Jason Fried of 37signals gave one of the talks which seemed most relevant to European startups. His business partner is actually from Copenhagen and they worked together for 2 years before meeting in person. Here’s a summary of his presentation and a chat I had with him afterwards.

• Bootstrap your startup because it teaches you how to make money. Funded companies are focused on spending it.
• Charging for something forces you to be good. People care about something they have to pay for so you will get very good and honest feedback.
• Useful is more important than innovative. “Cool” wears off, useful doesn’t.
• Software has no edges. This makes it more difficult to stop it from expanding beyond where it should. Think of your product as a museum and the features as the pieces of art you select. Only the most important pieces should make it into the museum.
• You can’t make just one thing. Every product has a byproduct. Again this is harder to see in software than with physical products. In the case of 37signals, books and conferences have been byproducts of the software products.
• Say sorry in the right way. Don’t say “we apologise for any inconvenience which may have been caused” when you should just say “I’m really sorry”. Talk to your customers as you would to any other human being.
• The best are everywhere, not just in the golden California Valley. So live somewhere you love. Don’t feel you have to move just to make your company work.
• Failure is not a pre-requisite for success or a rite of passage. Unfavourable comparisons are often made between the tolerance of business failure in the US and in Europe. Maybe we should worry about that less. Jason advises replicating what succeeded as opposed to learning from your mistakes – the results are much more predictable.
• Europe can be a less risky place than the US to start a company because of the social security system here. You are never going to starve or have to do without medical care even if it all goes pear-shaped.
• In some European countries it may be more frowned upon to succeed spectacularly than to fail. In countries like Denmark or the Netherlands, standing out is often not considered to be a good thing.

CrunchBase Information

Y Combinator

Information provided by CrunchBase

Recipients

The release of Google Wave has prompted a lot of discussion on the future of email or the lack thereof. InBox2 was inspired by the insight that people use their inboxes for all kinds of purposes including content sharing – sending themselves or others links or files – and storage. According to InBox2 people have an average of 2.9 email accounts. They communicate with certain contacts mainly via Facebook or Twitter rather than email and they access mail from multiple devices. Ideally, users should be able to filter, label and organise messages, documents and files arriving from all sources on any device.

Message Body

The InBox2 Facebook application let’s you select email and Twitter accounts. The application pulls all your messages (email, DMs, mentions) and organises them into threads. Documents and other files included in the messages are listed independently as well as being accessible via messages. You can add labels and hide certain people or message sources like Twitter. More services like LinkedIn and Hyves, the biggest dutch social network, should be added soon. Twitter status can be updated and emails sent directly from Facebook. One feature I particularly like is the integration of email and DM alerts into Facebook’s notifications. There are some teething problems – the execution can be flaky at times – but there is definitely potential in the concept.

CC

There are plenty of social media stream aggregation tools but InBox2 concentrates more on email. The most direct competitors in that space seem to be Fuser, Digsby and Zenbe. Fuser is only available in the US and UK. Digsby is a desktop client only. Zenbe already has a desktop and mobile apps as well a Google Wave clone called Shareflow. It’s a subscription service though while web access at least is free with InBox2. Still, Inbox2 has some catching up to do.

Destination Address

By the end of 2009, InBox2 wants to offer a holy trinity of clients: a desktop client and phone applications in addition to the web clients. I have seen screenshots of the desktop client which looks great and has nifty features like previews of file attachments. Once all your input streams are accessible via a single client it’s easy to see the scope for many kinds of value-added features. The phone and desktop clients will be paid applications. The web clients will be ad-supported.

Amsterdam-based Sellaband allows artists to request support from fans, or in Sellaband parlance “Believers”, who invest anything from 10$ up in an album. Funding music this way is not for everyone but it does add a novel and badly-needed niche to the music business ecosystem. Sellaband’s next challenge is to prove that fan-funding can work for artists at any stage of their career and that the model will transfer from Europe to the US. The Public Enemy announcement is an attempt to hit both of those birds with one stone.

How Sellaband Works

Once the funding target is reached the album is made and the proceeds are split between the artist and the believers. Various incentives like downloads and concert tickets can also be offered to believers.

