4 tips for startup success if you’re not based in a major tech market

Editor’s note: This is a guest post by Alexios Ballas, who is founder & CEO of Fashinating. Fashinating was one of the first companies to receive accelerator funding in Europe outside big country hubs like the UK and graduated from the Openfund program in 2009.

Okay, you have a great idea, you managed to gather an A-team of co-founders and you are ready to rock the global startup stage! Nothing is stopping you except maybe one thing: your location. What if you do not live in a large, super-advanced market like the US and the UK? Let's face it, not all, but most global technology businesses have started or at least moved quickly to one of these markets before going global.

This, unfortunately for you, has various re-enforcing consequences. If the users of these markets are the first to receive cutting edge technologies, they are also the ones that learn how to use and react to them, which in turn makes them the best candidates to test the next new wave of technologies. It is a vicious (or virtuous) cycle, which you cannot ignore. Most start-ups with global ambitions need to test their products in these markets early - let's call this the ‘Foreign Market’ problem.

That of course is not your only issue. In order to scale your business you are going to need funding and good advice. Again you are in a disadvantaged position; money is not in abundance, your market is probably not educated enough on technology startup funding structures and advice from global tech companies is possibly limited.

Local vs. international investors

Trying to fund-raise in markets where the "convertible note" is an unknown term for most investors requires double the effort as you need to educate and talk about the basics rather than stuff that matter. This makes the angel market particularly hard to navigate, especially if there are no previous local success stories to lookup to. Fortunately, investors and governments around the world seem to notice the potential of Web and mobile startups and we are starting to see an ever-increasing number of accelerator programs and VC firms appearing in the periphery.

A good example is my home country, Greece. The Next Web recently reported from Athens, a city that hosts five startup-focused funds: The Openfund, PJ Tech Catalyst, Odyssey, Driin and First Athens. There are also a range of other initiatives like the ZeroFund and local representation of Hackfwd.

This is certainly good news and a very good reason to be active in your local startup ecosystem. Our company was born through a community event, namely the legendary Athens Open Coffee meet-ups. VCs value individuals who actively contribute to their tech communities. Part of their value is their proximity to these hubs of people, which combined with their local knowledge, helps them identify outstanding individuals (like you).

This is also the reason why fundraising in a market like the UK or the US is not easy for outsiders given that they are not connected with the local scene. Greek startups that were brave to raise funds in the US include Pinnatta, Daily Secret, BabelVerse and BugSense, all of which had to move abroad for prolonged periods to raise the money. If this is not possible for you, local VCs are your best chance for an early funding round. However, a not-fully-developed ecosystem though with no significant start-up experience should make you cautious.

You need to ask yourself the following questions: Does your VC of choice have previous startup experience? Do they have readily available funds to support their most successful companies? Are they able to link you with top-tier international VCs in the future? Rarely the answer is 'Yes' to all of these questions.

If I had to choose, sufficient follow-up money and experience would be at the top of my list. Getting the stamp of a respected local VC means that you stand out of the crowd and you should use that leverage to draw co-investment from international funds as soon as possible, preferably from the very start. Your local VC is great to have and you should definitely let them lead the deal. This will assure the funds abroad that the company is looked after at close-quarters. On the other hand, the international VC will provide you with invaluable strategic guidance and knowledge of your target markets. Getting them early will also ensure better networking and follow-up funding for your next round, gravitating you towards larger players.

VC co-investment is one way to help you solve the ‘Foreign Market’ problem. Just bouncing early product ideas to your investors will help you identify assumptions that might be right where you are but are not necessarily true in your target location and culture.

Launch in your target market first

Whatever your funding situation though, you should always launch in your target market first! Start locally only if you are targeting markets with similar cultural and technological characteristics with your own; a great example here is Taxibeat, a Greek mobile Taxi service helping to improve the quality of service in many countries that suffer in that respect.

If you are looking to make it in an advanced market though, chances are that the feedback you will get in your country will be in the wrong direction. You will be surprised with the comparative results; we have seen conversions differing for up to 300%. Thus, stop wasting your time with local users and get your product out there!

It is also very important to have a presence on the ground. Quantitative results through A/B testing are great, but qualitative feedback like speaking with your target users is paramount. Jon Vlachoyiannis of BugSense did just that and quickly realized that their then name of choice, which sounded intuitive for Greek speaking users (Sfalma.com), was impossible for Americans to pronounce. This is actually a very common problem for non-English speaking start-ups and only a glimpse of the localization pitfalls.

