Last year we wrote a blog entry about “Entrepreneurship in Davos and the year ahead”. Entrepreneurship was a leading topic in last year’s discussions, especially because many politicians saw it as a way out of the crisis. After one year we can say that entrepreneurship has been a buzz word for many and we’ve seen amazing things happening from Silicon Valley to the “Mediterranean Valley”. LinkedIn has gone public and now Facebook is following. Skype has been acquired by Microsoft and hundreds of events around entrepreneurship are taking place! It has been a great pleasure to see that at the 2012 World Economic Forum in Davos, Global Entrepreneurship had its own section on the website - further proof of the growing importance.
Although as they say, not all that glitters is gold, in his recent blog post in the Harvard Business Review, Daniel Isenberg argues that entrepreneurship (innovative, high-growth and job creation) is not what is really talked about. Too much focus is placed on self-employment and small businesses that are enough to sustain an individual or a family, but don’t create the type of growth and job creation necessary to make a dent in a country’s economy. Below we will explore what has been said at Davos 2012 and throughout the year see if words have turned into action – something entrepreneurs are very good at doing!
Entrepreneurship and the future
There has been a lot of talk by Klaus Schwab at Davos about the future; the future of jobs, the future of youth, the future of the environment and it seems like all the roads lead to Rome entrepreneurship. Sometimes explicitly, other times inexplicitly, entrepreneurs and innovation have been mentioned as the solution to growth, job creation, saving the environment and in general as those capable of making a dream/idea a reality. On a personal note, we want to remind you that the idea is important, but the successful entrepreneur is the one that can gather the right talent around him/herself and can execute!
Is entrepreneurship the 21st Century career?
At Davos an extremely positive attitude could be seen from everyone when it comes to entrepreneurs. It’s almost as if entrepreneurship has become a career. One can now study entrepreneurship at university and take an idea to an incubator, receive courses around pitching to investors, go to events, grow the company and sell it. It has become somewhat of a structured path like building a CV, to go and work for a big firm. In addition we have seen that the rewards of building a successful startup can be huge with all the investments and exits that are available today. Obviously huge rewards are also linked to greater risk – something important to keep in mind.
Barriers to entry & commoditization of entrepreneurship
The rise of information technology, globalization and increased knowledge sharing have been crucial factors in allowing teams and individuals to find the skill sets needed to create cheap prototypes of their main products that ride the wave of platforms like Facebook or the iPhone. As a result we are seeing many small players creating apps, social games and other software or hardware at a fraction of a cost leveraging resources and talent from different countries and with the advantage of not having to move from behind a computer.
This is all very beautiful, but some key questions arise; are we creating sustainable value or seasonal companies with seasonal apps? Is there valuable intellectual property and ideas that change the world or are we simply fueling a consumer, mindless society? And most importantly, are we blurring the lines between a family bakery and a 3 person developer team with an app selling for €0.99 cents and both with a revenue of €300.000/year?
There seem to be more and more young entrepreneurs, some are high-growth, status-quo changers, many are lifestyle entrepreneurs that are happy creating small enterprises that will stay small. What is apparent is that politicians and world leaders don’t distinguish enough from the two. Both are important and essential, but policies need to differ and the future Facebook, Google, cancer curing company cannot be treated the same as a cupcake store. We want to see a greater support towards those entrepreneurs and startups that will change the world and world leaders are not doing enough, as it was apparent in Davos where entrepreneurship was in everyone’s speeches, but on no one’s agenda!
Speedinvest, an angel fun based in Vienna and San Francisco, launched about 8 months ago, has made four investments to date. According to Founder and CEO Oliver Holle, the fund has invested more than €1 million in four startups and doubled that sum through co-investors. The investments range from VoiP to an already well-known social sharing application Sipwise. Furthermore, the fund invested a “6-digit” amount into Finderly, a social commerce site that focuses on consumer electronics and Soup.me, which launched at Social Media Week last week and which aims to become the digital hub for one’s online presence, much like about.me or flavors.me. Gaminside, another one of the investments made, is a white labeled loyalty program and gamification tool for online entertainment sites, where SpeedInvest led the angel round. In total the SpeedInvest fund has collected $10 million and is looking to expand further – both geographically and financially.
Founded by Lucian Butnaru in October 2009, ZebraPay is an instant payment terminal company conceived as the first local model of one-stop-shops. Last year, Zebra Pay made USD 1.5 million of investments in its infrastructure, taking the self-service kiosk network to national level. At the end of 2011, the firm had installed 500 terminals in 30 cities across the country, with 15 services available at these points. Zebra Pay has 22 employees and posted a turnover of USD 750,000 in 2011.
Dirk Freise, one of the founders of blau.de and handy.de along with his partners has launched Fastlane Ventures, which aims to support other entrepreneurs in developing their companies. Besides financial support, the start-ups in the portfolio will benefit from the broad experience of three fully-fledged entrepreneurs who understand their problems and speak their language. The company’s portfolio strategy will be internationally oriented right from the outset. The biggest investor in Fastlane Ventures’ fund is the Dutch mobile phone company KPN, the owner of the German mobile phone provider E-Plus. Due to their professional background in Silicon Valley, the three entrepreneurs also have a direct link to the USA. In Germany, Fastlane Ventures will initially operate from its offices in Hamburg.