Startup Community Blog

WHY SHOULD YOU TRY TO INTERNATIONALIZE YOUR START-UP

Internationalization comes nowadays as part of the future plans in most start-ups, although not quite realistic or close in time enough; many companies do not totally understand the implications and preparation needed to take profit of the opportunity to internationalize when it actually appears in front of them.

International relationships and investments are utterly practical for the majority of entrepreneurships all around the world. It gives the company the possibility to get access to opportunities based on the shared knowledge of the international partners on other countries, both in looking for new investors and studying new business opportunities and markets.

It is not an unusual situation nowadays to have investors from different parts of the same country in a company, and soon it will be considered normal as well to invest on other countries and to have foreign investors, on a great basis because of globalization. Additionally, multi-nationality inside the company can help the start-ups improve their business and success in a broader number of countries thanks to the combined knowledge. The world is turning into a global system which makes even more necessary a vision inside the company capable to adapt to this new situation, instead of the regional and country focused way of thinking that used to lead the business expansion and projects.

Being prepared for international relations can also be the perfect way for a start-up to acquire the funding needed. International investors are becoming a regular piece of many start-ups, and looking for this kind of investment can help in many cases an entrepreneurship acquire enough funding to turn from a little, regional and likely to fail company to an international and successful firm.

Information obtained from Loogic.com (last consulted on Feb 2, 2016) “Las conexiones internacionales son fundamentales para el futuro de tu start-up” Javier Martin (24-11-2015) available online at http://loogic.com/las-conexiones-internacionales-son-fundamentales-para-el-futuro-de-tu-startup/

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HOW TO GET PEOPLE TO KNOW YOUR START-UP WITHOUT A BIG BUDGET

Creating a start-up is always a big step, but getting people to know it is another main issue. New companies are usually unable to compete on a marketing basis with big enterprises, and it becomes an important disadvantage.

In order to make potential customers know your new brand, and decide to acquire your product or service, it is necessary for them to actually hear about you. It is a tough work, both because of the competition around the start-up and the usual lack of a big budget. However, there are several tools available to these new entrepreneurs in order to get visibility in the market.

An action having a lot of repercussion worldwide is to accept Bitcoins in the purchases; it generates a lot of feedback both in communication and social media. Companies such as Microsoft or the Fortune magazine allow right now making purchases using the Bitcoin.

It is also crucial to take into account how even if the main intention of the company is to create direct and indirect business actions, public exposure is always going to be a two-way road. The company needs to be prepared to deal with any response from the client, both positively and negatively; and it should remember public information cannot always be controlled.

A good option for those start-ups with low budget and a social background is to get a celebrity to sponsor the project. Creating a crowfunding campaign increases as well the visibility of the start-up, and allows validating the business idea before actually putting it into practice.

Another possibility is to use an investment model called media for equity, created in Germany on the 90’s and consisting on acquiring advertising spots on the media at a better price, in exchange for shares from the company.

An interesting tool available nowadays to low budget start-ups is a “growth hacker”. This type of employment combines marketing and programming, giving the ability to look for low cost ways to optimize the start-up presence on the digital media.

However, both new and traditional companies should never forget one of the main tools regarding visibility, social knowledge and new customers is a totally free one: positive word of mouth will always be an effective attraction to new clients, though uncontrollable.

Information available from Expansion.com (last consulted on Feb 2, 2016) “Fórmulas low cost para dar a conocer tu start up” Elena Arrieta (17/02/2015) available on http://www.expansion.com/2015/01/28/emprendedores-empleo/emprendimiento/1422466096.html

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6 MAIN MARKETS WITHOUT A LIFE CHANGING START-UP

A big part of the entrepreneurship idea has to do with being able to change the world, companies such as Google, Apple or Facebook managed indeed to change completely the way we work, communicate and live, becoming the prime companies inside their markets. However, there are still several markets that have not experienced that complete transformation induced by the appearance of a revolutionary start-up.

Here we have a summary of the 6 main markets still waiting for an entrepreneur to change our lives:

1. Artificial Intelligence

Even if the World could see in 2011 how the supercomputer Watson participated in a USA TV contest, artificial intelligence has not hosted any other life changing event in more than 4 years. However, it is indeed true there are a lot of important updates regarding interaction between humans and artificial intelligence. For now, we can only wait for an entrepreneur mind to put all this advances together and change the World.