Patents

If you have a solid idea that is patentable in your target market, go ahead and patent it! There has been a lot of talk about patent trolls and large co-operations killing small businesses through this system. The fact is that patents were built to protect inventors from unfair competition and no-one fits this description better than you. The fact that you are not local makes it harder to fight potential imitators.

Our company is utilizing the value of its US patent at its current stage, but an even better example is Kostas Eleftheriou of BlindType. He developed a keyboard app in Greece, which he immediately patented in the US and was later quickly acquired by Google, mainly because of the patent value. It is better to spend a few thousand upfront if these might value millions in the future.

On the ground in a major market

Patents excluded, the advice is clear; if you want to create an international technology business, it is good to have at least one founding member ready to move abroad to a city like London, New York or San Francisco to acquire local knowledge, make partnerships and above all help you realize your dreams.

Moving to London to develop our company is one of the best decisions we have taken and something that I should probably have done earlier. The experience, collective knowledge and energy of these cities combined with the unique characteristics of your local market, whether that is cheaper labor, location or culture should help you excel in your endeavors.

True innovators and multi-million companies like PeoplePerHour, Upstream, Velti, InternetQ and travelplanet24 have managed to excel having based their research operations in a country like Greece. So, why can't you? Good luck!

Image credit: NASA / Getty Images

Tim Ferriss predicts a “nuclear winter” for startup angel investment, but he isn’t worried

Earlier this week we published the first part of an interview with author and investor Tim Ferriss, who will be speaking at The Next Web Conference Europe 2013, which takes place on 25 and 26 April.

Here’s the concluding part of the interview, in which Ferriss discusses why he took the controversial approach of publishing his latest book with Amazon Publishing, his startup investment strategy and what the future holds for him.

TNW: Your latest book, The 4-Hour Chef is published by Amazon Publishing, an unconventional approach. Why did you take that route and how's it been going?

Tim: ”It's the first major book acquired by Amazon Publishing and they actually announced the existence of Amazon Publishing with the acquisition of the book. It's been a very exciting rollercoaster of a ride to put it very mildly, which has had some incredible pros; meaning I've been on the homepage of Amazon, I can look at metrics that I've never had access to before - I can look at the top 20 traffic referring URLs to my book product page. That's cool data. Super cool.

“I can identify all sorts of fascinating aspects of my customers so that I can better serve them and better reach them. Simultaneously, Barnes & Noble has boycotted the book nationwide in the US, as have many independent bookstores.

“It's been a tumultuous experiment, but one that I would do again. The reason I chose to go with Amazon was because I developed a relationship with them over time because of the volume of sales I was pushing through Amazon for the first two books. When the opportunity came about to work with them, I decided to take it because it's exciting to be able to be the first to do just about anything, and I was willing to take some risk in doing that.

“Random House, Simon & Schuster, these traditional publishers sell to the head category buyers at a Barnes & Noble or Books-A-Million. They do not know their end users, they have no data about their end users, nor do they have any way to communicate with their end users. Amazon, in many ways I would say, knows me better than I know myself just based on my Amazon Prime purchasing behavior as well as what I refer people to through my blog, which they can track of course.

“That's fascinating to me. I'm not anti-bookstore, I'm pro-reader. There's a big difference. My readers, if you look at the percentage of digital sales in my three books, The 4-Hour Work Week began at about 6% digital and it launched more or less simultaneously with, I would say, a user-friendly version of the Kindle.

“Right now, the lifetime sales to date are 20% digital for The 4-Hour Work Week, 30% for The 4-Hour Body and almost 50% for The Four Hour Chef, which is very unusual for a cookbook.

“So if you were to look at, let's say, cookbooks as a category where I sold 37,000 or so Kindle copies in the first week, my closest cookbook competitor in print sold probably in the hundreds or less than 2,000 certainly. I feel very comfortable saying that.

“I think if you were to look at my audience as, not exclusively but very much heavily weighted towards, early adopters, I think that's the future. I think that's a glimpse into what will be for most books, not too far from now.”

TNW: Aside from your books, you're heavily involved in the tech scene as an investor in startups. What do you look for when you invest?