Since Sellaband started in 2006, over 2.5 million dollars has been invested and 34 artists reached the original funding target of 50,000$ to make an album. Reaching the funding target has taken anything from 50 days to over a year. There are also distribution deals with Bol.com, the biggest dutch online retailer, and Amazon. Currently around 5000 artists are looking for funding.

New funding models

Thus far Sellaband artists have tended to be unknowns who wanted to make their first album. Sellaband recently changed the funding models available  to also target established artists. The two models are as follows:

• Standard: The funding target can be anything from 10,000 to 100,000$, the minimum incentive for believers is free downloads and artists choose how revenue is split between themselves and the believers. Previously there was a fixed funding target of 50,000$ per album.
• Custom: Sellaband a la carte. There is no limit on funding targets, the funds raised can be used for any purpose, e.g. concerts or promotion rather than recordings and the revenue split and incentives are entirely customizable. The custom model is invitation-only.

In both models the artists retain all master recording and publishing rights. The revenue share between artists and believers continues for a period of 5 years. Sellaband gets a 10% fee for each funding target reached. The new models can also seen as a reaction to the fact that recorded music is getting cheaper to produce and artists may want to spend the money raised in other ways.

Most of us choose movies based on rather amorphous criteria like mood or an association with another movie we like. Categorisations like genre are too wide; titles are too specific. Jinni approaches discovery in an intuitive way. You can search for movies and TV shows based on mood terms like “witty”, “stylized” or “disturbing” or plot elements like “unlikely couple” or “ambition”. The results are presented visually (we are seaching video after all) with more popular results getting bigger images. You can also tune results to request lesser known titles or faster paced content.

Links are provided to sites like Amazon, Netflix and iTunes (and for European users LOVEFilm) where you can buy or rent the content. The recommendation system learns rapidly based on ratings you give for the movies you find in the first searches. Within a few minutes it was coming up with recommendations for unfamiliar content as well as movies I already knew and liked. Jinni expects to offer high quality recommendations after 10-20 ratings. The database currently contains 25,000 titles, 20% of which are non-English language.

What’s New Pussycat?

The public beta adds several new features. The most important is the movie personality sketch which claims to identify each user’s unique entertainment personality. These are the parameters which are most common in your choice of movies and are presented in a word cloud with examples of typical movies with these characteristics.  You can then jump to other titles which share the same characteristics.

If you click on another user, you will see your shared tastes like “You both especially like clever stories about betrayal and gangsters” as well as movies you both like. Other community features like social recommendations and the pulse (what’s happening on Jinni right now) have also been introduced.

The Matrix (aka the Science Bit)

The most common recommendation method used by web sites like Amazon is collaborative filtering. This groups users who are considered to be similar to each other and assumes that if other users in the group liked something then you should also like it.

The core of Jinni is a “movie genome” similar to Pandora’s music genome, which categorises video content using 2200 different parameters or “genes” covering mood, style, setting, atmosphere, etc. Natural language processing and sentiment analysis to used to derive the genes from reviews and other information available online about the movie. The combination of algorithms used to extract the genes, determine their relevance and use them in recommendations is Jinni’s golden egg and a closely guarded secret. This is not an easy problem given the subtleties of language and meaning (“Is dark humour the same as irreverent humour?” “What is the distinction between assassin, serial killer and slasher?”) not to mention the unorganised nature of the web data which is used. It’s refreshing to see a startup which is actually tackling a difficult technical problem. Crowdsourcing is not the answer to everything.

Jinni has several advantages over other recommendation engines. As well as offering good recommendations quickly, it can explain why a particular movie was recommended based on the most relevant genes and even point out elements of your movie taste of which you may not have been aware. In contrast, collaborative filtering can only tell you that someone who has similar taste to you liked the movie.

A minimum of 4 reviews is required to analyze a title and even long-tail titles have typically been reviewed many more times. This method means that a title can be indexed even if it has never been watched by a Jinni user.

Top Gun

Jinni’s most obvious rival is Netflix, which just awarded a 1 million dollar prize for improvements to its recommendation algorithm. The founders of Jinni see the two services as complementary with Netflix’s main focus being content delivery while Jinni does discovery.  In fact, Jinni has already integrated with the Netflix API due to user demand. I don’t entirely believe the argument that Netflix is not a competitor. It seems unlikely that Netflix would place such emphasis on its recommendation engine if it was not seen as a fundamental part of the business.

