Video Of The Week: My Talk With Startup Milan

Last October, I skyped into an entrepreneur meetup in Milan and talked for 30 minutes. This was arranged by AVC community member David Semeria.

The main topics were building a tech community outside of the main startup hubs, raising angel and venture capital in a market where there isn't much of that, and the differences between US and european investors.

When I watched this video this morning, the audio and video were out of sync which made it hard for me to watch. I ended up listening more than watching. I hope you all don't have that same problem.

#VC & Technology

Comments (Archived):

  1. jason wright

    in 2000 i participated in a startup program run by a European university.fear dictated their every decision, their every action. ‘risk’ was a dirty word.i walked.

    1. pointsnfigures

      totally agree. my experience with Europeans in the risk/reward department has been similar. To a large degree Asians too. Not a lot of cowboys in those places. Most people work for big conglomerates, and never get their foot off first base when it comes to taking true risk in a personal business sense. Lots of fear.

      1. LE

        To a large degree Asians too. Not a lot of cowboys in those places. Most people work for big conglomerates, and never get their foot off first base when it comes to taking true risk in a personal business sense. Lots of fear.Fear of failure which is understandable.Growing up, the Japanese were seen as good at copying things but not innovating. (This was popularized in movies of Japanese taking pictures of everything and anything.) I guess if they took chances at all they were small gambles. Anyone remember the first Honda sold in this country? It had a motorcycle engine. Then the Accord was released (70’s) and totally kicked ass. It had something never seen before – a tray to hold your coins for tolls! That’s not a really big gamble. (Mazda gambled on the wankle engine and I’m sure the execs who did that suffered the consequences.)Here’s the reason perhaps that Asians don’t take chances I believe. They have that honor thing going on. That fear of embarrassment and family shame that keeps them rigid and in line. The fear of what others will think.In a sense this is fully understandable.Being raised by one parent that was European and grew up in a small town, many decisions made by my father were based on “what people would think”. And that made total sense when you lived in a small town back in that day (because you needed people there was no safety net or support system). Now of course it’s different. You don’t really need to depend on others as much as you used to.

    2. David Semeria

      Fear plays a role, but so does ignorance.A few years ago I was in a meeting with a $150m European VC fund and was trying to explain why the web framework I was working on was much better than Flash.I knew the meeting was over the moment they asked “What’s Flash?”That was the past, though. Already I’m seeing some much smarter people with funds to invest, and over time the ratio will only improve.

  2. William Mougayar

    The audio / video out of sync makes it look like you were speaking in Italian with a delayed English translation 🙂

    1. David Semeria

      It’s a real pity about the audio sync and unfortunately I can’t fix it.Fred was really on top form during this talk.There was real electricity in the air when the talk finished and the refreshments began. It may sound like hyperbole, but Fred’s words really gave a lot of people a lot optimism, hope even.

      1. pointsnfigures

        Hope is what they need since everyone else in the world will tell them they will fail. And some of them will. When they fail, pick them up and give them hope again. Eventually they will win.

      2. fredwilson

        That’s so great to hear David

    2. fredwilson

      Very disorienting

  3. JimHirshfield

    Bad Kung Foo movie.

  4. William Mougayar

    You drove home many of the key differences between agile & non-agile investment ecosystems, but this isn’t the first time Europe hears this.The cultural barriers stand in the way of the financial mindset change.What Europe needs is for their aspiring entrepreneurs to leave Europe, succeed in the US & return there in numbers big enough to change the culture. Otherwise, the aspiring entrepreneurs will keep getting crushed by their overwhelmingly conservative financiers.

  5. Massimo Sgrelli

    My name is Massimo and I’m an angel investor in Italy. I really appreciated your point of view, that actually I’ve heard from many other American investors before. The fact that European investors are definitely more risk adverse than the American’s counterparts, it’s true and real. Less money on the table and less risks taken generally. Probably we need to have our first billionaire coming from the software business or from the startup market to believe that it can be done, here and now. Wealthy people in Italy don’t easily understand how that it can be done, they don’t believe that a 20 something bunch of geeks can make the difference. But I’m sure that this will change very quickly in the future. We need time and success cases… and more angel investors as well.Thanks to Marco Ottolini and David Semeria for this wonderful StartuppaMi event.

