The strength of the team is critical in any startup’s success. Most investors believe in strong teams, like Ron Conway: “We believe in investing in people.”
The same goes for investors: although strong investors cannot make your company, the weak ones can break it. Sounds familiar? Yes.
We just issued a press release on The World’s Strongest Founder/Investor Competition. Why?
“In the industry, everyone agrees that strong founders and investors are key to any company’s success. Until now, the industry has been missing objective metrics on how to compare founders or investors”, comments Timo Ahopelto, Founding Partner at Lifeline Ventures.
“Today, the three top grossing App Store apps are from Finland. In addition, the region is nurturing awesome Web, cleantech and health startups. We at Lifeline Ventures are thrilled to further demonstrate the strength of the founders and investors in the region with this annual competition. I would not be surprised if the first winners in both categories came from the Nordics”, adds Petteri Koponen, Founding Partner at Lifeline Ventures.
The World’s Strongest Founder/Investor Competition is open for founders and investors at the Lifeline Ventures Conference Space at Slush 2012 next to the main entrance. This year, the strength is measured with the combined weight of maximum bench press and dead lift. The competition is arranged in co-operation with WODConnect and CrossFit Espoo.
Read also the official Slush 2012 release on this competition via PR Newswire.
The best advisors don’t charge for being advisors. Instead, they want to invest in your company.
The best advisors realize that everyone needs to be at equal risk and reward. They are entrepreneurs who want to show real commitment by becoming part of the cap table with their own cash. In their own minds, this justifies the time commitment. From the entrepreneur’s point of view, it ensures the needed mindshare. If you only get attracted by the army of consultants, “with experience you need to help you strategically”, it is a signal that something is not correct with your company.
This is what I have seen at Lifeline Ventures with the companies we work with. The better the company and the advisor, the more likely the advisor is to propose an investment. The worse the advisor and the company, the more likely the proposal is for cash compensation and free-of-charge options. In my opinion, cash and free options are fair for real work, responsibility and quantified deliverables – but not for advice. The best advice is free.
We have also seen that the best CEOs we hire to our companies come with cash. They typically invest from EUR 100,000 to EUR 300,000 at the latest round’s valuation, for two reasons: they want to put themselves at risk, and want to have an opportunity to earn from the value creation. They believe in the company they join, it is not just another job. Again, based on what I have seen, the better the CEO, the more likely there is a significant investment attached.
Last week, after being angel investors for two years, we announced a new EUR 20 million early stage venture fund. It allows us to serve entrepreneurs even better.
We got our heads together to figure out a new health 2.0 startup – but instead of founding one, we ended up investing in many. This investing got more and more serious, and suddenly we found ourselves with 19 early stage companies ranging from biotechnology to social games.
So, how did we get into this? Why to become an investor while you can start and run your own company?
Well, we realized the following:
- As investors we can do most things we could do as startup founders: While the adrenalin rush and the unique feeling of closing the very first sale (on the edge of an empty bank account and too much unpaid due invoices) cannot be fully experienced, working with multiple startups at the same time is rewarding. Working with many extremely high-quality teams at the same time makes life exciting: instead of having one empty bank account, you have a portfolio of empty bank accounts.
- An investor can be – and optimally is – an entrepreneur: Putting money in equals to having the skin in the game. An investor is not a consultant. As an investor, you can and need to be passionate about the company as an entrepreneur is. Whenever I engage with a company, I feel the “startup urge” of everything needing to happen faster and better than in reality is possible.
- Having a fund is the best we can do for the entrepreneurs: In addition to doing angel rounds and trying to be of help where we can, we can now speed-up seed and series A rounds. It is quite handy for the teams and us to start fund raising by saying that we already have million euros secured.
Ending note: We truly believe that the Reneissance of the Technology Entrepreneurship in Finland happens now. If you have been thinking of becoming an entrepreneur or investor, now is the right time. Healthy returns will be generated for the best entrepreneurs, investors and the society.
* Other instrumental people at Lifeline’s history and today’s operations include Jarkko Joki-Tokola and Ilkka Paananen, whose efforts are both comparable of being founders of the new Lifeline Ventures fund.
Every language has untranslatable expressions that are in the cultural core.
In Finland we have one: Sisu.
We are very proud of it, it pulls everyone together and powers up individuals. It makes us unbeatable. We believe that it will save us, magically, always. And it will definitely save Nokia.
