I have 5 children. They go from 21 to a 6 month baby. My 21 year old daughter, has come up with an idea for a start up. She is implementing it. This was a surprise for me because until recently she had not shown interest in the start up world. She studies history at Columbia College in NYC.
I will not go into detail on what her Internet start up as that is for her to share and she will at the right moment. What I can say is that I heard what the plan is and it looks very feasible to me. And this is only partly because I think all my children are stars. It is actually a great, original idea and she could execute it very well. But while not sharing with you what her business is I will share with you what I said to her.
My daughter, I said, what you have is the “start up bug”. It is a bug so powerful that once infected with it you carry it for life. The dream of turning an idea into a company that millions use and enjoy never goes away. I don’t know if this start up will be successful but what I do know is that sooner or later you will be. Go for it!
I just spent a week in NYC. What the city did vis a vis crime reduction between the 80s and 90s it did vis a vis start ups between the 00s and the 10s. It’s a whole new tech scene here. And it’s very new.
I remember when I invested in the first round of Tumblr with John Borthwick the tech scene in NYC was minimal. And that was as recently as 2007. On this trip I visited General Assembly and it was buzzing, and they are not the only nurturing grounds for entrepreneurship, there are many as well as many start ups who are making it big. Also what has happened in the last decade is that now Brooklyn is not a lesser cousin but an integral part of NYC as well and there are a lot of start ups and tech people who live there. It is interesting to see how Brooklyn has made it and NJ has not considering that they are both a river crossing away, but Brooklyn has a history and beauty that is tough to compete with.
Here’s a short and random list of reasons why I believe NYC is making it:
-when you leave work you have a lot to do.
-NYC is more environmental than the life in your car Silicon Valley. The ecofootprint of a New Yorker in his high rise apartment is lower than that one of a SV techie in his house in Palo Alto.
-NYC is way more than tech.
-NYC is half way between SV and Europe and SV is in theory closer to Asia but flying times are the same.
-Bloomberg, who had his own financial internet before the internet really gets it and is promoting NYC as a tech town every week, indeed this week he was at Tumblr promoting his tech friendly policies.
NYC is now a true rival to Silicon Valley and that is great news. Chicago is also happening I hear, thanks to GroupOn, not my favorite start up but still a force. And then there is London with Spotify, Badoo and many others. Overall I think that what happened to USA in the last few decades is happening to Silicon Valley now. SV is still number one but in relative terms shrinking in relevance. NYC, London, Berlin, TelAviv, Tokyo, Shanghai/Beijing/Taipei, Bangalore, all valid alternative places for tech start ups.
I lived in NYC for 18 years, between 1977 and 1995. Now when I visit I realize that I owe a lot to that city, my education, my first successful ventures. Would I move Fon to NYC? Well we decided to open our US office there and not in SV. But for us, the engineering talent we find in Spain would be hard to replicate in NYC. Spain as troubled as it is, is a great place in which to have your start up. With 47% youth unemployment and many talented young people if you have a great project you can get the engineers you need for it. It is true that Spanish work ethics are not as good as the American work ethic, but people are realizing that either they truly work or the country will sink. And the attitude is better now than a few years ago. So while I won’t move back to NYC for now I will go more frequently. There are too many admirable people there!
Correction, after writing this post Daniel Ek contacted me to say that NY has become so attractive for Spotify that now they have more employees in NYC than London. I also forgot to mention that large companies like Google and now Facebook have very sizable offices in NYC.
My answer generally centers around the fact how I have a great team of managers, that they are so good and reliable, that Fon has an amazing pool of talent, I also talk about how much I delegate, and that is all true.But there is another side to this question that I have not told journalists. I have not done it because I fear sounding obnoxious, elitist, or just weird. But this is my blog so if I don’t do it here where else? So here’s the other answer, the more private answer of how I have managed and manage my time.-I don’t watch TV, that alone gives me 14 years more of life for doing other things! If I watch anything it’s Netflix or Youtube, that’s where I get my TV content and movies from. I rarely go to movie theaters and watch all movies in our home theater with the family.-I am not interested in professional sports, another activity that seems to consume endless hours of many people including most of my guy friends. The Super Bowl went unnoticed. I only watch the World Cup and that is once every four years. Not watching sports, nor commenting or talking about them, is a real time saver.-I read less books than others, I just don’t have 30 hours to devote to each one of them. I read a lot on the net, and some magazines also short stories during flights. But just like I practice sports much more than I watch sports (I mountain bike around 8 hours a week) I write much more than I read. I read a lot in my 20s, now it’s my time to contribute to others by writing. Yes I did read the Steve Jobs bio, or some Nick Hornby, Martin Amis recently. But reading whole books takes too much time for me to be able to do it on a daily basis. I read when I am on vacation, when I sail. That’s when reading feels great and is a real pleasure.
