Seedcamp, the roving pan-European startup programme which seems to have the momentum of a juggernaut these days, kicked off its big week this week in London at University College London with a record number of teams, 23 this year picked from 900 applicants, and over 100 mentors taking to teams from 16 regions throughout EMEA. And already there are general themes emerging from the teams presenting.
Saving businesses money is one major theme – important in a recession: Thus Albia has an automated testing platform for software development. Getagreatboss gets feedback from employees on their bosses, but maybe helps to retain those great bosses in tough times.
Plus, fashion startups are a trend in their own right as they start to address the rather antiquated fashion world. Editd analyses web and trend data for fashion companies to enable trend forecasting. Product discovery and price comparison was represented by Hypezoo, Ineze, Nuji, as well as FinanceACar, which compares alternative financing for new cars.
“Data” startups are also a trend. In the UK there is Timetric and now Seedcamp reflects that trend, showcasing companies like GIS Cloud and Uberblic.
The problems of the media world are also being address by startups like Publisha (digital pubishing made easy) and Sparkeo (monetising expert online video).
But there is one elephant in the room which (almost) dare not speak its name: where were the really ‘big play’ consumer startups?
I talked to one investor who put it like this: “If I see one more consumer startup aimed at mobile location based social gaming I will tear my arm off. It’s over.”
That particular investor was of course referring to the hype around Foursquare and similar plays, but his comment betrays something else: Much of the big niches in the consumer space have been or are already being filled (*cough* Facebook!). That leaves only niches for consumer startups to go after and those in turn are being squeezed. What is left is the vast, largely unexplored ocean where enterprise meets the Cloud, and that, ladies and gentlemen, is where European startups are increasingly sailing.
Consider this. Out of 23 startups only 4 were directly consumer-facing. That’s less than a fifth. A few years ago that ratio would have been reversed.
It’s therefore a happy coincidence that Seedcamp was addressed by Jos White, cofounder with his brother Ben of MessageLabs, the internet security firm which sold to Symantec in 2008 for $700m and the proceeds of which they have used to put into early stage fund Notion Capital. They are now investing in largely… B2B startups.
Yes, Fred Destin – whose fund Atlas Ventures is a contributor to Seedcamp’s pot of cash – says the quality of the teams has improved this year. But try finding the companies like Seatwave, a direct to consumer business which Atlas backed.
Destin’s point that “There’s a lot of highly focused businesses that might look small but can scale and sell globally with just a few staff” is correct. A startup that has solved a pain problem for business in a small market like Slovenia can be internationalised easily.
And although there is no doubting that Europe will produce the seeds of a big consumer play again at some point (perhaps Spotify can do it?), the trend is clearly away from the consumer space.
High quality engineering is a strength in Europe. Product marketing, productisation and go-to-market, skills which are essential in consumer startups, tend not to be. This is not through lack of brains – it’s through a lack of consumer web startups in the first place producing enough experts in these areas to create a pool of talent of any critical mass.
North Americans are world beaters at simplifying and selling. We tend to embrace complexity. That’s a disadvantage in the consumer space, but in the enterprise space it’s much less of a barrier to getting traction, booking revenues and developing a business fast.
We are also in the middle of a bad recession. Would you like to be a startup attempting to get to 100 million, or even just 10 million users in Europe and rely just on ad revenues? No, I thought not. Remember that fragmented market of 44 countries and having to launch in at least three different languages to get anywhere? Yes, quite.
Just ask Kublax, which, to really scale in the UK and internationally, needed a lot more than the seed funding it got. Its competitor in the USA, Mint.com, spent a million dollars just getting its domain name. Kublax deadpooled.
The ones that do want to do this, typically try to launch in the one market where this makes the most sense, as soon as possible: the USA.
Add to that the habitual complaint that European VCs (with some honourable exceptions of course) tend to be more risk averse to startups with unproven business models and you have a perfect storm of factors which push startups away from the consumer space in Europe. Just ask the European VC who left the board of Odeo, out of which sprung…. Twitter.
But, remember, it’s not all the VCs fault. If European VCs are investing in big consumer plays and those are not taking off then well…and can I be controversial here…. maybe the companies are just not that good?
So, all of this adds up to the following: it’s off to the Enterprise we go.
And this makes perfect sense. Trying to solve the issues for the millions of small and medium sized enterprises out there that have real problems in a time of economic upheaval is smart, very smart.
But will these produce the big exits which VCs tend to demand? The jury is out.
However, it’s not all bad news. Where European startups might find they have a particular strength is in the marrying of things they know a lot about: retail, social commerce and mobile.
It’s the combination those things that may give us a very big consumer hit in Europe.
But as usual with Europe, the picture is never simple.
Finally, for your delectation, we present a quick run-down of this year’s Seedcamp finalists:
Albia’s Testadon is an automated testing platform for software development that reduces costs for testing in enterprise software solution development.
Cognician is a “thought processor” – a software that allows users to create, exchange, and view cogs – mindmaps developed on specific topics or content to speed up recognition and learning.
Editd
Fashion trends visualized. Analysing web and trend data for fashion companies to enable trend forecasting.