2. New ways of Transport

Companies such as Google, BMW, Volvo or Tesla attempting to create an autonomous car, or commercializing space travel are some of the ideas on this market. We can expect that somewhere in the future a company will create a start-up allowing honey moons to be actually enjoyed on the Moon; however, we still cannot see any start-up able to change the World as much as the creation of the train did.

3. The Immortality Business

Both health and medicine improvements have allowed the human kind to live better, longer lives. We can find already some entrepreneurs such as Peter Thiel (founder of PayPal) trying to fight against time, with investments on start-ups fighting cancer or looking for a way to defeat death. Another important change in medicine is will be the evolution to a preventive and customized healthcare, There are lots of ideas, but the life changing start-up has not still arrived. We will have to stay mortals as we wait for it.

4. Finances for everybody

Ever since the Lehman Brothers situation, the financing game rules have radically changed. Smartphone payments are starting to become a regular thing, and there is a fierce competition between industry regulars (credit cards producers, TPV providers…), tech giants (Apple, Google) and start-ups (Square, iZettle…) trying to come with an innovative solution, but yet nobody has been able to accomplish it.

5. Social, Local, Mobile, for real

It is one of the main tendencies on information technology, and the B2C with the three of them will be more useful for the consumer. Even if some business have reached certain success on this line (TripAdvisor, Airbnb) none of them reaches the power of Google or Apple.

6. Worthwhile experiences

Offering customers the realization of their dreams or life marking experiences has become a happiness industry itself, and it is being profited by some entrepreneurs. Consumers look right now for start-ups able to create those experiences in a few hours. Being able to satisfy them with experiences to collect, possess or combine is a completely new market with the possibility for a start-up to change consumer’s lives.

Information obtained from Expansion.com (last consulted on Feb 2, 2016) “Sectores con futuro que aún no tienen la Start Up definitive” Elena Arrieta y Tino Fernández (28/11/2014) available here.

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The success story of “Buch.de”, German famous online book retailer

Over the last twenty years, the e-commerce has continuously grown due to the increasing use of the Internet. The start-up Buch.de InternetstoresAG is one of the most remarkable success in Germany, where the greatest e-commerce customer potential within Europe is to be found.

Created in 1995, Buch.de was one of the first online bookshop and initiated the first digital book databank in Germany. The main challenge for this start-up was to foster the online sale of books while the use of the internet remained largely unknown by that time, so that the target group was still narrow. Nevertheless, Buch.de managed to establish itself as a pioneer in e-commerce by becoming one of the most important booksellers in Germany. Within the last twenty years, Buch.de significantly extended its product range in compliance with the new trends: e-books, audiobooks, DVD, and so on.

In 2011, its founder Michael Urban was awarded Gründer des Jahrzehnts – “founder of the decade” – as a result of an online voting organized by Gründerszene.de, a German online magazine primarily intended for entrepreneurs, companies and start-ups. More precisely, Mr. Urban got the recognition of the public by receiving the audience award (16 000 voters) with more than 1000 votes ahead of his 25 competitors.

As an accomplishment of its expansionist policy, Buch.de finally merged with Thalia Holding GmbH – the book market leader in the German-speaking countries – in March 2015.

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The “Mikromezzaninfonds-Deutschland”

A banking funding opportunity for start-up in Germany

financing

The creation of a start-up requires the use of banking funding opportunities through for instance mezzanine funding which consists of debt capital enabling high return in compensation for the high risk level of investment.  The mezzanine capital allows companies to get even more leverage and thus finance larger transactions.

This kind of funding method is not common in Germany yet. That is why the “Mikromezzaninfond-Deutschland” (MDD) was created by the Federal Ministry for Economic Affairs and Energy (Bundesministerium für Wirtschaft und Energie) in 2013 in order to provide SME’s, start-ups and entrepreneurs an access to such funding opportunities. Partly financed by the European Social Fund (ESF), the MDD especially targets social and environment-friendly companies which are set up by woman, former job seekers or people with a migration background.

The application file can be submitted any time to the Mittelständischen Beteiligungsgesellschaft of the federal state where the investment is supposed to take place. A company can be financed with the amount of 50 000 Euro within 10 years. The loan should be paid back in 3 equal annual rates during the last 3 years.

Further information about this funding opportunity are available here

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Start-up funding in Germany

The KFW provides attractive funding opportunities for start-up coaching!