-Personal grooming: many top business people spend a great deal of time selecting their clothes, getting haircuts, manicures, pedicures, massages, and all sorts of time consuming personal grooming activities. I instead sometimes cut my own hair, dress simply, wear sneakers and jeans, never wear ties or suit. My wife chooses my clothes. This alone saves me 83 minutes a day according to some estimates.
-Logistics and commute (this part is only useful for entrepreneurs): I sometimes drive, but I have a driver and while I go anywhere, I work in my car. I don’t need to look for parking. This is clearly a luxury but it is a time saving luxury. Also by design my home is 10m from my office and 20m from the airport, also near my kids schools. I pick up my kids from school every day and spend the afternoon with them. When I travel, we have homes in New York, Paris and London. This is partly because I don’t like to pack nor check in hotels, in those homes I find all I need. I can go in and out quickly. I also have another special luxury which is a small private jet and therefore spend much less time at airports and travel more efficiently point to point. The Citation V increases my environmental footprint but I have built a lot of wind farms to pay for my sins
-Even though my company’s name is Fon I rarely make phone calls. I communicate over every imaginable platform, Facebook, bbm, whatsapp, Skype, Google Talk, you name it, but phone calls are for family and friends . In business I prefer electronic media or in person meetings.
-I don’t drink. Yes this one is a shocker but I rarely drink, if anything a glass of wine with a meal. I dislike beer and liquor. Drinking is something that consumes an incredible amount of time in the lives of other people and renders them useless for a lot of other activities for a significant percentage of their lives. Not drinking has put me in difficult positions doing business, especially in Japan. Same with drugs, I tried many, but didn’t like any. Cigarettes, cigars, I don’t like any drugs. Being sober at nights, on weekends, already puts me ahead of most of the population in terms of productivity.
-I rarely do business lunches and dinners and spend most meals with family and friends who I really care about. Business meetings are at the office and in the morning. I work from 9 to 2. Afternoons are for family and sports. Evenings for family and friends. My business meetings instead are invariably short. I am always online and work online. But I don’t like to be at the office just for being at the office. When I am at Fon, my door is open and people can walk in for short meetings. People at Fon know that I treasure my time, but they also know that I am there every time when I am really needed. Of course I do show up for emergencies, road shows or those moments of the year when I am needed all day. But that is an exception not a rule like with anyone else who does spend their afternoons at the office. Being CEO allows me that benefit. If I was anything else I would have to be at the office all day.
-I am punctual and have little patience for those who aren’t. I don’t make others wait, I don’t wait for others. The word must have gotten around on this because we all tend to be on time. I don’t waste time waiting.
-I make social media work for me, sometimes people say, how do you get work done if you spend so much time on social media, but I use social media to take notes, like I have an idea for a business and I blog it, I share it, I work collectively with people, social media looks like a waste of time for others but it saves me time, I recruit on twitter, I brainstorm on Google+ or my blog, I work inside social media, get ideas, its a sanity check many times, crowdsourcing saves me time. When tweeting I use Tweetdeck to time my tweets so they appear at different times of the day when I am doing other things. This allows me to tweet across time zones although sometimes it angers people when they think I don’t answer and I am asleep. I also developed an Android app to listen to my social media on my bike. It’s called Radiome and it reads your social media while it plays music, it’s perfect for my bike.
-Against what many think I sleep and I sleep well, 8 hours or so. Sleeping is an important time of the day. I sleep much better with my wife than alone when I travel without her. Lately I sleep with our 5 month old baby and I still manage to sleep reasonably well because we are lucky enough to have a baby who sleeps 11 hours almost every night. She sleeps much better than my older kids and I think it’s because we adopted co sleeping.
