Bring Your Startup to Life

Interview by Kevin Ohashi of Ohashi Media

Alex Farcet is the founder of Startupbootcamp. Alex is a well-known figure around the Copenhagen startup scene. He hosts monthly meetings called First Friday where entrepreneurs are ‘networking with purpose.’ It’s a place to ask fellow entrepreneurs for help with any problems their companies are facing followed by traditional networking. Alex also runs StartupDenmark.dk a site dedicated to the Danish and Nordic startup scene. Alex also organized Startup Weekend across the Nordic and Baltic region this year which saw Copenhagen, Stockholm, Lund, Oslo, Vilnius, Kaunas and Aarhus all getting their first experience from the US created concept. Alex is also an investor in the region, he’s a member of the Danish Venture Capital Association and Startupbootcamp is his latest project.

Startupbootcamp’s goal is to bring Tech Stars to Europe. They are the first Tech Stars Global Affiliate and provide seed funding and a mentorship program that aims to help companies launch within 3 months. The background behind the project is it comes from Rainmaking, a team of dedicated entrepreneurs who have been commercializing their own and others’ ideas for three years and have seen two multi-million dollar exists and revenue of around 165 million DKK (~27 million dollars) and 65 employees from 10 companies.

Kevin Ohashi:

You spent 10 years working at DHL. Were you also trying to start your own projects during this time? If you weren’t, what caused the transition into becoming an entrepreneur?

Alex Farcet:

Corporate life kept me plenty busy! Having grown up in Spain, France, Africa and England my ambition was to continue to travel and discover the world. DHL offered that and more: I never had a position more than 2 years, I worked all over Eastern Europe (right after the wall fell which was hugely exciting) and was posted in Brussels, Hong Kong and Denmark. I was kind of shoved off the corporate ladder when my 3 year old son fell ill (he’s fine now). I took a year off to take care of him and never went back. I started working as an independent consultant and on the side began helping startups. It turns out I’m pretty good working with geeks, I’m good at translating what they do into language business people can understand and I’m a really good networker – all of which is useful for a young tech company. Going back in time, when I finished business school I took a couple of months off in France and immediately went back to the US. I did the immigrant thing and went through Ellis Island in New York and headed straight for a friend’s couch in San Francisco.

I ended up working with a startup bringing the ‘minitel’ (a neanderthal version of the internet through a phone box) to the Bay Area. The company was not a success but I loved the experience. So as soon as I had the the time and opportunity to pick what I should do I went back to my first love: working with startups. I did a business angel investment and put up www.startupdenmark.dk which instead of a blog was a compilation of resources and interviews with entrepreneurs. In November last year I interviewed Martin Bjergegaard, co-founder of Rainmaking (http://rainmaking.dk/forside.aspx?lang=en) and we hit it off. I was dreaming of doing a Northern European TechStars and it turns out they were working on something similar so we joined forces. 6 months later, Startupbootcamp is ready to go with close to 60 amazing mentors, a facility in the heart of Copenhagen and investors lined up to see our ten startups at the end of the 3 month program in November.

Kevin Ohashi:

How is the culture of entrepreneurship different in Europe compared to the US? Is the Nordic startup culture different from the rest of Europe or can you see regional differences within parts of Europe?

Alex Farcet:

The more I’ve lived different places the more careful I’ve become with generalizations. Having said that there’s no doubt there are some overall differences. Denmark for example is a very wealthy country with a unique society willing to put a lot of what they earn into the common pot so that (almost) everyone is taken care of. In effect the peaks and troughs of wealth are cut off and brought back to the middle. You might think that pushes for more risk taking (“if my startup fails, I’ll won’t end up in the street”) but in fact it means you can be square in the middle and have a very comfortable life: the infrastructure is outstanding, university students are paid a salary and people like me get to take a year off to take care of their family – by the way I happily pay my taxes. Compare that to the US where being jobless in most cases means no health insurance combined with a culture which worships successful entrepreneurs. Those are generalizations but you can sometimes feel the difference in every day life.

