I would just like to give special thanks to our Friends at Apple for letting eRepublik be among the first companies in the world to get iDesks. Since the roll out this morning, productivity has gone up by 20% and we have been able to always get 3 star ratings on all of the Angry Birds levels.
Just came across this “Global Videogames Investment Review” presentation and its got some good insights worth sharing.
Digi-Capital Global Video Games Investment Review
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The early days, trying to do angel investing in Romania: 2007-2009
I have been taking it easy on the angel-investing front in the Romanian market for the past 12 months. Actually I thought I was going to stop investing in it for a while so I could better concentrate on developing existing local investments such as Trilulilu, (not really a local investment anymore) eRepublik and other smaller ones. This is because most of my investments locally have been very different to the usual spray and pray approach of angel investors.
When I first started looking at the online market in Romania, about 4 years ago, the scene was dominated by large groups that saw the Internet simply has another vertical and just bought majority stakes in as many copycat projects that they could feed to their in house media houses.
This with a few exceptions resulted in poor companies, entrepreneurs that became project managers, selling out their “dream” for a few ten of thousand euro (enough to buy an apartment at the time) and in some cases some nasty bankruptcies and unhappy investors. This created a lack of motivation and more importantly learning, a lost generation of Romanian entrepreneurs and low quality online companies with very little innovation or international potential. You can’t learn to become an entrepreneur in a big structure where your company is just a project of a larger group where you don’t hold equity. The moment you make that move you are an employee, not an entrepreneur.
So although I wanted to take a different approach, a more Silicon Valley type of angel investing, taking minority stakes in great teams with interesting projects, I found it very difficult to find the right teams on the right projects. I kept receiving proposals either from people who thought starting a company and getting it funded was the same as selling a development project to a client or entrepreneurs who wanted to sell out before even having achieved real traction. There were some exceptions but very few, and one of the major show stoppers was many of the better entrepreneurs could not concentrate on just one project and would do several at the same time. I know what it takes to build up a great company and you can’t lead 2 at the same time (hard enough already to lead one and look after investments in others J. So I would always turn these down and advise them to focus on one company only and then come back. Of course very often this was not their fault, these entrepreneurs needed the income from one of the companies (usually in the development services industry) in order to fund the other. Problem is that they didn’t really realize that in order to get the funding they absolutely had to focus themselves and their team 100% on the new venture. The ones that had international projects, I advised to just go abroad, participate in international start up competitions and not raise money locally. A few followed that advice (no merit there, I’m sure they would have done it anyway without my advice), managed to raise funds (in some cases from personal friends of mine) and are making the right connections to make their current start up or the next one succeed, opening the way for other Romanian entrepreneurs.
As a result of pushing this type of entrepreneurs with an international project to go to start up competitions such as LeWeb or programs such as Seedcamp, I may have missed the opportunity to invest in companies such as Ubervu or Brainient but I don’t think Emi or Vladimir regret having gone instead directly to Seedcamp. They had the type of project that simply would have been way to hard to turn into a major success just from Bucharest (Congrats again btw guys).
And now the recent deal between Y-Combinator and Yuri Milner will I am sure create a few vocations (Note
to all other sugar daddies, Seedcamp sounds like a good European candidate for a similar deal), although I do worry when things start looking to much like an incubator. I do believe that entrepreneurs having to deal with all the sh*&t you have to deal with when you are bootstrapping with few resources for a certain amount of time are usually stronger as long as they manage to take themselves out of that situation fast and without someone having to hold their hand.
My first Investments in Romania: People and focus.
In time I found 2 entrepreneurs with personalities, backgrounds and projects that I felt had real potential, but they were very different ones.
One, was George Lemnaru his project, eRepublik simply didn’t exist, it was just an idea we discussed whilst I was meeting him for something totally different (an online e-commerce website), everything needed to be done, we actually even changed the concept quite a lot in that first discussion and it needed to go international right away to have any chance of success.
This was not something I could simply invest a minority share in and advise from time to time. If the prototype phase demonstrated the potential, it was clearly a project that would need significant funds to grow. And demonstrate it did! Within 10 days of launching we had 10.000 players from 30 countries and our first hacking attacks and crisis.
