Marcin Szelag @martechvc - Tumblr Blog

Moving to Medium

The Times They Are a-Changin. The idea of cultivating your own piece of the web is fascinating, but it comes at a high price. The price you pay is denominated in time. When writing is not your primary business activity, then it gets challenging.

I gave blogging a few tries over the years. Beginning with a high activity to be stuck later with a measly few posts every quarter. For that kind of regularity supporting your own blog is an over kill.

Following this self critique I have made a decision to limit my writing to the occasional post on Medium.

This decision was also influenced by a change I am observing. I started the post with a Bob Dylan song title because the web is definitely changing. To be even more granular - the thing that is changing the most is the way we create, distribute and consume content. Platforms have taken over the Internet - on web and even more so on mobile.

I have been active on Twitter for some time now. Twitter is good for short form but very limiting for longer thoughts. This was the main reason I started my own blogs. I wanted to have a medium where I could share the sort of things I think are important to the community. The main problem with a personal blog is that it is not a platform. Unless you put in the effort to promote it, no one will come to read it. Hence a need for a medium to publish longer posts.

From now on my new medium for publishing outside of the Twitter platform will be Medium. I believe that it is a great extension of the initial platform built by Ev Williams a since Medium is his new baby I think that its is a safe bet.

This blog will be active until the domain expires. For future posts, please visit my Medium page.

System of record vs single purpose marketing apps

I’ve written many times in the past about the complexity of the marketing landscape. Be it on the investment (VC) side or the founder/product side. With so many markeing applications available today it is harder to make the choice than ever.

I meet many founders who are excited about their cool MarTech startups but having seen hundreds of these startups the change just feels incremental. One common characteristic of these startups is DATA. It almost seems as everyone these days wants you to put their little Java Script on your website. Measuring, activity, collecting data, automating actions - the full array of use cases is pretty limited. Hence the problem with differentiation among marketing software.

This leads me to a very important question I’ve been asking myself over the last few months. How should we navigate between:

• systems of record (like Percolet) • platforms (like Salesforce) • single purpose applications (Like HotJar)

I keep hearing that marketers are looking towards a more unified experiene, where data is always available, freeflowing between applications. This is somehow offset by wishes of single purpose build apps which are best in its class.

If we were to look at the marketing tech ecosystem as sort of an “App Store”, than marketers have a very wide selection to fit their needs. What might be missing is the “data backend” which allows all these applications work together. Maybe it is just wishful thinking that more than 2 000 marketing apps can somehow exchange data to allow a unified user experience. Maybe this is a great opportunity to creat the next generation marketing platform to host all of this software in a “App Store” manner.

I have no strong opinion yet, as to what will dominate the future of marketing. With an increasing density of the marketing tech landscape I feel like there is a need for change.

Data, meaning, logic, action — the four pillars of modern marketing technology.

// This post first appeared on my Medium channel, you can find it here.

Scott Brinker (ION Interactive vel Chief Martec) published the 2015 version of Marketing Landscape Supergraphic. There are now more than 1 800 companies/projects serving marketers around the world. It is hard to judge if that is a big number. There are more than 220 million businesses globally. That is a lot of potential marketing $$$ to fight for.

There are multiple categories on the Marketing Landscape Supergraphic, but if we flatten all the functions of marketing to just one — I think it would be to drive more sales. Unlike in traditional businesses, sales&marketing in online business models is very often morphed into one function. What does it mean for all the martech startups out there?

A concept I have come up with is that there are four pillars of modern marketing technology:

Data

Meaning

Logic

Action

When ever I hear a startup claim in their value proposition that its main purpose for existance is to increase sales I try to benchmark it against my DMLA (short for data/meaning/logic/action) model. In most cases it goes like this:

Data — there is a java script to catch user data or an API integration to get the data from various sources

Meaning — once the data is gathered, there is some sort of meaning given to it. In a more advanced scenario machine learning might be applied

Logic — now that we understand the data that was gathered, we can try to apply logic to it. This is done by trigers and complex algorithms

Action — the last mile is all about performing an intelligent action to realise our goal of increasing sales

If you are a martech startup founder I dare you to take the DMLA test. Try to think of your product in those four processes. I think you will find it very easy to fit most feautures and functionalities of your product into all or some of those four categories.

