The 20K for 100K Challenge
This week Toivo Annus, founder of Ambient Sound Investments and an angel investor from Estonia, challenged start-up communities in the Baltics to create a public service application that would attract 100 000 active monthly users from Baltic states by March 2012. The winner would get a $20,000 cash prize with no strings attached. The initiative is driven by Toivo's frustration with the fact that few start-ups in the region aim high and by his desire to encourage entrepreneurs build truly useful applications for a wide audience. The three main criteria for submissions are to make use of public data, to reach said number of users and to offer high value for the public like help save lives, reduce government spending and engage users in a meaningful way.
The challenge provoked a rigorous discussion. Some entrepreneurs were expressing doubts about the possibility to meet the challenge in reality. There are few living examples of online services or applications in the region that grew so fast without heavy investment. In fact, few local web services have that many active users after years of existence. Besides, given that the combined population of Estonia, Latvia and Lithuania is around 6.7M, getting 100 000 active monthly users for an application is hard, some claimed.
On the other hand, the world is full of nay-sayers and the fact that Toivo's challenge received such criticism only proves his point: start-ups in the region suffer from low ambitions. But aiming high is easier said than done: Internet users today are quite spoiled, Baltic market (just like Europe as a whole) is fragmented by language, their population is small and by far not all are tech-savvy. But one needs to bear in mind that Estonia is the birthplace of Skype so it is not at all impossible to build a successful service for a wide audience even when you're based in a Baltic state.
Naturally, the challenge found some supporters who were not only happy to compete for the prize but some even suggested upping the stakes to $40,000-$60,000. In the end, the bigger the prize the more effort people would put into getting it. In the best-case scenario, this challenge will play a part in mobilizing Baltic hackers and entrepreneurs to outperform each other in building ambitious and useful applications. The world would be a better place and one lucky team would be $60,000 richer. In the worst-case scenario, the challenge would go unnoticed and Toivo would get to keep his cash.
Though the challenge is undeniably attractive and topical, it needs to be promoted and supported for the best-case scenario to materialize. Ambition does not grow overnight and having a deadline a year from now might seem far-fetched in today's dynamic world. Despite all the challenges, it would be a real pity if the initiative gets completely dismissed - Baltics and Nordics need more, not less, of challenges like that.
Image from Siim Teller's Blog .
Nice initiative. The fact that some are complaining the goal is too difficult to achieve is a proof that this is a good idea.
That's so funny to blame Baltic entrepreneurs not aiming high and then put just a 20K prize for competition. Honestly, it's sounds to me like 1 of April joke - compare it to 1 million dollar Netflix competition.
I believe Baltic investors should also start aiming high and put their money where their moth is. For example, look at the few investment deals happened in Estonia lately:
1. Arengufond puts 17KEUR into my!WIND
2. Ahti Heinla leading $70K convertible note investment into Utopic
3. Arengufond puts 130KEUR int GrabCAD
Tell me, is it what you mean by aiming high?
Mark