Ideas on paper

Thoughts by José Luis Agell

Tag Archives: Entrepreneurship

Youth in the search of value

More news about the weak Spanish economic status: in its last report, Reuters revealed that the Spanish youth (below 25) unemployment rate climbed up to 51.1% in March.

This is obviously discouraging for the young people who are currently getting their degree, dreaming of their first working opportunities. However, I’d like to claim, once more, that the youth can conquer the world.

In these times of lack of jobs -at least standard jobs-, the search of value becomes crucial. How can I make an impact on society? What is it that I am passionate about and can improve the current economy? The possibilities are unlimited- each problem to be solved can be a great opportunity!

It’s been proved that the old ways of doing business are not valid anymore. Internet has changed our lives, our corporate structures and dynamics. Mobile internet gets to every pocket, opening up new distribution channels and new business models. Young people are the piece of society that will make corporations not only transform and adapt but take most advantage of these new trends. I can understand that, given the current legislation, it is much cheaper to fire the youngest in the company than a veteran employee. However, employers also need to think in terms of value; younger members of the team can be an expediting spark.

Moreover, young people are also the ones that are most prepared to resolve our current problems and give an answer to our challenges. They are open-minded, they speak several languages, they are cost-effective, they still don’t have familiar obligations. There’s no better moment to start up a company than in our twenties.

So, let’s not take the fact of having a job for granted. Let’s focus on generating value and  look for the answers we can provide the world with; I’m convinced jobs will come later.

Ctrl+Alt+Compete, a movie about startups

I can’t wait to see this movie that gets into the journey of 5 startups to show what it takes to be successful and what are the main risks.

Getting inspired by innovators and entrepreneurs

One of the reasons why I decided to come to Silicon Valley 3 years ago was to learn and be inspired by the most talented innovators and entrepreneurs.The truth is that my experience so far has been tremendously enriching.

Last week was one of those in which I felt very grateful for the opportunities that life is offering me in this part of the world.

First, on Wednesday I had the chance to meet with Yves Béhar, the founder of Fuse Project. His design studio has become a reference in the human-centered design space. As Tom Kelley said: Through his San Francisco-based design and branding company fuseproject, the Swiss-born Behar has shown that a futuristic, hi-tech approach to design can be deeply humane.

I had seen his TED talk on designing objects that tell stories, I admire his work and was very excited to meet him in person. We met in his San Francisco office in SOMA, a reformed industrial building that gathers engineers, designers and strategists. I loved the atmosphere and the lighting system that is a collection of lamps designed and built by the first employees.

We had a very pleasant discussion about Innovalley, innovative startups and the future of wearable technologies. I had the impression he’s one of those visionaries who like staying down to earth. He’s a tech savvy and knows what he talks about. He gave me valuable feedback. I realized he enjoyed working with startups. In fact, Fuse Project has a disruptive programme -The Design Venture – that connects them with startups and creates profitable joint ventures.

On the other hand, I hade the pleasure to met Mark Dwight, the founder and CEO of Rickshaw bags, which is an outstanding bag company. Its brand is strongly related to the city of San Francisco. Sustainability, design and innovation are Rickshaw’s values.  I had the privilege to visit their facilities, an old warehouse in the vibrant Dogpatch District where they create, test and produce their bags.

Mark is a seasoned entrepreneur. He was previously the CEO of Timbuk2, where he led that company’s successful turnaround. The San Francisco bag company was acquired in 2005 by a San Francisco private equity fund. He left after the acquisition and, following his passion, decided to create his own bag company.

“I love bags and the business of bags.” says Mark. I could tell because he talks about his innovative fabrics and designs with bright in his eyes.

He’s also very passionate about technology. He holds a mechanical engineering degree from Stanford and though making bags doesn’t sound very technological, he’s always curios to try new products. I’m sure we’ll be able to surprise Mark with some of our latest innovations. 😉

It was a great pleasure to meet both of you. Your energy, enthusiasm, focus and hard-work are a reference for young entrepreneurs.

Trying to understand startup dynamics

The startup world is chaos. Everybody knows it.

If we had a way to predict the success of  technology ventures and diagnose easy solutions to their problems, entrepreneurship would die. However, many people are trying to detect and understand some of the patterns that determine startup behaviors.

A first attempt was led by Younoodle  a litle bit more than 2 years ago. They surprised the startup community with the Younoodle score, a complex algorithm that, given certain values and data, was able to evaluate the success rate of a startup. The company planned to license this tool to the venture capitalism sector as a way to rate their investments and their potential. I personally don’t think they succeeded but they were able to generate some buzz at that time.

Today, the Blackbox team launched a new tool: the startup Genome Compass. I had the chance to test a first version of it when I applied to the EU Demo night. But today, I took some time to redo the benchmarking questionnaire for Innovalley. The results were very surprising.

Of course, I didn’t get a secret recipe to boost our business, but it’s useful to compare some important metrics against more than 3200 startups. You get a sense on where you stand regarding customer acquisition costs, distribution channels, customer growth…

Moreover, the startup Genome algorithm classifies startups in 4 types and 6 stages depending on the answers to the benchmarking questionnaire. Innovalley has been classified as a Challenger:

The Challenger / Type 3

These startups are focused on closing high paying customers in large but fragmented markets. They are highly dependent on a small number of deals being successful and usually operate in complex and rigid markets. To be successful they need to find a repeatable and scalable sales process.

If you’re interested in how you compare your startup to other early stage ventures, they summarized their results in a report  Startup Genome Report Extra: Premature Scaling. One of the biggest surprises is that success isn’t about size of funding or team. It turns out premature scaling is the leading cause of failure. These startups, called inconsistent, are those who try to scale before they have reached product/market fit and streamlined their customer acquisition process.

  • The team size of startups that scale prematurely is 3 times bigger than the consistent startups at the same stage
  • 74% of high growth Internet startups fail due to premature scaling
  • Startups that scale properly grow about 20 times faster than startups that scale prematurely
  • 93% of startups that scale prematurely never break the $100k revenue per month threshold

I am sure these insights will be valuable for all of us. Great job Blackbox!