I came up with the DMLA model so that I can better asses the potential of a company I am trying to invest in. There many variations of a martech startup. From „marketing clouds” which stand on all four pillars, to single pillar „storks” which specialize in a given area.

The biggest realization I came to is that the DMLA approach suggest that:

there will be a plephora of martech companies of all shapes and sizes

an ecosystem of single function apps and big end to end solutions might emerge

data is the currency of martech, It will need to flow to fuel the whole ecosystem

we will probably see many smaller exits and not that many „unicorns”

In a recent conversation a collegue of mine told me that he doesn’t like martech because it is too crowded. It is hard to differentiate the product and stand out from the competition. Very difficult not to agree. On the other hand it still feels like early days.

#startups

Focusing on two segments: ecommerce and SaaS

Great, you made the decision to start a marketing technology company. One of the first questions you will have to answear is pretty simple - how do you want to target with your tool or solution. I get to talk a lot about this topic during my office hours. Founders usually think that ther software will be helpful to all the different kinds of marketers. This is not always the case.

When I think about market segments for marketing software I tend to skew towards ecommerce and SaaS. These two markets are definitely riding the technology/internet wave. When you channel your thoughts towards these two segments, many thing become very clear:

these segments are big and growing,

both segments are responsible for a significant change in how we do things today and will do in the future (buy online/mobile | use software for most processes),

it is fairly easy to find information about potential customers in those two segments,

marketers at ecommerce and SaaS companies live in a digital state of mind. Their companies do business online. They acquire and retain customers through online activities,

in a world of constant change (new platforms, new communication channels) there is a need for new innovative products,

in both segments you will find small, medium and enterprise customers in need of marketing software,

no two marketers are alike, thus many products in the same category can scale to substantial size (not all might be a fit for VC funding, but that is a different aspect),

as smaller and smaller companies look for marketing software, there is a growing need for simpler tools.

Ecommerce and SaaS are not the only markets in need of marketing software, but in my opinion they are the most ready to “buy”. Most if not all companies in these two segments use some sort of marketing software already. As they gather more know-how their needs of marketing software will become much more sophisticated.

Marketers working in those two segments might use a very limited stack of marketing software today. It could be as primitive as a simple email marketing app but that is OK. What really matters is that these marketers are starting to see more possibilities to market their products. In order to take advantage of them, they will need to shop around for more advanced marketing tools. This will lead to a true explosion of martech.

#startups

MarTech Meetup

For a few months now I have been thinking about getting some of the european MarTech startups together. As a first step I have decided to organise a small, invite-only meetup for the MarTech scene in Poland. We will hopefully have all the Polish MarTech companies listed on the Marketing Landscape Supergraphic.

We have decided to use the "Apply to Attend" rule for this event. We want to keep the quality of our events at a very high level so that we can provide great value to our attendees. Feel free to let us know if you would like to join us. We will also be reaching out directly to some MarTech founders across Europe, so that the meetup has a more international flavour.

The event is planned for the 3rd of June and will be held in Krakow (Poland).

You can find out more information on the event here.

#startups

Sustainable business models

If you are into tech and startups you are probably going through the latest batch of YC companies. 114 companies selected from almost 5 000 companies from across the world. Yes, that is an acceptance rate of just 2,5%. It is probably harder to get to YC than raise your initial funding. I am still unsure if this is a good or a bad thing.

Looking at the companies which were presenting yesterday during the Demo Day I have mixed feelings. Trying to figure our their business models I asked myself this question - are those business sustainable in the “very” long term?

Warren Buffett is famous for saying that he doesn’t invest in tech because it is hard to keep the competitive advantage and defensibility in long term. Some say that Buffett doesn’t understand technology and this is the reason why he is not investing in it.

Whatever the reason - it is hard not to agree with the competitive advantage and defensibility argument. Tech becomes obsolete at a growing rate. Software gets copied all the time it is hard to differentiate - just look at the 60 or so email marketing solutions.

There are few other stats on YC that are interesting. More than 800 “portfolio” companies out of which 4 have a valuation of more that $1B and 32 have a valuation of $100M. In normal circumstances these numbers would be amazing but... YC is a “premium product” attracting the best tech talent, and accepting the top 2,5% of the best teams. You would think that their success rate would be much higher.

