“You would be amazed at what kind of chain-reactions are set in motion when one of the startups has some smart idea, tries it and tells everybody that it works.”

Interview by Kevin Ohashi of KevinOhashi.com

This is part of our Startupbootcamp 2010 Coverage.  We will be profiling many of the teams that have recently completed this seed funding program in Copenhagen, Denmark.  You can also read our interview with the founder of Startupbootcamp, Alex Farcet. The format is slightly different from our regular format.  Each interview will begin with a set of questions about the experience of going through Startupbootcamp and follow up with questions about the specific startup.

Disclosure: I know many of these teams personally and have worked with some of them informally to varying degrees.  However, I do not have equity in any of these companies nor have I received any type of compensation from them (other than a couple beers!).

Artas Bartas is a Co-Founder at Spockly.  He and his other Co-Founder, Dovydas Ignatavicius, are from Lithuania. Artas received his Bachelor’s from Vilnius University and a Master’s from Central European University in International Relations and European Studies.  He has five years of experience in sales and project management. His previous company, Kaobanga.com, was an online shop for design accessories, which is now his personal blog (Lithuanian).  Artas also worked at an IT company called Alna Business Solutions, where he gained expertise in business intelligence and data crunching.  His most recent job was running a small web agency developing ecommerce and internet marketing projects for clients.  Artas’ current business is Spockly which was part of the inaugural Startupbootcamp group in Fall 2010.

Spockly unmasks the users behind email addresses.  It takes a user database, mailing list or any other collection of emails and processes them through various social networks.  Once processed, Spockly turns the insights gleaned from a userbase’s social profiles into actionable information for businesses.  Spockly’s goal is to allow businesses to peek into their customer’s behavior and interests without intruding on their on-site experience.  Spockly can be used as a complement (possibly even a replacement) for surveys and complex registration forms for gaining marketing information.

MO:
Where did you hear about Startupbootcamp and what made you decide to apply?

Artas:
Some 3 months into our project, we realized that we spend so little time on our project, because of the external distractions – demanding clients, no shared office space, differing schedules and so on. We started thinking about this problem in strategic terms – how do we find time, energy and space to focus on our startup, which is when Dovydas suggested we look for business incubator programs modeled on YCombinator and TechStars. I did some Googleing and one week later we have sent off our application.

MO:
After going through the Startupbootcamp program, what did you find added the most value to your startup?

Artas:
Many things that SBC gave us were very valuable, I personally found that insight into thinking how investors and successful entrepreneurs think was something that changed my understanding of how one builds a startup. SBC forces you to focus on critical things and then it also helps you understand what are those critical elements in your own business. Another valuable addition were introductions to very impressive entrepreneurs and business people at large (marketers, vcs, investors) – these connections do wonderful things for young businesses.

MO:
What sort of progress did you make while in the Startupbootcamp program?

Artas:
We came to SBC with an idea of doing a startup that would cater to companies engaged in behavioral targeting, that is, work with advertising industry. At the same time, none of us had any real connections within that industry. We had a few designs and wireframes and we have tested a few critical pieces of technology, but not more than that. Our one-on-one sessions with investors helped us to achieve two things: become aware of our strengths and weaknesses and build our business on strong points. So after pivoting in the beginning, by the middle of the program we clearly knew what we wanted to achieve and how that piece of technology would support a viable business model. That is when we started cutting down on sleep to get our prototype ready by Investors’ Day.

MO:
Looking back, what could be improved upon for seed funding initiatives like Startupbootcamp?

Artas:
I remember that before coming to SBC, we hardly knew what to expect, since the program was so new. And then we met Alex who was very energetic, ambitious and committed to turn SBC into a top business incubator in Europe. We were pleasantly surprised with his level of expectations for the program and it was about that time that we started to realize how lucky we were to get selected. So, in retrospective, I would say that SBC should market itself wider and set the level of expectation for incoming teams right.

MO:
Any other thoughts about the Startupbootcamp program?

Artas:
Actually, the teams themselves is one of the crucial elements of SBC: you would be amazed at what kind of chain-reactions are set in motion when one of the startups has some smart idea, tries it and tells everybody that it works. Also, on a purely social level, working side by side with other passionate startups takes out a large part of the routine from working on your startup. It really starts to feel like an army bootcamp – in terms of all that camaraderie – after a while.

MO:
What was the most exciting day for your startup at Startupbootcamp? The most stressful?

Artas:
I think the day after the Investors’ Day was pretty exciting, because then we realized that we managed to pull off a decent presentation. The day before that – Investors’ Day – was without doubt the most stressful one, because it was time when we had to venture in front of everybody and finally present our idea. And do it well. In 8 minutes. In front of 200 people. Gee, that WAS stressful ;)

MO:
Seed investment programs/startup accelerators are starting to attract talent from other regions and even internationally.  You are facing one of the big challenges after finishing Startupbootcamp, where do you base yourself?  Could you tell us about your thought process so far?  What are the choices you are debating between and what opportunities do they offer for Spockly?  What are the disadvantages of each?