Tim: “There are a few criteria that I have and my model is quite simple. Whether it's Shopify, Uber, Evernote, TaskRabbit, I look number one for a product that I can be a power user for, something that I would pay for even if it's free in the case of Evernote for instance.

“I look for a service or a product ideally that already has a certain degree of traction. I make exceptions for that with entrepreneurs that I've worked with before or founders who have already displayed success.

“In the case of Uber, for instance, I was already an advisor to StumbleUpon and knew Garrett Camp very well and Travis Kalanick who came in as a CEO, I had already invested with in two or three companies. So I was very confident in investing in that team even though it was starting from scratch.

“One social proof point is recommendations from my readers. So I actually connected with both Evernote and Shopify by spotting patterns in my reader feedback on Twitter and Facebook.

“Then lastly, ideally it would be a product that I would feel comfortable pitching to the New York Times as part of a trend piece because that means that it has both the simplicity and the timeliness to scale to a mainstream audience. That's pretty much it.”

TNW: Are you still looking to invest in more companies or are you just happy with your portfolio as it is?

“I'm going to become a bit more selective by necessity, given time constraints. But I still spend 30 to 40 percent of my time on startups. I will continue to do that for a very long time so I'm not into any rush. I don't feel like there is a gold rush that I have to cash in on in the next 12 months and, in fact, I think there's probably going to be a nuclear winter of sorts in the not too distant future and that doesn't bother me because I will still be into the all the startups when all of the fairweather investors go away.

“If you look at, let's say, the dotcom depression of 2002 as one, that's when Facebook and LinkedIn were founded. I think that's when the real entrepreneurs who are driven show their true colors and that's also when investors show their true colors and can also invest at very reasonable prices.”

TNW: Finally, what's next for you? Is there another ’4-hour’ book on the way?

“I haven't decided what's next just yet besides taking three to four weeks off after this last book push. I'll probably focus on some type of physical skill like surfing along with a language of some type. I'm thinking about Southeast Asia specifically but to take some time to create negative space so that there's room for the big ideas.

“I think for 2013, I was reading a book by the two of the people that led the Clinton campaign in 1992 and the presidential campaign which was successful of course; Buck Up, Suck Up . . . and Come Back When You Foul Up.

“One of their concepts, which was borrowed from Newt Gingrich with whom they have nothing politically in common necessarily, but the concept was focusing on antelope instead of field mice. What that means is or the analogy of the story that was used is, as a lion you can keep yourself fed everyday all day by eating field mice. You just have to spend all day eating field mice, 300, 400, 500 field mice or you can reserve your energy and focus on one antelope.

“I think it's extremely easy in the digital world, certainly involved with start ups or running a startup, to become very reactive where you're reacting to field mice all day long. So I'm going to take a break to determine what the antelope will be for 2013.

“I'd like to experiment with the visual medium more. I've had a lot of fun working on video trailers for the books which have been some of the most successful ever created. I've done some experiments for television but teaching through the visual medium is something I think I'll focus a lot on in 2013.”

Tim Ferriss will be speaking at The Next Web Conference Europe 2013. Tickets are available now.

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Developer Tools — Including GitHub, Zencoder, AWS — Offered Free To 250 Young Startups In Second Startup Pack Giveaway

Startup Pack is back. After giving away 1,000 bundles of free web tools to newly established startups last October, the entrepreneur who set up the giveaway has gone ahead with a second, developer-focused Pack — with fewer packs up for grabs but a larger range of freebies on board, including from Github, Zencoder and Amazon Web Services.

The appetite for the first edition of Startup Pack — which saw more than 2,000 applications from more than 50 countries — convinced founder Matthieu Vaxelaire to do a follow up. ”Bigger, better and crazier, for this second edition we teamed up with 15 best-in-class partners to offer a unique bundle of free software especially for developers,” he says.

Giving away a quarter of the quantity of packs in the second run has allowed them to include “better offers from all partners”, says Vaxelaire, and also to have “smaller” partners onboard — who may not have been able to afford to offer their service for free to 1,000 winners.

To be eligible to apply for a chance to win one of the 250 packs, startups must be incorporated, have been formed less than two years ago and have raised no more than $250,000. There is no restriction on startup location.