There are many other recommendation engines (e.g. Tastekid, Clerkdogs, Criticker) but none of them seems to cover all the functionality available in Jinni or match its pleasing design. The closest is spirit to Jinni is probably Nanocrowd which uses its own 3 word genome called the nanogenre. An example is happiness-struggles-pretentious which apparently applies to “The Hours”.

Dirty Sexy Money

The Jinni team believes that just as most content on the web is free, while filters like Google rake in revenue, video content will become the commodity and personalised discovery the value-add.   The business model therefore involves  licensing the Jinni API to TV operators and Internet content providers as well as advertising based on user taste modelling. There are also plans to introduce a premium package with personalization features by mid 2010. In the longer term, Jinni wants to apply the genome approach to other products like books and video games.

We need to talk about your flair

This year’s Vodafone Mobile Clicks competition was a battle between Dutch and UK startups with 3 finalists from either side of the Channel. The prize money was ramped up to €150,000 this year so it was all to play for in the fight between the cloggies and the rosbifs. The prize was awarded based on a combination of votes from the public, Mobile Monday members and an expert jury. The jury gave the finalists a hard time on stage (in particular Rummble and MyNameisE) with most questions focusing on the money.

The Dutch Contenders

My name is E offers an alternative to the traditional business card in the form of multiple electronic cards for different situations. The card contains contact details including accounts on 50 social networking services and websites. The cards can be exchanged via phone or an RFID-enabled device called a connector (when two connectors touch the data is automatically exchanged). The company will charge for professional accounts and the connector.

Mobypicture shares content (which may also be geotagged) directly from a mobile phone with 25 social networks and content sites and it is also embedded into many 3rd party applications. The company provides a “backchannel” to businesses which groups all tweets and other content associated with a particular product, event or location. The business model involves charging niche publishers who want to push content to their site, the back-channel and white labeling. A premium service will be added later.

Layar makes an augmented reality mobile browser. The browser can be used to view layers which overlay data over the camera view of the phone, e.g. the asking price of an apartment for sale in the building in your camera view. Hundreds of layars are now available for the current free browser for Android. Revenue will come from featured layers, publication fees and white-labelling.

The UK Finalists

Woobius gave a great presentation on Woobius Eye, a mobile to desktop (building site to office) live collaboration tool for architects and contractors. This extends the existing Woobius desktop offering. A user on site can take photos, draw on them and get support from someone at the office viewing the same thing. The business model will be freemium. Woobius Eye is still at prototype stage but the company is already getting interest in the tool from other industries like inspection and maintenance.

Audioboo is an audio blogging platform which allows users to record, location-tag and share audio via an iPhone app. There is a free version which is ad-supported and premium versions for businesses or heavy users. Many newspapers and radio stations in the UK use the service.

Rummble currently offers an iPhone app for discovering content related to a particular location. It uses trust scores (users who rate locations similarly to you get higher trust scores) to return personalised infomation in searches. The company also just launched Twitter features which will search for tweets linked to a particular location, use sentiment analysis to decide whether the comment is positive or negative and link this information into Rummble. The free service is ad-supported, there is also a premium service and a B2B offering licensing  the APIs.

And the winner is…

The first prize of €75,000 went to Layar who also won the public vote. 2nd (€50,000) and 3rd prizes (€25,000) went to Mobypicture and Woobius. The jury commented that Layar has a window of opportunity of 6 months to become a global phenomenon. Watch this space.

Vodafone 360 People

When you scroll through your 360 contact list you will see status updates, photos, etc. of this person. After selecting the person you can then choose how to contact him, e.g.  sms,  email, IM, video chat. You can see friends of this user from multiple services and content associated with him like photos. There’s a very nifty 3D photo view of your contacts where the people you contact the most have larger images. The timeline (3D or 2D) view shows latest status updates and other activity.

Vodafone 360 Content

Photos can taken, location-tagged and then uploaded directly into Facebook or other websites. Vodafone maps allows you to tag locations.  It will be interesting to see how this will effect 3rd party applications which allow easy location-tagging and sharing of content between mobile and social networking sites . The music service will run on mobile and PC while 1000 applications are available from the 360 shop.

