Michael Arrington On What Works In The Current Economic Climate
I acknowledge that our postings have a been a bit video heavy lately and continue to be so this week, but still wanted to give you a few, what I think is very useful, soundbites from Michael Arrington, editor and founder of TechCrunch. Despite the on-going general post-LeWeb brouhaha in the web, this is worth a watch. Andrea Vascellari, CEO of iTive.net consultancy did a good job asking Arrington where he sees the startups given the current economic climate.
Here's the key take aways from the video:
- In a tough economic climate winners find an aggressive way to expand without spending a lof of money by
- Reducing head count
- Paying lower salaries now that they are collectively down
- Paying less for everything = lower expenses overall
- Acquiring competitors pennies for dollar when they are about to belly up
- A lot of startups make headcount adjustments already, which is probably a smart move (Think Fruugo and Blyk)
- Those startups that have better execution end up being winners (this is something that I believe always bares repeating even though it's a no-brainer)
- Remember that this downturn is different! Those who act as they acted in the previous one probably end up being one of the losers.
- You have to be quick on your feet and agile
- Those who focus on technical market analysis on what used to work tend to too poorly in the new climate: You should look at the playing field as a new one and compete given that
Le Web: A Few Hiccups and The European Startup Culture
The web erupted in a fierce conversation (see especially the comments) on European* vs. US entrepreneurial culture after the Le Web in France. The conference itself was a disaster in terms of organization, even if many people dislike admitting it, even though the speakers were of high quality. I won't go into ranting about it, since the 'few hiccups' have been well documented by others. Helene Auramo, the CEO of Zipipop, summed it well on her Tweet on why she got a very high fever and cold after the conference: "...cold and not getting any food in LeWeb for two days... What can you expect?".
That said, I personally enjoyed the conference, largely because of the great people who showed up. I also believe that is the most important bit so, despite Loic Le Meur got a lot of shit for the organizing, I believe he got the most important bit somewhat right.
I don't believe I have ever enjoyed any panel as much as I did enjoy the Gillmor Gang panel at the end of Le Web's second day (see video below). This was mainly thanks to Michael Arrington, the infamous editor of TechCrunch, calling it as he saw it. He gave Loic a run for his money when Loic tried to tell different truths to different audiences. A minor disappointment was how the panel ended in loud music and everybody tapping each other on the back and all the important issues were talked only half way though. After what was very refreshing stance from Michael Arrington during the panel, he also got soft at the end and started praising the organizers. That said, as I told Mr. Arrington after the conference, it was very very refreshing to see someone brave enough calling it as he sees it, which at the end helps everybody improve their game.
A more serious point in this storm-in-a-tea-cup discussion was the stage of entrepreneurship in Europe versus in the US. I believe there is a cultural path dependency in Europe, which has set the course for generation after generation regarding the working culture. Thus, people who work over 60 hours a week are pitied and seen as unfortunate. In effect, not having life. Whereas in the US the opposite is true. They are seen as having the time of their life when they go after their dreams with all they have, not counting hours. I remember living in London, which is surely the most Anglo-American city in Europe (in fact, some people don't count UK in Europe at all). In London you could 'taste the blood' in a sense that people were willing to sacrifice something to get the other, whereas the sentiment in Helsinki is that you should be able to have the cake and eat it too. People believe, right or wrong, that you work to live, not live to work, and doing the latter is seen as unacceptable social behavior. I don't think either one's any more right than the other and that we're all different in that respect. Only the path dependency that I talked about earlier has shifted the culture to be very critical for those that choose to live to work. This is very unfortunate as we many people I know love their work and want to make it big whatever the cost and are thus looked down on or criticized. In fact, most of these people who work beyond 80 hours a week don't even consider it work. They love what they do and are grateful for every hour they can spend on doing it.
I, for one, like to have more life than just my work and personally struggle with the trade off as does Robert Scoble (see video here), a famous American video blogger who says it's really hard if not impossible to have a healthy balance, let alone manage it, if you want to be on top of your game. That said, I know people who are willing to pay the price and build the next big European success story and I very strongly believe we should respect these people for their choice in life instead of criticize and look down on them. The culture needs to change. Europe is a patch work of countries and national cultures. Therefore, we should not impose one working culture on the continent either by thinking we know what's best for everyone. There are room for both: Those who value the quality of life as defined by leisure, free evenings and weekends as well well as those who define quality of life by being able to work 80 hours a week to build something bigger and follow their dream.
