Claude Ritter

Zurich, the next startup epicenter, not.

Posted by claude - 12/05/09 at 01:05:41 pm

Paul Graham has an interesting blog post essay about startups and the idea that most successful startups are located in a startup epicenter, such as San Francisco. According to his article, all you need is a first-rate university and a place so nice that rich people would want to live there.

Being Swiss, I was always quite optimistic that Zurich could become one of these places. It’s a beautiful city, it’s home to the ETH, it has a nice lake, an international airport, nearby mountains to go skiing and, last but not least, a “flexible” tax system for high net worth individuals.

Unfortunately, my high hopes took somewhat of a hit a couple of weeks ago when I was invited to speak (video conference) at an event of the EPFL, the French speaking counterpart to the ETH. The event was dubbed “Managing Risk of/for New Ventures” and was a mix between presentations and shorts pitches from local entrepreneurs. The event being part of the university’s “Executive MBA in Management of Technology” program, I had quite high expectations and I was looking forward to seeing some good pitches.

Sadly, I thought that the presentations were quite disappointing and I was almost shocked by the way these entrepreneurs pitched their products and services. Out of 6 two minute pitches there was only one pitch where I understood what the company is doing and what their value proposition is that will help them succeed. The other 5 pitches all had the following “features”:

• Slides with so much size 12 Arial text that you could write a book out of it.
• Graphics that came straight out of the word art gallery.
• Speakers with very limited English skills.
• Inability to tell the audience what the company is doing within two minutes.

I do think that some companies might actually have a good product but I strongly recommend that they all start broadening their horizons, start reading some English blogs about entrepreneurship, get their pitches right and live up to international standards because Switzerland just isn’t that big of a market. Granted, Lausanne (EPFL) is not Zurich but I fear that the level at ETH isn’t really all that different.

Could someone please build the Paypal of mobile payments?

Posted by claude - 13/01/09 at 07:01:54 pm

I was just reading this article on TC about mobile payments. As the article appropriately describes, transaction fees of 30-40% are way too high for any merchant to seriously consider this as payment methods. Especially because mobile payments, as a quick and easy way to send money, would be best used for cheap articles (virtual gifts etc.). But giving away 40% of a low priced item isn’t really something you want to do. And what about adding mobile payments to existing website, shops or communities? Would you just charge members, who want to pay via mobile, 40% more or give up half of your margin?

So, why is there no Paypal for mobile payments where I can store my CC number and then simply use my mobile phone for payments? Depending on the country, there could even be an integration for direct bank billing and other country specific payment methods. Maybe I am missing something but I sure that even with all charges considered, the merchant transation fee would be way below the 30% that are currently charged. Zong, can you please add that?

Recruiting in China – pitfalls ahead

Posted by claude - 11/03/08 at 05:03:44 pm

I think we all agree that hiring the right people is crucial for any company, especially startups. However, sometimes this is easier said than done. We are frequently hiring new talent and hiring in China seems to be a rather different story than it is in the US or in Europe.
I am planning to continue posting about hiring in China but here’s the first list of some of my findings and impressions so far:

• University != University. We often get applications from people who state to have been studying at a university. This often happens because Chinese CV’s are translated into English word by word while the Chinese work for college is the same as for university. So if you are looking for graduates, make sure the university really was one.
• English: advanced. If you are looking for people with some English skills, don’t let yourself fool with English certificates such as CET-4 (which might also be fake) or self assessments. Too often have we had applicants with “advanced” English skills and then it turned out that they don’t even understand even simple questions. Call applicants before inviting them for an interview.
• Work samples. I don’t know whether this is a special China thing but applicants often seem to overstate their role in their reference projects or simply show samples of someone else. Make sure you have some sort of check or test in place to verify the applicant’s abilities on the spot.
• Keyword stacking. Some applicants are very flexible adjusting their “proficient knowledge” by memorizing keywords depending on the job. Don’t just check whether people are familiar with common terms you maybe even included in the job advertisement. Same as above check the applicant and ask questions, which require further explanation.
• Ugly looking CV’s. We get tons of CV’s which are badly formatted, in some strange format, have typos all over and so on. 99% of these CV’s wouldn’t even make it trough the Spam filter of western companies. However, I learned that good-looking CV’s should not be the top criteria when going trough CV’s. We hired great guys who applied with a “me.txt” file but turned out to be great picks for our company.

Ok, that’s it for now. Happy recruiting!
(Image from madebytess)

Why you should let users define your app, sometimes

Posted by claude - 18/02/08 at 02:02:14 pm

ReadWriteWeb has an interesting post titled “Why You Should Let Users Define Your App“, written by Josh Catone. First I have to say that I generally agree with that statement but I feel that some things have been mixed up in this article.

To explain my point I need to reach back a bit. Most businesses, be it online or offline, have to generate revenue in order to operate and grow. This is the case with our company. We operate a bunch of community websites and generate revenue with a mix of advertising and premium services (Freemium Business Model). Our company did not take VC money until know and is running profitable since the beginning. I said “most businesses” above because a startup could also try to get some external investment, grow as fast as possible and then look for an exit. I am not saying that’s wrong but it’s something to keep in mind when reading the post I linked above.

Josh mentioned Twitter as an example. Twitter is running with VC money and is trying to expand its userbase as fast as they can. Eventually they will become some sort of “Internet Messaging Bus”, people and applications will depend on it to a degree that they can’t live without it. And then, Twitter will be sold.

Seesmic, Loic Le Meur’s new startup, also heavily uses crowd-sourced product planning. Without knowing their strategy I would guess that they have a pretty similar approach like Twitter. Do what the users want, get as many users in as possible and then sell the company. Therefore new features don’t have to support the business directly by generating revenue but are built to attract new users.

Another example mentioned in the article is the game industry. User driven development has been practiced quite a while in the gaming industry and I think that it’s the only way to develop games that people really want to play. But, there is a big difference between services such das Twitter and games. Games are actually SOLD, for real money.

I said that I agree with the fact that you have to listen to your customer. But the approach to simply do what the user wants, won’t work in every case. The two examples from ReadWriteWeb are very different and don’t represent the majority of companies or startups out there. So, unless you have a world changing idea with first mover advantage, a profound business strategy is still the key to a successful company.

Search