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Since 2007 the ESF-project “Gründercoaching Deutschland” has helped tens of thousands of start-ups on their way to develop a sustainable business plan and to succeed on the open market. The program has been administrated by the KFW since the funding period 2007 to 2013 and will continue until the end of the current period (2014 to 2020).
In the framework of this project, the KFW offers attractive possibilities for the funding of business founders coaching. It provides a partial payment for professional coaching for those who are setting up their own business. New freelancers can receive up to 3000 euro for professional counseling as a public support in order to become a competitive business company. The funding is especially designed to help female founders, migrants and those who can count on family-friendly working conditions. In general, the coaching should provide skills in economic, financial or organizational affairs to optimize one’s abilities to compete on the open market with accompany recently set-up.
The Credit Institute for Reconstruction (Kreditinstitut Für Wiederaufbau) is a public-law institution and is subordinated to the German Ministry of Finances. The funding bank is in charge of many different kinds of public funding. Among other things they offer credits for small and medium-sized companies, infrastructures, house building or financing power efficient technologies.

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In the “new” German states (except for Berlin and the Region of Leipzig), the public funding ratio is 75 percent of the consulting fee. In the old federal states of Germany including Berlin and the region of Leipzig the fund is 50 percent of the consulting-fee.
• The net price of the coaching must not be higher than 4000 Euros.
• The wage per hour must not be higher than 100 Euros.
• The coaching should not be longer than 8 hours.
• The start-up needs to be kicked off during the last 2 years.
All in all the KFW provides a highly recommendable funding opportunity for company founders. The program (“Gründercoaching Deutschland”) will help recently created start-ups to improve their competitiveness and to develop a profitable business plan.

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Entrepreneurial on-the-job learning

TOY-model from Finland

Most professional and vocational programmes include a period of on-the-job learning. TOY (entrepreneurial on-the-job Learning) is one way of completing it. Ordinarily, students do their on-the-job learning at an employer´s workplace, but in this model they complete this aspect of their studies in a cooperative society, where they develop their entrepreneurial skills.
In the TOY model, entrepreneurship is learnt by doing. The TOY programme nurtures the students´ entrepreneurial attitudes and prepares them for running a business in their own fields. The most valuable experiences they obtain from learning with their peers in a TOY team.

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Entrepreneurship

The TOY programme offers an opportunity to try out entrepreneurship in practice. It allows students to test and develop their own products and services. It gives them time to consider what they can do, what they want to do and what they might make money from. Students can also probe the market and competitive scenario in their fields and figure out how to price their products. Trying to run a business without any customers is just a game; customers make the learning genuine. TOY encourages students to make their competence known and to seize opportunities. It develops their ability to market their competence, their social skills and their networking.
In the TOY model,the learners join cooperative societies set up in their colleges. Working in these turns their ideas into reality and experience.

Team coaching

Each TOY team has its own team coach or pair of team coaches, who broaden the students’ perspectives and encourage them to take steps towards their dreams. The team coaches are vocational teachers well versed in team learning and in coaching team-based entrepreneurship. They challenge and spur on the learners to experiment boldly. They do not provide ready-made answers, but ask questions to fuel the students’ own thoughts. They encourage students to seek information and apply it in practice.
It is important for the team coach to “read” the team and the individual learners to respond correctly to their learning needs and to decide how to apply the team learning methods. The entrepreneurship training sessions are not lectures, even though they contain theory related to the topic.

TOY Entrepreneurship coaching

During the on-the-job learning period, the TOY team get together for joint entrepreneurship training sessions. The one-day sessions are themed and make useof tools and methods that support team learning. The content of the sessions is determined based on the issues that the learners bring to the table. With the training sessions taking place during the on-the-job learning period, the sessions can cover questions that have come up in the students’ customer projects through themes related to the entrepreneurship topic. Alternating between practical work and joint deliberation deepens learning and understanding.

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THEMES OF THE ENTREPRENEURSHIP TRAINING:

  • Team learning and its objectives
  • Customer-oriented thinking and networking
  • Productisation
  • Self-management and friend leadership
  • Creativity and marketing
  • Identifying product selections and customer relationships
  • Outlining a business idea and growing to be an entrepreneur

Toy principles:

  • A TOY team is composed of learners who learn together and from each other.
  • A TOY coach supports and spurs on the team in its entrepreneurship training during the on-the-job learning period.
  • There is a direct connection between the customer and the learner. The customer is the most important teacher.
  • The on-the-job teacher is in charge of ensuring professional learning takes place, just as in other job learning processes.
  • The cooperative functions as the location and environment for the on-the-job learning and allows for real billing.