-I go to a couple of conferences a month. What I like about conferences is sometimes the content, like at TED, but mostly the fact that I get to see a lot of people all at once there. Many think conferences are a waste of time. I find them a very efficient way to have a lot of in person meetings in the same place.
-I say no to a lot of formal invitations, events, dinners and business meetings. I see time as sailors see wind or photographers see light, as something to use, manage and shape, not as something to be a victim of, or to see go by. I rather stay at home with my wife and kids than go to some useless business meeting.
-I take a lot of vacations. Around 10 weeks a year of vacation. But only one week in which I am truly disconnected and on vacation. My other 9 weeks of vacation are devoted to family, friends, sports and meditation. Meditation in the sense of thinking deeply about some problem that I am trying to solve. Like my best ideas for work I have while on vacation. Maybe because I think my work is a vacation. Because I love what I do. This is something I can do because I am an entrepreneur, because entrepreneurs get paid for their ideas, not for their time.
And yes, I do have a great team of people who work for me and help me out and I am very, very thankful for what they do.
The kind of intelligence that you need to succeed in business goes mostly undetected at school. Its a sense of leadership and strategy that is not what teachers reward. Entrepreneurs tend to antagonize teachers, they are in class wishing they were in charge and teachers hate that. That’s why so many drop out or do poorly at university only to thrive in real life.
This was surprising, I was speaking at a conference in Zurich and somebody from the audience came up with this video of Mark Zuckerberg and I in 2008. That was superkind of this person, to shoot this video I mean. You can see how Mark Zuckerberg was going around the world promoting Facebook, this was the Spanish launch at it took place at a theatre I owned in Madrid called Teatro Lara. The video starts in Spanish and I speak, then switches to English and Mark speaks.
Today, 21 European early-stage VC firms released a standard term sheet they will use as guideline for their future investments (actually they released 2 term sheets – one for “general use” and another designed to facilitate the EIS tax relief for investments in small private companies). Both docs were drafted for the UK market, but the general idea should be the same in most countries. Especially first-time entrepreneurs in Europe without much experience in dealing with investors can benefit greatly from this document. While the terms will still be adjusted as required for each transaction, these general guidelines give entrepreneurs a good idea of what is considered “common practice” in a term sheet. This will also help to reduce legal costs and speed up the whole investment process.
Of course not all start-ups will end up winning. Some might have been able to negotiate more favorable terms if the SeedSummit term sheet had not been published. But the positive effects will surely far outweigh such drawbacks (TechCrunch readers seem to agree – so far almost entirely positive comments). Even with all the information available on the web about term sheets, there are still many entrepreneurs out there who have no clue of what should and should not be included in a term sheet. Even top MBA candidates have this problem, as I observe frequently among my students at IE.
As with most innovation in the European VC sector, this move comes more than a year later than the US Series Seed documents, which were adopted in March 2010 by a group of prominent US seed investors, such as SV Angel (Ron Conway), First Round Capital, Mike Maples, and others. But better late than never!
Good news for my friend and CEO of Acens José Cerdán, good news for the Spanish start-up scene in general: Acens has just announced that it was acquired by Telefónica for a rumored €80 million. Acens was founded in 1997 and provides cloud hosting and housing services for more than 100k business customers and operates large data centers in Spain (about 6,000 square meters). Acens hosts over 200k websites, can provide VPN services and allows companies to outsource their entire server infrastructure.
If the price tag of €80 million turns out to be correct, the Acens acquisition price will have surpassed Tuenti’s by €10 million. Not bad! Compared to tech exits in other European countries or the US, this figure might not seem exceptional. But considering the unfavorable start-up environment in Spain, this is a very important signal, both for investors and for (potential) entrepreneurs that exits to local buyers are possible.
The acquisition comes just one day after Apple announced the launch of iCloud. While Acens is a B2B company and does not target individual consumers like Apple, there is clearly a trend here and that is towards hosting everything in the internet.
José has done an amazing job running and scaling Acens since 2007. He was a guest at the Menorca TechTalk and has an interesting bio, having founded his first company at the age of 22 and being a current advisor to the current opposition leader and head of Spain’s People’s Party, Mariano Rajoy.