The result is that having raised substantial funding on top of my initial investment from international external investors, eRepublik is by far the company where I am the most involved, holding the CEO role and I am really enjoying the ride so far. Focus on one company = practice what you are preaching; I owe it to the other investors who have placed their trust in us as well as to the greatly talented and dedicated team we now have.
eRepublik’s growth although not free of hick ups and major challenges: hacking attacks, team building trough trial and error, design errors… you name the crisis, we probably had it at one point or the other; has been great.
eRepubik now has over 2,2 million registered users from all over the world and growing (yes many are no longer active but that’s the measure all browser games give). It is a truly international company with offices in Dublin, Madrid and Bucharest and a team of 30 great people that have acquired considerable experience and know how and more importantly work great together. Less than 5% of eRepublik revenues come from Romania and we have sales in over 120 countries. As a part of this, it has been a challenging but rewarding experience to build from scratch with George Lemnaru an online games development studio in Bucharest. I’m looking forward to taking eRepublik to the next level now, leveraging what we have achieved so far.
The other was Sergiu Biris; Trilulilu’s story is different, by the time I had spotted Trilulilu (through a cover story on a local magazine: “Business Magazin” it was 11 months old, one of the top 15 sites in Romania, already had buy out offers on the table and virtually no revenues. Still, in that case, the initial idea was to actually simply be a minority investor and do an angel play.
So I took a 10% stake in the company. The team was great, and the project had clear traction, it was a no brainer. I had not counted with the fact that within 6 months there would be new offers on the table to buy out the company. Although the offers would have given me a great return on my investment, working with Sergiu Biris over that period, I just knew he could take Trilulilu much further, so I simply decided to replace that offer taking a majority stake in the company but leaving a significant share to the founding team and Sergiu in particular.
Again Trilulilu.ro is not your typical angel investment since I also took the non-executive chairman position and although my role is much more limited to the one I play at eRepublik I am more involved in the company than a typical angel investor. Still I make sure that this does not represent more than 24 hours per month. My international expertise is much less needed here, so Sergiu pretty much runs the show and I play more of an advisory role stepping in only when I can truly accelerate things.
Trilulilu.ro is a very different company to eRepublik, at the moment it is a truly local play, the largest Romanian site according to SATI with over 3,5 million unique users per month. I am really impressed by how it has grown and what Sergiu and the team have achieved and what they are planning. I am convinced that Trilulilu.ro will surprise many in 2011 and seriously leverage the leading position it has built.
Tjobs.ro and the emergence of real angel investing in the Romanian online market:
This means that so far, although I wanted to do at least 2 investments per year locally, I only managed to do one small real angel investment in Romania: 123Flori.ro where I simply liked the entrepreneur: Mircea and followed the hunch of Alexandre Almajeanu a great angel and friend who was the lead investor. I follow 123Flori.ro from a distance but I am pleased to see the progress of the company in what is still a small market that is ripe to grow substantially over the next few years.
So this is why I am really happy that I have finally found another company with a great entrepreneur focusing 100% on a high potential project to invest in: Tjobs.
You can find the full details about the company and investment in the Tjobs press release here (Romanian Press release)
Basically I think it’s a great entrepreneur & team with exactly the right background taking an innovative approach in a market that already has a proven business model (online jobs) but was not being done properly online for that particular segment (providing jobs abroad for Romanians).
Tjobs will have many challenges ahead but I am confident it has a good chance of being a major success and it is already showing great traction. More importantly perhaps, it will change many lives for the better and give many Romanians the chance to find employment abroad much more easily, in a safer more efficient and transparent way and with better conditions (the “T Standard”). Thousands of people have already seen their life change thanks to Tjobs.
Clearly the Romanian online market is maturing. Andreas Cser another fellow angel investor and friend, spotted T-jobs at the Biris Goran first Venture connect event in June 2010. I had seen it to and found it interesting but I was to busy to follow up properly and Andreas is the one that really followed trough and convinced me to co-invest.
