Some thoughts on the European Venture scene

Saul Kleinsaul@indexventures.com

Web2Expo – BerlinOctober 22, 2008

The weather looks pretty terrible right now

No wonder Jason was getting depressed

The Valley is seriously downbeat

Though Dave McClure did shout out a “get over it”

Fact is start ups are really tough

You have no customers

No money

You and your team are fighting an imaginary war

Armed just with some big ideas

But hey, we’ve fallen from greater heights

Founded IPOVC

Some of the greats started in depressions

FoundedIPO

VC >> ?

Many major winners started during and after the last bubble

Now the Internet is nearly 6x the size of 2001Hosts

How we spend our time online has shifted radically

Big 3 Social 14

Minutes 159 bn 141 bnMins/Visitor 5 13Page Views 216 bn 296 bnPages/Visitor 125 583

This shift will have big, long term repercussions

We’re living in a new technical world order

Firefox has 42% market share!!!

We now have substantial shared “public” resources

New platforms are changing infrastructure and distribution costs

Free resources exist to support and educate start-ups

8 hubs 80+ cities

Boulder

Leeds

Utrecht

Helsinki Hamburg

Paris

Belgrade

We will almost certainly face severe and sustained recessions

- 61% YTD

- 63% YTD

- 49% YTD

- 40% YTD

- 62% YTD

- 56% YTD

But where the Internet is used has changed dramatically – its not just the US anymore

There is still a lot of capital to invest in Europe

Capital will look to back people who understand the new reality

Angels will retreat

Focus. Don’t panic.

Bootstrap Like Crazy.

Focus. Don’t panic.

Bootstrap Like Crazy.

Focus. Don’t panic.

Make products people want.

Get Paying Customers.

Bootstrap Like Crazy.

Focus. Don’t panic.

Make products people want.

Get Paying Customers.

Cut costs. Get to break even

Bootstrap Like Crazy.

Focus. Don’t panic.

Make products people want.

Raise enough capital. Stay Strong.

Get Paying Customers.

Cut costs. Get to break even

Bootstrap Like Crazy.

Focus. Don’t panic.

Make products people want.

Whatever works for you use it.

Good luck

Appendix

Some interesting data….

Latest figures show European investment is going up

Europe already had three $ bn investment hubs

Why break-even and capital are important