    1. awaldstein

      Really well said Massimo.In Milan at least, there is talent aplenty and great work is being done.The barriers are breaking down a bit more each and every day.I agree Marco and David deserve a lot of credit for their work there!

    2. William Mougayar

      The issue is that many of these future billionaires are still in the making, on their first or second venture.You need to have made your money from that same ecosystem in order to feel inclined to be generous enough to give back to it.If you have made your money from real estate or publishing, they are your sweethearts and you will treat Tech VC investment as a side hobby.

      1. awaldstein

        Don’t agree completelyIf that was the case then nothing will every change until an entire new generation of investors comes on board.Investing is giving back at one level. But investing is a business and there is money to be made and big changes to happen by understanding how to leverage tech.As a sales person I appeal to the smarts of the customer, in this case the investor. It doesn’t always work but it certainly can.

        1. William Mougayar

          I think we will disagree on that. Yes, this is a generational gap, and Fred alluded to it in the video. Look how long it has taken New York to find its own groove and ecosystem self-sufficiency.Only those people that made their money in Tech will be the driving forces for future investments in Tech. That doesn’t mean those driving it won’t attract traditional investors as their LP’s, but that’s the extent that traditional money will dip its toes into the risky tech startup business.

          1. awaldstein

            Of course you are correct at the core and the majority level.But…and this is where we differ.-Tech in many instances, especially around transactions and marketplaces is not about tech, it’s about the community around the objects being sold. Who knows or has a better vested interest in owning their brands online than the fashion industry for example?-I just don’t ascribe to the fact that because it’s been that way it will remain so. Everything is globalized. Funding will as well. I have Portuguese friends in the tech end of the movie business who are funding startups in Lisbon. They are bringing the culture back to their roots.Sure stuff takes time but the future is not dependent on the schedules of the past.I still owe you a bottle of Chateau Musar on your 100th post though William.

        2. LE

          As a sales person I appeal to the smarts of the customer, in this case the investor. It doesn’t always work but it certainly can.Agree.I think people who get frustrated easily and have no resilience are the first to fall if there is no low hanging fruit of success. They quit trying just because things aren’t immediately easy. And whine and make excuses.There is a big difference (in selling) when you only have to make a few sales vs. make sales everyday.If you go out and don’t make sales and cold call every day you may have to consider finding another product to sell (or another line of work). (The first thing I tried out of college I went cold calling for several weeks and judged by the response to the service offered it would simply take took long to find enough customers so I changed to another business and that worked immediately when I cold called the first day.)So if you only have to make 1 or 3 sales (“find investors”) you can keep plugging away because eventually things will hit if you keep plugging away.Dating is a another example. People get frustrated and give up on online dating because they have had bad experiences and it’s hard to meet someone they like. But the thing is you are only looking for 1 person and when you find that one person you are done. I was very persistent with online dating with my approach and I’m now married.In the case of looking for investors (as you are mentioning) the same is true. You are only looking for a limited number perhaps even one. And when you find that one investor you have achieved your goal.

      2. jason wright

        no contacts, no relationships, no trust.

        1. William Mougayar


      3. JamesHRH

        Lived this in CGY. Comfort level is key.Congrats on AdvoHub deal.

        1. William Mougayar

          You’re thinking about oil money that doesn’t go into tech either, right? (Thanks)

      4. Abdallah Al-Hakim

        I think the European startup scene is thriving and continue to grow and will be led by Northern Europe. There has been terrific technology startups coming from that region and I expect more will and along the way more entrepreneur-VC types will emerge

    3. peter

      Skype, spotify, minecraft from the top of my head. How many successes do they need to see? 🙂

      1. David Semeria

        If you can also name an Italian internet company off the top of your head I’ll send you a bottle of Barolo

        1. ShanaC

          i can name one looking for a round funding (which I believe I will be doing a short term gig for in exchange for going to florence….)

