Eastern Europe’s got web talent, but does it have business potential ?

When we started to organize How to Web 2010, a lot of people asked me: is Romania or Eastern Europe ready for this ? Is the local and regional industry developed enough so it can be interested in a big and expensive international event ?

Everybody knew that, during last years, more and more web businesses have arised from Eastern Europe. You can see that just by looking at the winners from the major startup competitions across Europe. Also, we’ve got Adobe Labs in Bucharest and Amazon developing cloud technologies in Iasi, and that’s a big leap forward from the traditional support centers we’ve got all around Eastern Europe.

Well, my answer (and my bet) is that we are at the begining of a new development stage for the Eastern European tech scene. Up until now we’ve only got the technical talent, along with a major lack of venture funds, international exposure and entrepreneurial skills. However, the startup scene is getting more global than ever, and talent starts attracting the money and the attention it deserves. All we need to do is ask.

And that’s what we’ve been doing for the last 8 months: we’ve been asking major web players and personalities to switch their focus to Easten Europe too, and we managed to get their attention. First part of the problem was solved.

Now moving to the next one: do the local business people understand their potential and want to move forward ?

Well, that’s one thing we’ve still got to find out in the same direct manner. Since last week, we’ve started to meet with local communities for small and focused presentations and direct chats. But that’s not enough, as we’ve found out some amazing things. More to come !

The Seedcamp secret: it’s the network that matters

Everytime I thought of Seedcamp I’ve consider it a competition event. Well, that’s not the case anymore.

When entering the Seedcamp Week venue, I’ve could do nothing but dazzle looking at all the great entrepreneurs and investors gathered there.

When starting a startup or just moving your web business or project to the next level, you need a lot of things: market information, PR exposure, probably some investment, but also a lot of knowledge about how to handle your innovation. Most of the times, you have non or little of all of that.

And here comes the amazing part: Seedcamp puts you in the same room with people having knowledge on all of that. All you have to do is grab the opportunity and have your 1 minute pitch as many times as possible. You’ll get some knowledge, but mostly direct access to people who can help you during a longer period.

Beyond the actual competiton, Seedcamp is a great networking event. And the most important part is that it really helps all the participants, winners or not.

Networking is one important thing we’ve been focusing on at How to Web 2010, and for sure the ones that want to enlarge their network will be able to do it big time.

Seedcamp winners: what’s the trend ?

While on my way to Seedcamp Week, the main question I had on my mind was what are the criterias used for selecting the winners. That’s a tricky question, and let me tell you why.

When any VC decides to finance a startup, the criterias are quite general: great team, some experience, big market opportunity and/or powerfull innovation. But everybody has different priorities.

During the first two editions, Seedcamp selected as winners mainly disruptive innovation startups, focused on developing technology and engaging in new markets. That’s a risky bet, because the market addressed might prove to be too small for the VC’s to make a great exit out of that. Also, geting further investments for a technology-disruptive startup is more difficult in Europe, and the startup might run just half the way to the exit. But that might be also a rewarding strategy, and probably the only chance to build world-wide champions.

However, in 2009, Seedcamp selected mosty businesses that already had a finished product, and also had a client base and revenue, but were liniar businesses in terms of innovation. And that’s a different game. For sure most of them are great businesses, but do they have the potential to disrupt the market in such a way that it might get the investors to a great exit ? Don’t forget European internet market is just a tiny part of the global market, after all.

Before choosing the 2010 winners, the question was: will Seedcamp move further from it’s original seed investment focus, or will it go back to it’s roots ? It is not a matter of personal taste, but rather a more mathematical calculation, because Seedcamp, as a pre-VC investment fund, needs to be sure as much as possible that their winners get the next VC investment for moving on.

Most of us were betting on the first option. However, we were wrong.

Between the 11 winners, many are technology innovation businesses, and that’s a big deal. It means Seedcamp managed to gather a bunch of Internet-focused VC’s, with enough market knowledge to push technology inovation in Europe. Personally, I think this trend encourages Eastern European startups to apply, mainly because their skills are more technical-focused then market-focused.

Seedcamp 2010 is a wrap, but there are many things to be told. We’ll also be back soon with a interviews of some of the teams and some of the How to Web 2010 speakers, hope you’ll enjoy them too.

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