Developers

Developers get access to a billing API which allows charges to be added to mobile phone bill, a location API and of course Vodafone’s huge distribution network. Vodafone are also launching an app star competition with a 1 million EU prize fund awarded to outstanding applications evaluated on value to the customer, user experience and innovation.

Vodafone’s Motivation

CEO Vittorio Calao talked about how mobile data accounts for 10% of Vodafone’s  revenue. Currently 1 in every 5 new phone sold are smartphones but only around 15% of the customer base have a smartphone. Vodafone wants to target those customers. The fact that Vodafone isn’t selling the iPhone market in many markets may also be a factor.  40% of web page views are on social networks and most users access the networks multiple times a day; hence the emphasis on social networks.  Vodafone are aiming to have 21 MBit/s connection speeds soon in many countries in parallel with 360 services. 360 can be seen as a direct attempt to counteract the app-store effect which has seen operators been bypassed in favour of 3rd party app stores. Some might say that it is too little too late but underestimating Vodafone’s reach is usually a mistake.

While the Layar features are not very sophisticated yet, Augmented reality and 3D seem like a natural fit. TV technology is already moving to 3D (it was one of the big buzz words at the recent IBC TV trade show) and companies like Vuzix, who make video eyewear, are taking AR seriously for applications like aviation training. The latter showed me a demo using their very stylish new 3D wrap glasses which included a motion sensitive view, i.e. when you tilt your head to the right the video orientation doesn’t change, and tag-based augmented reality features built in collaboration with the German AR company Metaio. Even for a non-gamer like myself it was pretty exciting stuff and points the way to the next generation of AR applications. Maybe you will be plugging these glasses into your phone sometime soon to view Layar.

Distimo provided us with some UK-specific trend data for August. The overlap in popular apps between US and UK is much higher in the Android market than the Apple app store. Navigation and travel apps have the lowest overlap because of location dependencies.

Where is the money?

The release of Tom Tom’s iPhone navigation application single-handedly caused a big jump in the total price of the top 100 Apple applications. Navigation applications are by far the most expensive catgeory of applications in the UK but games also do well in terms of the top grossing applications. For example, on Sep 18, there were 10 games and 5 navigation apps among the top 20 highest grossing applications in the UK. Entertainment remains the most popular application category overall.

Apple Vs Android

Apple is still the king of the app stores but Distimo expects big growth in the Android market. If Nokia can get its act together and make it easy for Nokia users to download and access applications, it could be the sleeping giant of the application store market due to the sheer volume of Nokia handsets.

Android users seem to be quite different from Applers based on the applications they choose.  To me this looks a bit like the Linux-Apple split in the PC world. The highest ranked paid app on Apple in Aug was Camera Genius while the top free app was Sky Sports football score centre. The top paid apps on Android are all admin tools like Power Manager Full. Android users have a curious obsession with the weather putting The Weather Channel at the top of the free apps and a couple of weather widgets in the paid top 10. Social networking applications are more popular with Apple users. Is the iPhone for pleasure-seeking, social butterflys? Are Android fans serious, technical types who don’t trust any piece of hardware as pretty as the iPhone? Answers on a postcard to the TechCrunch Europe cod psychology department.

What does it do? GyPSii allows you to find places close to you, create places and add content to them, find friends who are closeby and share information with social networks like FaceBook. Currently the content is mainly user-generated but curated 3rd party data is being added. There isn’t a lot of content yet in Europe since the majority of users are Chinese. The Android application supports photo and text content only but applications for other phones also covers audio and video.

So far so FourSquare… but the ultimate ambition of GyPSii is to develop an index of place content which is analagous to Google’s index of web sites or FaceBook’s social graph. To this end the company has developed an algorithm called PlaceRank. As the amount of geotagged information explodes, filtering will become crucial especially given the constraints of the mobile device screen. PlaceRank combines location, demographic and social graph information to define the relevance of place information to a particular user. Machine learning is employed so that the user profile continually evolves based on behaviour. Large scale analysis can be performed faster and with fewer machines than other techniques and data is processed as it becomes available rather than periodically, allowing the index to be continuously updated in real time. PlaceRank is curently cutting its teeth in deployments with two Chinese mobile operators (Unicom and China Mobile).