Even though some of us, not least the LeWeb founder Loic Le Meur, might have had his ego bruised in the process, I believe the panel at Gillmor Gang and especially Michael Arrington's stone cold comments did us a great favor by bringing an important conversation to the fore.
I am, yet again, dumstruck by how easily the local media here in Finland dismissed all the efforts by us and
by the whole Finnish startup community to raise the awareness of the local startups and the formation of a startup culture here in the Nordics. First we set up the biggest startup event Finland has ever seen which was a big success and now we took a whole Finnish Sauna (video here and here) full of startups to Paris with Tommi Rissanen of Digibusiness.fi, just so the Finnish media can ignore all of it. This happens while at the same time tens of millions of euros are poured into programs to help Finnish startups, but most of this money go to those who know how to game the Finnish system and have the time to go through the endless rounds of red tape. Tommi Rissanen, who was pivotal in bringing the sauna to LeWeb, is the only person working for one of the supporting institutions in Finland, who I have met who knows and is interested in what is happening at the grass roots level in the Finnish startup scene and is willing to bust his butt to help out the startups. And I follow this space every single day.
Another sign to get the pulse: Christine Lagarde, the French minister of economy came to visit Le Web 2008. She actually came even to the stage to have a chat with Loic (previous years French President Sarkozy himself has visited the event). We in Finland, on the other hand, got an email from the Finnish President's assistand telling us that the president is too busy to visit the Finnish startups.
*Where I talk about Europe, I mean what we know as the Western Europe. I can't speak of the Eastern Europe, since I have not lived or worked there.
Finnish Startups Taking A Sauna Truck To LeWeb
ArcticStartup and Digibusiness Helsinki Region are organizing a trip for Finnish startups to LeWeb which takes place in Paris on 9th and 10th December.
LeWeb is the brainchild of Loic le Meur and his wife Geraldine le Meur. Loic is also steering the much talked about startup Seesmic. LeWeb is currently hands down the biggest and most talked about startup event in Europe that features many of the world famous anti-heroes and heroes such as Michael Arrington of TechCrunch, Dan Farber of CNET News, Steve Gillmor of The Gillmor Gang, Om Malik of GigaOm and Robert Scoble of Fast Company along with hundreds of startups.
A group of Finnish startups will invade LeWeb with a massive Sauna Truck. Yes! You heard right, a Sauna Truck! The hottest Finnish social media startups, metaphorically and literally after a few hours in the sauna truck, will combine their efforts at Le Web’08 in Paris in December. The trip is a continuum to a successful joint business trip to the Web 2.0 Expo San Francisco last April.
The Finnish startup mafia will arrive in Paris on Monday December 8th and the Sauna will be open for press, bloggers and industry leaders already in the same evening. If you're a Finnish startup and want to tag along contact tommi.rissanen [at] culminatum [dot] fi. There's still room for a few so hurry up!
Hope to see you all in the sauna.
Photo by wili_hybrid (CC:BY).
Nordic And Baltic Companies Non-Existent In TC50
Currently, the most talked about startup event in the world is the TechCrunch50 being organised in San Francisco by Michael Arrington's TechCrunch. Mike Butcher wrote an article in the UK version of TechCrunch about the non-existence of European companies, compared to Israeli startups (there were 5 Israeli startups present).
Now if we look at this from a Nordic and Baltic perspective - the only Nordic company we could find in the participation list was Burt (Sweden). While the investments required for such a trip is high, I was wondering if it really is worth the money for the European companies or do they already receive enough visibility here in Europe?
I know the Israeli companies in general are pushing more aggressively to the US market, while European startups can somehow still manage locally here in Europe with its 300 million domestic market. So there are differences in strategies, but I'm throwing the ball to the entrepreneurs - what do you guys think, is it worth the money? or do we need something like this in Europe? Or is there an explanation I've missed for Europe's absence (could it be that many applied, but did not get through)?