This is exactly how angel investing works in the Valley and Western Europe. It is very rare that an angel investor will spend a lot of time studying a company; usually one lead angel will do most of the work and get others to join him. This is what I did at eRepublik where we have great angel investors but very few studied deeply the investment case (they trusted me and the first lead investor Brent Hoberman) and none are involved in a day-to-day capacity (although some do help with advice and contacts when needed). This is great for the entrepreneur because it saves him time and gives him more c
ontrol and access to wider know how when needed.
The fact that such deals are now happening in Romania is a clear sign that things are finally moving in the right direction and entrepreneurs more mature. Although I first saw Calin Stefanescu pitch Tjobs.ro last summer, from the moment Andreas was in, it only took me one face to face meeting with Calin and a phone call with Andreas on terms to make athedecision to invest, 1 week. The fact that the paperwork was handled by a law firm that knows the space (disclosure Biris Goran advise Erepublik and Trilulilu in Romania as well as other companies I am involved in) made a big difference. The gain of time was considerable for all parties involved.
The emergence of events like Venture Connect in Romania is in my opinion key; they really give entrepreneurs a platform to learn to pitch to investors correctly (and prepare for larger start up competitions) and for investors the possibility to see quickly what the Romanian online Internet start up scene has to offer. I strongly recommend this type of event in particular if you have a local early stage start up project.
But very few international investors will be interested in a local early stage start up, they want to invest either an international market play or in mid to late stage growth plays. Actually I think that in the next 18 months we will see several growth investments in local leaders. We will also see the first trade sales or partial exits above the 10 million euros mark. Several investment funds and companies are turning their attention to the Romanian online market and a few start-ups are reaching substantial sales levels and reach. Romania is after all the 2nd largest Eastern European Market in the EU after Poland with 22 million people and has one of the best broadband services in the world. In Romania, a lot more value is going to be transferred from the offline world to the online world than most people think particularly but not only for advertising and e-commerce. One simply has to look at what has happened in western countries.
This means that if you have an early stage start up you should either focus on the international market or practice and eventually get your first investors (preferably ones that are truly well connected internationally) in local events but quickly put yourself in a position to pitch and eventually move to London or other such emerging European internet hubs.
If you have an early stage start up focusing on the local market, there are investors for great teams with great projects that sow initial traction but you will have better chances of scoring investment in local events either from local angels (and here are very few good ones still) or from the few international angels that travel to these and may be interested in a local market play. But you need to have a clear shot and vision to reach the growth stage very quickly because that is where the action will be locally.
And remember with TJobs done, I still want to make one early stage investment in 2011 in Romania and two in 2012 so don’t hesitate to contact me if you think you have what it takes to be the next big thing (I prefer B2C to B2B).
(Si te sientes cómodo y representado por este texto, dale toda la difusión que puedas y quieras: reprodúcelo, enlázalo, tradúcelo, compártelo, vótalo… todas esas cosas que puedes hacer con total tranquilidad y libertad gracias, precisamente, al hecho de que tenemos todavía una red neutral. Hagamos posible el seguir teniéndola)Los ciudadanos y las empresas usuarias de Internet adheridas a este texto MANIFESTAMOS:
La Red Neutral es un concepto claro y definido en el ámbito académico, donde no suscita debate: los ciudadanos y las empresas tienen derecho a que el tráfico de datos recibido o generado no sea manipulado, tergiversado, impedido, desviado, priorizado o retrasado en función del tipo de contenido, del protocolo o aplicación utilizado, del origen o destino de la comunicación ni de cualquier otra consideración ajena a la de su propia voluntad. Ese tráfico se tratará como una comunicación privada y exclusivamente bajo mandato judicial podrá ser espiado, trazado, archivado o analizado en su contenido, como correspondencia privada que es en realidad.Europa, y España en particular, se encuentran en medio de una crisis económica tan importante que obligará al cambio radical de su modelo productivo, y a un mejor aprovechamiento de la creatividad de sus ciudadanos. La Red Neutral es crucial a la hora de preservar un ecosistema que favorezca la competencia e innovación para la creación de los innumerables productos y servicios que quedan por inventar y descubrir. La capacidad de trabajar en red, de manera colaborativa, y en mercados conectados, afectará a todos los sectores y todas las empresas de nuestro país, lo que convierte a Internet en un factor clave actual y futuro en nuestro desarrollo económico y social, determinando en gran medida el nivel de competitividad del país. De ahí nuestra profunda preocupación por la preservación de la Red Neutral. Por eso instamos con urgencia al Gobierno español a ser proactivo en el contexto europeo y a legislar de manera clara e inequívoca en ese sentido.