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The TOY model was developed at the Ikaalinen College of Crafts and Design (IKATA). The college comprises the cooperative society Taidosto, which has been implementing the model since 2008. IKATA also manages the HOPE project, which provided the funding for piloting and developing the model.

For more information check the English broschure of TOY-model: http://issuu.com/letshope/docs/toy_english

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Creative Europe: new calls !

Creative Europe: new calls for proposals promoting networking and entrepreneurship available now!

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On Thursday, July 23rd 2015, the Directorate General for Education & Culture  published two new calls for proposals in the framework of the program Creative Europe.

Replacing the program Culture for the new funding period 2014-2020 Creative Europe aims at boosting the cultural and creative sectors by promoting the use of new technologies. Innovative aspect of the candidate projects is clearly expected and encouraged.

According to the Regulation (EU) No 1295/2013, one of the top priorities of the Cultural – Subprogram consists in testing and expanding of new business models.

Call for proposals EAC/S08/2015 – EU Network of Creative Hubs and Co-working Spaces

The Call for proposals EAC/S08/2015 intends to grant one single pilot project which  “will set up and support an EU-wide network of creative hubs and co-working spaces for cultural and creative professionals and entrepreneurs”. The project should reach this goal through the following activities:

  • To identify and select eligible creative hubs and co-working spaces
  • To develop virtual networks through the creation of a web portal, a digital platform and social media pages
  • To facilitate exchanges between creative hubs
  • To provide coaching and training support to creative hub managers
  • To organize a EU Network of creative hubs conferences in Brussels
  • To publish a report about EU creative hubs and co-working spaces

Application have to be submitted no later than on Thursday, September 10th 2015. The selected project will be granted with a maximum amount of 1,000,000 Euro for 24 months covering no more than 80% of the total budget.

For more details, please consult the guideline of this call for proposal.

 

Call for proposals EAC/S11/2015 – Pilot project supporting networks of young creative entrepreneurs: EU and third countries

The Call for proposals EAC/S11/2015 intends to grant one single pilot project enhancing networks of young entrepreneurs from the EU member countries and third countries active in the cultural and creative sector through the establishment of an innovative platform. Beyond this overall goal, the project should achieve specific objectives related to those of Creative Europe:

  • To support the capacity of young entrepreneurs to operate transnationally and internationally
  • To foster peer-learning and exchanges of experiences on new business and management models in the cultural and creative sectors
  • To foster the entrepreneurship, innovation and creative potential of young entrepreneurs for international cooperation in the cultural and creative sector

Applications have to be submitted no later than on Tuesday, September 15th 2015. The selected project will be granted with a maximal amount of 800, 000 Euros for 24 months covering no more than 80% of the total budget.

For more details, please consult the guideline of this call for proposal.

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TECH ALL STARS 2015: most innovative web start-up awarded!

What is TECH ALL STARS?

From 16th to 18th June 2015, the fourth edition of Tech All Stars took place in London.

Launched by the European Commission in 2012, this annual competition awards the most innovative web start-up company once a year in June. It is especially intended for accelerator graduates and web camp winners.

Beyond victory, successful applicants can expect to gain both exposure and network through this high-level competition.

Results of TECH ALL STARS 2015

Start-ups were invited to submit their application until 17th May in compliance with the following criteria:

  • Registration within the EU
  • Launching within the last 3 years
  • Profit below 1,000,000 Euros (in external capital)

Among all applications the selection committee accepted 12 start-ups for the Tech All Stars Battle organized in London. After having heard the pitches of all participants, the jury finally awarded Trip Rebel Tech All Stars 2015, an online hotel and accommodation provider. Winnows and Watly completed the podium.

As a result, the three finalists were invited to attend the Founders Forum, the biggest event gathering digital and technology entrepreneurs at the European level.

Successful start-ups: the case of WINNOW

Located in London Winnow was set up in order to help the hospitality industry to drastically reduce food waste through the use of new technologies.

The start.up was co-founded by Marc Zornes who as consultant at McKinsey co-wrote the Global Institute report “Resource Revolution: Meeting the World’s Energy, Materials, Food, and Water Needs”. According to the report, 1/3 of all food is wasted which also generates an economic loss in the amount of $750 billion per year.

The system created by Winnow involves a scale to measure the weight and cost of each food that is thrown away. In this way restaurants and hotels can easily check what the highest wastes are and adapt their food consumption. According to Winnow, it seems that this system has contributed to having saved 678400 meals and 3392 CO2.

