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Were back in the main lecture hall for the closing speakers of the Dublin Web Summit and first announcement is that Datahug has won the Maples and Calder Spark of Genius award. Definitely a very worthy winner, well done guys.
Our first speaker tonight will be Niklas Zennstrom, co founder of Skype, Kazaa and Joost who has been meeting with potential VC recipients all day.
Margaret Brennan of Bloomerburg is introducing and will be interviewing Niklas this evening.
Atomico, his VC company has met with 55 companies today alone, a great sign of the amount of entrepreneurship in Ireland. Niklas is also from a small country, Sweden. He realised that to make it big he had to think big. He quit his job the same week that Nasdaq peeked in 2000, the beginning of the dot.com crash. It was difficult to raise money. His co-founder had to move into his flat with Niklas and his wife. You have to lose your fear of failure if you want to be a successful entrepreneur. If you fail, so what. A failure is a learning experience fro which you can come back stronger.
His first company was Kazaa. It had 380 million downloads of it’s software. At one point over half of the worlds internet traffic came from Kazaaa but it wasn’t a commercial success and they ended up in a 5 year legal battle with the music and movie companies.
He learned that you need to simplify technology to solve everyday problems. You need to surround yourself with the right people. It is about building business models with sustainable revenue models.
Being an entrepreneur is not a job, it is a lifestyle. You have to be willing to make personal sacrifices but the rewards are worth it.
With Kazaaa he was able to smell success but not taste it as they couldn’t make money from it. In hindsight they were way too early without their product.
Back in 2002 they had lined up a buyer for Kazaaa and wanted to move on. They really believed in this peer to peer technology and so started Joltid but didn’t seek finance as they didn’t want to make the same mistakes again. Their costs were escalating as they had staff in multiple locations so they tried to cut down their phone bill. When they looked into it they realized that the technology to reduce their overhead did not yet exist but it represented a major opportunity.
They thought it could become a billion dollar company and could change the way people communicate.
At the time though they struggled to find investment in Europe to match the investment they had been offered in the US. They were thinking too big. However, coming from a small country forces you to think globally because your home market is too small.
Shortly after selling Skype in 2005 Niklas decided that the European VC market wasn’t working so he saw an opportunity for experienced entrepreneurs to invest in other entrepreneurs in Europe.
He believes that there is no reason why the next Google cannot come from Europe, we have all the building blocks.
Companies are growing at even faster rates today then Skype, Google and Facebook did. The world is better connected and companies like Groupon and Zynga are changing the rules today.
Companies today are much more capital efficient so the ammount of funding available is less important. Partners need to align their expectations. Investors need to have a deep knowledge of the sector that they are investing in.
The world is much smaller today so if you have a great product or business idea, don’t limit your ambitions to old school locations, seek out investors who can help you with emerging markets.
Europe has a huge ammount of talent and infrastructure that should enable us to be successful. We also now have investors who can hep make this happen. Technology companies can fuel innovation to promote growth and get us out of this recession.
About the author:
Jonathan Campbell is a Director of Select People, a specialist headhunting firm and also the co-founder of social media consultancy Social BPO/ Social Talent, which grows and manages talent communities on social media sites for recruiters. Check out our Facebook Page: Facebook.com/socialbpo for more information.