My take on this is that most of the teams are working around business models which are not sustainable in the long term. The ideas might look great on paper but when they hit the market - people vote with their wallets. Another argument might be that there is a limited number of sustainable companies that can be deployed at a given time.

I wish good luck to all the YC founders, beacuse the real test starts now.

Subscription overload

During the weekend I spent some time going over the various cloud software I have signed up for in the past months (even years). I was asked to provide invoices for some of the services to our accounting.

Going through your credit card statement and discovering how many startups you are supporting with “monthly donations” is a great experience. We are definitely in a period of major transition from owning to renting/leasing products and services.

This transition makes people feel they can access a greater number of goods because they don’t have that upfront cost of actually buying the product. It is very easy to sign up for a $5 dollar per month plan. The perceived value of $5 is very low, but when you add up all the $5 plans together it becomes a much burdening figure. It is easy to lose control, because hooking up your credit card online is so simple these days.

Narrowing it down to software for personal or business use it becomes even more of a problem. It is very easy to forget which services you are actually paying for when the incremental value is so low like the $5 mentioned before. Businesses today use more and more services online. At Innovation Nest we use probably close to 20 different serivces for which we are billed. Some we use every day, but most are used occasionally. This is a huge flaw of the subscription model on the consumer side. There are very few services where you truly “pay for what you use”.

Looking at churn I think it could be much higher than the usual industry average if you would have to confirm a credit card payment each month. I wonder what would be the drop rate after the first 30 days if such a model was applied.

With the software industry exploding and more products/services being pushed to businesses every day I think “Subscription overload” will become an issue.

#startups

Investor updates

As our portfolio grows I am discovering new challenges of the venture businesses. One of them is being up to date with what is happening across all the companies in the portfolio.

When we started out with the fund - during the first year we made around 5 investments. Our approach was to get involved with the companies we financed. With three partners and five companies we kept close with the founders. It was very easy to follow key metrics, hiring and sales&marketing efforts. With only 5 companies we didn’t really need any fancy tools or workflows. It was more like a close partnership.

As our portfolio grew in the number of companies, I started seeing some new kind of problems/challenges. Suddenly we had many more companies and founders to keep in touch with. Their businesses took on different velocities - some were growing at an expected rate, others need work around the business model.

At the very beginning we have formed a practical thesis on how we would like to work with portfolio companies. The “tools” we decided on were:

one 2 one mentoring sessions every two weeks

operational sessions every 6-7 weeks

strategic sessions when ever there would be a significant milestone approaching

This platform worked for some time. But as our portfolio grew again, it got difficult to service all the companies the same way with only three partners. Another thing that has changed were the companies themselves. This change forced us to iterate again on our support platform. The companies could be organically devided into three groups:

no help required

more pull than push

close relationship

Another thing that also came somewhat naturally is the division between partners. Each of us is very different and we are drawn to different companies. This has allowed us to allocate some of the companies to each partner. We were back on track with staying up to date. Internally we had our regular portfolio updates so that the information could flow between all the partners.

We have also introduced a new tool to our support platform - portfolio meetups. This was our answer to the growing needs of our portfolio as a whole. We decided to host these internal meetups on topics that were common to most or all of our portfolio companies. These meetups are starting to work really well.

Now we have grown yet again. In order to stay on top of all the companies we work with I feel the need for regular investor updates. As I have experienced it over the last four years - this isn’t something that founders/CEOs like doing. It takes time they could spend on building the product or doing sales. There are millions of excuses for not updating investors on a regular basis. I am sure that many VCs experience a similar reaction from their portfolio companies.

I must say that Marcin Treder (CoFounder and CEO at UXPin) is a master level ninja at investor updates. Once a month Marcin sends out an email with a PDF updating all investors on the current status of the company. The PDF includes key metrics, new reference customers, product updates, challenges, wins and plans. Spending 30min on that PDF is more than enough to be up to date with the company. I wish more founders would do that.

