Together with Jazztel, Eolia Renovablesmiguelsalis is another remarkable Spanish start up story. Started five years ago by Miguel Salis, Eolia Renovables is one of the leading European operators in clean energy generation with a first half of 09 EBITDA of $64 million dollars. There are very few companies in the world, never mind just in Spain, that achieve these results in such a short time. Eolia´s estimated market cap is now around $1.5bn but it was built with only $148 million in equity plus a large amount of project financing. Eolia grew through a combination of organic growth, namely wind and solar farms built by Eolia and acquisitions. My holding company Jazzya developed some wind and solar farm projects that were sold to Eolia, with the most relevant being El Moralejo near Albacete.

The story of Eolia shows that not everyone is born an entrepreneur. Indeed I have two good friends who got most of their training as executives and then went on to found their own start ups. Marc Benioff of Salesforce.com, whose remarkable story is very well known, and Miguel Salis, whose trajectory is practically unknown. This is probably the case because, in Spain, entrepreneurial success stories are seldom shared for an unreasonable fear of generating envy in a society that has very confused feelings towards successful people.

Miguel and I were at Columbia University together in the 80s. While after graduation I became an entrepreneur, Miguel had a 20 year career before becoming an entrepreneur as Founder and CEO of Eolia Renovables. First, he became a banker at Lehman, then Salomon, then CFO at Jazztel, the telecom operator I founded in 1999 (now also worth over a billion dollars), then Ya.com (which I also founded together with an amazing team of ex Telefonica managers and we sold for $800 million dollars), then he managed my family office known as Jazzya and only in 2004, 20 years after graduating from business school, Miguel became an entrepreneur on his own. In order to raise the funds needed to build Eolia, Miguel became partners with one of Spain´s most creative investment banks, N+1. Here are the bios of the team that Miguel put together.

Here are Eolia´s latest results. They speak for themselves.

eoliaresultsenglish2

And to top it all, Miguel Salis is also a great jazz musician 🙂

I shot this video at the Clinton Global Initiative. Jack Ma is the amazing entrepreneur behind Alibaba. Here´s some financial information on the company. He is worth listening to.

This weekend Nina and I were in Rome. Original plans were just to hang out and enjoy what possibly is the most beautiful city in the world but a fortuitous encounter led me to give a talk to a group of techies in Trastevere on Sunday. The talk was very interactive, with me presenting but mostly asking questions about the Italian start up scene. The event was organised by Johanna of Frestyl, which is a website that brings fans and amateur bands together. Freestyl is currently under development and it is one of the investments of my friend Joichi Ito.

If you have read my article about creating businesses Europe you can probably imagine what I spoke about. It´s a mixed picture. The European scene for start ups is better because there is less competition, salaries are lower and medical and legal costs are much lower but it is worse because VCs are rare, markets are fragmented by language and labor laws make failure, common in start ups, extremely costly. But what I found in Italy was discouraging because, as opposed to Spain, where I live, labor laws are even worse, VCs are even rarer, Internet success stories are few, and the Italian language market is much smaller than the Spanish language market. After asking many questions about the Italian startup scene I reached the conclusion that, even though Spain’s economy is doing worse than Italy’s in general, our technology startup ecosystem is doing better. When we built Ya.com, for example, we invested 38 million euros, and sold it for 550 million. Of those 550 million euros, 70 went to 50 employees thanks to our stock option plans. Jazztel was a similar story depending on when employees cashed stock options after IPO, some did very well some didn´t. But out of all of those who did well many new angels emerged. Jon Berrojalbiz is one great example of a successful entrepreneur who came out of Ya.com. He is currently CEO of the very successful Trading Motion and an investor in other strat ups like Isolee. There is also the case of Miguel Salis, who was CFO at Jazztel and is today CEO of Eolia Renovables. Eolia, which was started when Miguel was the MD of my family office in 2004, is now the biggest independent alternative energy company in Spain. Over $1bn was invested, EBITDA is now over $120M and up 110% from a year ago and many jobs were created tons of carbon emissions saved. There are also many cases of companies that were sold successfully in Spain which had nothing to do with me. In Italy, however, I did not hear stories of 70 million euro stock option plans or cases in which wealth was created and distributed in a way that would create an angel network. As a result, the culture for small investors in Italy is lacking and entrepreneurs have to ask their parents or family for money which I consider in general a very bad idea. The only way to do well in VC type investing is to have a diversified portfolio, asking your parents to invest with you is contrary to that.

