The Accelerator Group (TAG): 2008

Tuesday, December 30, 2008

Mergers back on the agenda

Mergers are really difficult transactions to bring about and even more difficult to make work post-merger.
The rewards for doing so properly and well can be significant.
In these times, we are likely to see a number of mergers taking place between companies which will find it really hard on their own to raise cash to lengthen their runways or for those for whom the commercial logic is overwhelming.
Looking back, one can see some mergers which had they not happened may well have led to the demise of both companies (or at least a protrated and far more capital intensive journey) whilst what emerged was a real powerhouse.
I'm thinking particularly of the Betfair and Flutter.com (remember them?)merger in December 2001. Current Betfair revenues in the order of £250m and PBT over £40m.

Image via CrunchBase
I'm also not forgetting the LoveFilm and VideoIsland merger of April 2006, creating Europe's dominant on-line DVD rental service now turning over some £70m profitably.

We will be encouraging TAG companies to look at their markets carefully and consider whether getting together creates more value for everyone in the long run.
The difficulties are - fairly obviously - a) arriving at relative values and
b) resolving the question of who runs the combined entity and how.
It takes some skill, no little suppression of ego, sensitivity and far sightedness to achieve a good result.
The benefits can be huge. Aside from rationalisation of overheads, marketing can be made so much more efficient and effective (less competition for those keywords, greater clickthrough rates from natural and paid search)and its far easier to do those all important business development partnerships.

Commentators need to focus more on what value has been created, rather than on who 'won' and who 'lost'. In the case of the great mergers, everyone's a winner.

Thursday, December 25, 2008

Happy Holidays and a very good 2009!

2008 can be split into 2 distinct periods. Pre-crunch and Post-crunch.
In the coming days we will all be reflecting on a pretty crazy year and most will be fearful, uncertain or excited by the coming one.
I think we are all agreed that 2009 offers significant opportunities and challenges.

We are in for some very tough times. The funding climate has changed radically and the chill wind is blowing.
All sensible companies are focusing on their cash. Getting themselves to break even as quickly as possible and focusing more intently on what makes a difference than ever before.
TAG companies are all looking closely at their costs, their revenue generation and their cash runways. They have been for some time now.
The opportunities are still there - but may be found in different places from the pre CC (Credit Crunch) era.

Certainly, competitors may be hurting and this will represent opportunities for some. Businesses that genuinely remove cost, save money and increase efficiency will be attractive as will those with well proven business models and with revenues continuing to rise.

Interesting to look at what date defined the start of the credit crunch.
For the tech community at large, it seems that Sequoia Capital’s publication of their 56 Slide Presentation Of Doom - October 7th,2008 - marked the date.

It was much earlier for most others.
On 22 February 2008 Northern Rock was taken into state ownership. On September 15, 2008, Lehman Bros. filed for Chapter 11 bankruptcy protection, the filing marked the largest bankruptcy in U.S. history. On September 16th AIG suffered a liquidity crisis following the downgrade of its credit rating - it had been the 18th-largest public company in the world! And so it went ...

Certainly, if one was looking for signs (and who was?) we could go back to March 2007, when the United States' subprime mortgage industry collapsed due to "higher-than-expected" home foreclosure rates.

However for the tech start-up scene, the fundamentals are still strong. Technology is likely to lead the way out of recession for many economies. Better application of technology leads to lower costs and greater productivity. Broadband penetration continues to increase, eCommerce is holding up. December numbers are not out yet but November continued to show on-line gaining share from off-line. So it is with advertising. Whilst there is an overall slump, on-line continues to win share from off-line.

Of course, what has changed is that it is much more difficult to get ideas funded, values are not what they were and exits are very hard to achieve.

The idea that the funding community is closed for business is, however, not entirely correct.
The big brand Venture Capital Funds still have money to invest and in our view most will be successful in raising new funds - as Accel have recently.
Angels will return to the funding scene seeking capital efficiency and opportunity.

Since October 7th, 9 of TAG's companies have received follow-on funding (or have term sheets leading to that end).