The best description that I have read is In Other Words, a book by Christopher Moore. Enjoy!
It is 1939 and two Finnish foot soldiers are pinned down in a battle.
“We are outnumbered,” one soldier says. “There must be over 40 of them, and only two of us.”
“Dear God, it’ll take us all day to bury them!” exclaims the other.
Sisu means a proud refusal to lie down and be beaten.
When you ask, startups usually are “just about to complete” something big. A new product, a new sale, a new partner.
However, most never complete or finish anything well. There are no end products, just things in progress.
This is deadly.
The end product each day –mentality focuses your team to deliver. It has two parts:
- First, “end product” means that you always deliver something tangible and complete. As an example, you don’t create ideas how your next product will be like, but you present the full product spec. End products take company forward, while half-made drafts only create unnecessary internal meetings and debates.
- Second, “each day” means that progress is constant and delivery cycles are short. I personally believe on daily deliverables. Working in a startup means enjoying the brain dash to get things completed at a constant pace.
Having the End product each day –mentality installed into your startup is very powerful. The entire team will have a culture that focuses on accomplishing, not doing. This is a bigger thing than personal effectiveness alone.
This is the third part of Startup Management Series based on my experiences and the culture we institutionalized at CRF Health. The earlier parts discussed “Deliver or die” and “There is no place to hide” principles that are inevitable for every successful startup to follow.
There is no place to hide
Tons of strategy books have been written about measuring performance and making people accountable. I propose that startups need to take this to the extreme: everyone’s performance is fully visible to all, with no place to hide.
This creates high performance culture: the ones not performing drop out without needing to fire them, while high performers enjoy the continuous learning and an environment that moves on. Also, if executed well, the ones leaving will get a good reference: they were part of the high-performing team and in any event are well above the standard.
In this culture, it is ok to fail. Failing is different to low performance. Consequence management needs to be clear and quick. If you allow people (and especially yourself as a manager) to hide, it will spread.
Any downsides? It is difficult to implement in a sophisticated manner, and can easily kill creativity – and even create fear. Performance means different things by environment, and that needs to be taken into account carefully. You run Navy SEALs different to a symphony orchestra.
My experience is that the most competent and creative people will love this – and ultimately demand it to stay and be happy.
When we started CRF Health in 2000 – currently the global eDiary leader (yes, really, “global” and “leader” are not the traditional marketing jargon here) – we set three management principles.
Deliver or die is the first one.
In 2000 there were 200-300 eDiary startups in the world, and today there are three left who share the market: At least our princples did not prevent us from becoming #1.
The deliver of die -mentality is in the heart of every successful startup. Strategy and unique ideas are important, but ultimately, they are only the platform to deliver. One should consider all strategies, slides and spreadsheets being invented. You should also consider at least two or three teams doing exactly the same thing as you are, somewhere in the world at the same time – and as excited, as competent and as advanced as you are.
Strategies and slides do not win in the startup market. It is about being two to three times faster, better and more agile in execution, never accepting compromises. This hard-sounding mentality needs to be become the DNA of everyone in the team.
When a startup has the deliver or die -mentality, it is difficult not to succeed.
We are happy to announce today that Ilkka Paananen, the Nordic games industry pioneer and entrepreneur, is part of Lifeline Ventures.
We have been already working together for few months with three companies – – to be announced soon. It has worked well for all, and especially for the entrepreneurs.
Lifeline Ventures is a different start-up accelerator. Ilkka adds games and entertainment to our Web and digital media experience, and lives and breathes the Lifeline model.
The official release is below. Welcome to Lifeline, Ilkka!
November 10, 2010. Helsinki, Finland – Ilkka Paananen joins Lifeline Ventures, the early-stage investor in health and Web, as Entrepreneur-in-Residence and Partner.
“Ilkka is one of the most successful and experienced entrepreneurs in the Nordic games industry. He has successfully built large teams from scratch and managed companies through rapid international growth. Ilkka is the perfect match for Lifeline Ventures, experienced in working hands-on with entrepreneurs and adding to our digital entertainment competence”, comment Lifeline’s co-founders Timo Ahopelto, Jarkko Joki-Tokola and Petteri Koponen.