An investor update is not only a good thing for the VC but first and foremost for the founders, and this is why:

having to prepare a written report makes you think about the business

it is an opportunity to close the door to your office and leave all the bustle out

spending few hours reflecting on the past 30 days will give you a chance to see a much bigger picture and check if your ship is sailing in the right direction

it will also allow you to plan the next 30 days and correct the course if needed

putting eveything together in a report will structure your thoughts around the key aspects of the business

There are many formats for Investor Updates. I would like to share with you one resource that I find valuable. RRE Ventures (investor at Base) has put together a neat website called www.updatedmyvc.com. On this page you will find an email template you can use for your investor updates. There are also some links you can check out. As we are coming to the end of March and Q1, it may be a good time to make use of this resource.

#startups

Growing online marketers

Steve Ballmer used to shout from the stage - “developers, developers, developers”. Today I feel like shouting - “marketers, marketers, marketers”.

When you think about online businesses - you probably think developers and lines of code. We are living in an ever expending tech economy and developers are the builders of the infrastructure. Everyone talks about how hard it is to hire devs, that it is getting too competitive and this drives the prices sky high.

This thinking and over emphasising of devs reminds me yet of another phrase - “build it and they will come”. With the resources available today almost any idea can be translated into code and shipped. It’s is great but it only paints half of the picture. Once you have a great product you need marketers to push the message across and reach target audiences.

When it is hard to hire good developers - it is almost impossible to hire great online marketers. In places like Silicon Valley you might at least have a group of marketers to choose from. It will probably cost you - but you will be able to find someone with the right skillset and experience. In other tech hubs it is a whole different ball game.

Krakow today, has 5 really well venture backed companies - Estimote, Base, Brainly, Kontakt, Seed Labs. Guess how many online marketers work for these companies in Krakow - probably less than 10. I would say it is a ratio of 1 marketer to 100 developers. If run an online business out of Krakow it is almost impossible to locally hire experienced online marketers.

There are few reasons for this. a) most online/tech businesses located in Krakow are focused on development not sales&marketing b) universities are far behind in the evolution of marketing - no courses around marketing technology c) some potential talent is locked in at agencies - there is no transition to product focused companies. If this continues Krakow will grow in tech talent but stagnate as a pure outsourcing center for development work.

One of the challenges of growing a healthy startup ecosystem is to have diversity of skills available on the market. Code is not everything. In order to allow comapnies to grow beyond the development stage, there needs to be push for growing all other competencies - online marketing would be on top of the list. I think there needs to be a bottom up approach. Companies should train online marketers on the job.

As community leaders we should host in Krakow regular meetups focused on online marketing. We should be inspiring more and more people to join the ranks of fast growing tech companies on the marketing side. This is why we have decided to host a meetup on Marketing Technology in June. More info comming soon. I belive we can make Krakow famous not only for its dev talent but also for its marketing brains.

#startups

Investing in change

The last few days were extremely busy. Every day I had an opportunity to talk to some great founders from across the region. I am still amazed how this “startup” revolution is playing out in Europe. Besides the three main hubs of London, Berlin and Stockholm there are plenty more cities with tech ecosystems. I would even risk saying that you can find a tech ecosystem in any European city above 500k people.

Although this increased startup activity is fueling a lot of innovation, there is a huge disparity in growth potential of tech companies which are currently launched. Investors, founders and the media have coined the phrase “unicorn” which translates into a high valuation a company can attain. Everyone wants to experience the unicorn effect, probably because of its monetary value. I would like to pose a question - is this really what we all should be obsessed about?

My answer to this question is NO - at least to the monetary aspect of it. When I look at companies seeking funding I try to be very open minded because you never know what this “stupid” idea might morph into. Paul Graham wrote a good post about it - you can read it here. When evaluating a company I always try to figure out what sort of impact can this company create. This is what I call “Investing in change”.

When you think about it, most “unicorn” companies are hugely successful because of the change their products or services are empowering. My two favourite examples are AirBnB and Uber, These companies have had an enourmous impact on economical, social and political grounds. Their products created new jobs, new income and forced new social behaviour. As these two companies are still very young, there is so much ahead of them - we can only speculate what change will the next 10 years bring to their respective industries.

As an investor or a founder when you look across the board not all startups have the same potential for change and impact. If everyone would be obssessed with creating a unicorn there would probably be much less startup activity. There is a fairly limited number of processes or activities in our life that can be so deeply affected by technology and innovation on a mass scale.

