Based in Iasi, Romania, IntelligentBee is holding its own internal “business reality show” similar to Shark Tank in which the winning projects receive up to €20,000 to grow their business ideas.
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Bulgarian seed fund LAUNCHub has just announced the composition of the new batch joining its investment portfolio. Out of the 200 startups that applied to the selection run in February 2014, only six companies made the cut: one from Romania, four from Bulgaria, and one from Slovenia.
Lyuben Belov, managing partner at LAUNCHub, told inventures.eu that the three main reasons they have decided to invest in the six new companies are their teams, the traction gained so far and the markets they are addressing. “These factors are crucial for us to identify an investment opportunity and growth potential in a startup company,” he said.
According to Belov, the overall total investment in these six companies is approximately 400.000 euros. In addition to receiving seed funding, the selected startups will also benefit from coaching and networking during the programme. Created about two years ago, the Sofia-based fund has already invested approximately three million euros in the digital tech sector mainly in the SEE region but since recently, also further west. With those newcomers on board, LAUNCHub now spans the South European map from Romania to Greece and Slovenia to Ukraine with 41 investees in seven countries. “This is the region we are focusing on and we have seen some impressive tech talent here ready to disrupt the tech scene,” Belov said.
Among the happy few entering the LAUNCHub family is Romanian Style Jukebox, who’s recently made our front-page news. This cross-platform for saving music enables the users to access and stream their favourite songs from different devices, both online or offline.
Who else is on board?
The four Bulgarian newcomers include AdTapsy, a mobile ad revenue accelerator aiming to help publishers and developers to monetise their apps. Easy to integrate, the tool is fully automatic and supports profitable ad networks.
Both a personal organiser and a social tool, Clusterize combines Facebook and Google+ events and categorises them automatically. The app also recommends users the best ways to spend their free time based on their interests, the people they hang out with most, and their previous outgoings.
Meanwhile, the CM2W platform provides a cost-effective and easy way to monitor and control remote devices in real time, responding to customer needs for consistent information and opportunity for timely response to different input events.
To encourage personal education, Zeduki is a marketplace for live e-learning and tutoring where students and teachers can meet and share resources. The platform offers users to pay online and get lessons directly, either on one-to-one or group sessions.
Last but not least, to the great joy of winemakers and oenologists, Slovenian Enolyse offers a comprehensive system for monitoring must fermentation thanks to a small device and an app. The smart sensor measures the degree of sugar, alcohol as well as temperature and, from the web or mobile application, tells the wine producers about the stage of the fermentation and when they should rack the wine.
Belov said the fund expects fast growth and further development of those six investees’ products and solutions, as well as readiness to learn, to share experience and to work together as a team and as partners. “The most successful teams we have supported in the past two years have shown commitment, creativity and passion in their development and we have the same expectations for the newcomers as well,” he added.
Entrepreneurs of the region, mark your calendars and refine your business idea: LAUNCHub’s next investment round is scheduled to open on 12 May.
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Calling herself a “rebel against regular rules” Adelina Peltea is no one who settles easily. Seeing the value in challenges and struggles, she believes in hard work and determination; in not giving up. Yet, in December 2013, the 26-year-old Romanian had to learn how to give up on her startup – without giving up on herself.
Being someone “who sees opportunities all over,” Adelina always knew that she wanted to create, to build. “Even with a steady job, my own schedule has never been 9am – 6pm,” she says. “I simply don’t function like that.”
After finishing her marketing degree in Bucharest, Adelina first got a glimpse of the entrepreneurial world when she joined “JADE” (European Confederation of Junior Enterprises), a EU-funded organisation to foster entrepreneurship among young people. Heading the organisation for a year, Adelina learned how to run a business while building a network on a European level.
She had smelled blood – and wanted more.
Upon returning to her native Romania, Adelina founded her first startup, internshipin.ro, a platform for students to find internships in Romania. Launched at the beginning of 2011, the venture recorded sales from the first month of activity onwards, with clients ranging from corporates and Romanian startups to other SMEs.
