Hello-hello, happy Sunday and welcome back to Sunday CET.
Here’s what I got this week: Klarna in Spain, Europeans and entrepreneurship, also Europeans dying because of pollution, and how plastic recycling is just a trick.
Enjoy!
Interesting deals
🇩🇪 SAAS for procurement
🇦🇹 3d printing plant-based salmon
🇨🇭 10x better image compression solution
🇫🇷 Joone raised series B from Vaultier7 for baby products DTC
🇩🇪 Cluno extended its series B for car sub biz
🇩🇪 Wunderlist has a successor called Superlist, backed by Cherry Ventures
🇫🇷 Qovery, a software developer of what they call a container as a service platform, raised $1 million.
🇸🇪 Klarna finally launched in Spain, in a smart back-to-back with H&M. We talked about why.
🇳🇱 Speaking of which, Klarna’s competitor Mollie does the same in Benelux and Germany, and just raised €90M to accelerate.
🇸🇪 Remember Dance from Berlin? A Swedish bike store operator called Stålhästen launched a bike as a service rental called Jonna, just like Dance.
🇸🇪 Also in Sweden there is a chain of un-manned grocery stores that’s being built up - they have 20 now. They say that profitability is achieved with one manager able to run a cluster of five stores.
🇪🇺 The hottest 35 startups in the Nordics right now
🇪🇺 What you need to know about the Nordic investment market in August.
Observations, research, data
🇩🇪 Nicolas Colin is singing the praises of Rocket Internet, the German investor which is known as the cloner from Europe. If you didn’t read it yet, go ahead and do it now, it is a well-argumented piece, as all the writing Nicolas is doing.
He does have a point, as Rocket Internet filled a big void in Europe at that time, which, Colin argues, makes secondary the fact that they merely imitated what American successful companies were building, since at the end of the day they managed to develop quite a few valuable assets too in spite of their rep.
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If you don’t know what Rocket Internet is, it’s worth reading their wikipedia page and the Controversy section. You may also be aware that history is not what actually what you think happened, but what remains written in the history books.
To make a quick parallel, in the 90s in Romania after communism fell and Ceausescu was executed, entrepreneurship meant racing to bring in American fast food franchises - McDonalds, Burger King etc. Specifically you would pay for operating a brand and its playbook and it was up to you and your skills to adapt those to the local market.
This is exactly what Rocket Internet did with tech businesses, except that they didn’t pay anything. They just copied mot-a-mot US companies which seemed promising because they raised money and added their own logo on top it, and created their own playbook in a market which was empty, like Romania was in the 90s.
And not only that, but also, upon building them, they tried to sell them to the guys they cloned from as “their European operation”. Boy, did that piss off some American dudes back then!
Some of the startups worked, most didn’t. Rocket Internet certainly built assets that returned money to the investors and others which now are solid European businesses.
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A topic that is less talked about is that by doing this the Germans had a bigger role in creating a new nomenclator of jobs, the startup jobs. They made startups cool in Germany and provided an educational structure and infrastructure, even though they were clueless about tech startups to begin with.
School doesn’t teach you the combination between tech and building business out of it. Back then and even today, school meant a lot theory crunching, as good as storytelling over a cup of coffee and most of the times senseless without practical support. You either got the concepts or not, and, in some cases, you got theory combined with mistakes made by corporates decades prior wrapped in business cases. Why corporates? There were not startups to learn from at that time.
The rest, which was actually everything, you learn it on the job. Back in the 2000s, your career path as a graduate was to work for a corporation, become a management consultant or an investment banker.
There were not too many startups, especially tech. Sure, there was an emulation because Google was cool and not evil at that time, but, just like now, it was just a small bubble. Especially in Europe.
And so, when Rocket Internet started, their startups clone incubator became an alternative, fast-paced, high-learning curve to a straightforward and rather boring career. And which today has led to a good range of qualified people who are skilled at working for tech business.
Rocket Internet was a huge school for kids eager to learn tech and business at that time, even better than an MBA in some cases - some of those guys are actually Euro VCs or successful entrepreneurs these days.
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But. Other than all those conjunctural spillover effects, the question remains:
Is it better to steal people’s ideas rather than create something from your own head?
Good artists borrow, great artists steal, they say, but Rocket Internet ain’t an artist, it was a bunch of rich kids willing to make a quick buck. We’re talking business here, and in US what they did can be treated as intellectual theft and you can lose your shirt if you’re found guilty.
And, beyond morality, in secondary markets such as Europe, it didn’t really matter for the consumers. It doesn’t matter anywhere actually - as always, the market will dictate what works or not, regardless of you being an innovator or just a mere follower.
And on to morality I don’t think there’s a clear answer to that, it’s up to one’s values and intellectual abilities, and, at the end of the day, that’s rather philosopical and personal choice.
And that is why the opinions about Rocket Internet are polarised:
Some people see the idea stealing. The lack of originality and of creativity. All those are associated with personal values and organisational DNA.
Others see happy customers benefiting from value created by those successful companies.
And others see some good assets that made some investors rich.
And yet another see the related jobs and an educational ramp that created a bunch of successful middle class, savvy these days in building startups.