And then there is the cost of failure. Most start ups fail and that is true anywhere in the world, but in Italy the cost of failure is enormous. If a company shuts down because, for instance, their product had no demand and this company has say 100 employees, the costs for the entrepreneur can be brutal. In Fon, for example, we began with many employees. Unfortunately we had to lay off half of the team at one point and now that we are profitable we have started hiring again. This situation would have ruined us in Italy, because there they have different laws of forced severance payments for companies under 15 employees and over 15 employees. Significant startups can’t exist in this environment since they never know with certainty how many people they are going to need. On top of this, entrepreneurs who fail are seen as crooks. Not as people who tried to create a good product and create jobs but simply failed. Having an entrepreneur president who has barely escaped jail for many years now has given Italian entrepreneurs a bad name and that is not fair. So, on top of everything, I said before up and coming Italian entrepreneurs confront a mood very different to those of say Dutch entrepreneurs, Netherlands being the European country which in my view respects entrepreneurship the most. Now, to end on a positive mood, Italians are still very creative and have many SMEs who thrive on a European and sometimes global basis and hopefully this will soon also be the case of Italian Tech Companies.

And, in closing, here are some pictures of Rome.

Thanks to agreements like BTFon with BT, SFR, Zon and other carriers and to the introduction of the Fonera 2.0n, Fon is now profitable. We now sell in one day what in January of this year we sold in a week. That is great news. But we still don’t have money to spend on advertising. We are only doing some advertising through partners. For example in Spain, we just launched the Fonera 2.0n in the chain PCcity . As a result we are featured in their advertising. But other than piggybacking cases like this Fon grows mostly on word of mouth. And in many cases Fon grows through the word of my mouth. These words are generally spoken on Twitter. It is because of this that I became curious in knowing “the second derivative” of Twitter. I wanted to know not just how many followers I have in Twitter but what is the sum total of the followers of my followers. I nedeed to find this out in order to measure my RT or retweet potential, something I call Twitter Reach. RT it is becoming a way of spreading news that is faster than Digg or other news amplifying sites. It is instantaneous. It is viral. And it is not the same to be followed by followers with very few followers themselves but by extremely popular bloggers. The latter give you more Twitter Reach.

I asked Javier Mares Romero from my team to help me find out, beyond my 7200 followers on Twitter, how many people could I possibly reach if I was retweeted by everyone who follows me. I know this is not realistic but that would set a maximum. I was shocked at the number: it is 12,828,899 people. To give you a sense of what that number means to Fon I share with you that after 3 years of hard labor we are now the largest global WiFi network, but, we only have 650,000 fonspots (T Mobile btw has less than 50K). But I know that almost all my followers and the followers of my followers have WiFi routers. So they are our target. This is the value of Twitter for Fon (how this is the value of Fon for Twitter deserves another post, it is still not clear to me).

Now obtaining this result was not easy because there is a limit on the number of data requests you can make on Twitter. To obtain this data we used a Python script with a Tweepy library functioning on a developer account. But somebody should look into this and come up with a real and easy Twitter Reach or Twitter Power measure. This index should show the number of followers of your followers. It would be also great if clients like Seesmic Desktop color coded followers according to the number of followers that they themselves have. I know you may think this is elitist but that is what Google does giving sites Google Rank. There clearly is a Google intellectocracy. We now have a Twitter one as well. It is just not that easy to rank and find with color codes. It would also be interesting to be able to send Tweets that go to groups of followers or at least to be able to sort them by language.

Here is a spreadsheet showing who my followers are and the number of followers of my followers. I was surprised when I saw the results not only because of the absolute total but because I had 79 followers with more followers than myself. I guess in Twitter it´s like in Tennis. You look better when you play with a pro, or in this case, when a pro listens to you.