FinanceAcar is the a car finance comparison engine. 80% of all car shoppers use finance for the average 2 million new vehicles acquired each year in the UK (market of circa £19 billion/year). However, traditional comparison websites only compare vehicle finance prices based on car loans which account for only c.20% of all new car finance. FinanceAcar compares all finance options (car loans, hire purchase and car leasing) and answers the question: “What is the lowest monthly price I need to pay to drive the car that I want?” FinanceAcar allows a user to select their preferred new vehicle by make and model, by budget and/or by car type and then it tells them the cheapest monthly price to finance that car. A user can choose their car, select their finance and insurance deals, complete a credit check and application and have the car delivered to their front door.
Garmz is a stage for upcoming fashion designers to show and feedback their designs to a worldwide audience. Garmz then produces the best of these designs and sells them through it’s webshop. The vision behind Garmz is to become an ecosystem where products of future fashion trends can emerge easier and faster than in the common fashion industry.
GetAGreatBoss. People join companies, but they leave bosses. GetAGreatBoss believes people should join companies because of good bosses. Managers can use the platform to showcase their management strength in order to attract talent and boost their own careers. The site conducts a review of the management style of a boss by his or her own employees. If the results are favourable, then it links the results of the manager review to job ads that the manager is trying to fill. In this way job seekers can see exactly what the boss will be like to work for even before applying for the interview. It also links the results of a favourable review to the manager’s resume, enhancing his or her appeal to executive recruiters and head-hunters. Traditionally, managers have been unable to follow up on anonymous feedback from employees, due to the need to protect the identities of the respondents. This site enables managers to follow up on any comment or rating by means of a private online text conversation with the employee concerned. The employee remains anonymous throughout these interactions.
Hypezoo is a product search engine that keep track of upcoming products and their release dates. The service lets you search and display upcoming products on a timeline, sign up on products that you are interested in and get notified when they are released.
Ineze offers structured decision making about products with a comparison engine.
iSigned: Secure storage for important documents, contracts, and the like.
Mailerlite. Very simple email marketing solutions. Help companies to build relationships with their customers by sending good looking email newsletters. Easy to use web-based email marketing software.
Movyloshop. Mobile shopping outlets as SAAS for long tail retailers.
Nuji: Social shopping platform that allows to tag, rate, share and remember products.
Offset Options. Using web services to fight climate change. Our technology enables companies to integrate carbon offsets into online point-of-sale.
Publisha. Publisha allows anyone to publish a digital publication into Facebook, iPad and iPhone and the web from a simple browser-based CMS. Publishers can manage their content (text, images and video) using a simple browser based CMS and publish it into a Facebook publishing app, iPad + iPhone apps and a website generated by Publisha without any technical know-how or experience. The basic service is free while premium packages offering a branded iPad and iPhone app and more bandwidth start at $50 per month. Publishers can monetize their publication using the built-in ad server and subscription sales modules on a revenue share basis.
Robot Media. Mobile rich content application publishing.
Tigerlily offers a white label Facebook Page management system that makes community management a heck of a lot easier than Facebook intended. In essence, the tool set encompasses flexible contest and quiz widgets to customize a Facebook Page, and is targeted at media groups, large brands and their agencies and marketers. The FPMS uses ‘Share’ buttons on the individual items, encouraging conversation around posts. There’s a free and pro version, with the latter sold on the basis of an annual licence fee. Orange France is among the early pro users. They plan to expand out of France soon across Europe.
Trebax Innovations helps online casinos, poker rooms, and affiliate networks leverage their brands and gain engagement through software solutions, thereby increasing acquisition growth and improving their reach and scope. Customers can rely upon Trebax Innovations to supply engaging marketing techniques and automate and measure programs that generate revenue. Trebax Innovations is headquartered in Toronto, Canada with offices in London UK.
Uberblic Labs – Data integration services for web and enterprise data, providing developers with API solutions for thus far untapped information sources.
Visionect is developing a web-based tablet system for enterprise environments such as restaurants, hotels, hospitals and similar. They developed their own tablet system because all known handhelds are built for the consumer (smart phones, tablets) and they all lack key features for the enterprise use: autonomy, robustness, price, security. Tablets work up to 9 months without a recharge, can be washed in a washing machine and have zero buttons, touch only. All information displayed is web based (no data is stored on the device, no boot time). The first application, “Geoffrey”, will be used in restaurants by guests to order food and drinks, to browse information like weather, news, tourist info and to buy event tickets, play lottery and so on. Guests get a better experience while the tablet improves the bottom line for the restaruant owner (up to 35% higher revenue).
Wordy provides content producers with a standardised editing service which is fast and at a very low cost. All editing is done by skilled professionals who have been individually tested and verified by Wordy.
Sparkeo is an online learning platform. Experts sell their videos online through any site without the need for development or hosting costs. You price your own content in the flash player, which can be embedded in blogs or social networks. The key to it is the functionality which is built directly into the player.
GIS Cloud is web service based on cloud computing that combines maps and business data into a web based geographic information system i.e. GIS. Use of GIS Cloud solution will improve decision making and as a result will cut down costs and optimize operations in any organization. GIS Cloud is full featured GIS and delivered to users through Freemium business model. This business model enables free use of the Software as a Service and commercially where users pay monthly subscription based on different Premium features. It eliminates upfront investments, high priced hardware and software, lengthy configurations and complex licensing agreements. From Zagreb, Croatia.
Profitero offers sales analytics for retailers, monitoring competitive information (price, shipping, web presence, customer feedback, etc.), benchmarking each product against competition, suggesting priority products to work on, actions to take, and monitoring sales impact.
Video from the first day (produced by Seedcamp):
Seedcamp Week 2010 Day 1 High Quality from Seedcamp on Vimeo.