Artas:
I think one of the nice things about SBC was that it gave us plenty of time to accustom ourselves to Denmark, grow our business contacts, find out more about business environment and local traditions. As the result, by the end of the program, we could already see ourselves setting up a business in Denmark. And it is a big achievement, because the only thing we knew about Denmark business-wise before coming here was that Danes pay one of the highest taxes in the world and people leave their work at 5 o’clock with no buts, ifs or maybes.

The second thing that we did was to look at potential markets we would like to go into: UK seems to be the most attractive one, since we heard many good things about the ease of making business there, there is a plenty supply of internet talent and high concentration of business angels and VCs. Plus it’s an English speaking country, which would allow us to blend in really fast. But then we considered things more thoroughly and thought that for a business like ours – for a variety of legal and technical reasons – it makes much more sense to start from a Scandinavian market and slowly build up our customer base throughout Europe.

Going back to Lithuania and talking to several companies back home also made the decision to start in the new market easier, because we immediately saw that there is no demand for a service like ours back home. So the terms were pretty straightforward – either we stick to our startup, but move to a more advanced market, or we stay in Lithuania, but drop the idea of providing email analysis tool.

So in the end we decided to move to Denmark and start building our startup here in earnest. We might move in the future, and as I said UK looks very attractive, but for now we would be happy to work in Scandinavia.

MO:
What are the challenges of starting a company in a place that isn’t your home country?  How far have along in the process are you?  What have been the major obstacles?  Any tips?

Artas:
We have not got down to the process of incorporating the company so far, because we think that the right time to do that is when our startup starts generating regular income. So I can only guess what challenges lie ahead. However, I have been talking to many Danish entrepreneurs with practical experience in this field and all of them, without exception, reassured us that doing it is very easy and does not take a long time. Of course, company incorporation is just one thing, then there are things like finding housing, office space, opening bank accounts and so on. However, our experience of Denmark so far was that people are very forthcoming in this respect (we already had 4 offers of affordable office space) so I am confident that we will manage to resolve those issues.

MO:
How have some of your customers used Spockly to help their business?

Artas:
We had some hypothesis about how people might use Spockly, but we also knew from people like Steven Blank and Ash Murya that it is very important to get into the habit of observing our customers and extracting from them these little gems of wisdom that people have. So we talked extensively to our early adopters and pretty soon found out that less than 10% of early customers were interested in personalization of emails, something we thought majority of our customers will use Spockly for. On the other hand, we did not think about the fact that our service can be used for customer acquisition purposes. Our customers, however, spotted early on that they can use audience reports to identify online channels where more leads can be found. And they were pretty happy about using it for this purpose. There were even people who suggested that our reports could be useful for determining what brands to stock in their online shop, this is the type of knowledge that one can only get by talking to customers.

To give you another example, we have analyzed email list for one of the shops selling baby stuff online. At the start, we were a bit skeptical about the rationale for doing that, because everybody knows that baby sites attract a very homogeneous audience: women aged 25-35 raising children aged 0-5 years old. When we run the analysis on that list, some things were confirmed, it turned out that 95% of visitors indeed were women and majority of them belonged to the age group we suspected. One thing we did not expect to find was the fact that many women in the list were divorced. They clearly constituted an interesting – and previously overlooked – segment of customers. So this was one thing that our client found interesting, because it gave them an idea for the type of promotions they could offer different groups. Secondly, the client discovered that many of his visitors frequent a particular Facebook group, which otherwise was very obscure. And there they had the idea of engaging with potential customers in a very natural way, through the channel that was essentially free.

MO:
Spockly must have some competitors that are similar, what makes your service unique?

Artas:
We know that many people (including us) feel rather uncomfortable about being tracked online. So from the very first days we decided that we will build our startup in a way that allows businesses know more about their audience at large and reach out to the right audience segments, without compromising individual privacy. This sets us apart from many other companies working with consumer data.

Secondly, we are aware of subtle cultural differences that exist across different national markets: consumption of social media, effectiveness of marketing channels, types of marketing platforms businesses use – all those things differ from market to market.

So when we think about our growth strategy, we focus on making sure that we have a compelling offer for every market that we enter.

We believe that these steps will make our service very simple to use for local businesses, because Spockly will be able to provide information that is relevant to a particular country, it will be easily accessible from whichever marketing platform that local businesses already use, and businesses could use that information safe in the knowledge that they conform to privacy legislation.

MO:
How did you and your partner Dovydas get together to work on a startup?

Artas:
I met Dovydas about 1.5 years ago, when I hired him to work on one of the projects for our clients. It was his first “official” job, although I could see from his CV that he has done some impressive projects by himself. What I really liked about Dovydas was that he is one of those developers who produces beautiful code (by contrast, many other developers with whom I had to work at the time excelled at producing endless excuses). With Dovydas, I would tell him in basic terms what kind of feature a client expects and two days later he would come back with fully developed feature that also had a whole range of useful extras added to it. And all that with no further input from me. It was so beautiful to look at, I almost cried. So when I started thinking about doing another startup Dovydas was the person I really wanted to have onboard. And the great thing is that he also has this startup bug in him, so it was relatively easy to convince him to do a startup together. I mean even now, after we have been working with him for so many months and had differences of opinion on several issues, I still think that he is one amazing developer. Now I just know that he needs to get out and party a little bit more. So I am making sure it’s not all work in front of the computer for him.