On the 28th of December 2009, the 1 millionth eRepublik citizen was created a little over one year after the launch of the public version of eRepublik. This was a great moment for us and also for me personally as many in the industry (that I won’t name) told us that eRepublik would never interest more than a few thousand people. I was even told that 250.000 players was the absolute maximum we could hope to reach for this type of game. Well not only we have more than 1 million registered users (all banned accounts have been excluded from this total), 320.000 play regularly and over 50% of those every day. So thanks to the doubters for encouraging us to prove you wrong :). This is especially encouraging as eRepublik is still a work in progress we have only about 30% of the core game finished and this doesn’t include many other things we have planned for and around it.
This has all been achieved thanks to the hard work of our team (now 45 people) and the feedback and enthusiasm of our incredibly passionate and smart community of players and I thank them again. We know that the eRepublik experience is still far from perfect today and although we do everything in our power to make it better that is the cost of innovation, of learning and of taking on such an ambitious concept. What I can promise is that we will continue to constantly improve it.
To close off 2009 and start 2010 on another positive note we have also learned that eRepublik was selected by AlwaysOn as an OnMedia top 100 Winner, a selection of the hottest emerging private companies in the digital field.
To celebrate this you can find below a few video comments in “Guido’s fake eRepublik interview”. In case you are wondering, yes its totally amateurish uncut and first shot in the tradition of other such eRepublik team videos such as the (beta launch), 786 days ago when we had about 300 players waiting to go online. Oh and in this new video I’m watching in my computer how my home country France is actually disappearing from the map and at the same time trying to look trough my notes what it is I’m supposed to say. Our PR people say its time for some media training so perhaps the reaction from the french president might show how these things must be done: Sarkozy in France vs Spain.
This year I came for the third time at LeWeb, the first time was in 2007, where eRepublik, fresh out of a private beta participated in the Start up competition and won the special jury prize. This was a great event with amazing food and already good networking. I wouldn’t be able to comment much on the sessions because I saw less than 2 or 3 and missed in particular the controversial Nicolas Sarkozy speech. Still that Le Web edition helped us get noticed.
In my second Le Web edition in 2008 we came back a little bigger, as sponsors fresh from the launch of our public version. There we wanted to show mostly to the industry that we were an ambitions player and here to stay. Although we were probably one of the smallest companies out there, many people said we had the best and most professional stand. Again that got us noticed a little by the press but more importantly it allowed us to be alongside brands such as Microsoft, Google, Netvibes, Facebook, Nokia etc.. Although we had virtually no cash at the time we took a gamble and showed everyone we were players and had grown up. It meant that if you were somebody in the industry with a clue you knew us, especially if you were a VC.
This greatly helped us in my opinion close our Series A round in what was probably the hardest time to do so (November 2008 / March 2009)
On the other hand this in spite of the Nordic Saunas and other amusing things was a poorer edition, the change of venue made things difficult for the organization, not only the participants had virtually no Internet, there were no cables in the stands so we had to run our computers and demos off USB 3g devices most of the time. The participants of the start up competition had it worse with no internet connection to demo their internet start ups. It was also freezing cold and to be honest the priority given to speakers for access to food when there was so little of it was downright insulting for paying participants and sponsors. Also the fact that sponsors had no access to organization cars (reserved to speakers only) meant that my co-founder George Lemnaru who had to stay late one evening to sort out things in the stand, after being refused a car had to walk back to his hotel for 45 minutes under the rain in not the best of neighborhoods. Anyway he survived so did we and fortunately so did LeWeb.
Hint to Loic and Geraldine, sponsors are important (and not just the top 3), nobody risks and believes more in what you are doing than them, you should treat them at least as well as Speakers or Press. I don’t know about 2009 but in 2008 it clearly did not feel like that.