As regular readers know, this blog essentially showcases the TAG portfolio. Since the portfolio is pretty well representative of the tech start-up scene, I hope that it of wider interest than just to friends of TAG.

Good luck in all your 2009 endevours!

To finish off this serious post, I share with you the movie that our friends at First Round Capital produced for the season of goodwill.
First Round are a special kind of firm with whom we share many common values - some of which are reflected in this video.

Friday, December 12, 2008

TAG invests in Amee

One of the precepts we believe in at TAG is the one that goes "what you can measure, you can improve". Hence our 'obsession' with selecting the right KPIs and monitoring them so closely.

Amee's idea is a simple but important one.

Their mission is to measure the "Carbon Footprint" of everything on Earth.

This goal requires a neutral aggregation platform. AMEE is that platform.

The AMEE platform is being used internationally by many organisations including Defra (DECC), The Irish Government, The Welsh Assembly, Google, Morgan Stanley, Nesta, the Energy Saving Trust, BRE, Radiohead, Sun Microsystems, plus numerous other IT, business services and software companies.

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AMEE has been designed to deliver a new standard in functionality, transparency and interoperability. AMEE's aim is to map, measure and track all the energy data on Earth. This includes aggregating every emission factor and methodology related to CO2 and Energy Assessments (individuals, businesses, buildings, products, supply chains, countries, etc.), and all the consumption data (fuel, water, waste, quantitative and qualitative factors).

It is a web-service (API) that combines measurement, calculation, profiling and transactional systems. Its algorithmic engine applies conversion factors from energy into CO2 emissions, and represents data from 150 countries.

The company has just announced that it has secured substantial Series A funding from leading VC funds in the USA and UK.

The collaboration between O'Reilly Alphatech Ventures (OATV), Union Square Ventures (USV) and TAG enables AMEE to enhance its data and to extend its international reach.

Tuesday, December 09, 2008

Dopplr is strengthened ...

Image via CrunchBase, source unknown

Image via Wikipedia

Dopplr has appointed Marko Ahtisaari as CEO. Dopplr, the online service for smarter travel, today announced it has appointed Marko Ahtisaari as CEO, effective January 1st 2009. This is great news for the company as it prepares to take its next steps.
Marko was a founding investor in Dopplr and has been active in guiding the company. Co-founder and founding CEO Lisa Sounio will become Chairman, alongside fellow board members Tyler Brûlé and Saul Klein.

Since launching to a select group of global companies last fall, Dopplr has attracted an international following of smart travellers. Lisa and the team have done a super job of launching the brand and building a strong following. As a founding investor Marko knows the team well and with his background in mobile services and media is an excellent fit to grow the business.
Today, Dopplr is an important 'intention sharing service online', akin to social platforms like Twitter and Facebook, but with a tight focus. When people share their travel plans and tips through Dopplr their mind is already set on the travel experience: on where their colleagues and friends are going, how they’re getting there and what hotels they’re staying at.

Marko Ahtisaari has worked previously as Director of Design Strategy at Nokia and serves on the board of directors of F-Secure and Artek. Most recently Ahtisaari has been Head of Brand & Design at Blyk, the free mobile network for young people funded by advertising, and will continue in a role supporting Blyk in its partnering and expansion strategy. In September 2008 Dopplr announced its second financing round from a group of prominent international investors — all users of the service.

The investors include Esther Dyson, Tyler Brûlé, Thomas Glocer, Yat Siu, Aditya dev Sood, Lars Hinrichs, Joshua Schachter, Brian Behlendorf, Daniel Sachs, Joshua Cooper Ramo, and Azeem Azhar. Saul Klein, whose Accelerator Group, invested in this round, also invested in the previous round together with Martin Varsavsky, Reid Hoffman and Joichi Ito. www.dopplr.com

Monday, December 08, 2008

A good reading list.....

Douglas de Jager, co-founder of Byteplay, the company that created Dothomes, has put together a useful set of links, interesting articles, golden rules for entrepreneurs and the like.
They can found here.
Doug tells me he'll be adding to the list regularly.
There is some good Xmas reading in amongst his recommendations.

