Is it worth to raise in the EU?
Salvatore V.
20+ yrs in software | Creator of Shoppi Coin | Community Builder | Public Speaker | Travel Enthusiast | Impactful
During the last 6 months I’ve attended several events across Europe in order to promote my company, get valuable feedback, and find a risk taking investor — here’s the story step by step.
In February 2017, I’ve re-branded my company to reduce the friction during marketing tests. The new name is Shoppi (the old one was “Savelgo”) — the re-branding immediately got me to the Wolves Summit in Poland as the selected startup, where I had the opportunity to pitch my initiative on 1:1 meetings.
I had a requested meeting with RubyLight, a venture-capital firm focused on consumer-only startups, but I’ve decided not to pursue the opportunity. Later at the event, I had a meeting with several Polish investors that are willing to invest, but only in local companies (that’s a problem in the EU). At Wolves Summit I’ve decided to use the leftover time to learn from the lectures — I’ve decided listen to Steve Schlenker’s speech called ‘How to build a multi-billion dollar company’. I even had the opportunity to shake his hand.
After that event, I’ve been focused on understanding the Polish market, but after contacting a lawyer to understand the procedure of opening a branch in Poland — I was surprised by the complexity of bureaucracy there. Isn’t startup life hard enough?
Shopping Made Personal
After getting useful feedback during the Wolves Summit I’ve decided to change our slogan and go for something simpler and more memorable — ‘shopping made personal’ (changed from ‘personalized shopping experience’).
During browsing my Facebook feed my attention was caught by a post from IKEA. They were offering an interesting opportunity to innovate retail industry and improve customer experience — I’ve presented our pitch to them and bingo, the ball was in.
I only had few minutes to pitch Shoppi and our propositions to IKEA. I’ve been asked several questions about differentiation and privacy concerns. One of the things I was asked was to explain them the difference between Shoppi and an already existent social media. My replywas: ‘Social media let you can understand people — Shoppi lets you understand customers’.
Are you curious? Here you can see the whole Pitch.
The new mission
I’ve realized then that my USP was strong but still required improvements in how it discerns from other tools. Hard work began again and I’ve come to understand that our mission was to deliver a personalized shopping experience and reduce the gap between online and offline commerce. It’s easy to understand if you follow the trend of e-commerce. I packed my bags again and signed in to another event — the Pirate Summit, an invite-only event for most promising (and crazy!) early-stage startups (cool!). I got the invite (thanks, guys!).
The Pirate Summit was crazy and I loved it, but let’s get to the investors — I had a chance of having 1:1 meetings with a VC firm from Münsterland (eCapital) and Horeca digital (Metro Group) to show my product and get feedback. The first investor was very pleased with the brand and our propositions (women do understand the meaning of shopping experience), but it wasn’t the right moment for them and she said she’ll be in touch. However, I got very interesting feedback from the VC of Metro Group that led me to creating the “Feed Settings” feature.
The Pirate Summit was a part of the Startup Safari in Cologne, and I’m grateful to the organizer for letting me meet with local companies, tech guys, and enthusiastic entrepreneurs (you rock guys!).
Once I was back home, I started working on creating the “Feed Settings” — this way I realized that we’ve lost our initial focus during development of the mobile apps. I managed to fix that by implementing more filters for users — making their experience more personalized, as I meant in the beginning.
I was able to catch some investors (Ventech and Cherry) during workshops and obtain more feedback from them. They made me realize that my startup needs a market to thrive and build enough traction — it was a mistake that I was still paying for it without finding a suitable market first.
I’ve learned that talking about your product and your cause can help a lot — I’ve decided to go on with that and signed in for the CapitalWeek in Amsterdam (easy money?). I took a ride there and left the stress behind — I can say that Amsterdam is a colourful city and I definitely liked it.
The first event that I attended in Amsterdam was the Angel Island, an invite-only event that aims to connect angel investors with early-stage founders. I really enjoyed the format and I had an opportunity to talk with a couple of ‘angels’ (very lovely and easy going).
