oriented towards scoops and better-documented articles - still, difficult to assess how profitable the European operation is, market estimates indicate that overall TC makes north of $20 million a year.

However, TC looks more like a dinosaur living off of its inertia, good brand and lack of real competition in Europe. And have you checked their website and mobile app? Simply terrible, come on, it is already 2020.

And in the middle there are a lot of small outlets, either small, English-written brands or in a local language-written, bigger fish in a small one-country pond, usually owned by the larger media groups.

Quite sure this is an incomplete picture but fact is that as the European investment ecosystem becomes more mature, competitive and border-less, there is a need of good sources of coverage and insights.

The question is how much is the market willing to pay for it. EU Startups’ valuation can be an indicator. A back-on-the-envelope calculation starting from Sifted’s payroll can also point to how much is FT is investing.

It is obvious though (to me at least) that in the years to come, media will not be won by the outlets with the highest traffic or social media following but by the ones with the better brands and smarter product strategy.

Conventional media thinking from the past 10-15 years, ever since media business discovered the internet, is long outdated, probably the best example of a good media biz done for the 21st century is Skift.

American investors looking for more startup opportunities in Europe.

A lot has been said about American investors interest in spending more time and money in Europe.

In general competition is good for consumers aka founders, especially since the American way of doing business is more pragmatic and risk-taking oriented - in Europe the VC investor job is still a very young profession, as (tech) startups as a class started to get serious traction only in the past 10 years or so.

Inevitably the effects will be felt at the seed and pre-seed level, once the competition for later stage deals will lead to high level valuations and everybody will look for undervalued assets down the value chain.

The early stage infrastructure in Europe is incredibly fragmented and unprofitable, supported by high subsidies of local governments and EU.

Add also the fact that the knowledge is also scattered and rather local than global, inefficient and insufficient for the founders’ quest to get to the next level until the exit.

This is probably the biggest vulnerability of the European ecosystem, startups growing make it in spite of that not because of that.

And this rather than the lack of capital access makes European startups to flee to US/Silicon Valley. There’s never been so much investment money available in Europe.

Besides a more homogeneous 300m ppl market, the US offers entrepreneurs access to a concentrated area of investors available, knowledgable and experienced, three attributes that are still difficult to find aplenty in Europe.

It is as easy to book a ticket and fly to the East or the West Coast as to go to London, for example, in order to internationalize and raise money. And yet the US investors are more available, easier to talk to and sell to. They get it and their risk appetite is different than that of the Europeans.

And hopefully this is where a more active US VC presence will impact by doing business directly in Europe. Competition creates market efficiencies.

Data driven insights about VC-backed start-ups in Europe

Start-up growth can be sorted in five profiles – laggards, commoners, all-rounders, visionaries and superstars.

Laggards dwindle, commoners grow mildly, all-rounders record considerable progress across all indicators, visionaries’ intangibles skyrocket and finally, superstars’ growth is astronomical on all fronts.

Apart from laggards, VC made every other profile grow considerably more than their non-VC-backed counterparts. Furthermore, almost half of high growth start-ups would have either fallen into a less successful profile or defaulted in the absence of VC. Overall, when an entrepreneurial idea has a high potential for success, the “VC factor” expands their opportunities for growth and enables start-ups to unleash their full potential.

This is from a paper in EIF

words of wisdom

Sometimes you want to do too much. Sometimes you feel you don't do enough. Either way, if you're true to yourself and what you stand for, putting the hours, the resources and your mind to what you try to accomplish should do. Even though, sometimes, there are no visible results.

I recently ran into some notes that I made about 15 years ago, when I was starting my first company. It was refreshing to see how many are still applicable even today.

#1  Being too busy is not good. Having some buffer time increases quality, responsiveness, creativity, endurance, and enjoyment.

#2 At any given time, focus on as few things as possible.

#3 Always start simply.

#4 There are always more opportunties and ideas.

#5 Business can be fun because it's a competition, and winning is fun. And, even better, it can make a difference to people and the world, and also because it can bring you security and nice things.

#6 Good people want to kick ass. Join forces with good people and let them.

#7 Take the long view.

#8 You know what to do next. You don't have to know what do to after next, because you will when you get there.

#9 Think big.

#10 There are few things more important than where you put your attention.

#11 Measure. Machines are better than humans at knowing what is really going on inside machines and can even be helpful in figuring out what's going on inside humans. Make them tell you and make better decisions.

#12 Pretty much everything is about user experience.

#13 A better work environment leads to a better customer envionment (product). A better work experience leads to a better customer experience.

#14 Making money is good. Even when you don't have to.

#15 Make it easier to do the right thing than the wrong thing. (Reduce the sin gap*.)

#16 Things that make for healthy people often lead to healthy companies: balance, good communication, breathing, grooming.