Tuesday, November 11, 2008

TAG has 8 in Library House's Top 100

Image via Wikipedia

Congratulations to those companies listed in Library House's ranking of Europe's Top 100 Media technology companies.
One does get somewhat justifiably cynical about these awards or rankings but one must respect Library House's credentials as a leading research house for this industry and the advisory board was comprised of people from all the leading investors in the ecosystem.

The roll of honour had Moo at no 2 and Stardoll at No 10. The other TAGsters listed are:
Netlog and Zemanta in Community, Mind Candy in Games, MoveMe and Zoopla in Search and Directories and OpenX in Advertising.

Friday, November 07, 2008

Now..... gain in market share is a survival imperative!

In times of recession and rapidly slowing consumer expenditure, relying on momentum in the market for maintaining profitability is no longer an option.
Even eCommerce - although it is predicted to take more share of retail sales - will see its rate of growth slow further.
So, gaining market share (a bigger share of shrinking wallets) is a business imperative.

This could be one of the main reasons why TAG backed company, Fizzback, is gaining such traction.
Fizzback provides a service to retailers and other service providers which elicits feedback - at the point of experience. Its a unique service in that it enables consumers to tell the retailer what they think about their products and service while they are in situ.
Its sophisticated artificial intelligence engine (using NLP, Natural Language Processing) interprets customers comments in free form and analyses these comments, presenting them to the company through a web dashboard.
The fiercely contested mobile industry has widely adopted the fizzback service to get really close to their customers eliciting feedback in real time.
Major retailers like Tesco, Marks $ Spencer, HMV and others are testing and rolling out Fizzback across their stores. Read Retail Week's article of last week on the subject.
Tesco are famous for having built one of the great retail business by listening intently to their customers and react.
The companies that emerge best from this recession will be those that get really close to their customers, listen well and react with speed to their requirements.

There are a number of services that provide on-line feedback but few that enable consumers in an offline environment to provide feedback via SMS, voice, email. Fizzback is one.

Awards are not certain indicators of success or even of great products but having a string of them clearly shows Fizzback is on the right track.

I wrote about Fizzback back in July and at that point its brand was just begining to enter the conciousness of the Customer Experience sector.

Sunday, November 02, 2008

Optimor, a business for our times

The last thing consumers are going to give up in these times of frugality is their mobile phone. Their link to the world.
But, they will certainly want to spend less on these phones.
Currently European users spend about £100bn annually.
Could they spend a lot less?

Image via Wikipedia
Ofcom estimates that only 23%% of us are on the right tariff and Optimor estimates that we could save about 32% ie £3.3bn (UK Only!)per year IF we were on exactly the right tariff.
Every year 33% of us switch operator - in an attempt to save money.
That's 22m UK switches per annum (8.6m contract users).
The costs to the operators of this churn has been variously estimated but clearly runs into many billions.
Of course, there are price comparison engines which will encourage you to switch based on some fairly superficial evaluation of the minutes you use, the texts and the Mbytes handled (do you have a clue how many of these are whizzing through the phone?)

TAG has been working with a group of Mathematicians from Oxford University led by Prof. Chris Holmes and the founder, Stelios Koundouros, himself a Phd in Maths from the other place (Cambridge) to develop the world's most powerful algorithm for analysing and forecasting usage (of mobile phones, expenditure of all kinds) and comparing it with the literally 10's of thousands of tariffs out there. The company is called Optimor.

The service, which will monitor your phone bill automatically every month - after you give it access to your on-line bill - will recommend the best tariff, provides tips for future usage and generally ensure that you are spending no more than you need.

The service, code named Karoosh (apparently Japanese for death through overwork!) will be released in private beta in the coming few weeks. If you can't wait and want a play with the Alpha, go to the Karoosh blog

My own bill analysis showed me that I can simply save over £200 per year - the regular comparison sites which simply asked me for my minutes and texts would have sent me to a more expensive tariff than I currently have.
Karoosh independently test 38,279 plans & add-ons across the major UK operators.