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Aids to create a startup in Spain

Since the middle of the economic crisis, and when the Spaniards began to understand that no one except ourselves could get us out of the situation we were in, the interest in new businesses creation in our country soared. Of course, one of the biggest challenges that entrepreneurs face is obtaining grants to launch a startup or business start-ups.
Startups are “the apple of everyone’s eyes” in the programs to support entrepreneurship because of their potential for growth and future profitability. So they have many avenues of help, not only economic.

The different types of aids to create a startup

If you have a business idea and you find yourself in this situation, the first thing to consider is that there is a very diverse and varied infrastructure surrounding the launch of new businesses. Aids to create a startup can be translated in many different ways.
First, if you create a startup or you are under the development process, you will benefit greatly from the set of competitions and contests for entrepreneurs held in Spain throughout all the year.
The events seek to gather in one place to all those who are interested in undertaking, together with an assortment of experts, consultants and successful entrepreneurs to share their knowledge. Contests are an excellent choice if you’re a novice entrepreneur with a business project in mind. Prizes include cash grants and / or personal advice for you to start taking your first steps with your business idea.
On the other hand, if we focused on the financial aspect, we can think of the variety of credit possibilities that banks make available to SMEs. Unfortunately, after the “bank recue” or as we prefer to call it, the Spanish financial institutions, despite the ICO loans, have imposed severe restrictions on lending.

However, there are other more specific alternatives, referred to entrepreneurship, whose first phase is what is called seed capital. It consists in an amount of money contributed by an investor to launch a business idea, not a loan that has to be returned, but involves the acquisition of an interest in the business. In this case we can find public organizations, banks, venture capital funds and, of course, “business angels”, private investors who act individually.
Finally, the aid to create a startup can also come in the form of advice, fully-equipped offices offered in favorable conditions and the opportunity to work and create synergies with other entrepreneurs in the same situation as ours. This is where the full range of business incubators and shuttles that exist in Spain come into play.
It is noteworthy that, in many cases, these various aids are combined in the same association or institution, so that it is sometimes difficult to establish clear differences.

Capital seeds and accelerators: Economic aid and support to create a startup

The entities mentioned below are mostly specialized in seed capital or advice to get it, although many of them also invest in second round funding. In the case of accelerators, they usually combine financing, training advice and contacts.
However, it should be noted that, unlike in the US, to get funding of this type of seed capital in Spain, it is necessary to have a good and well defined business plan or even that the company has already taken its first steps and even count on some customers.

There are a huge amount of seed capital entities in Spain, some specialize in specific sectors and others that have a much broader spectrum of investment. This is a small selection of some of the most significant ones:

  • CDTI

The Centre for Technological and Industrial Development is a public entity which, among its many functions to support entrepreneurship, provides its own financial aid and access facilitates to third parties (primarily in the form of credits) for R & D + I business projects.

  • DAD

Digital Assets Deployment is a Spanish-based incubator for Internet and Technology 2.0 businesses and, which has a large international presence and support projects through seed capital.

  • Caixa Capital Risc and Bstartup

These are the two separate divisions of the Caixa and Banco Sabadell, respectively, responsible for monitoring and financing of startups.

  • AIEI

In addition to providing advice to selected projects, the Association of Investors and Entrepreneurs of the Internet helps them to achieve economic resources and to get access to funding rounds.

  • Cabieces & Partnerts

This venture capital company was founded by brothers Luis and Jose Cabieces. It enjoys great prestige in the Spanish investment landscape.

  • BAN Madri + d

Business Angels Network of Madri + d is an investment network specialized in projects of technological nature whose companies have headquarters in Madrid.

  • Wayra

The Telefonica startups accelerator offers capital injections of EUR 50,000 and support through mentoring and offices for the first months of operation.

  • Lanzadera

Accelerator driven by Juan Roig, President of the company Mercadona in Valencia, which offers capital, mentoring and workspaces.

  • Seed Rocket

Prestigious Accelerator for technology-based projects that has the support of various business angels and that at the same time provides training, advice and networking for innovative entrepreneurs and startups.

In Spain there are many options to get aid to create a startup. The key is to have a good business plan, prepare an excellent pitch and know how to invest the necessary time to call as many doors as possible.

* Source: Infoautónomos.

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The Project and the Product of this projects is funded by the European Commission. The information in the documents is provided by the beneficiaries' organisations and is the sole responsibility of those organisations. The National Agencies as well as the Commission declines all responsibility regarding this information, particularly regarding its accuracy and its respect to copyright.