“As a recruitment-based product, internshipin.ro was not very technical. We were educating the market,” says Adelina. “As such, we did not care so much about numbers.” At the time, she and her team were not looking for investment either. “It was all revenue-based.” With three co-founders and two additional employees, they were a small team, none of them working full-time on theproject. “Internshipin.ro was a side project for all of us,” says the Romanian entrepreneur – a side project that grew slowly, but steadily, reaching around 3.000 users. When Adelina and the venture’s business developer moved out of the country in the spring of 2012, however, there was no one to take over, causing the site to close down.
With the knowledge she had gained as a result of her first entrepreneurial experience, Adelina decided to move on to bigger and, as she hoped, better things. “I wanted to launch a startup in continuation of my first venture, but on a global level.”
Big Data Business
The concept behind splinter.me was to help companies find the person they needed for their enterprise. It was planned as a more technical venture, a “big data business” that was to focus heavily on analysing and extracting information of what people share on social media to create profiles on splinter.me.
By chance, she met her co-founder-to-be, Ahmed El Hussaini, in Egypt while interviewing people for her book Customer Seduction. “It was pure luck that we found each other. Ahmed had had the same idea and with his technological background and my marketing experience, it made sense to join forces,” says Adelina.
After two months filled with hours of Skype conversations, Adelina officially joined splinter.me – already launched by El Hussaini, as a co-founder. They were optimistic and believed in their idea: The business concept had been validated because customers were already paying for similar services, such as headhunters or job boards, and direct competitors in the US were making money as well. Therefore, “our focus was on developing a good product,” says Adelina.
This, however, turned out to be more difficult and time-consuming than Adelina had expected.
Things turn sour
“After one year, the product was still not finished, the whole project got delayed,” says Adelina. “As a startup you are running around for a while trying to find out what works – but you should not do that forever.” For her, 12 months of ‘running around’ was definitely too long.
Splinter.me was also facing the challenge of acquiring users when the product itself was not finished. Despite constant traffic to the site, the conversion rate remained low. “We only managed to get 2000 users, which is very low on a global level,” says Adelina. “In the end, our product did not get the traction we would have wanted and needed.”
In addition to problems on the execution side, the entrepreneurs had financial difficulties. They kept on pouring money in – their personal savings – without getting much in return. Besides a small angel investment of 20.000 dollars, which was used to pay the other co-founder a small salary, splinter.me did not attract any outside investment.
With financial hardship and not enough users, things between Adelina and Ahmed El Hussaini, started turning sour. It became clear to her that her work in marketing the venture was not being appreciated. Adelina decided to resign.
“Of course things would have eventually gotten better had I continued – but my personal life, as well as my budget, was suffering. Compromising to reach only 5% of your dreams – that’s not good enough for me,” says Adelina, who describes herself as someone who has never wanted to settle with what she had.
While without regrets on the marketing side, the Romanian entrepreneur bemoans some of her business decisions. “I don’t see my resignation as a personal failure, but I do regret that I was not stronger in terms of managing things, setting deadlines, and meeting targets,” she says.
On the financial side, she regrets not having made any prior arrangements. When she decided to resign from splinter.me, Adelina found herself without a ‘prenup’ to govern what happens if someone decides to leave. After a painful fight, she ended up not receiving any shares in the venture.
“Imagine you are married with kids and you end up getting a divorce –what do you do with the kid? Splinter.me was my child. It is my work, I believed in it,” she says. And she still does. “If I had the financial capabilities I would do the same business again – with different people.”
Forging plans for the future
While splinter.me will carry on without her, the 26-year-old Romanian is determined to continue her entrepreneurial journey – on her own terms. “I can’t help it – entrepreneurship is in my blood,” she says. Thus, she is already forging plans for the future – with an important realisation in mind.
“After going through all kinds of emotional phases – denial, anger, and sadness – I finally understood that I need to look at what I’ve learnt and accomplished. All these experiences are mine. No one can take that away from me.”