Here’s the full list of free booty which eligible startups are in with a chance of winning:

• Github: to build software better, together — 12 months for free
• Zencoder: Cloud video encoding — $250 for free
• Amazon Web Services: Cloud computing infrastructure services — $1,000 for free
• New Relic: Application performance — 6 months for free
• Mailjet: to send transactional emails — 12 months for free
• Engine Yard: to host your website — $1,000 for free
• oDesk: to hire freelance talent — $350 for free
• Code Climate: Automated ruby code review — $500 for free
• Transifex: To localize your app — $495 for free
• Geckoboard: All your key metrics in one place — 12 months for free
• Code School: Learn by doing — 12 months for free
• TextMaster: to translate all your documents — $450 for free
• MongoHQ: to host and manage MongoDB — $1,000 for free
• Pivotal Tracker: Build better software, faster — 12 months for free
• Twilio: to bring voice and messaging to your web — $500 for free

The application process for Startup Pack 2.0 has been made slightly more involving than last year’s run. Applicants will first have to prove they are human, and then prove they can code.

“We built a unique ‘geek-friendly’ applications process,” says Vaxelaire. “Instead of ‘simply’ fill-in a form with your info, you need to prove us that you are a human (with a funny test) and then you have to submit your application via an API call.”

Startup Pack’s rules for the giveaway are as follows:

1. Everyone has 10 days to submit its application.
2. We will manually review all applicants.
3. We will randomly select 250 lucky startups that will receive the Pack.
4. Every applicant will be notified via email.

The winners will be selected from applicants that meet the entry criteria using “a simple random selection functionality”, according to Vaxelaire.

He says all data gathered in the application process will be deleted once the giveaway is completed, with the exception of email addresses (which are retained). “Of course we don’t sell their emails and we don’t spam,” he confirms.

To apply for a pack, visit the Startup Pack website.

Wedding Party, The Mobile App That Lets Guests Contribute Photos To Gorgeous, Shared Albums, Scores A Million-Dollar Seed Round

Wedding Party, the mobile app that allows wedding guests, friends and family to contribute to a shared, digital album of photos and notes which can later be posted directly to the couple’s Facebook timeline, has raised $1 million in seed funding in a round jointly led by NEA and Felicis Ventures.

Also participating were a number of angel investors, including early Dropbox investor Pejman Nozad, plus Ullas Naik, Darian Shirazi, Rich Chen, Zeki and Haroon Mokhtarzada, Doug Pepper, Mark Jung, Kumar Malavalli, Chris Hobbs, Hamid Barkhordar, Sam Ferdows, and Merced Partners.

The app, which first launched this summer on iPhone only, was being bootstrapped by Ajay Kamat, Himani Amoli, Gordon McCreight and Dan Perez, three of whom had previous social community building experience from an earlier project called MicroMobs. Dan, meanwhile, came from Coupons.com.

Since its original debut, Wedding Party has expanded to Android, where it’s now available in beta. The Android version isn’t yet feature-complete compared with the iPhone app, says co-founder Ajay Kamat, so that will be an immediate focus for the company’s product development efforts. Longer-term, the team is thinking about ways to bring the experience of viewing the collected and photos to the iPad’s bigger screen.

“It’s very obvious that the consumption of the content on a tablet would be gorgeous,” Kamat says. “It’s definitely something that we’re thinking about.”

Currently, wedding guests and newlyweds can revisit their digital album after the fact either via Facebook (if they choose to publish there) or through an album on the Wedding Party website itself. In addition, thanks to a partnership with MyWedding.com, the album can also be integrated into the couple’s main wedding website.

When the team first created the app, they thought of it as something the couple would ask their guests to use on their big day, but they soon found that their users had other ideas. “The biggest surprise for us was that, almost immediately, we saw that people were using us months and months in advance of their wedding,” says Kamat. “They were using it to get their friends and family involved in the wedding experience early on. We’re seeing things like cake tastings, dress fittings, rehearsal dinners,” he adds.

To support this slight shift in focus, Wedding Party has been updated with features designed for all the expanded use cases. It now offers things like upgraded guest pages with collages of all the photos the guests were involved in, plus is has added the ability for users to tag people in photos. “Going forward, we’re going to be building more features that focus not only on the photos of the wedding itself, but the people who were involved in the wedding,” Kamat notes.