But, overall, all those opinions are among a very small segment, a closed circle of people building stuff out of Europe. At the end of the day, as I said, the market is the only one validating your business, and that is customers giving you money.
It is certain though that there’s a good part of Europe following Rocket Internet’s blueprint, i.e. copy ideas and adapt to the local market. The continent is full - in Germany, France, Spain there’s plenty of startup clone factories today, they’re building their fame out of that. And there’s plenty of investors backing them up.
Problem is that this is just small thinking, with lower returns on investment as the risk is lower too. It’s not Champions League, it’s a secondary league for teams dreaming with eyes wide open to get drafted to CL teams some day.
And, on top of that, it’s other variables like path to liquidity, lack of fast deal turnaround and lower M&A levels that are part of Europe’s entrepreneurship problem and have been since the beginning.
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And so, are those guys part of the problem or part of the solution today?
Is Rocket Internet representative of the European DNA of doing entrepreneurship and innovation, by, as Nicolas puts it, “merely replicating models and strategies that have already been proven on more mature markets”?
Is this the European way of being a startup founder?
If this is it, it’s fine, but let’s call a spade a spade. We just need not be too hard on ourselves when asking why kids cross the ocean in droves when they want to create top products and businesses. In spite of US being a shitshow these days.
And us, outliers, we’ll always have the French/Germans/Spanish etc to make fun of when they will unsuccessfully try to clone Google, Amazon or whatever shiny new things Americans and Europeans living in America may invent.
Which begs another question, a bit meta - does Europe really need tech entrepreneurship? Why or why not - just because today there’s more money than projects, with a bunch of VCs sitting on funds and looking to justify their jobs? :-)
🇪🇺 How VCs hire in Europe + followup.
🇪🇺 The Cheat Sheet coefficient is a simplistic way of assessing the experience as founders and operators for the partners in a venture firm.
In case you missed it, just 8% of UK venture capital investors have experience working in a startup, vs. 60% in the USA.
🇪🇺 The buying market as we know it in Europe will be different in a few years. As always, change is coming from the US.
🇬🇧 Dominic Cummings confirmed he was looking at “ways we can build $1 trillion tech companies” in the UK. Anybody upping the ante?
🇸🇪 A good interview with a Swedish serial entrepreneur saying that there’s a lot of VC-backed Swedish startups that don’t create any real value. As expected, he got criticised by the local tabloid media afterwards.
🇸🇪 Scandic Hotels launched a new coworking concept at around 270 locations in Sweden, Finland, Norway, Denmark, Germany and Poland. 20 euro a day, unlimited coffee and wifi included.
🇸🇪 Volvo wants to get half of its sales from online channels in 3-4 years.
🇸🇪 Swedish label Kön has produced a range of gender-neutral underwear to demonstrate that products "don't have to be categorised" as just for men or women.
The underwear is made from plant-based textiles and comes in recycled paper packaging.
🇪🇺 If 'Europe' is to survive, we must decide what being 'European' means. What unites us? Shared values? A shared culture? A shared history? Are we any more than the sum of our parts?
🇫🇷 France will ban heaters used by cafes and restaurants on outdoor terraces as part of a package of measures aimed at reducing carbon emissions and energy consumption.
🇪🇺 In the EU, 13 percent of deaths are linked to pollution, according to the European Environment Agency.
13 is a big number.
🇨🇭 Resources for newsletter creators
🇫🇷 Why the French love to complain
🇳🇴 Donald Trump was nominated for the 2021 Nobel Peace Prize by a Norwegian Parliament member.
🇷🇺 The Russians proposed a draft legislation in Parliament for Apple and Google commissions on the sale of applications be capped at 20%. Apple currently collects a 30% commission on sales in its App Store.
Meanwhile there’s more complaining about Apple and Apple started to adapt its store’s rules.
Other stuff
The plastic industry pushed recycling because if consumers think it’s all being recycled, they’ll keep buying plastic things.
No more than 10% of plastic waste has ever been recycled. It’s never been economically or physically viable.
Capitalism: permanent remote workers will get a pay cut if they move from Silicon Valley.
That basically means you don’t get paid based on the quality of your work but based on where you live.
Would this kind of thing be even legal in Europe?
Facebook is doing a subsite targeted for schools, like it originally started in 2004.
Can anybody pls do the same for Instagram, which is as unbearable as FB now. I seriously think this could be lucrative too, was kind of waiting to see Flickr taking this space since they got rid of the corporate chains.
The Athletic says it hits 1 million subscribers after surviving sports shutdown.
Love their model and I am a happy subscriber but I find content sites usually getting bad as they increase in popularity.
It makes sense, the bigger the audience the lower the quality bar, and the Athletic is not an exception, I consume it less and less because of that.
Guess who else wants to make money from hosting virtual events? Google.
Those guys at FANGA are so bored with their jobs that they just copy each other.
How Patagonia is learning how to become an antiracist company.
Old investment memos - good resource for rookie investors.
Dogfooding Examples: Who’s Doing It Right? (dogfooding = the practice of eating our own dogfood)
Happy Sunday!
Thanks for reading 🙌
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