Monthly Archives: September 2011

Let’s be innovative: start by copying, remixing, mashing up..

“Startup America also represents a historic partnership with business leaders, investors, universities, foundations, and non-profits, and we’re urging others to join them in this effort. For entrepreneurs speak to what’s best about America, and in their drive and innovative spirit — in their willingness to take a risk on a bold idea — we can see the future. We can see how America will compete and win in the 21st century global economy.”-President Barack Obama, January 31, 2011

The answer to this call of Obama leaders of private sector have set up an independent alliance with top entrepreneurs, investors, corporations, universities, foundations and other leaders: Startup America Partnership. It has mobilized already more tan $400 million in private sector commitments to provide products, services, mentorship and funding to scale and grow tens of thousands of U.S. startups.

Let’s put know our hope to European Innovation Partnerships which also try to bring together public and private actors, with the complexity of the different levels of governance (EU, national, regional). These partnerships are focused to the main EU challenges: ageing, food security, energy and climate change. But should this kind of partnerships be broader? Not only challenge-focused?

We need more partnerships which huge involvement and participation of private and strong committments of public to scale up and grow ideas and startups in Europe. Research & Innovation grants can help with a systematically collaboration between private-public. Maybe the co-investment suggestions that we have been hearing by VCs in Europe could be a start.

But there are much ideas to explore..and maybe to import from Start up America?

For Entrepreneurs

For Investors

For Communities


Follow the money..

How relevant is the problem of insufficient early funding and VC funding for new social media related business ideas in Europe? And for growth? how can it be solved?

1) Looking at geography..

Since 1960 we have seen two dominant features of VC industry (see WEF report Global Entrepreneurship and the Successful Growth Strategies of Early-Stage Companies-2011):

1. The investor (VC firms) was based in US (specially Silicon Valley and Boston)

2. The investee (individual companies receiving venture funding) was based mostly in US..

The question now: is there the same pattern for social media business now?

2) Venture Capital Funding Stages

If we look venture sources database that let us distinguish social media businesses, could we see any difference between US and EU on VC funding stages? Dow Jones distinguishes four development stages: two pre-revenue (start-up and product development) and two revenue (pre-profit and profitable). Could we see what happens & trends in both continent?

3) Headcount of Venture-Backed Companies

Which are the average of headcount per start-up across the various geographies for social media related businesses?

4) Exits of Venture-Backed Companies

Does the dream of EU social media start-ups to be acquired by US companies? what are the patterns, if they are, in the exits of VC backed companies?

5) Growth Funding

“The lack of growth funding systematically rates first in all studies as the biggest problem facing high-tech high-growth entrepreneurs – European high-tech entrepreneurs typically only raise one fifth of the funding raised by US competitors, across all high-tech industries” (EU VC funding). In the social media industries, is this difference even bigger? Does it makes it very difficult for the best European business to compete with (most US) companies that raise many more times more growth funding?.


We need to get evidence on venture capital investment in new social media related business both in Europe and United States to understand if is there the main problem and why..


The biggest social media players are from US. Europe is clearly underrepresented. Facebook, Google, Amazon, Youtube, Twitter are just examples of this gap. About two thirds of the major web 2.0 applications are provided by US companies. In terms of traffic ranking, if we look at the top five sites, there is an overwhelming dominance of US sites within these top one. There is a particular worry on US dominance of the web industry and to what extent the “winner takes all” model will prevent the growth of other competitors even in other niches of the web ecosystem.

Still there are EU players but just not growing fast enough. Recently, young EU companies have emerged, and Europe has become a more and more fertile place for technology companies (e.g Spotify, Playfish, Skype etc.).But still..

Let’s explore why!

•           How relevant is the problem of insufficient early funding and VC funding for new social media related business ideas in Europe? And for growth? how can it be solved?

•           What are the main features of the EU regulatory environment that may affect negatively the creation and growth of EU web enterprises? What is the impact, specifically, of the data protection Directive (currently under review, and under considerable criticism)? Has it become a substantial barrier against innovation such as the diffusion of open data on the Web?

•            Are Universities and higher education institutions promoting entrepreneurial culture and providing sufficient incentives to researchers for developing business ideas in the web and mobile environment?

•           How to encourage a virtuous innovation cycle in the EU social media industry by promoting better cooperation dynamics between stakeholders providing funding, enterpreneurs, research organizations and large industries?

•           How to remove the barriers currently reducing innovative SMEs participation to EU-funded Research Programmes? Are there specific incentives-measures which could be taken to target Web or mobile-based businesses?

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