Before ending I would like to say that in my Twitter history less than 10% of my tweets relate to Fon. Or if they do, like this post, they don´t directly relate to promoting Fon but to share with my followers, as I do with the readers of this blog, what I go through as an entrepreneur.

The new Fonera 2.0n is not only the ultimate internet assistant, but it also helps to make the world a better place saving you money. If you buy a Fonera 2.0n instead of any other WiFi router you can keep your computer off when doing long downloads and uploads. Conservatively you might save 40 hours of computer time with your Fonera 2.0n every month, which means you will save 2280 Watt·hours. That´s why the new Fonera is black and green.

Image representing Marko Ahtisaari as depicted...
Image byhttp://www.fon.com

via CrunchBase

Marko Ahtisaari is a remarkable Finnish tech entrepreneur who I have known for many years. As you might have heard in this blog, Nokia just acquired Dopplr where Marko was CEO and I was an investor. Now I have more good news about him, Marko has just been named the new head of design at Nokia.

Let me give you some background about Marko because his bio deserves a post in itself. Marko was raised in Helsinki, Dar es Salaam and New York. He studied economics, philosophy and musical composition at Columbia University and later lectured there in logic, philosophy of economics and the history of thought. Marko serves on the board of F-Secure, Newsmill, Artek and WITNESS and is an advisor to our dear Fon. Marko was also one of the Blyk cofounders as well as a founder and CEO of Dopplr. He received a Grammy Showcase Award. His father is a former UN diplomat, president of Finland and the recipient of the 2008 Nobel Peace prize.

Now as a Nokia shareholder I count on my friend Marko to help Nokia where Nokia needs most help and that is usability. Nokia makes great smartphones but while they have some of the best hardware in the world they fall behind in ease of use. My own current ranking would be this. I rank iPhone and Blackerry tied ahead of the pack, then Android, then Nokia and Windows Mobile goes last.

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G.hn is a home networking standard developed by the United Nation’s ITU-T that supports gigabit speed communication over power lines, coaxial cables and phone lines. For example, if you have two notebooks with G.hn compatible chargers they would have access to the local network when plugged into a power outlet. The installation is simple and easy. The broadband modems will need an adapter to connect it to the home power grid. This technology is great for HD content distribution around the home.

What does this mean for Fon? Right now Foneras need an Ethernet connection to the ISP’s broadband router. This means their location at home is restricted. With G.hn the Fonera doesn’t need this and it can be placed anywhere in the house where there is a power, coaxial cable or phone line outlet. This means that you can place your Fonera wherever you want, to help you make more money by selling wifi or to increase wifi coverage at home.

Image representing Twitxr as depicted in Crunc...
Image via CrunchBase

18 months ago, at Fon, we launched Twitxr which means twitter plus picture (pronounced twitchr as in basque tx is pronounced ch). We then got coverage from Techcrunch, the Guardian and others. We developed Twitxr at the time the iPhone was getting started and Twitter was just gaining strength. We did from Fon because we wanted to show that there were ways to use Twitter that needed bandwidth and therefore WiFi. Our objective was to do something core to Fon and develop a WiFi enabled Twitter. We had planned to add video to it. But either by copying us or by simultaneous invention the idea of tweets+geolocalizationfriendsmap+pictures+crosspostingfacebookflickr became very popular. Other twitter type projects like Twitpic, Twitwall, Pikter, Pikchur, Twics, here´s 26 of them. At this point we are ready to merge with any of those sites. Twitxr is very global and gets a new picture every 3 minutes or so from all over the world. If you are interested pls contact me at martinvars@me.com.

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In this video I compare the Mifi from Novatel with the Fonera 2.0n. Bottom line is this. If all you want is to convert 3G to WiFi get a Mifi. But if you want a router that can do both ethernet and 3G as internet sources, that can upload videos to Youtube on its own, download torrents on its own, give you free roaming to 650,000 other routers, and allow you to make money, that is n and works with many mobile operators Get a Fonera 2.0n. Also 3G plays a great role in a Fonera in case your ADSL breaks down.

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As of next week the thousands of 2009 buyers of the Fonera 2.0g will receive an email from Fon offering a substantial discount for the purchase of the newer and faster Fonera 2.0n. We have received many requests along these lines and find them reasonable.

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