The Business

GyPSii is pursuing quite a different business strategy from other apps which tie location to user content like  Brightkite or Mobypicture. Rather than acquiring users mainly via the app stores, the founders went straight for the handset manufacturers and mobile operators. As a result the application will now be preloaded on all LG and Samsung phones globally and well as on a new Garmin device. Since many users don’t really care which application they are using as long as it has the basic features required, pre-installs seem like a smart move. A wide range of phones are targeted, not just top end smart phones like iPhone and Android. The next phase will involve 3rd parties using the API to access some or all of Gypsii’s functionality, e.g. the Garmin device is using the friend-finding functionality.

Income comes from advertising via revenue sharing deals with the manufacturers and mobile operators as well as licensing the API. PlaceRank will be used to “micro-target” advertising. Coupons offered by businesses near the current location are proving popular in the Chinese market and click-through rates are high.

So what are the Chinese up to?

GyPSii’s biggest user base is in China where it tracks the activities of the young Chinese middle class, a large percentage of whom create as well as consuming content via Gypsii. 90% of users don’t have full Internet access – only WAP. The Chinese take photos of food a lot and have an insatiable interest in the outside world. Adding a place in Amsterdam can generate reams of comments in Chinese. A few local content specialities are staged kidnappings at weddings, photos of work desks (important in a culture where people have little private space) and car stunts.

GyPSii faces plenty of competition in the location-based service space but its trump cards are PlaceRank and a canny business strategy. As with our supermodel, you can always add gloss but you can’t fake bone structure.

Be clear about your zero cash day

Julian Ranger – Angel investor

This is the date on which,  assuming no sales or sales growth, the money will run out.   Why is this important?  Simply, it tells you what you must have achieved by that day, either an investment or real sales with real cash attached or both.   If  your zero cash day comes before you are ready for it you may end up in an unplanned round of investment. Your investors won’t be happy and they’ll request a greater pound of flesh for the unplanned second round (i.e. greater percentage of shares) or they won’t invest at all, in which case you’ll have to go cap in hand to new investors who, seeing the original investors not invest, will ask for a greater percentage.  So build in contingency when doing your planning; better to ask for slightly more than you need up-front than being under-funded.

Create an advisory board

Angel Gambino – Entrepreneur and board advisor

Create an influential and passionate advisory board who who can give reassurance to potential investors. Some choose to do this after raising finance, since there is a cost associated with the creation of the advisory board but advisory board members often lead to more money.

One big difference I see in Europe compared to the US is that people here are often ashamed of prior entrepreneurial failures.  In the US, failure is considered more of a learning experience as long as the successes outweigh the failures.  My advice to many other young entrepreneurs here is not to hide past failures, but highlight what you learned.

You only get one chance to make a first impression

Barak Rabinowitz – CEO of Amuso

First impressions are critical so your initial approach to potential investors should be orchestrated with care. Cut through the clutter with an intro from a respected industry insider. In the first round of funding you are selling a vision and your ability to execute it so it’s vital that you show off the right mix of talent and complementary skills to engage and inspire an investor.

Look for an angel

Lucien Burm – Founder of Kimengi

Go with angel funding in the beginning since Angels will give you much more personal support. Don’t take all the money on offer just because it’s there. Define your own targets and figure out how much money you need based on that. It can take a long time to conclude the investment. Often a lot of time is spent on the “getting to know you” phase rather than on the negotiations themselves.

Break bad news early to your investors

Sake Bosch – Managing Partner of Prime Technology Ventures

This builds a lot of trust and allows the problem to be tackled earlier. Be very transparent and make the VC part of solving the problem. A typical issue is that the startup burns through capital faster than expected. In this case, the support of your current investor is very important even if you are seeking new funding from an external source so you need them on your side.

Stand your ground

Stefan Fountain – Founder of  Soocial

One thing I have learnt from doing several investment rounds is to be more arrogant with investors. Be confident in what you know about the business and don’t deviate from that if you really don’t want to.

Apply to specialist funding programs when you are eligible

Simone Brummelhuis – Founder of Iens and TheNextWomen

Women led companies can apply to particular programs and funds which are specially set up to encourage female entrepreneurs. Such options include: Astia, which offers an investor readiness programme in both the UK and SiliconValley (applications now open); the new Illuminate Ventures of Cindy Padnos in the Valley, and in the UK, the Aspire Fund which matches the amount injected by a co-investor.