A death by a thousand cuts - how do you challenge Apple if you are a startup.

A death by a thousand cuts - the way a major negative change which happens slowly in many unnoticed increments is not perceived as objectionable.

The idea is that a dominant position such as Apple's can be challenged not by attacking frontally but by creating and/or dominating some specific verticals, with a powerful brand & utility combination.

Taking a small, undeserved segment at Apple's edge, and creating value backed by solid marketing could lead to having a noticeable position in a difficult market with startup resources.

Basically, in a startup play, you spend $4-5M in a few years and which presumably would lead to a good brand, an economic model and arguably a functioning team. It is dificult to do that in a huge corporation with this budget.

Another way of doing is a bit risky - playing a complementary role to Fitbit's effort to attack frontally Apple. Risky, as Fitbit doesn't seem as equally fit to strategically compete with Apple head to head.

But... Fitbit knows best how to do hardware and, under Fitbit's arm, a startup with a dominant position in a niched vertical can leverage knowledge of building a combo of cool brand & utility in other markets - i.e. snowboard, water surfing, tennis (yes, BestShot).

The way Fitbit goes now by competing with a Fitbit OS, and w/ a general smart watch competing against Apple Watch, is a bit dangerous as they willl need to have at par Apple's developers ecosystem and their integration. And if they go frontal they will crash loudly.

But if they sneak in, step by step, by owning some key verticals, they might have a decent chance to count in the game.

And this is what tiny incumbent may be able to put on the table. And, very important, in a dual Fitbit/startup play, they need to integrate and manage those brands the way Google did w/ Youtube, or Facebook did w/ Instagram or Whatsapp - let them grow by themselves, don't corporately suffocate them.

The opportunity is that on specific verticals people are more inclined to adopt a saas model and pay monthly for their hobby as opposed to a general device such as Apple's.

That is, in a nutshell, a startup sale pitch positioning, the rest is execution, networking & bullshit magic. The big question is, given it is active in that underserved vertical to exploit, can a startup gather the required resources, the key people and visionaries to take this long term and make it happen?

why are people uninstalling mobile apps

Which begs an additional question - what is better: to have an app that is installed but never been used or one that is uninstalled right after trying it out?

Why Users Uninstall Apps

the art of war

The Art of War is a famous concept attributed to the Chinese military strategist Sun Tzu a long long time ago and which was also published as a book.

Jessica Hagy made her fame from a blog that posts periodically a simple and explicit graph with interesting stuff. Some time ago, she made a The Art of War series for Forbes., with cool illustrations for each of the 13 chapters of the book.


smart kinds

There are two kinds of smarts. There's Christopher Hitchens smart, which is Yes, I know everything, and I want to impress you smart.

And then there's guys like Michael Pollan, with an I want to share it with you smart. You sit down with the share it with you smart guy and suddenly you feel swollen and more intelligent. That's what I'm looking for all the time.

and some more:

It takes 20 years to build a brand, and it takes three tantrums to destroy it.

from an interview with Mario Batali

If i were a kid...

... these days:

- I wouldn't waste time exclusively on social media, but rather I would create a blog/website associated to my name in order to empashzie what I know, I would write periodically about what I am interested in, demonstrating the way I think.

- I would be extremely well informed about the domain I'd look for a job or I would start my own gig and wouldn't have the guts to do it (why you wouldn't have the guts in your 20s is another question you need to find a good answer to - there's lots of people who don't have the balls to be on their own, you are not alone - ask yourself why you can't and what have you got to lose)

- I would use that site, or blog, not to write about nonsense and trivial stuff from the news or *anything* that I have an opinion on in order to get traffic which can be a false sign of success.

- I wouldn't actually be that worried about the traffic as a way of selling advertising to an audience but... I would be looking at the traffic in terms of attracting like-minded people, people I have things in common with, and in general people who could give me a job and would be interesting to explore common projects with.

- I would try to get to know everybody who is best or has made a signifcant contribution in the domains I am interested in. Virtually or irl, but I would focus on people on global basis, not on a local community

- I would be fluent at least in one foreign international language i.e. English.

- I would try to do lots of diverse stuff, I would always look at the big picture and I would look for a mentor. Models also matters but this is tricky as if you find a bad one, you could turn out in a similar way to it. What are some signals that indicate a bad model - copy/paste, atitude, arrogance, "I am smart you are not". There is no recipe as this is a highly subjective interpretation but your system of reference would be the one providing the reference check - what is good and bad for you, what works or not for you, shouldn't necessarily be the same for others. Evolution is not about words or atitude, but about what you leave behind.

That's it - thereare  many other details, especially money related, when you are a kid. Money, at least in your early 20s, is less important than the value you are capable of creating but this will come in time, usually in your late 20s.