I’ve talked about my product, my propositions and tried to get feedback from experienced people — it was very helpful. I’m really thankful to the innovators I’ve met during this event for making me feel like I’m home with them. I had the pleasure to meet with a VC firm (ExponCapital) and to pitch my product over a hamburger.
What do we believe?
At Angel Island I had the time to think about my startup and reflect on it by asking myself: ‘What do we believe?’ As a part of our mission we aim to help top-notch companies succeed and reach new customers through visual content — that’s why we believe that e-commerce is shifting from being a sales channel to being a technology that enriches the customers’ journey. Later, I went back to the Hotel to write some emails and talk to my co-founder.
The next day, I’ve attended the CapitalFest, an event focused on meeting local investors, institutions and corporates.
I’ve seen a strong focus on ‘green’ bussinesses with a real startup example and it was brilliant. I had three meetings with investors — the first meeting was about a VC from India (T-hub). We’ve discussed a potential cooperation in the future (India is a huge market). He was interested in Shoppi and he gave me valuable information about the Indian market.
The third meeting I’ve obtained by chasing the investor some days earlier via e-mail. He decided to dedicate me 10 minutes of his time outside meeting slots (I’m very thankful for that) and I’ve clearly explained our focus, the problem, and what we believe along with my cause — he has expressed good feelings. Unfortunately after several days he informed me that they can’t pursue the opportunity (different investment focus).
I’ve met a lot of guys at that event — one even surprised me when I was just drinking my wine the network area (you need that after pitching all-day). He asked me about my company — I started with the vision. He asked me what’s next for the company. I replied that I see a great opportunity to push the retail experience forward in TVs and entertainment. During the talk, he mentioned the Startup Demo Day in Berlin (I’ll write a separate article about it) and told me that he is a Corporate VC (Tengelmann).
Once I was back to my work I started improving the copy of our website and following-up with people that I’ve met during the events. I can say that this experience taught me numerous lessons that you can see below:
- VCs from EU prefer to invest later or to co-invest (network and connections play an important role).
- Angel investors prefer not to take too many risks and perform local investments (tax relief, more control, connections etc…).
- Every country in the Europe claims to be the Silicon Valley of Europe (I’ve heard the same words in 3 different countries).
- If you want to build sexy traction you have to stay focused on a single country and move slowly to the next one, apparently seems a good logic but in my experience this can collide with your “global vision” and can lead you to lose your initial focus.
- Every country in the Europe aims to focus on a specific industry and this is something that you have to keep in mind (always!).
- If you build a startup in Germany, you can expect to see the same startup in UK (I’ve met both startups in the payment industry for kids and they have a similar product), this is not a copycat issue but a problem with different cultural approaches and it’s better for both startups not to enter each other’s markets.
- Customer acquisition strategy varies in every country, so there are no doubts that Europe is not a unified market and you need a strategy for every single territory (find people, chase them and find partners).
- Accelerators take too much equity and don’t build the startup to appeal investors for big rounds, you can get perks but at the end of the program, you will have a hard time scaling up (most of them go for pre-seed or multi-seed).
- European startup culture is broken due to the lack of vision of the future — it seems that building new big companies is not a priority for Europe, probably because they can be very disruptive (see Uber).
- Most EU conferences live by the “go big or go home” motto, but I think they don’t understand that “go big” requires “big talents, big market, big opportunities and big capitals”.
My conclusion is to move to the US to scale-up, Europe is still a great place to build a great product and craft your DNA but it’s not the right place to play big.
Here some useful articles:
- https://www.cityfalcon.com/blog/the-startup-journey/how-to-raise-money-for-a-start-up-risk/
- https://www.bbc.com/news/technology-37417758
- https://medium.com/@collinmathilde/the-difference-between-raising-early-stage-capital-in-the-us-vs-europe-15cc32ab7ecd