Entrepreneurship in Europe

Throughout this class we had the chance to meet speakers from a number of exciting new Internet companies such as Thrillist, Etsy and FreeWheel. All this innovation is quite impressive -- but, being from Europe, I do wonder: why can't we replicate this in Europe? Why does European entrepreneurship usually start and end with "fast followers" (a fancy word for knock-off)?

While it might not have any definitive answers, this week's Economist does have a lengthy and interesting article about the state of entrepreneurship in Europe. The general development seems to be positive, with red tape being reduced, some first start-ups that pioneer new concepts in Europe instead of the US (such as ever-present vente-privee.com) and VCs finally discovering the European market. On the other hand, many obstacles -- in some cases quite unbelievable -- still remain. Did you know, for example, that any equity stake is taxed immediately in Germany? If this stokes your interest, go read the entire article.

Reid Hoffman - Angel investor and Internet sage

Yesterday, we had a very special guest at my company, Knewton.com. Reid Hoffman, CEO of LinkedIN and angel investor to our start-up, met with us to discuss his thoughts ranging from viral campaigns and network effects to entrepreneurial investing and leadership. ANGEL investor (i.e., he invested before anyone thought they would be successful) in: Digg, Facebook, Flickr, Friendster, Ironport Systems, Last.fm, Nanosolar, Ning, Six Apart, Socialtext, Tagged, Technorati, Tiny Pictures, Wikia, and more. His ability to foresee which start-ups will ultimately succeed is the stuff of legends. Witty, humble and (dare I say it?) nerdy (remember, it takes one to know one!), Mr. Hoffman was an exceptional gracious speaker and we felt very fortunate that he had taken an interest in our start-up. Here are a few key takeaways from the interview…

On website launches: Mr Hoffman made a very interesting analogy about website launches. He said “if you are not embarrassed by the first launch of your website, you waited too long”. As a company, we have struggled with getting a product up that was both functional and visually attractive. With our first launch in October 2008, the site was launched and honestly, it was quite weak - no fancy animation, no Ajax graphical elements, few videos (and our online GMAT prep course was based on video classrooms!). It was Spartan but at least it was operational. We still struggle with the website now, (it’s only been 8 months), but at least we have more videos up. So yes, the challenge of managing scarce resources torn between graphical and operational improvements still remains. But on a brighter note, our SEO efforts seem to appreciate the heavy emphasis on copy --- so there is always a silver lining.

On the start-up process: Another interesting analogy about start-ups: “Trying to get a start-up off the ground is a lot like building an airplane – in mid-flight. The ground is fast approaching and you have a very limited amount of time to get everything together and working before you crash. If you do get it together, you suddenly take off. And then it’s about staying afloat and ascending. ” It’s good to know that the frantic pace and chaotic atmosphere is to be expected… Often times there are fierce battles for IT resources between Product and Marketing or debates on strategy and direction. The passion that people feel for the product is remarkable but it also makes it hard for us to be objective.

There was a lot of great advice he dispensed (the obvious and amusing one is use LinkedIn.com) and I am thankful to the opportunity to shake his hand. After all, I believe the recruiting company that introduced me to Knewton.com found me there.

So how’s that for a customer testimonial?