With the additional funding, the Palo Alto-based team, which has already grown from four to six will hire a couple more developers and designers to help them grow. They’re also actively working on adding more functionality, including the soon-to-arrive ability to upload photos from the web (desktop or mobile). Though seemingly minor, that feature could actually help Wedding Party grow from what may still be thought of, in some cases, as a supplemental album, to one of a more professional nature, as the couple or their photographer could now upload the high-quality photos from the big day alongside those gathered by friends and family.

Wedding Party is one of many new startups focused on the weddings space, including (but definitely not limited to) RegistryLove, Appy Couple, Wedit, Lover.ly, WedPics, WeddingLovely, Weduary, HoneyBook, Carats & Cake, and more. But while many of these companies are targeted towards the couple, or more honestly, the bride, Wedding Party is one of the few which is thinking about improving the guests’ experiences and involvement with the wedding, which in turn, ends up benefitting the bride(s) and/or groom(s).

For the newly engaged, or anyone else involved in the wedding planning (or those who want to remarry now that there are all these great services!), Wedding Party is a free download from here.

Like A Net Nanny For The Mobile App Age, AppCertain Alerts Parents What Apps Their Kids Download And What They Do

It’s rare to come across a service that’s directly tackling a problem affecting a large number of people out in the real world, but AppCertain is doing just that. Designed for parents whose children use an iOS device like the iPhone, iPod Touch or iPad, this new app-monitoring service sends out email alerts informing parents of the apps their kids have just installed, what those apps do, and whether or not they’re appropriate for children.

The project is being incubated out of Birchmere Labs, the seed and studio fund within early stage VC firm Birchmere Ventures, which now both invests in startups directly and incubates select companies in a similar fashion to the betaworks model. AppCertain is the first studio company that Birchmere has publicly announced, partner Sean Ammirati tells us.

Based in Pittsburgh, and staffed by a number of Carnegie Mellon University alumni, AppCertain aims to help busy parents keep track of the activities associated with the applications their children are using. It’s a “net nanny” for the mobile age, where it’s no longer just about kids coming across inappropriate content on the web – it’s about protecting children from the inappropriate content found in apps, too.

Although former Apple CEO Steve Jobs took a hard stance on keeping the company’s devices kid-friendly (he famously once said that Apple had “a moral responsibility to keep porn off the iPhone,” for example), the rise of social networking applications – like, most recently, Twitter’s Vine app – has made keeping that promise much more difficult.

And it’s not just pornography that parents are worried about. It’s also things like violence and gore, language, drugs and alcohol references, adult themes, whether or not the app allows kids and adults to communicate with each other, whether apps are accessing data or services on the phone that go beyond what they need to function, whether apps allow for private communication which parents don’t know about, and much more.

Explains AppCertain CEO Spencer Whitman, parents – even tech-savvy parents in some cases – have a hard time keeping up with all the new applications their kids are downloading, installing and using. Parents tell themselves they’ll keep track by taking the device from time to time and looking through all the apps, but often, that doesn’t end up happening because people are just too busy.

“The reason we started with parental help is there’s a big need for it, but also it gives us an opportunity to focus on one platform, to really understand what the applications are doing on there,” says Whitman. He adds that iOS is the more difficult platform to build on, so if they can be successful here, it will be no problem to port it to Android later on.

How It Works

AppCertain works a bit like TestFlight, the beta application testing service, in that it also takes advantage of iOS’s ability to load “security certificates” onto the device. Apple put this functionality in place so enterprise customers could better manage the mobile apps and devices on their network, but as TestFlight shows, the feature allows for other types of activities as well. In TestFlight’s case, that’s providing a platform for accessing and installing apps which have not made their way into the public App Store yet. And in AppCertain’s case, it’s about knowing what the apps on a particular device can actually do.

Whitman’s background is in computer security, and he previously worked at CMU’s CyLab with technology that runs a binary analysis on software programs in order to determine what that program – like Firefox or Word – does. “The initial idea was how can we bring that technology to mobile devices?,” he says, “because that’s where we see a lot of opportunity in the future.”

In AppCertain’s review of an application, it looks both at objective facts about how the app functions (e.g., does it acces the camera or GPS? does it upload your iPhone contacts to its servers?), as well as subjective information. On the latter, it’s more about answering questions like “is this app educational?” or “is this appropriate for a young child?,” for example. Parents will help with those questions through AppCertain’s community, which will eventually be designed to better automate crowdsourcing answers from its users. Whitman says the deeper behavioral analysis is also still being developed, and being able to fully execute on both of these fronts is around six months out.

