categories
HOT TOPICS
- The Accelerator Conundrum
- The Startup Velocity Question
- Platform as a Service
- Man and Superman
- Web 3.0 = (4C + P + VS)
- The Future: End of Capitalism
- Capitalism 2.0
Thought Leaders in Mobile and Social: Not Just Wine in Bordeaux – Interview with Benjamin Mestrallet, Founder and CEO of eXo (Part 7)
Sramana Mitra: Up to a point everybody has to do it. Nobody finances concepts anymore. Everybody wants to see a business. So you have to bootstrap up to a certain point. Then, when you are in Silicon Valley or a place that has a seed capital system, you can get money to start. If you are in Bordeaux, for instance, you are not going to get any money.
Benjamin Mestrallet: No, but you can get money from the government. It is a bit different. You didn’t use to have angels in France. Now you have. At the time it was much easier for us to get funds from the government. We used some of that. This year we also met a spin-off. We raised a lot of money for the spin-off – about $9 million. This market is very different.
SM: Who is running that?
BM: Smoeone who was working with us for two months. When he joined we decided to spin off the company. So he went to raise money, and I helped him. This one is VC backed.
SM: What do they do?
BM: It is an ID in the cloud. When you go there as a developer, you can build an app inside your browser, test your app and deploy it to a platform as a service. This is a completely new market.
SM: Who invested the $9 million?
BM: The existing French funds that were with me plus Toba Partners. Their limited partner is Vinny Smith. He was the former owner of Quest, which was sold last September for a couple of billions, so he has some money. For eXo we don´t need that much capital, though, because it is a different market. For that new market, a lot of capital is needed to be the first mover. With eXo the strategy was to come into an existing market with an open source strategy to disturb that market.
SM: I am not a fan of raising too much capital for unvalidated businesses.
BM: If you look at Jive, they were the first in the market at the time, and there was a lot of capital to validate the market. They had to use a lot of capital to evangelize on the market.
SM: We have seen a lot of companies being developed in that mode, but I prefer the mode of development you have chosen, where you bootstrapped to validation and then you raised money so that you understand the economics of the business. Otherwise people tend to waste a lot of money. A lot of companies go out of business because they raise too much money upfront and don´t do the right things.
BM: That is true. We advise the new management not to overspend.
SM: But you can only advise.
BM: That is true.
SM: I always love hearing stories from other cultures and different countries. Thank you, Benjamin. Goodbye.
BM: Thank you. Goodbye.
This segment is part 7 in the series : Thought Leaders in Mobile and Social: Not Just Wine in Bordeaux - Interview with Benjamin Mestrallet, Founder and CEO of eXo
1 2 3 4 5 6 7