The telco industry's reaction to Karoosh (or whatever it will be called in future) is going to be interesting. It seems to me that the operators would do better to help consumers find the right tariff within their own network rather than keep fighting for users to switch from another network to theirs.

Wednesday, October 22, 2008

Saul's Berlin Presentation

Thoughts on European Start Ups

From: cape, 11 hours ago

Thoughts on European Start Ups

View SlideShare presentation or Upload your own. (tags: web2expoeu09 seedcamp)

SlideShare Link

Sunday, October 19, 2008

Cash Management

The Bank of England is one of the oldest centr...

Image via WikipediaWithout entering the great debate of the moment regarding the length and depth of the recession and how specifically it will affect the tech start-up world, we at TAG have been providing guidance to our investee companies for the past 3 weeks - via circulars to their in boxes.
Much of the advice has surrounded 'right-sizing' the business and focusing on lengthening runways etc.
Our most recent one is about Cash Management and we've decided to publish it here for the benefit of any and all.
"All businesses have turned their attention to cash management - whether they have piles of it and/or are generating lots of it.....or not.
I thought it would be helpful to set out some simple guidelines for effective cash management.

Cash Management

One of the most important disciplines to instill into the culture of a company is the obsessive management of cash.
This is often neglected in early stage companies because they have no bank debt and are typically funded by piles of investor's equity.
Equity is not cheap and in loss making companies, it diminishes daily.
Preservation and management of cash is essential.

Some tips:
1. Make cash a KPI.
1. Get a daily email. Just 4 numbers - Yesterday's opening balance, add receipts, less payments, closing balance. Comments against any unusual movements in receipts or payments.
2. This will keep your finger on the pulse, trigger actions related to large or unusual payments, build awareness of the dynamics of cash
3. Set monthly cash targets and beat them.

2. Working Capital
1. Accounts Receivable, Customer Receipts.
i. Look at ways you can accelerate these. For example, if you are negotiating an annual license with a corporate or doing any customisation, strive to get payments up front – annually, quarterly etc. Even offer handsome discounts for this [after all other negotiation is complete of course].

ii. You may have noticed if you are a subscriber, that LoveFilm regularly offers a big discount for payment of annual subscription in one lump sum – up to 3 months off. This always proved very successful in locking subscribers in and generating large amounts of cash.

iii. Monies owed to you on account. Collect these firmly and strictly in accordance with the terms of your sale (check your standard T&Cs and ensure that clients have accepted these). Make collections a routine process done by 'someone in finance' not by your relationship person. Ensure there is a rapid and decisive escalation process for slow or late payments

2. Payments. Creditors.

i. Reputation is everything. Always pay on time. BUT on-time means the time you negotiated at the time you had leverage – ie BEFORE you placed the order.

ii. Suppliers want certainty and reliability of payment. To get the contract many will extend credit – stick precisely to the terms agreed and use regular good suppliers as references if needed when negotiating those payment terms.

3. Stock. Inventory. (books are written about this)
i. Don't carry it. If you have to then,
ii. Clear slow-moving fast and decisively. Use slow stock to run aggressive promotions generating revenues and customer engagement.
iii. Have suppliers deliver directly to customers – or little and often.

Monday, October 06, 2008

Managing your API

Technorati Tags: API,mashups,mashery

To get full benefit of the network effect of the internet, most web 2.0 companies have been developing an API (application programming interfaces) enabling others to use data and link effectively them.

APIs let software applications talk to each other, push/pull information, etc. It's how developers build third-party clients, apps for Facebook, Google Maps (GOOG) mashups, and more.

Now even the giant mainstream retailers are making their data available. For example, Best Buy, the giant US electronics retailer (and partner of Carphone Warehouse), just announced its own A.P.I., called Remix. Web developers can now draw on any information from the Best Buy Web site – product specs, prices, photos, user reviews – and port it over to their own sites.

The protective walls around information are slowly crumbling. Although of course the use of the API is carefully managed and controlled. In Best Buy's case managment of the API is done by Mashery on their behalf.

