This is an older text but still very useful to read. Sorry for not crediting the original author, but I can't remember who had written this as I just had this sitting in a text file :)
“I worked hard, and I worked all the time. But then, you are not ‘working’… you are building something – and it’s fun.”
Paraphrasing a bit, this was how Niklas Zennström started his talk in Copenhagen. He’s the co-founder of Skype, as well as Kazaa, the mythical P2P file-sharing powerhouse of the early 2000s.
I had the chance to hear Niklas live for more than hour. He spoke about his own ventures, how he invests and gave general advice and ideas for want-to-be entrepreneurs. Here I’ll share a few of his key points with you.
To start, Niklas talked about investments. He explained how his investment group, Atomico, invests in companies - to sum up, he mentioned the following characteristics as the keys:
a) They have a superstar team – which, in his words, means people who are: ambitious, leaders, highly intelligent, with a lot of stamina and with a diverse academic or work background.
It impressed me that he named stamina among the five main points – but then, as the quote I started with implies, when building something great you need to work A LOT. Keep that always in mind – no big success will come easy.
b) They have a game-changing technology. Not copycats – teams working on something original which, he pointed out several times, can be scaled fast. Category winners, and international-oriented by default.
Think about these as the keys to success – straight from a very successful guy who has done it twice.
Then, he made some good points about location, especially for European entrepreneurs. He said that companies starting in places like Denmark (a smaller economy than the US state of Washington), have the advantage of being internationally-focused by default, given that the local market is very small and, if going for the big bucks, the entrepreneurs have to think for a global market from the start. That’s an advantage to, say, German, French or even American entrepreneurs.
But then, he also threw a rock at Europeans in general – in the EU, he said, people try to protect the past (via social security, welfare state, etc), while in Latin America and other emerging markets people just go forward and push for the future, making innovation more likely.
The Success of Skype
Skype was a huge success – Niklas had already started Kazaa, which in the early 2000s was the most downloaded software in the world. A huge precedent, this made him and his associates no strangers in the start up world.
Kazaa, via its immense platform, and the buzz around its founders made the funding and spread of Skype easier – but then, what’s remarkable is that Skype, with 600+ million registered users, completely eclipsed Kazaa. And, for the record, it made (and keeps making) big money – something which Kazaa, given it’s nature, found very hard to do.
Other keys for Skype’s success, he said, were:
They had the right timing. Skype hit just when broadband connections were spreading big time – was it before, it would have flopped. Was it later, it would have been too late.
They were very fast. They rapidly integrated Kazaa’s technology to the product. Skype was nothing about file-sharing, but the technology behind Kazaa’s direct-user connections was what ended up powering Skype’s own connections.
Skype passed the Mom’s test. It was a super advanced software, but it needed to be easy to use. Niklas made his mom and sister try it – and they learned to use it effortlessly and very fast.
Skype kept innovating and constantly listened to its customers. That’s how it outpaced its competition.
The rest, you know, is history – Skype not only has become the world’s lead chat service, but it has also survived the attacks of Google, Microsoft and Yahoo while also taking a big chunk of the multi-billion dollar international phone calls service.
To close off, here’s a bit of random points of the talk I also found very interesting:
1- Now it’s very cheap to start in the tech-entrepreneur world. Cloud computing, he said, changed the game. You don’t need your own servers anymore, and there are cheap, web-based tools that will do most of the work that took time and costed a lot of money before.
2- Mobile is key – it’s more intimate. People carry their mobiles everywhere. The smartphones are everyone’s alarm clock – and they are never more than a meter away. You NEED to play mobile if you want to win.
3- When he started Kazaa, he turned the living room of his house into his office – while married and all. We’ll always hear about garage entrepreneurs, but having him telling the story in front of me made it sound much more real.
And last, there’s just one more point I have to make myself. Niklas didn’t start with Skype alone – nor did Larry Page start Google alone, or Bill Gates in Microsoft or even Mark Zuckerberg in Facebook. Instead of keep looking for the ‘next big idea’, start looking for WHO is the right person to help you pursue that said idea.