    4. robertdesideri

      “Probably we need to have our first billionaire coming from the software business or from the startup…””We need time and success cases…”Yes, Massimo, I agree. There was a lovely well educated woman I dated many years back who liked to say “if I was tall, thin and wealthy” I could …”. She was thin and becoming wealthy, she knew she was at a disadvantage for height, accepted her DNA. Smart.The European distaste for those risky seed investments appears to be in the culture. That’s possibly why so many young well educated entrepreneurs head for SF, Boston and NYC (and perhaps Boulder if northerners). BTW, we see this in the USA too, in fact just last week I heard your refrain, in a US city known for it wealthy inhabitants, from makers and startup types.Every city is a SV wannabe, it’a a pandemic at the moment. The cure is reality, in many locals it’s just not in the culture. The DNA is not a match. Almost all cities are better to stick to their knitting. In the case of the mentioned US city I believe it’s country club secured debt deals on the golf course. Generations will not change this, their kids will be selling their parent’s houses, living elsewhere and investing their trust funds elsewhere.Don’t fight the tape. Changing the European investment culture, any national culture for that matter, is a non-starter. Import the seed or relocate the startups to the USA. Here we _trust_ the kids and their crazy big ideas and the governance framework. The USA is the easiest place to create and build a company, just not in every city. The time is now, do it now or your opportunity will be undertaken by a US-based kid, it’s not going to change quickly, if at all. The trend is your friend :)A handful of success cases are like strappy red high heels, at the end of the day it’s (a) just fashion and (b) a pleasant and appreciated deception. DNA matters.Disclaimer: I could be wrong, this post does not constitute investment advice.

    5. ShanaC

      what would need to change in order to normalize some measure of risk?

  6. pointsnfigures

    One thing that goes unsaid is what are the tax incentives in place to engage in startup investing? Remove the taxes and the incentives change.

    1. fredwilson

      I am not a student of tax differentials but I am sure its a factor

  7. awaldstein

    There is startup chutzpah on the ground in Milan. Trust me.I’ve experienced it first hand and can attest to the energy, the smarts, and a unique point of view that the people and culture brings.More and more, US VCs are funding companies in Europe. More and more startups in Europe are moving to the US markets. And while tech may be new as an investment, investments in other areas has been alive and well for awhile. It is changing as I write.PIty about the quality of this video. I’ve seen it w/o issues and Fred’s talk and the enthusiasm and unique point of view of the community there was a great watch.David–great work in Milan!

    1. David Semeria

      I’m really sorry about the video quality. It works fine from here.Unfortunately it’s the only version we have.Thanks for the generous comments Arnold.

      1. David Semeria

        Actually, the audio is crap from my end too.

  8. Esayas Gebremedhin

    when the first people from europe came to south america they used to laugh about native americans who used to plant different potatoes species (big and small) instead of only big once. they finally found out that the variation in their planting strategy was successful because more and more potatoes survived insect attacks.

  9. William Mougayar

    Summary of the talk:Beam me up, ScottyGo to the mountain, Moses

  10. Benjamin B.

    Dear Fred,Listening to you helps me understand how far France is from a real startups ecosystem and, unfortunately, it’s getting worse these days.I would clearly encourage french entrepreneurs to start overseas to give their project most chances to grow and be successful. That being said, they should understand that if they plan to grow too fast, dreaming of being bought by some big groups they might fail. On the other side, if they truly believe in what they are building and how it could change people’s life they have more chances to succeed.And on from the investor point of view I must admit being more attracted by american startups than french or any european ones and that is a real shame.I hope Europe will quickly understand what is going on and work hard on encouraging entrepreneurs, startups and… investors.All the best,Ben

    1. William Mougayar

      We need to bring @loiclemeur into this conversation 🙂

      1. Benjamin B.

        Loïc understood a long time ago that France wasn’t the right place to raise a startup! 😉

  11. george

    Creating a new fertile angel/VC community requires pioneers, people to lead the charge. It happened this way in silicon valley, NY and now hopefully in Milan and many other places. I think it’s important to recognize that in both colonized regions there was an implicit message map established early on by these pioneer investors – don’t give in to greed. For communities to sprout, it takes the right ethos – passionate investors (like Fred), who understand entrepreneurs, their needs and how to best coach them through adversity. Talent and capital are drawn together where they are treated best.

  12. jason wright

    how’s the weather?

    1. William Mougayar

      Sunny! And yours?

      1. jason wright

        it was snow, it became sludge, and now it’s just rainy.

