The 2015 edition of the pan-European startup contest Idea Challenge sees an increase in variety and internationality. The series of events re…
Austro-American Christopher Clay has one foot in the world of hackers and one in the world of startups. The winner of the 2009 TechCrunch Europe awards and pirate politician told inventures.eu about his numerous projects and lessons learned.
If you want to hide from Christopher Clay (29), hang out in the smoker's lounge at Metalab, a hacker space he co-founded in Vienna in 2006. He doesn't smoke and hates the smell. But he is otherwise as much of a fixture there as its myriad blinking lights, electronic gadgetry (including 3D printers, a laser cutter and a phreaked phone booth) and its hundreds of hyper-creative members.
Christopher Clay at Metalab, Photo: Michael Bernstein
We meet there at 11 a.m., which for hackers is akin to a pre-dawn wake-up call. The space is almost empty—the real work there starts after dark, when its members punch the clock at their day jobs and begin their passionate repurposing and reengineering of technology, systems, things and, well, the world in general.
Clay has one foot in the world of hackers and the other in the world of startups. Clearly, he is more comfortable in the former, but recognises the similarities and differences between the two. While both are creative and independent, “a hacker doesn't have to have a commercial purpose and is open-source by nature. No one here is trying to protect his ideas. Entrepreneurs often have to close things off, create some unfair advantage, in order to make a profit. Hackers work on entirely different things for similar reasons, while entrepreneurs are trying to do similar things for different reasons,” Clay believes.
An enigma wrapped in a riddle, Clay wants to make the world a better place, but isn't really a social activist. He wants his products to be used by millions but isn't motivated by financial gain. He nurtures the creativity of his fellow hackers but isn't overly concerned with their getting noticed by anyone. He is an honoured technology entrepreneur who now devotes his energy to politics.
It may seem strange, but to Clay it's all part of the same goal: Hacking the world to make it a better place.
As a 10-year-old in Austria, the son of an Austrian mother and an American father started BASIC programming on his mom's computer, running up thousands of schillings in dial-up access fees by the time he was 14. He transitioned into building websites and a site-statistics product that was used by thousands, but kept crashing his sponsor's servers.
Photo: Jacob Appelbaum http://www.flickr.com/photos/ioerror/315405038/ Later, Clay studied Information Design in Graz: “I always wanted to build things that didn't just look pretty, but served some sort of purpose, so it was a logical progression to entrepreneurship,” though it didn't seem obvious to him at the time. “Without stumbling across Metalab I probably never would have realised that option, because there was really no startup scene back then.”
Then, a lucky break of sorts. He was drafted to serve in the Austrian military, but in order to retain his American dual citizenship he chose alternative civilian service instead. This left his nights and weekends free to pursue his startup idea.
In 2007, Clay and Esad Hajdarevic founded Soup.io, a tumblelog platform. While working for media agency knallgrau he was frustrated with using their slow blogging platform while covering live events, so his idea was to make a blogging platform where one could share quick links and small bits of multimedia. “Seems so obvious now, but Soup was the first, also the first to have endless scrolling.”
Initial funding came from Y Europe, a European Y Combinator clone started by fellow Metalab founder Paul Böhm. SeedCamp rejected his first application, but accepted his second attempt (by that time Tumblr was on the map and SeedCamp understood the concept better).
Clay moved to London in Fall 2008, just in time for the global financial crisis. “The conversation changed from 'how do we raise millions to change the world' to 'holy s#!t, will venture capitalism even exist next month?'” Bad timing, indeed.
Nevertheless, he pushed on to Silicon Valley, started pitching and growing the company. The product took off in Germany, Austria and Poland (“I wish I knew why, so I could replicate it”), as well as China, until blocked by the government's firewalls.
Accolades followed. The Guardian listed Soup as one of the “100 essential websites” of 2009. TechCrunch Europe awarded it with “best boot-strapped startup.” More money rolled in.
Missing the hockey stick moment
But time and technology caught up before Soup could have its “hockey stick” moment. Facebook and Twitter eventually caught on to the sharing concept, and Tumblr offered its users easy theming and customisation of their blogs. So it was back to the drawing board for Clay, where he conceived soup.me to take advantage of the rich graphic possibilities of HTML5, WebGL and CSS transitions.
In 2010, new funding came from SpeedInvest and Clay moved into Oliver Holle's Santa Cruz beach house for a few months, hacking away and pitching to potential investors (“Robert Scoble loved it”). However, expensive freelance talent broke the bank and Clay's co-founders were no longer on board to help out.
