From Israel to Pakistan, Community is Key When Building a Startup (Google I/O)

• Eden– we have mandatory service in the army (18-21). It created awesome companies, but the army doesn’t do ecommerce, or much mobile, which are now the biggest growth engines in startups. When I moved to VC, I found out that there were no good consumer internet startups. They were sporadic. The Junctionwas a prototype. We ask applicants 3 questions:
  • Are you working on the venture full time
  • Is the entire team going to work together?
  • are you willing to spend 10% working on other people’s startup.
• The junction is all about creating a pay it forward model. We don’t care about short term revenue. We ask nothing from the companies, we just want them to help each other. In a B2C

• Jon -London has 250 nationalities, the next one on the list is New York with 150. We attract great global talent. I very strongly believe that no geographic region has a monopoly on entrepreneurship. The valley is full with fellow travelers, it’s a big advantage as you have to create critical mass to have a successful cluster.

• Jeff – we look at mobile, consumer Internet, games and SaaS. Singapore is a developed country, and we’re right smack in the middle of developing countries. The challenges are many for Singaporean entrepreneurs: they tend to think very small and very local. We are missing a layer of mentors that ‘been there, done that’, not 10 years ago though. Cause technology changes very fast. We need current role models.  My last investment is an enterprise company from Malaysia that went global from day one. There’s pressure to make money fast to survive quickly, so innovation takes a second seat.

• Eric – we had a vibrant tech culture, but there was no central space. we have 8,000 members now, in Nairobi. How are you going to measure success? “if we put enough smart people in the room good things will happen’. You have to experiment in a market like this, because you don’t know what will work. Some of them got funding, when you’re in a nacent market, you’re builidng the market. For us it’s about bringing people together. Testing if  we can apply the accelerator model from the Bay Area to Africa.

• Eden – I wanted to add the purpose of The Junction – team building. The most important thing for every entrepreneur is to be able to convince the team of what they should do before they have funding. Geekcon brings people together to build stuff. The purpose is to build useless projects.

• Jon – I used to do a lot of seed investment. when I wrote people a big cheque, they stressed out on metrics from day 1. When I wrote people small cheuques, the first thing they do, is go talk to a customers. In Bulgaria, where I’m involved in a new fund, it’s a desert. There’s lots of entrepreneurship and little funding. So in the next 3 years, we’re going to fund 200 teams to take forward their ideas of products. The approach is throwing a lot of shit on the wall and seeing what sticks. I call it the entrepreneurial compost team. Just because you failed, it doesn’t make you bad. You’re retaining the knowledge of your previous experience. We want to embrace cultures that embrace that attitude, where it’s ok to fail.

Bridgette:- In Israel there’s lot of money. you have opportunity to get series A, why seed? 

• Eden – the way that VC works, is that you have to deploy quite a lot of capital. If you run a $100 m fund, you are expected to create $300 million. The VC typically owns 25% of the value of its portfolio, so he needs to exceed $1.2 billion in exits to be able to enjoy the carry of the fund. So the amounts that a VC has to deploy have to be fairly big for the investment to matter to the fund’s bottom line. I’ll give you an example. A startup that made Internet based insoles, for shoes. The guy needed $100,000. The amount of money that I made as a VC is insignificant, even if he sells the company for $10 million. I think the model needs to be different.  VCs should reduce the cost of entrepreneurship and make sure that people fail fast – if the idea succeeds, we can get you the money. Don’t take anything, give them the value they need to build a company ($20K, office space,) create a community.