This disparity in impact and potential for change brings many risks to the venture capital business model. As the common truth is told over and over again - fund returns are generated from the biggest exists. This philosophy should push every VC to only invest in “unicorn” type companies. Well, there aren’t that many companies with a “unicorn” potential to start with. If this was the focus of all the funds, we would probably go months and months without writing a check. Maybe even years. When you look at the numbers there are probably only few (I would say around 5) of these types of companies created each year. The ratio is very unoptimistic - few companies and thousands of venture capital funds. You know that the equilibrium point will be reached by only few funds contributing to the equasion. You can also easily guess which funds might be in that club. What about all the other funds? Well this is where it gets tricky - I think there is a huge opportunity in focusing on “sub -unicorns”.

Now you should ask - what the hell is a “sub-unicorn”? I would define that a “sub-unicorn” is a company that creates a huge impact but on a sub set of the market. The sub set might be relatively small. It might an app for bloggers or a software solution serving a small vertical market. In $$$ value impact of a “sub-unicorn” might not be that impressive, especially when compared with “unicorns” like AirBnB. In terms of VC returns it might also mean that when most of your portfolio is made up of “sub-unicorns” your success rate must be much higher then that of “unicorn” VCs. As most of the companies in such a portfolio will only have a potential os single digit multipliers you have to get most of them right in order to generate returns on the fund. If you were to analyze all VC firms, most of them will be in the “sub-unicorn” category.

This “sub-unicorn” thesis is also very important when it comes to founders. I know many founders running great companies that will never reach the “unicorn” trijectory. Does it mean you shouldn’t invest in them? My answer is NO. I think they are exactly the right kind of “sub-unicorn” material which can work for a VC who recognizes that there is another model to the game than “unicorn hunting”.

This whole “unicorn” / “sub-unicorn” thing is a bit like the celebrity world. Everyone wants to experience the lifestyle of the rich and famous, but most of us are still happy living our own lives.

#startups

Staying focused and believing in your vision

I came across this motivational video today. It is pretty long but the narration is awesome. Most of it is a perfect fit for the struggles of startup entrepreneurs.

via evencarmichael.com

Giving up is easy, hanging on is hard. In the last three years I came across many types of entrepreneurs. To keep it simple you could divide them into two groups:

Enthusiasts - they got into the startup game because they saw everyone else involved. They wanted to try the experience.

Schwarzeneggers - pure muscle. Hard as a rock - unbreakable. No matter what the challenge, no matter what to struggle - they keep pushing forward.

Many of the "enthusiasts" I've met went on to do other things in life and left the startup world to the tune of bitter sweet harmony. Those are the ideas that were never fully executed. The risks, chances and opportunities never fully taken.

I was also fortunate enough to meet few of these "schwarzeneggers" who are still pushing forward. They are the backbone of this game. If it wasn't for them we wouldn't have some of the most important technology companies of our time. Steve Jobs often talked about this focus and persistance. Hope you will enjoy the video as from time to time everyone of us needs a bit of motivation to keep hanging on.

#startups

MarTech vs AdTech

Last week we hosted another SaaS Meetup - this time the main theme was all about #people (hiring and company culture). During the event I had an interesting conversation with Kamil Stanuch - cofounder at KoalaMetrics (AdTech startup in the mobile space). We discussed the differences of Marketing Technologies versus Advertising Technologies.

MarTech and AdTech are often coined as the same "space" but that is not really true. There are no strict definitions of these terms. When I think of these two markets I think along these lines:

MarTech is all about understanding the customer and the ability to communicate with him on multiple levels

AdTech is mostly about Branding (copy and creative) and Traffic (clicks)

Both of these markets are very big in terms of $ spent and the number of available products. What is very different about these markets is the ability to innovate and come up with new solutions.

Advertising technologies are as old as the Internet itself. The first reported banner ad is dated back to 1993 and was sold by Global Network Navigator. Two years later came out the first central ad server released by Focalink Communications. Twenty years later the online ad business in one of webs most popular business models.

Publishers sell their "real estate" to advertisers. In order for this trade to happen seamlessly - there is a whole ecosystem of products in the AdTech space. I think the most interesting developments in the advertising technology in recent years can be pinned to Real Time Bidding (RTB) and programmatic ad buying.

