By David Smith
I meet a lot of European companies who have moved their CEOs out here to access markets or funding. If you are seriously looking for investment from the funds in the Valley this is a good move, maybe even a pre-requisite. Most funds like their CEOs and management teams to be close by, and expect you to have made the commitment before you approach them, not after. The issue is that many VC’s are limited to investing only in the USA and for the rest, there’s too much going on here in their own back yard for them to put in the serious effort of looking further afield.
The upside of moving here is that you can get a lot more visibility in the market, which can also generate a lot more inbound calls from investors or buyers wanting to take a look. It’s worth being discerning as to which conversations to progress; otherwise you can end up spending a lot of time talking to people rather than running and growing the business. The downside of being here is that the competition for visibility, resources and funding is intense, and it can take time to build the network to get support you may need.
GSV Capital investor day
I was at the investor day for GSV Capital, the publicly traded growth stage investor, last week. It was an impressive lineup, albeit it a soapbox for GSV portfolio companies. Some highlights include:
Mark Khavkin (Head of Partnerships, Upwork) talked about Upwork which is the merger of oDesk and Elance, the freelancing marketplace. What has driven their success is the demand from the supply side from Millennials, who prefer flexible work arrangements. The company is eating the lunch of its more traditional competitors such as staffing agencies, and is 10 times the size of its nearest online competitor. Next key step is to penetrate the large enterprises, but it’s a great story so far.
Ron Johnson (CEO, Enjoy) shared his views on their differentiated customer proposition. Where most online retailers go for minimal consumer touch, Enjoy is all about real people serving real users. On their site you buy an electronic product, which is hand delivered within 4 hours, and includes one hour of free setup/installation support, all for the same price as shopping on Amazon. Enjoy sells 150 products from 30 companies like AT&T, Apple and Sonus. The idea is to support manufacturers to gain back control of the customer, as today 90% of online purchases come via stores like Amazon rather than via the manufacturers own sites. One of the important benefits is that there are zero returns as the products are set up and working within an hour.
Jason Rosenthal (CEO, Lytro) talked about VR and AR as the next wave of interfaces – noting that Magic Leap, Microsoft, Apple, Facebook etc. are investing heavily in this space. Lytro’s light field solution essentially uses data on all of the available light in a photo to separate objects by depth and stores them in a three-dimensional grid. It maps every individual beam of light, its intensity origin and direction in a 2d movie or game, and using this data it can build a 3D rendering of a 2D film, game etc after the movie is shot or the game produced, as well as enabling re-editing films in unprecedented ways after shooting. Cool stuff!
And in other news…
As an Irishman, I am particularly delighted that Intercom, the Irish/San Francisco startup is named as one of the 11 Hottest Startups in the USA according to a recent poll of investors. Intercom is tackling the problem of customer-communications faced by many web-based businesses, with a highly regarded suite of products.
A strongly argued guest post in tech.eu by US researcher and author Boyd Cohen presents the case that the US is no longer the dominant engine of global innovation and that Europe will overtake the US. I’m sure some of my neighbours here in the Valley will disagree, but it’s great to see recognition of the fantastic opportunities in Europe.