I am happy for José and his team. Let’s hope that this acquisition gives a boost to the entire start-up scene in Spain. Enhorabuena José!
Tonight in Paris, at dinner with @loic @geraldine and @ninavarsavsky, we spoke about attitudes towards failure in USA and Europe. In Europe it’s still terrible to fail and that is bad because failure is an essential part of success (think of all the sperm that fail to make a child). But in Silicon Valley, failure is becoming too much of the opposite: too accepted, people are not trying hard enough, too many start ups are getting funded as if VC’s knew there were bound to fail but went ahead anyway. In Europe now we are more like in Silicon Valley in 2006 when Fon got funded. Back then it was not that easy to get started. And that may not be all that bad. Failure has to be accepted, but not encouraged!
A couple of weeks ago, Telefónica announced the launch of Wayra, a program that will support the creation of high-tech IT companies in Latin America and Spain. Basically, Wayra is a business incubator, although it wants to be more than that and calls itself a business “accelerator”. (Future) entrepreneurs can submit their projects, even if they’re only at an idea stage, and the 30 teams with the most promising ideas will be given the opportunity to present in front of a jury which will then narrow the selection down to 10 projects (this occurs on a country level). The first three countries are Colombia, Mexico and Spain, and the goal is to have this initiative running in eight countries by the end of this year. This will bring the number of supported projects to 80 by the end of 2011.
Every project will get access to Telefónicas top-notch technological infrastructure, and in addition will receive financing of $30k to $70k during the first six months and will obtain all the necessary support needed to establish and build a successful company (office space, mentoring, day-to-day management, technical support from Telefónicas R&D department, etc.). Wayra will also help the most interesting of these projects to obtain additional financing after the initial six-month period.
The idea behind this project is to facilitate the creation of global tech companies out of Latin America and Spain, which, despite some great successes like MercadoLibre, is still very difficult. Many potential founders move to tech hubs like Silicon Valley, New York, London or Berlin because they can’t find the necessary environments needed to create and grow an international company in their home countries. Access to capital is difficult (especially finding “smart money”), it’s hard to find skilled employees and the overall environment (legal, etc.) is often not supportive of entrepreneurship.
Wayra’s mission is to plant the seed from which local “Silicon Valleys” can emerge over time in the target countries, enabling talented individuals to pursue their dreams without having to leave their home country and fostering innovation and entrepreneurship in the region. A great initiative, I am looking forward to seeing the first projects emerging from the program.
Today I came accross the question of why aren’t many very smart people rich. And while blunt, I am sure many smart people who are not financially successful have asked themselves that question. Especially if smart is defined as having performed very well at school which is how most people find out they are very smart. But I can relate to that question in a different way. Not as to “why aren’t many smart people rich” but “why aren’t people who are not considered to be smart, rich”.
When I was at Columbia Business School I was in the bottom half of the class. I was not considered particularly smart or bright. All I got studying entrepreneurship was a B+ and that was supposed to be my best subject as I wanted to be an entrepreneur. But then, after graduation I built, 8 companies over 25 years, 3 of them worth over $700 million. My last start up, Fon, has become the largest WiFi network in the world. And it is not only me, I know quite a few entrepreneurs who were mediocre at school only to thrive in real life. Some did better than me. So school is not such a good predictor of real life performance after all.
While teaching entrepreneurship at Instituto de Empresa, I have given a lot of thought to this paradox. How can school performance be a better predictor of life performance? Especially in entrepreneurship. As a result one thing I stopped doing, is grading students. Now they grade each other. And from what I have seen, students who other students think are smart, tend to do better in life than students who professors think are smart. Especially many professors who teach but don’t practice entrepreneurship. Entrepreneurship is more an art than a science.
Having said all this, my comments refer exclusively to business studies. In business getting rich is a direct consequence of success. In other fields being smart needs not to equate with being rich and that is fine. People shouldn’t become judges, or military commanders, or legislators, or many other essential occupations with the aim of getting rich. And getting rich is not a great objective in itself. In general in life having objectives is more interesting than having achieved objectives. Success in business is no exception.