And Adelina is convinced she will put these experiences to good use in her next venture. “I am not saying goodbye to the startup world for good. I already have lots of new ideas.” Until she can realise these startup ideas, however, the Romanian entrepreneur will have to restore her financial capabilities. “Fortunately, I have already received offers to work as a marketing consultant for startups,” she says.
Besides job offers, though, she has also received numerous messages of support and encouragement from around the world, and especially Europe. “My story seems to resonate with people,” says Adelina. “They appreciate my journey and my experiences, especially regarding splinter.me. To me, this is a truly outstanding shift in [entrepreneurial] culture.”
Correction: A few sentences in the intro as well as paragraphs 8 and 10 originally read that Peltea launched splinter.me together with her co-founder Ahmed El Hussaini. They have now been modified to indicate that El Hussaini had already started the venture when Peltea joined full-time. The reason for the correction was a factual inaccuracy that has now been clarified.
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Adelina Peltea is a Romanian entrepreneur, previously the founder of internshipin.ro and more recently – of splinter.me. It is exactly splinter.me that is the reason for us to republish a post from her blog. Last week, Peltea announced and explained her decision and motivations to move away from her own startup. We have selected seven of her lessons learned to share on inventures.eu.
1. Have a job aside.
In my first business, I had a job aside. I considered it wrong because I could not focus completely on the business and take it to the next level. So in this second business, I chose to dedicate to it completely. And there is nothing worse than looking back at one year of cash-drain while waiting for investors in shining armours – that did not lead to anything.
2. Don’t confuse business investment with personal investment.
My tech co-founder managed to get a small angel investment. We decided to use it mainly for paying him a small salary. What would I have done differently? If the investment doesn’t go in the business directly (hiring etc.), then what goes into founders’ salaries should be discounted from their individual equity.
So if you give x% equity to the investor for y money and that money goes to covering your co-founder’s salary, then the x% equity should only be taken from the co-founder’s equity, not the total. Then everyone will be happy.
3. Draw a very strict timeline and stick to it.
We got carried away with the trial and error period, with too much optimism, with too much ambition despite the conditions, with too much un-focus (let’s try this, and let’s try that, and we also need to do this).
I should have said: If in one month we don’t reach this, and in three months we don’t reach this, then x happens. This can be defined for the business, but it has more value, if it is defined for personal goals. As in how much can a co-founder hang on if expectations are not met. I believe that I stayed too long (a year) to draw this line. I could have done it earlier.
4. If possible, get three co-founders.
It is more human power and it is better for internal balancing. At internshipin.ro, we were three co-founders and it felt much better than here with two co-founders. We could do more things and we could temper potential arguments. When you are just one-to-one, lots of things can go wrong.
5. Get leaders and doers. Separately.
When you start a business, you want co-founders that are great leaders, have a shared vision, are well-connected and experienced or good at what they do. In practice, when running a startup in the first year, you need someone on the management side, and someone on the implementation side. It is difficult to have someone good at both. And you need to be aware of this.
On your team, you need people who can lead the business, and people who have the exact skills you need to implement it. If you cannot hire, make sure you choose the right co-founders to cover both areas (separately).
6. An accelerator can actually slow you down.
We went into an accelerator about a year after we started. Although this was an accelerator with more advanced startups, I could only see its value if we would have done it earlier in the startup’s life. Because you get lots of learning from mentors and peers, you get to question and redefine many aspects. And the sooner you do that, the better.
The moment we joined the accelerator we should have only focused on releasing the first version of the product and getting clients. And by being there, these got delayed.
7. Stop when you need to stop.
There is a difference between ambition and stubbornness. Make sure you don’t stop too late. And make sure you’ve learned from it. The next time will be much better.
I learned lots of things that will prove useful later on. I learned how to be data-driven and use Analytics to the max. I learned how to create content that goes viral. I learned about different markets. I learned how not to work with technical people. I learned a lot about the recruitment industry, about social media and about tech startups. I learned what hype is and what isn’t in the startup world.
I have become stronger and more experienced. In the end, we ourselves are startups. Startups that we can never leave.
Peltea’s original post can be viewed here.
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