Google is of course the undisputed king of AdTech. I heard that an internal joke around the campus is that people think that Google is a search engine company - when in fact it is the biggest advertising agency on the planet. Over the years Google has acquired many companies in this space. Google paid more than $3B for DoubleClick, which might be their biggest acquisition in the AdTech space yet. But Google is not alone, Facebook is also serious about the advertising space. With billions of people on the platform - Facebook has a lot of "real estate" to sell to its advertisers - especially in the mobile medium.

Google and Facebook are only two companies of hundreds active in AdTech. With RTB and programmatic ad buying it is a razor sharp game on margins. Advertisers are only getting smarter and want to pay for effect driving clicks. This drives margins down and makes it very hard to compete with big established players on the market. It might be the reason why so many VCs say no to AdTech companies. We have probably reached a peak in advertising technology and to be honest I don't see anything in the near future that could bump AdTech onto a new growth curve.

MarTech on the other hand is nowhere near reaching a peak (at least in my view) but it also has a set of challenges on its own.

The markering technology world is hugely fragmented. Luma Partners or ChiefMarTech are very good at documenting all active companies in their supergraphics. There are probably few thousand vendors of MarTech solutions. This is mind blowing. I always like to joke that there are more solutions than marketers who know how to use them.

In AdTech the process of buying is very simple. Most advertisers will choose the biggest networks to allocate their budgets. With MarTech it is exactly the opposite. Each marketer is different. Each company is different. Each marketing process might be different. This is whay choosing your marketing technology stack is so difficult and might hugely differ from one company to the other.

To illustrate this - there are more than 200 marketing automation solutions on the market today. The value proposition of the bunch is pretty much the same - they take a data/event driven approach to automate marketing/communication activities. The differentiation lies in the tiny details of each product. The interfaces. The integration (API) capabilities. There is still plenty of room to compete even against the giants. My favourite example is SalesManago a marketing automation company based out of Poland - now with an office in New York.

Another difference between MarTech and AdTech is the adoption rate. Thanks to such products as AdWords by Google - even the smallest business in the most remote place on earth can use and uses AdTech. This low barrier of entry drove massive adoption among businesses.

In MarTech it is not so easy. One of the simplest marketing tools, a CRM is still not widely adopted by businesses. Another example - email marketing, although there are close to 60 different vendors of email marketing solutions - many businesses still have challenges implementing them in their marketing processes. We are talking about the most basic tools of them all. There is an enormous potential for growth in MarTech.

I am trully bullish on marketing technology companies as I think that their products benefit both the business and the consumer. With better marketing software, companies can far better serve their customers in a more 1on1 personalized way.

At Innovation Nest we consider MarTech as a very important area of focus. We have invested in marketing technology companies in the past and we will continue investing in the future. I still believe we are in the early days of this marketing technology revolution.

#startups

Mentoring sessions

Mentoring has become a common service for accelerators and startup competitions alike. It is a great way to get startups in front of investors and potential advisers. I have been doing a lot of mentoring during the past few months - mostly at accelerators and office hours.

A mentoring session can help founders get a fresh perspective on a challenge they are currently struggling with. It can also spark new ideas if the company is in a pivoting mode. Useful tips on fundraising can also come from a session with VCs. There are probably plenty of other benefits founders can get from mentoring. What worries me is that very few founders know how to levarage these sessions.

Two common mistakes:

Entering a mentoring session without a clear plan. Mentors are there to help you. If you don't know what you want, you waste your time and the time of your mentors.

Not preparing before the sessions. In most cases you will know exactly who you will meet during for mentoring. You can do a background check of each person. Knowing who will sit in front of you will allow you to focus on specific areas.

At Innovation Nest we think a lot about mentoring. it is one of the tools we use to work with our portfolio companies. To expand our know-how we are building a network of mentors. Yes - we are serious about mentoring. No matter what your startup does, there are always people who have done it in the past and learned a lot by doing it. Their feedback is really valuable.

#startups

Hard things about saying NO

As a VC you say NO more often than YES. The ratio between YES/NO might differ from VC to VC. More established VCs probably get to see more deals each year and thus say NO to more entrepreneurs.