According to Paul Graham, a startup fails when it's founders run out of motivation. Clay didn't want to BS investors anymore without having something concrete to show them, but time and money ran out. “We had run out of money before, but we always stretched it out until the next grant or investment came in. In the end, I realised there were more significant things I could be doing with my time. I was alone, without the co-founders or anyone else to take their place. SpeedInvest was very supportive, but I was the only founder left and found it hard to pour my heart into Soup, my baby for the last five years.”
“What came back to bite us really hard was that we co-founders didn't set up vesting at the outset. Our Austrian lawyer advised against it, due to costs and its complication. We split amicably and they left with modest shares, but they turned into relatively large shares that were, understandably, sold to the investors, so I lost controlling stake. That was a bad mistake! NEVER, EVER, EVER FOUND A COMPANY WITHOUT VESTING!!! Don't do it! If the Austrian legal system won't support it [through a GmbH], set up a Limited corporation or get out of the country entirely!”
Back when Clay started Soup, Eric Ries' concept of the “lean startup” didn't exist. “No one was there to tell us back then, but it's been fun to watch this whole culture develop and see what progress has been made in the body of knowledge available to start-ups.” The lean ethos is closer to hackerism, and this better suits Clay's current goals.
“My advice is to be lean, get your team right, be iterative, be willing to incorporate reality into your initial vision. Also, if you're developing a social media product without a clear business model, do it in Silicon Valley, not Austria – regional clusters do matter. And wait until you get traction before taking on investors.”
Applying startup principles to journalism
Clay has just recently beta-launched onon.at, an experimental open-source journalism platform based on a product he co-developed with Markus Hametner called Luminous Flux. Most online journalism uses content management systems that are trapped in the print-journalism model, but Luminous Flux's CMS seeks to amalgamate original journalism with content fed from diverse media sources, including social media, wikis, commentary, as well as archived news stories, all on one page. “Technology should meet the demands of news coverage, not the other way around.”
“It's not my passion to start a media company in Austria,” says Clay. Rather, he wants to apply startup principles to the news biz. Journalists would be integrated with their audience in a revolving loop of mutually beneficial feedback. The feedback loop extends to the CMS programming, which is tailored to meet journalists' needs instead of tying them down to a print-journalism model. Onon is an experimental iteration for the Austrian market, funded by a small grant from netidee.at that will soon run dry. So what's his business model for the future? “We have none!” When will he know it's a success? “If the New York Times starts using it!”
From tech to politics
With all the accumulated experience Clay has garnered, his next step would seem to be predictable—launch a new product or iterate an existing one. But Clay is aiming high on his next venture: using politics to change the world. He sits on the board of the Austrian PiratenPartei (Pirate Party), which advocates a hacker-like, techno-progressive philosophy and calls for the state to provide all of its citizens a guaranteed basic income, so that anyone can freely pursue his creative dreams and add value to society.
Hardly some marxist ideologue, Clay is “a big fan of markets, at least how they function on paper. But there are other measures of value besides money. Arthur Clark once said that the future is here, it's just not evenly distributed. Now that technology has flattened the flow of information and robbed [the powers-that-be] of their source of control, society must follow step.”
His entrepreneurial spirit attracts him to the huge challenge and he sees similarities between political and technology startups – always cash-strapped and clinging to irrational beliefs in changing the world for the better. What makes them different? “Nobody will invest in a startup political party,” at least if it claims to be as incorruptible and transparent as the Pirates.
“The Piratenpartei is like the first iteration of a startup, on the social level. How do we get power directly into the hands of the people? Every new iteration will bring us closer to that goal. So, our proposed solution on the continuum between traditional representative and pure direct democracy is 'liquid democracy' The net effect will be to get people to think of themselves as the state, and not think of the state as some entity above us.”
Clay must now perform the high-wire balancing act between hackerism, journalism and politics – no easy feat. Ethically and philosophically, there should be firewalls in between in order to keep each as pure as possible. But Clay has the hacker spirit of a doer, not just a talker-dreamer. If anyone can, he can.
Radu Negulescu (26), founder and manager of Loading Media, is an unlikely hero on an unlikely mission. The monster he has set out to slay is one of the most terrifying he could find: the chocking bureaucratic Romanian administration. His weapons: common sense and simplicity.
© copyright inventures publishing GmbH 2011-2018