Mashery, is working with old-line firms like Hoover’s, Reuters, and even the New York Times, to develop A.P.I.’s.

The New York Times ran an interesting article on this subject a couple of weeks ago, with CNet following.

As many companies have found, doing a commercial deal with a business partner is the easy part of the relationship, getting systems to talk to one another, accounting for the traffic and seamlessly integrating presents a more difficult challenge and one that diverts scarce development resource. This is particularly the case when you need or want multiple partners - sometimes in the hundreds.
San Francisco-based Mashery, helps companies manage their APIs
using its fully-hosted, scalable on-demand infra-structure.

Mashery now numbers amongst its clients:
MTV, Trulia.com, compete.com, calais.com, linkedin.com, whitepages.com, daylife.com, lonelyplanet.com, zemanta.com, zoominfo, reuters.com and shopping.com

The company raised $2 million in new funding at the end of June to help build out its product, add more customer support, and hire more sales and marketing staff.
.406 Ventures led the round; Salesforce CEO Marc Benioff participated, as did previous investors First Round Capital and Formative Ventures. The company has raised $5.2 million to date.
TAG has been invested since July 2007.

Wednesday, October 01, 2008

Koodos partners with Daily Mail to launch the Fashion Boutique

Daily Mail Online and Koodos have launched a major discount Fashion Boutique

The Boutique, www.dmfashion-boutique.co.uk, offers stylish women’s and men’s clothing and accessories at savings of up to 70 per cent, starting with over 2,000 styles.

The Boutique is integrated into the Mail Online website with its own look and feel, in contrast to affiliate deals where shoppers are taken off to the partner’s website to make a transaction.

The koodos proposition of fashion deals seems to be resonating with credit crunched consumers. In less than two years it has become one of the top ten most popular fashion websites, according to recent Hitwise data. Under the shared revenue deal, koodos is providing the Daily Mail Fashion Boutique’s product, ecommerce platform, customer service and fulfilment.

Product is sourced by the koodos team of European buyers.

The Daily Mail readers are affluent but savvy and love a fashion bargain. FeMail has long been a core section of the newspaper and has built for the Mail very strong fashion credentials. Readers look to the Mail for fashion advice and offers and launching an online store was an obvious development.

Partnerships of this nature depend very much on getting strong support from the offline media and decent placement on the partner website. It will be interesting to see how this evolves.

Technorati Tags: fashion,koodos,ecommerce

Tuesday, September 23, 2008

Kindo joins the MyHeritage Family

The acquisition of Kindo by MyHeritage was completed yesterday.
Congratulations to Nils, Gareth, Mario and the Kindo team.
Clearly their technology was some way off that of MyHeritage but what they achieved in creating a brand with real personality in 11 languages with very little cash was truly impressive.
Their grass roots marketing using local 'community managers' demonstrated just how rapidly a viral service can grow without any PPC marketing.
Combining the social features of Kindo and The MyHeritage technology and enormous user base takes the combined business closer to its vision for building the 'Facebook for the Family'.

Sunday, September 21, 2008

Seedcamp - Day 5

Seedcamp Day 5 Highlights from Seedcamp on Vimeo.

Friday, September 19, 2008

Seedcamp - Day 4

Seedcamp Day 4 Highlights from Seedcamp on Vimeo.

Thursday, September 18, 2008

Seedcamp Day 3

Seedcamp Day 3 Highlights from Seedcamp on Vimeo.

Tuesday, September 16, 2008

Seedcamp - Day 2

Seedcamp Day 2 Highlights from Seedcamp on Vimeo.

Seedcamp day one

Seedcamp 2008 Day 1 Highlights from Seedcamp on Vimeo.

Sunday, September 14, 2008

Looking Forward to Seedcamp 08

One of the highlights of my year - without a doubt - is Seedcamp. The one week of mentoring, networking, working, learning is really exhilarating.

Seedcamp is itself a start-up and its formation, evolution, development and growth is not unlike many of the start-ups in which I have been involved.