    2. fredwilson

      It is gorgeous in NYC todayI love the city when its bathed in snow

  13. JLM

    .One of the great experiences of my life was a visit to the Amalfi Coast and hiking the Path of the Gods above Positano and Praiano.Unbeknownst to me it was over 100F and I completely missed that fact thinking, wow I am really, really hot. I had a Coke that day on a terrace overlooking the water which was and still is the best beverage I have ever tasted.We visited a church from the 1400s and it was a real treat.I think one of the fundamental issues is simply our comparative views of history, including investment history.Our Nation was built last week and we are a nation of builders while Italy and Europe are literally Old World countries in which their entire infrastructure is long since settled. Only wars have unsettled their built environment.I love Italy and the Italians.JLM.

    1. David Semeria

      In Italy there is much to appreciate and much to deride.You only really get the full picture after living here for a decade.

      1. JLM

        .With the long list of things to admire and appreciate, I suspect I would never, ever get to the things to criticize.I love Italy.JLM.

    2. JamesHRH

      The haves have in the Old Worlds. Why would they invest in the have nots?There is a stagnant logic to it.

  14. JLM

    .This is just another example of how the Internet is driving the world closer and closer. In the last week, I have spoken to folks via Skype in London, Japan and Singapore. It is just amazing.I also Skype my wife from my office to hers which are only 60′ away but that is a different problem altogether. Serious level of laziness enhanced by technology.The enthusiastic reception of Fred’s wisdom — the product of a communal interaction among David, the vehicle, Fred’s Place and Fred — is the seeding of a healthy and vibrant cross culture as it relates to VC and that is how these things happen.A single seed is planted and the growth begins from that alone because, in this instance, two smart and clever guys saw the possibilities. This is exactly where government needs to get out of the way and let capitalism and markets work their magicIs this a great world or what?Well played, David & Fred. I am proud to see the embers roaring to life.JLM.

    1. David Semeria

      They never died JLM :)I’ve been busy trying to leave some trace of my existence.Some people have a made it and some have yet to.Brothers all the same – it’s the attitude that counts.

      1. JLM

        .No, of course, it has always been so. A country that conquered the known world has in its DNA something special.And, there is no more hospitable place in the world and the food? Did I mention the food?We are all brothers under our skins.JLM.

    2. andyidsinga

      I’ve skyped with the fam beijing to portland – of course I f’d up the time diff and woke them up at 5am (oops).I occasionally try to skype with my wife when we’re about 25′ away ..never works 🙂

      1. JLM

        .Wow, that is great.My wife is a willing Skyper as it is her favorite method of delivering my orders. Works every time.JLM.

        1. Aaron Klein

          We haven’t done the Skype thing for that. I generally receive my directives via text message.

      2. Aaron Klein

        My wife was in Europe a few months ago and called me on FaceTime at 2 in the morning. Of course, I had my phone on do not disturb, but she was in my favorites list so it dutifully rang. 😉

        1. andyidsinga

          it is amazing how forgiving we can be with the time zone mess ups when our sig other is on the other side of he world 🙂

          1. Aaron Klein

            Indeed. 🙂

    3. ShanaC

      Laziness enhanced by technology…is this something we want to encourage?

      1. Dave W Baldwin

        Don’t worry, we humans are adaptive, being lazy with/without tech

    4. Abdallah Al-Hakim

      I still love face to face meeting but the ability hold meetings via skype or Go2Meeting is amazing. At my new job, our current VP of marketing resides in Boston despite that the fact that the company is Toronto-based. When I asked the CEO – his answer was that to get the best people you have to remove geographical barrier. I think a big reason why this is a doable alternative is the improved connectivity and collaboration via the internet.

  15. andyidsinga

    at approx 10:50 – love the part about 100 page business plan and spread sheets and no correlation between how well you can write business plan and how good of a business you can build.investment directors in big corporations doing internal “venturing” and “incubation” need to learn think like that too 🙂

  16. laszlo kovari

    Doesn’t seem related but I think it is: were you still having breakfast at the beginning?

  17. jason wright

    scaled networks need strong and well placed ‘circuit breakers’ to stop negatives ripping through them at uncontrollable speeds.the second amendment and gun laws are nothing as to the threat from Raytheon’s RIOT to social liberties. That is a doomsday weapon. networks like FB will have to fall.

  18. Seriously_Please

    Thanks for sharing the insights. Looked liked people in Milan really enjoyed it as well. As I was watching it the first time, I thought it would be helpful if there were place markers or tabs next to the video player for publishers i.e.,TRT 17:45, you talked about the narrow point of the wedge, which was a great way to introduce the journey of building a company.