Today I spent the afternoon and evening at the Second Chance Tuesday event in London. In the afternoon there was an "Early Stage Funding Workshop" for an audience of about 100 companies, which consisted of a panel discussion with entrepreneurs and investors talking about what setting up and investing in a business is really like.
After a networking break the evening event started, where the auditorium at the Royal College of Physicians was filled to the brim with over 300 people; entrepreneurs, investors, and media. We were treated to a rare public appearance of Niklas Zennström, founder of KaZaA, Skype, Joost and Atomico Investments in a "fireside" chat with BBC Technology Correspondent Rory Cellan-Jones.
Niklas went through the ups and downs of his serial entrepreneurship career, from being sued out of existence with KaZaA, working for a year with no funding when starting Skype, to re-visiting his old friends in the media world from the KaZaA days with his new venture, Joost.
Rory kept Niklas on his toes with some good questions, both for Niklas (Q: "So you've done three 'successful' start-ups but none of them making any profit?", A: "Actually, Skype is profitable, with number of users, revenue and profit all growing."), and for the audience (Q: "Who here has tried Joost?", A: a large majority of the audience. Q: "Who here is using Joost regularly?" A: not one hand raised that I could see) - in his defence Niklas pointed out that the premium on-line TV/Film market that Joost is addressing is still at a very early stage.
Overall it was a very entertaining session, and gave a few insights into the thinking and processes behind companies that have achieved a critical mass of users in a short time. This involves things like focus on solving problems that people care about (in this case sharing files, making cheaper/free international calls) in a way that is "friction-free" (easy to acquire and install), easy to use, and so compelling that you get the viral effect of users introducing their friends to the service.
I think Niklas perhaps underplayed the level of technical sophistication that is also necessary to be successful. At the root of each of these ventures is some very nifty networking and peer-to-peer algorithms that required some serious technical innovation. Building a business around a core piece of intellectual property is more important than it sometimes appears in the Web 2.0 world, and the current generation of web entrepreneurs should think carefully about this.
From a Microsoft perspective, this event was important because we used it to announce the next five companies to join the Microsoft Startup Accelerator programme. They are:
Although these companies operate in some very different spaces, they all have some great capabilities, and we're looking forward to working with them towards building successful businesses. We will of course be writing more about all of our Accelerator partners here in the future.
The Second Chance Tuesday event also had a number of media outlets in attendance, and I expect we'll see some coverage on Channel 4, Startups.co.uk, TechCrunch, and Newspepper amongst others.