Twenty-three technology startups are learning this week what it takes to turn an idea into a viable business, hoping to follow the precedents of Europe-born companies such as Skype and MySQL.
The gathering marks the second year in London for Seedcamp, a program intended to nurture fledging entrepreneurs looking for industry contacts, advice, and, in many cases, venture-capital funding.
Seedcamp was started by Saul Klein, a partner at the European-focused Index Ventures venture capital fund and founder of The Accelerator Group, a technology consultancy.
Seedcamp kicked off Monday with five-minute rapid-fire presentations from the startups, most of which are staffed by just a few people who have clever ideas for pushing Internet-based services to the next level.
With occasional stumbles, dashes of humor and sometimes crumpled notes in hand, entrepreneurs detailed their plans in a variety of areas, from travel Web sites to enhanced instant messaging to Web application development to iPhone application analytics.
They hail from many countries: Ukraine, Slovenia, France, Poland, Romania, the U.K. and U.S.; Seedcamp only requires that the companies initially commit to building their business in Europe.
During this week, the entrepreneurs will meet with experienced technologists, finance and marketing people to figure out ways to make their businesses more well-rounded.
Five of the 23 teams will be selected to receive a €50,000 (US$71,200) living allowance to stay in London for three months to undertake intense mentoring from lawyers, product experts, accountants and others on how to keep a wily startup from turning into dust.
Seedcamp gives participants a way to build up relationships with people who otherwise might be hard to reach, said Alistair Hann, the founder of Zoombu. The company — now composed of just three people — is designing a Web site that would let people book a complete trip on a single Web site that aggregates services from many vendors.
“You’ve got guys here who have run very big businesses,” Hann said. Seedcamp is a chance to get “lots of very intense feedback that would otherwise to take months to acquire.”
Primoz Rome, the chief information officer for the Slovenian company Uniki, has a problem with his business. “It’s growing too slowly,” he lamented.
Uniki develops interactive displays where the user can have a degree of control over what they are seeing. For example, one product is a projection screen system that advances slides when the person
standing in front of the screen waves an arm.
The company is working on plans for other systems that can show more of what’s inside a retail store. Images can also be customized depending on whether a man or woman is standing in front of the screen since a camera recognizes the person’s gender. Rome said he’s hoping Seedcamp will bear contacts that can help Uniki with funding.
Europe has never seen the vigorous level of venture capital interest compared to Silicon Valley. “It’s still viewed as more of a nice tourist destination than a venture capital hub,” said Danny Rimer of Index Ventures.
Europe is less attractive than the U.S. due to its many languages, complicated business environments and different cultures. Nonetheless, there’s still a vibrant atmosphere of innovation, which has made Europe interesting for Index Ventures, he said.
However, deteriorating economic conditions around the world will make “exits” — the term for selling a company for a profit — difficult in the next year or two, Rimer said. Startups, however, should continue to see interest from investment funds, he said.
The decision whether to accept venture capital can be a tough one: startup founders find their companies in different hands who want to make executive management decisions that may cause ripples.
“They can be your friends or they can be a pain in the ass,” said Michael Birch, co-founder of the social-networking site Bebo, which AOL bought for $850 million in March.
Birch, who spoke on a panel of veteran entrepreneurs behind businesses such as Lastfm.com, the music recommendation Web site; Jaiku, a Finnish microblogging platform bought by Google in 2007 and Plazes, a German social-networking platform scooped up recently by Nokia.
In the early days of Bebo, Birch and his wife were the sole employees. They remortgaged their house twice to raise funds since for the first three years, Bebo made no money. “It was all about surviving,” he said.
Birch even approached Rimer and Index Ventures for money. “But I’ll just remind you that you wouldn’t give me any,” Birch told Rimer, who was moderating the panel, to laughs from the audience.
“I told you I went through therapy for that,” Rimer jokingly responded.