And now to the 2009 edition, that closed yesterday. This time I came as a simple paying participant. We are concentrating 100% on product development at eRepublik and I honestly had nothing to sell, raise or announce.
Actually it kind of reminds me how far we have gone when one of our team members told me: “What do you mean we have nothing to announce, we just launched eRepublik this Thursday in Russian, Swedish, Romanian and Hungarian meaning eRepublik is now available in 10 languages!”
Well what can I say, the Internet was flawless, and the networking superb and I actually got to listen to some of the sessions for a change! It was less than 30% of the sessions but that is 10 times more than usual. Ok I’m French so I have to complain a little and yes the food wasn’t great but at least there was plenty of it and tons of free Nespresso made sure we were alert at all times.
This time I did not go to any of the parties or events outside of LeWeb and wasn’t invited to the speakers & sponsors dinner etc.. .so I can’t comment much on those. Although most of my friends and colleagues who went, including our VC’s AGF Private Equity who were one of the sponsors of this year’s event all said they were quite good. Another good thing was that I was told eRepublik was mentioned several times in various speeches by Loic as a LeWeb example of success. I guess you haven’t really made it until people talk about you even when you are not there!
In terms of the sessions the ones I saw where in general quite good, although to be honest I did not learn much from them and do think that LeWeb completely missed the huge transformation that is occurring in online games at the moment. Lots of talk about social media, future of online video, online music and nothing about games when that industry is bigger than music and cinema put together and online game companies like Playfish (European), Zinga, Gameforge (European), Bigpoint (European), Moshi Monsters (European) etc… and to a lesser extent (for now) eRepublik, have more revenues, growth (and in many cases profits) than most other stat ups.
Online gaming is the real star of 2009 and will be even more so in 2010. So Loic, Geraldine hint 2, next year don’t forget online gaming. This is where one of the next European billion euros companies will come from and it will happen sooner than you think. Anyone miss that Playfish went from 0 to 400 million US $ exit in 2 years?
Coming back to the sessions and roundtables, of the ones I saw, I felt that Chad Hurley’s was quite disappointing, I actually felt bad for him as I know how little you can say when you have been acquired by a public company and probably would have dug more in what the hell was he doing blowing his hard earned exit in a F1 team. (The saying goes that the best way to make a small fortune is to start with a big one and then buy an F1 team). There must be more to it for sure, F1 is nowhere in terms of online video presence and strategy , I guess Chad hopes to have a word about it with Bernie.
Another session that I found disappointing was the Pearltrees one, honestly I don’t get it a nice UI doesn’t make a business and I failed to see why this company deserved so much coverage and time on stage. Looked like a niche social media play for me (ie: perfect for Scoble). Again it is only my personal opinion and I don’t know the founders and or team and I’m probably missing something there but then if it there is something great it sure did not jump out. In any case congrats to them for the coverage they managed to get I heard they were even on CNN.
On the good side, Queen Rania’s session brought a sense of glamour and high purpose to the all event that I don’t think was artificial. Its great in this kind of conferences to have a breath of fresh air that makes you look at things in a different light with great quotes such as: “ Can the real time web bring real world change?”, “Social networks are about life streaming, not life changing, they are about where we are not where we want to go”. Also being called the “Digital Darwins” of the world was weird but insightful, particularly when applied to eRepublik where we are sort of creating a mirror version of the real world. Her words were inspiring and eRepublik will be giving one day in 2010 to support education for all children with 1 day for 1 goal www.join1goal.org
Niklas the founder of Skype, was not the most charismatic of speakers but then he doesn’t need to, his candor was appealing and his words explaining just what an entrepreneur needs to sacrifices to make his ideas succeed where right on. Good sound bites / shared wisdom where: “Swim against the tide, follow your own path”, “failure is a great learning curve”, “To be successful you need an unshakeful belief in your product and business”.
Many other interventions such as Tariq Krim’s of Jolicloud the Google challenger showed that the internet is still an industry where we can take on giants and at worse if you don’t succeed you can try again until one day (and I wish it for him) you do!