For VCs who are still building their brand and reputation this YES/NO ratio is a challenge. As I still consider myself and Innovation Nest to be on this road, I thought it would be a good idea to share with you my thoughts on the topic.

Over the last 4 years I personally said NO on hundreds of occasions. It is easy to say NO when:

the company is outside of your main investment thesis,

the founders are not "A players",

the company is to early in terms of product and traction,

When one or all of these characteristics occur, you don't really feel bad for turning the company down. It is good to have such a checklist.

Where things get tricky is when you tick all the boxes on your checklist and there is still something holding you back to say YES. I had this feeling on few occasions already. It is a stomach twisting, head aching experience. You know that by saying NO you are doing the right thing but still after making that decision you feel bad. Some of the reasons for saying NO in such instances:

there is no founder-investor fit (maybe due to differences in character)

the valuation is to high

the captable will be difficult to fix

Saying NO to founders who you spent weeks or months talking to and built a relationship with is even more difficult. Saying no might jeopardise the relationship. Because of the decision one side will always feel worse than the other. With saying No comes the whole emotional and psychological package.

I guess this YES/NO aspect is just a natural part of the VC game. I only hope that it gets easier with time.

Poland - a European growth engine

Last week I came across a report published by McKinsey&Company titled Poland 2025: Europe's new growth engine. You can download the report from the McKinsey website. I tweeted about it over the weekend and the post got some attention so I figured I should also address this topic here in more lenght.

If you follow my blog, you know that I am a huge advocate for Poland. Not only as a true patriot but also as someone deeply involved in the local Venture Capital industry. I Just turned 33, and as I was growing up the past 25 years Poland as undergone an unbelievable change. The change has come in many dimensions: economical, political, social. To illustrate this - below are two photographs. One from the 1991 and one from 2014.

Polish streets in 1991

Polish streets in 2014

In the last 25 years Poland went from an Eastern European communist country to a Western European economic tiger. Glass buildings, cars, shopping malls, brands, and the list goes on. Poland has cought up with the West. For now mostly in the bigger cities like Warsaw, Krakow, Wroclaw, Poznan, Gdansk, but where ever you look you can see a dramatic change.

The McKinsey report looks at few key areas where Poland can gain additional momentum in growth of its GDP. Here is the list:

Technology-intensive industries

Services

Process manufacturing

Basic materials industries

Local industries

Demographic and labor market shifts

If an aspirational scenario will be carried out, these are the key metrics for Poland 2025:

In 2025 I will be 43 years old. No matter what the outcome will be I think Poland has a bright future especially in terms of tech startups. In the next decade we will see some of todays rising stars like Estimote, Brainly, Seed, Base, inPost, SalesManago mature and fuel the startup ecosystem with a new breed of skilled and experienced entrepreneurs. We will also see more angels coming from the tech world. This will definitely be a great decade for Poland.

Office hours

One of the things investors can do to be more accessible to founders are Office Hours. If your are not familiar with this concept - it is very simple. As an investor you can allocate some of your time to the community. Founders can visit you during office hours to talk about their idea or business without the fundraising preassure. Ycombinator is famous for hosting its office hours during the program.

We have been doing Office Hours at Innovation Nest for some time now. I think we started in 2012. We tried to have them on a regular basis - once a month for few hours. Over the years many people visited us to basicalliy get our feedback on their startup. I think there wasn't even one occasion when we wouldn't have at least one person show up. It was a great learning experience for us too.

Now what I am seeing with Office Hours is that founders started using them as a point of first contact. A chance to meet us in person and start a relationship. Most of the ideas that founders come to us with, are in a very early phase but now and then we get teams which could be an interesting opportunity to invest.

Because we have these Office Hours every month, anyone who would like to pitch to us, has an easy way of doing it face to face. It is a much better approach than a cold email from our website.

Another effect of Office Hours are referrals. Today Adam (CTO of a company I'm and investor in) told me that he referred two of his friends to me with their startup.

If you would like to come by our office for our next Office Hours, please register on our website to book your slot -> innovationnest.co

SaaS Meetup #people

In the end everything depends on people. How they come together, how they perform, how they move things forward.

More info -> http://saasmeetup.com/

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Marcin Szelag