Aug 5, 2011

Esther Dyson: The worse mistake for business is to invest in bad team with good idea!

3 -7 October in Vienna will take place a significant event StartUp Week Festival Europe, which will gather more than 70 international speakers: investors and business men, top managers and startuppers, journalists and bloggers. It will last 5 days and consist of 30 sessions and workshops from experts.
Why it’s important for start-ups to be there?
If you are startup with international ambitions and looking for fundraising or networking – you should be part of this event!

Welcome words from Esther Dyson
Before StartUp Week Festival Europe we proposed you to ask some questions from our great speaker – Esther Dyson, investor (Evernote, Flickr,, 23andMe, Meetup, WPP Group,, Boxbe, Yandex, XCOR Aerospace, Space Adventures/Zero G, Constellation Services, Icon Aircraft, Coastal Aviation Software and Airship Ventures). Thank you very much for your interest!

- How young start-ups can convince the market, while presenting a new business model, especially if it has potential to change the industry in general? What are main steps you would recommend in this case?  
- It really depends. If it was easy or there were a single answer, it wouldn’t be really new.  But you do need to think about how it’s useful for the customer, not about why it’s new or different.

- What is a driving force of a start- up: idea, management or a founder’s creativity?
- The combination, but without leadership and execution, an idea is worth nothing.

- Do you have own secret in leadership for the start-up team?
- Remember to listen more than you talk! Admit your mistakes early and then fix them.

- Do you think that innovations and technology open new horizons for women in business?
- Not really.  It’s more an issue of culture – both among men and among women.

- Looking back, what was your biggest mistake in the business?
- A few cases where I fell in love with an idea and invested in a person who was not as good as the idea.  If the idea isn’t good enough, the management can improve it (this process is called a “pivot”), but if the people aren’t good enough you have a big problem!

- Cloning of US projects seems to be the latest hot trend in the global startup community (i.e. and CityDeal clones of Groupon). From your point of view is it: 1) legal/moral, 2) needed/unavoidable?   
- It’s legal and moral  to reuse an idea and do it better, and ideally, to do so creatively with an understanding of the local market.  It’s not moral to copy an interface and in extreme cases it’s illegal.  In the end, as I said above, innovation is not interesting without implementation.  Personally, I like to invest in new ideas.
FWIW, I don’t think Groupon itself is a very good idea.  It’s basically e-mail marketing, and the current margins are not sustainable.

- Do you think, American investors have prepossession against European and Russian market?
- Generally, investors prefer to invest in markets they know – which makes a lot of sense.   However, yes, outside investors generally have a pretty negative opinion of Russia.  In fact, it’s justified in many parts of the Russian economy.  But in the Russian consumer Internet, there’s a culture of honesty and transparency just as in the rest of the world.  In short,  you can bribe one person for a small amount to win a big contract with a big business, but you cannot cost-effectively bribe consumers to use your products and services…

- From your point of view, is necessary for the Russian/EU start-up to move in USA (Silicon Valley) in case of success on global market?
- That really depends on what kind of company it is.  But no, it is not always necessary.

- What kind of risk assessment usually investors are using for evaluating start-ups?
- Personally, I believe almost nothing they tell me… but then I invest anyway.  One or two real wins make up for a lot of mistakes.

- In what stage of project development is better to look for investor?
- That depends.  Usually you should go as far as you can before raising money so that you get a better valuation, but you should make sure to raise the money before you get desperate for cash, because that will *lower* the valuation (if it doesn’t put you out of business).

- When was the last time you have faced a real challenge full of passion that made you not to sleep at nights? Would you like to have one?
- I’m going through a couple of these right now.  They have to do with management issues… CEOs who aren’t managing effectively, conflict between managers and the like.

- Do you think with the hyper inflated IPOs that we are headed for another crash?
- I do think there’s a bubble in some parts of the market, but I hope that it’s not broad enough to cause a crash when it pops.

- Do you have to be in Silicon Valley to have a chance to succeed with your startup? Would Europe work? How about Vienna?
- Perhaps the best answer to that question is Yandex, based in Moscow, which just went public at a valuation around $8 billion.  I am on its board.

To meet Esther Dyson personally  come to StartUp Week Festival. You can buy tickets here. Till 10th of August price for “early birds” is only 149 euro.
And we will continue to publish actual interviews and posts with speakers for you. Keep in touch and don’t miss a chance to be part of historical European startup event!

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