In my view, Seedcamp is destined to become a significant brand in the technology world. A founder with amazing vision (Saul), strong backing and goodwill from almost all the leading players in the industry and a brilliantly determined and smart CEO (Reshma) is a pretty good cocktail.

As was made clear last year, Seedcamp is not all about the relatively small amount of funding which the winners receive, it is designed to provide a publicity platform, an incredible network and some intensive and expert mentoring to the 20 or so finalists.

Every day this week, Seedcamp will be featuring highlights of the day on their site. Check it out.

The blog too has loads of interesting stuff - I particularly liked Michael Orland's post on the Zeitgeist:

It read in part: "Our 2008 application zeitgeist post exactly one month ago generated some attention, which is why when it was suggested we do a follow-up for our finalists I was a little hesitant. There's a fine line between a useful device and a gimmick, and I feared we might stray into the latter territory. After actually performing the analysis though, I see there are some interesting contrasts: "mobile" has dropped off the top of the "what are you creating?" list to be replaced by "travel", "advertising" is less of a top-line panacea (and yes, we realize the tautology of "revenue" as a way to make money - thankfully it was substantiated a bit more than that), and Amazon has replaced Google as the cloud solution of choice. There are other differences as well - which is why I'll cease my yammering and leave you to draw your own conclusions."

You should read the whole article.

As Michael acknowleges, its a bit of fun ....but ...interesting to see what teams are building and what the judges thought was going to be most successful.

Sunday, August 24, 2008

Koodos makes the top 10 Apparel sites in the UK!

Retail Week list the ten most visited 'Apparel and Accessories' websites in the UK for the week ended August 9th, 2008.

The data was supplied by Hitwise.
They are:
Next.co.uk market share 6.61%
asos.com 4.99%
topshop.co.uk 3.00%
riverisland.com 2.67%
newlook.co.uk 1.92%
mandmdirect.com 1.54%
mothercare.com 1.48%
dorothyperkins.co.uk 1.40%
koodos.com 1.13%
jdsports.co.uk 1.08%

Interesting to note that only ASOS, M&M and Koodos of the top 10 are pure web businesses - all the others have extensive exposure on the high street with hundreds of stores each.

Consumers are clearly interested in the Koodos proposition of great international brands (about 120 of the world's top brands are now represented on the Koodos site)at heavily discounted prices. Especially in these credit crunch times.
See examples like Prada .... private sale coming soon.
The Koodos blog which features fashion and celebrity gossip is also getting noticed and helping to develop the brand's authority and establish its fashion credentials.

Thursday, August 21, 2008

Stardoll is UK's top kids site - Nielsen Survey

The rich functionality and continued focus on fashion has paid off handsomely for Stardoll. Mattias and his team have continuously evolved the simple idea of dressing up dolls in a virtual environment in a sophisticated and intelligent way.
This is a community which is really engaged and interacts.
And Stardoll is now truly a global brand.
With 20m members worldwide and still growing strongly its not surprising that a new Neilsen survey of kids sites puts Stardoll at No1 for under 12's
Ahead of Club Penguin, Nickelodeon, Lego, Cartoon Network and the like, for proportion of audience under 12 Stardoll's challenge was always going to be monetisation.
Stardoll has approached this intelligently too. Revenues come from the sale of virtual clothes, gifts, scenery as well as from sponsorship and advertising - all in an integrated and non-invasive way.

Sunday, July 27, 2008

Following an extensive beta test of the service during which 50,000 customers were served, Wonga.com has now launched. Wonga offers a new source of fast credit, without the long-term commitment associated with bank loans, overdrafts and credit cards.
The premise is simple, the customer inface clear and easy but the technical execution extremely complex.

Wonga is offering a service that could not have been provided pre-internet. Loan applications are processed in real time and, if approved, funds are transferred to the customers account within minutes. Its about as close to instant cash as it can be.