“Lifeline has developed a new model for early-stage venture capital. I am impressed with the quality of the portfolio, and look forward to building the games and entertainment sector further. I believe we can make Lifeline the preferred partner for the best entrepreneurs in this space”, comments Ilkka Paananen.
Lifeline Ventures was founded twelve months ago and has made ten investments to date. Its portfolio includes such category-leading health and Web companies as Applifier, the World’s largest cross-promotion network for Facebook games and Valkee, the maker of the bright light headset that effectively relieves seasonal affective disorder symptoms.
Ilkka Paananen was the CEO and co-founder of Sumea, the mobile games pioneer that was acquired by Digital Chocolate in 2004. At Digital Chocolate, Ilkka held various management team positions from Managing Director of Europe to President of Digital Chocolate. In the latter role, he oversaw the publishing and development of the company’s product portfolio, managing Studios in Helsinki, Barcelona and Silicon Valley.
About Lifeline Ventures
Lifeline Ventures is an early-stage investor that co-creates growth companies in health and Web. The company invests in revolutionary ideas and driven entrepreneurs, often before the product launch. The Lifeline team works hands-on with the entrepreneurs to build their startup into a global category leader. More information: http://www.lifelineventures.com
When iAd launched, I wrote a blog post at ArcticStartup. Since then, Steve Jobs has told us that 2010 iAd revenues will be exceeding $ 60 million. That’s well done for a new mobile ad format for its first year.
For your convenience, my original post is below. I am almost obliged to re-visit this later this year, as I am sure there will be something coming.
Steve Jobs did it again – first content, then device and now ads
(April 13, 2010) Apple will be the talk of the town in mobile advertising this year. Last week at Apple’s OS 4 event, Jobs presented what advertising industry has been asking from mobile: iAd – the engagement media with scale and quality.
For brands, mobile advertising has had a big promise but no breakthrough: digital media and technology companies trying to fit the traditional online advertising model – mainly display and search – into mobile have not taken off. Mobile media is different to online: being based on communications and quick tasks one performs, not browsing, mobile requires different user experience. Running banners on mobile is like running radio ads on tv.
Most importantly, every new media property needs to add to what existing media already have. In mobile, this has not been the case and despite all the hype, the market is still very small. Planners and buyers already have tons of ‘eyeballs’ they can buy elsewhere in the six mass media channels. During my time at Blyk, the feedback from London’s media industry was clear: “Mobile does not add value to what we already have.” It is understandable – why to bother with complex mobile screen when I get richer experience in traditional web, and reach more people elsewhere? Blyk is the first media company to have formats that engage a qualified audience in mobile, but initially lacked audience scale with the MVNO model.
At the same time, advertising industry has been very clear on what they would need from mobile: engagement. Traditional reach and frequency –based media planning does not work anymore. Media landscape is cluttered with titles and channels, and media consumption is more scattered than ever. When built properly, mobile could become the engagement channel with massive reach. Unfortunately mobile operators who could play a role have lost in this game already.
More specifically, agencies have for long thought that mobile media opportunity is in engaging applications. Mobile needs to provide engagement, and in mobile engagement equals to applications that are fun, valuable and something you like. Whenever an agency showcase mobile, it is applications like Lynx Effect by BBH London. Thought leaders like Ogilvy UK’s vice chairman Rory Sutherland voiced already in 2007 that mobile advertising opportunity is in smart phones and ads that become indistinguishable from being a service.
Now, what Apple and Jobs are up to with iAd? In the OS 4 event Jobs addressed everything that the advertising industry has been waiting for. Apple has now an opportunity to combine mobile media user experience needed to engage people with creative opportunities that will inspire the industry – and most importantly, that has a mass media scale immediately:
– You know the ads on the web… They’re eye catching and interactive, but they don’t deliver emotion. What we want to do with iAds is deliver interaction and emotion [to create real engagement between your brand and our Apple users].
– This is a pretty serious opportunity [with 1 billion impressions per day in our AppStore ecosystem], and it’s an incredible demographic [as there is no more attractive technology brand for advertisers today than Apple, qualifying its users as the audience you want to talk to]. But we want to do more than that. We want to change the quality of the ads too [as mobile is a different media to online].
– These ads are looking a lot more like apps. Almost totally separate apps that live inside apps. Is your mind blown yet?
I believe that Apple will be the talk of the town in mobile advertising for 2010.