Today, AppCertain’s app database comes from the 1,300 or so apps its earliest testers are using, and it’s adding around 10 to 20 more per day. When a parent first starts using the service, the tool is not yet able to send a full review of everything that’s on the phone or iPad currently, but instead will begin sending out email alerts from that point forward. (You can see an example of that alert here, for Snapchat).

AppCertain Will Be More Than A Tool For Parents – It’s Taking On Anti-Virus, Too

Further down the road, the longer-term vision for AppCertain isn’t one of being just a service for parents – it’s about re-imagining app security for everyone, and in particular disrupting the mobile anti-virus industry.

“Anti-virus is absolutely broken. With mobile devices there’s an opportunity to fix it,” says Whitman. “What we’re really interested in is understanding the behavior of every mobile application,” he explains. “That’s our goal. While we’re building more interesting analysis methods and while we’re adding support for every application in the App Store, we can help parents out right now.”

AppCertain is currently working with and out of Birchmere Labs, which has also seed-funded its operations (undisclosed, but under $1 million). It’s advised by CMU’s Dave Mawhinney; John Pera, former Chief Technologist of the Federal Communications Commission and White House Assistant Director of the Office of Science & Technology Policy; as well as security policy experts Jose Morales and Lujo Bauer.

30 TechCrunch readers can sign up for the private beta here: signup.appcertain.com/techcrunch.

Subscription Underwear Startup MeUndies Launches A Redesign, Now Sells T-Shirts And Socks

Subscription commerce startup MeUndies has a new look and new products. The company, which provides monthly shipments of boxers, thongs and other underthings, is rolling out a new design for its website. It’s also introducing a new, ultrasoft fabric for its products, as well as a line of other basics, including t-shirts and socks.

For those of you who have been wearing the same ratty underwear for years, MeUndies basically provides a way to sign up and have comfortable, attractive underthings mailed to your door once a month at a reasonable price. Its underwear comes in a variety of styles and colors and sizes, providing the right fit and look for pretty much anyone.

The Los Angeles-based startup just launched a massive redesign of its online store to make way for new products and to improve the conversion rates it sees. The old website had been built by a third-party developer, but for the new design, the company brought development in-house. The idea behind the new design was to make room for new products, as well as improve the order flow and make it easier to add products to be purchased. The old design had a fatal flaw in its checkout page, where if you added items without saving and then tried to leave the page, you would lose your order. That’s no longer a problem.

With the new site, MeUndies is adding to its collection of basics, including a line of men and women’s t-shirts, as well as a new line of socks. T-shirts will come in three colors and various sizes. Meanwhile, MeUndies will have an extensive collection of various sock designs to choose from.

The company has also been working on improving its existing products. Launched in early 2012, MeUndies has spent the last year listening to customer feedback in an effort to refine its products and service. The company recently switched to an ultra-soft modal for its men’s products, and it has a whole new line of women’s underwear coming soon.

That was the result of finding that many women were stealing their boyfriend’s clothes. So it switched from the generic, Hanky Panky-style lace underwear to a new, modal-based design that’s similar to its men’s products.

“We want to make such a good product that people are going to tell their friends about it,” co-founder Jonathan Shokrian told me while I was visiting the company’s office/photo studio/fulfillment center. In addition to redesigning its website and its underwear products, the company is also adding new sizes to accomodate customers. That means adding XS, XL, and XXL to its sizing chart across its product lines.

While the redesign should help in conversions and getting people to sign up to its monthly subscription service, MeUndies doesn’t plan to stop there. The company expects to launch a mobile app in the second half of the year to make purchasing its products even easier. It will also be going international, making all its products available outside of the U.S. and Canada. In the meantime, it thinks that having more products to choose from will help grow its customer base and revenue numbers.

EA Lays Off Employees At LA, Montreal Studios

EA has laid off an as yet unknown number of staff in Los Angeles, Montreal and at “smaller locations”. The announcement was made by EA Labels president Frank Gibeau, with the blame being placed on upheaval caused by the industry’s transitional period, as indicated by yesterday’s PS4 reveal.