To answer your question about differences within Europe, I think it depends what kind of entrepreneurship you’re talking about. Certainly web and IT entrepreneurs are very similar – everybody reads the same blogs, knows about the same success stories, and attends the same conferences – but they have to adapt to their local circumstances. I think Stockholm, now Copenhagen, Berlin, London, Paris and Barcelona are becoming hot beds of entrepreneurship. We may not have a Silicon Valley but we should embrace our differences and use them to our advantage (I wrote a blog entry about that: http://www.startupbootcamp.dk/blog

Kevin Ohashi:

The Nordic countries are (in)famous for high taxes. What are the advantages and disadvantages of starting a company in Denmark?

Alex Farcet:

The corporate tax in Denmark is 25% which is right in the middle for Europe. The infrastructure is outstanding, the Danish government is pouring billions into promoting growth (which is a political obsession) through programs such as “knowledge coupons” (promoting R&D spin off) and ministries are actively sponsoring good programs (such as Startup Weekend which I ran earlier this year), people are highly educated, I could go on and on. Of course personal taxes are high but they fund all of the above and actually only have an impact the day you pull money out of your company. Assuming you’re as frugal as Warren Buffett you can keep plowing the proceeds of your fabulous exit into your next venture!

Kevin Ohashi:

Startupbootcamp is a seed investor. I imagine often you are simply presented with an idea and a team of people. The wisdom often being espoused by seed investors is it’s all about the people. How do you get to know the potential applicants and judge people?

Alex Farcet:

My objective is to get at least 200 teams to apply, and we may yet get there. We’re going to bring that down to 50 teams only by looking at the people. It’s only with the final 50 (or 25%) that we’ll start looking at the idea / product. Startups are so difficult to pull off, the personal challenges and pressure are so high that getting the right people on board is crucial; every single successful entrepreneur will confirm this. So our process is: fill out a relatively simple online application; if it’s decently put together we start with a phone interview, if possible followed up by a face to face meeting or at least a Skype video call. We don’t care about age, experience, nationality, country of residency or even startup experience. We look for smarts, integrity and honesty, chemistry within the team and with us, and potential.

Kevin Ohashi:

One of the largest cultural differences between the US and Europe in terms of entrepreneurship could arguably be the tolerance of failure. In the US, failing is almost a rite of passage. In Europe, it’s not something that is talked about often. How do you manage these expectations and deal with this cultural stigma when you’re trying to invest in 10 startups knowing that statistically, some of them will fail?

Alex Farcet:

First of all I think that’s changing, entrepreneurs are being recognized in the media. A guy like Martin Thorborg is very famous in Denmark. Bankers are different but let’s ignore them for now, hopefully our startups won’t need them. Secondly, experienced VC’s and Angels are well aware that an entrepreneur who failed with his or her first startup and comes back for more is probably very hungry. As Brad Feld says, he loves an entrepreneur who had a small taste of success then saw it all disappear because it means he has a huge chip on his shoulder! So I think yes there’s less adoration culturally for come-back entrepreneurs, but the good ones come back swinging and good investors know that they’re a good bet. If we had a Startupbootcamp team who were smart and worked hard but failed for another reason (market timing, killer competitor, whatever) and they came back with another great idea then they would have a very good chance of being accepted again.

Kevin Ohashi:

I wish you the best of luck with Startupbootcamp and would love to see it succeed in the region. As a young entrepreneur myself, why should I pick Startupbootcamp over other European programs like SeedCamp or some of the US based ones like YCombinator?

Alex Farcet:

Thanks Kevin!
If you can get into YCombinator, or my preferred choice TechStars, and if it makes sense for you and your company then I think you should go! But there are a lot of good reasons for wanting to start your company here (I mentioned some above) or in Europe somewhere then maybe attack the US market. As for Seedcamp I think they’ve done an awesome job in Europe, especially in terms of discovery through their Mini Seedcamps. I’m no expert on how they work, I have a perception of a more competitive approach where a winner gets a pile of money and some mentorship. I’d like Startupbootcamp to be seen as a co-founder of ten startups. We don’t take board seats or preferred shares, we sit on the same side of the table and work like hell (with our mentors who are all highly involved) to make 10 successes. Then we do it again the following year!