The service does not compete with Bank Loans, Hire/Lease Purchase or other larger amount finance packages - initial loans are restricted to just £200. When might one want a Wonga loan?
The service has been designed to appeal to anyone who experiences the occasional ‘Wonga moment’ - such as an urgent time-sensitive purchase, an unmissable social event, emergency repairs or a shock bill.
Errol Damelin, founder and CEO of Wonga, has a neat way of positioning it. "we're not the cheapest way to borrow money, but we provide a service that's much faster, more convenient and flexible than anything else out there. It's much like a black cab, which might not be an economical way to get around on a regular basis, but you get a fantastically fast, convenient and secure service on the occasions when a bus or tube won't do."

The central ethos of the company is openness and simplicity. The customer is informed of the cost in a clear way and is able to choose precisely how much they want to spend. Like in many other service industries, the Wonga customers are willing to pay a premium for a high level of service and the instant response which only it can offer.

The back end processes and the number of 3rd party integrations needed to make this all so simple for the customer has been anything but trivial. Wonga uses a sophisticated and proprietary credit decisioning system to assess every application -its only interested in lending to people whom they believe can reasonably afford to repay their loan without undue financial stress. All these features are in contrast to many internet or high street lenders who offer little or no flexibility, few or no credit checks and large fixed fees.

Errol explains: “Banks and other lenders are weighed down by tradition and complexity. People have come to expect rigid terms, realms of paperwork and slow decisions - particularly in recent times with the increasing pressures of the credit crunch. So a frequent reaction to our service has been amazement at the speed of our process."
Wonga also operates a trust system, similar to community-orientated sites like eBay, whereby new applicants are initially limited to borrowing up £200 but can increase their credit limit by using the service responsibly over time.

Errol and his partner, Jony Hurwitz, have a number of further innovations to the Wonga service in the pipeline which promise to add more value to Wonga customers soon.

Wonga employs 37 staff in London with a development team in the Ukraine, and is backed with venture capital from Balderton Capital, TAG and Kreos Capital.

Read the Guardian article which features an interview with Errol for further information.

Oh yes! Almost forgot. The company has also won a string of awards (including "entrepreneur of the year" from Credit Suisse sponsored National Business Awards, SE region) and been shortlisted for others.

Tuesday, July 22, 2008

MyBuilder starts building

Ryan Notz applied to Seedcamp 07 with his Buildersite plan(since relaunched as MyBuilder). He came all the way through and got his funding and with it many column inches of publicity. Like the piece in the Observer. Ryan's presentations at Seedcamp will be remembered for the obvious passion and sincerity that he displayed for his project. His own experience as a Stonemason and his intimate experience of the way in which the building trade works and what a nightmare it generally is for consumers, has guided the development of the business. He has chosen the success-fee marketplace approach rather than the lead generation model believing that it particularly attractive to both buidlers and consumers because unlike the lead generation sites, MyBuilder is able to retain their builders through both the good and the tough times. Lee Dryden, a builder registered on the site says: "This site is great. I paid for lots of leads with another site and didn't get any work at all. I'm more than happy to pay MyBuilder's fee when I get work -it's fair!" Ryan says that the approach works better for consumers too. "If you want to find a great builder, you need a lot of choice. A lead generation site can only put you in touch with builders who have bought your lead. Worse, they can only sell your lead to a few tradesmen (or they'll get an even bigger drop-out rate). Consumers prefer to choose their builder based on feedback, distance, skills, qualifications and experience, rather than simply those who buy their lead. MyBuilder gets around this problem by providing an open platform where consumers can search the entire database of over 10,000 tradesmen, and tradesmen can look at and enquire about all the jobs (currently at 1000 a month and growing). It ensures a better match, with satisfied customers that come back, and tell other people about the site. The network effect with this model is powerful, and it also enables MyBuilder to publish search results of both live jobs and registered tradesmen, which helps implement valuable partnership deals." Key to MyBuilder's 'go to market' plan has been the partnership with Travis Perkins (including Wickes) who joined Alex Hoye, TAG and others in a post Seedcamp funding round. A major PLC with sales exceeding £3bn, Travis Perkins is a leading company in the builders’ merchant and home improvement markets, and is a main supplier to the building and construction market, one of the largest industries in the UK.
The Mail on Sunday covered Travis' investment in MyBuilder here.

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