But to be honest as everyone in the industry will tell you the real point at LeWeb is the networking and with 2300 people attending, Paris was the capital of the internet world for 2 days and that is something that is priceless. A point that in my opinion was kind of missed in the various panels about Europe and European champions. Its events like LeWeb that really help crystallize and build an industry in a region. There were even about 12 Romanian entrepreneurs shopping projects and looking for investors, something I keep telling everyone I meet there that they should do. Of course its not so much about the people you meet for the first time there but more about people you already know but get a chance to speak directly to, often in a non prepared way.
So congratulation and thank you Loic & Geraldine for organizing this great event in such difficult times. Long live LeWeb.
Ps: Was the networking useful for me this year? Well let’s just say that 1 or 2 deals might emerge again from this years event…. 🙂
I normally don’t post in Spanish but basically had to share this as what is about to happen in Spain is pretty scary. Basically the Ministry of Culture is setting up some sort of commission that could bypass the judicial courts to close down web sites or remove a citizens internet access if they decide they are threatening author rights. I’m speechless, luckily others aren’t.
Esta viñeta, creada por Eneko para 20minutos.es y 20 minutos, tiene licencia Creative Commons. Puedes cogerla y usarla en el medio que desees en apoyo del Manifiesto, firmándola Eneko/20minutos.es
Ante la inclusión en el Anteproyecto de Ley de Economía sostenible de modificaciones legislativas que afectan al libre ejercicio de las libertades de expresión, información y el derecho de acceso a la cultura a través de Internet, los periodistas, bloggers, usuarios, profesionales y creadores de Internet manifestamos nuestra firme oposición al proyecto, y declaramos que:
I was invited last week by the legal firm Biris & Goran that helped me in parts of the eRepublik Series A round to talk at an event: “IT Start Up How To” they held at the Novotel in Bucharest.The event was very well organized with interesting questions from the audience. eRepublik was out in force amongst the speakers as one of our angels: Alexandre Almajeanu as well as Guillaume Lautour the Partner at AGF PE that is on the eRepublik board also made presentations.Guillaume’s presentation was very clear in terms of what European VC’s look for in their investments and I would recommend you check it out. Guillaume’s explanation of all the incentives built by the French government to help private individuals invest in start ups was particularly insightful and I hope somebody who could make some of these things become a reality in Romania was listening 🙂Ana Maria Andronic from Biris & Goran had an interesting presentation concentrating in particular on IP and copyright giving loads of useful free advice and Vlad Stan a local angel that started seedmoney got a few laughs from the audience with his YES presentation but not as many as Alexandre Almajeanu with his creative use of picture in his presentation, including spiders and the Eiffel Tower.Big thanks to Christian Mindru and Dan Visoiu from Biris & Goran for putting this great event together.Ps: You can find my slides below and all of the other presentations are available on the Biris & Goran website here:
View more presentations from alexisbonte.
Overall Gamescom (trade day August 19th) was very interesting, the traditional industry was out in force with giant stands in spite or maybe because of a drop in sales of about 33% YoY in June / July.Online players were a lot more discrete, only present in the trade area. Interesting when you think that this where most of the growth will be coming from over the next 5 years. The only MMOG players that were out in force with a large stand were WoW and Dofus (ok and Wharhammer was kind of there to within the giant EA stand and the conference org seems to like Twitter).Most of the big releases that were announced were for traditional offline games with a lot of interest for Avatar and the new Starcraft. Dofus 2.0 was the only major MMOG announcement. In terms of the offline games that I felt were interesting was Ruse from Ubisoft, a wargame that looked really cool.
I also had a series of very interesting meetings but I can’t talk about them yet J
Just before GamesCom there was a GDC conference and from an online perspective I think the following were probably the most interesting talks as reproduced by Gamasutra:
Playdom VP panel on social gaming
Gameforge CEO, Klaas Kersting Keynote (great guy by the way, a real industry leader)
When I see something like this it just makes it all worthwhile, a big thank you to the Indonesian eRepublik community for showing us once more how special they are and how lucky we are to have them as eRepublik citizens. On top of the highest volcano in Java, Mt Tangkuban Perahu, must have been quite a climb!
Alexis Bonte 