Establishing good relationships with possible investors is essential, but ensure you gain independent advice from your peers. Finally, don’t forget, with investors you are always pitching, even in an informal setting.

Bruce Sterling on AR

The Layar event was opened by science fiction writer  Bruce Sterling who has been blogging recently about the augmented reality scene.  He pointed out that the biggest language bases for AR are actually Korean and Dutch with English coming in third. Similarly, the greatest interest is not in San Francisco but places like Singapore, Lisbon and Amsterdam. Could this be a new tech industry which does not revolve around Silicon Valley?

He described AR as a “technovisionary’s dream come true” but warned of trouble ahead for the fledging industry as it will face all the problems which accompany any technology with massive commercial potential, e.g. the AR equivalents of spam and online criminalty, the Gartner hype cycle, the environmental impact. He imagined a “Crack dealers layar” or “Neo-nazi’s occupation guide to Amsterdam”.  Sterling also gave the audience a metric for maturity in their industry – when AR people have a characteristic, and expensive, look (“All Web 2.0 people took the same”). He was guessing it would not be dissimilar to the look of chic, off-duty Hollywood executives. If only we had more fashion talk in tech presentations.

Brightkite Augmented Reality from Brightkite on Vimeo.

Building a Layar

Building a new layar is pretty straightforward using the Layar API. A layar can be customised via a simple web form and an Android APK is available for testing. Full info is available on the Layar Wiki. The layars announced in today’s event range from Sapporo hot spots, Poetry in motion (geotagged poems), celebrity sightings and city soundwalks to mobile coupons. There are also plenty of layars for navigation, tourism and real-estate applications. 500 new developer keys were also released today so join the revolution and start building your own layar now.

Wakoopa tracks application usage in order to recommend new software, games and web applications. It has two main groups of users: professionals and hedonists. The professionals are generally developers or designers who enable the usage tracker during working hours and account for around 60% of users. Hedonists use Wakoopa to track games and entertainment applications. These users are stereotypical early adopters; what they use today we may all be using tomorrow.

The company just released its latest State of the apps report showing trends in application usage in Q2 2009. The report is based on 110K users of which 88% are male, although female users account for half of the top users. 40% are in the US while 30% are from Europe. It’s easy to bowlderdize a report like this especially when looking at trends across all users, e.g. Linux users have an entirely different usage profile to Windows or Mac fans, but there are some interesting patterns here.

Most popular applications

Firefox has clearly won the browser war in this group with 55% of users. It is the most popular browser across all platforms. Facebook is the dominant web site with 17.9% of usage time followed by Gmail at 10.5%. Twitter usage is growing steadily but still only accounts for 4.32% of usage time even though 25% of Wakoopa users are on Twitter. Windows Live messager is the most popular IM tool, followed by Skype.

Biggest changes in Q2 2009

Wakoopa Windows users racked up a huge number of hours on SIMs 3 in comparison to other new applications introduced in Q2. Tweetie is flavour of the month for Mac users. The biggest climbers in existing web applications were Habbo (a social network for teenagers) and Orkut (Google’s social networking site). Interestingly, the applications which experienced the biggest gains on Windows were both anti-censorship tools, Freegate and Ultrasurf, even though only a small proportion of Wakoopa’s users are in places like China where Freegate was originally popularised.

A day in the life

In case you needed convincing, developers are different. Development software is most used in morning and 3pm. Developers become less productive after 4pm when they start doing office tasks and entertainment. Peak application usage is at 4pm for everyone else. Most gaming happens on weeknights. Email peak is at 11am while social networks hit a high after 8pm, e.g. peak Twitter usage is at 9pm.

Age and apps

World of warcraft, the most played game, actually gets more popular with age. The heaviest users are 31-40. Over 50s are the most enthusiastic Skype users with 20.17% on Windows and 58.46% on Mac (talking to the grandkids?) while Asian users don’t seem to know that Skype exists.

Next for Wakoopa

Wakoopa now contains a database of around 300K applications and is in the process of rolling out services for large technology companies and research agencies who have customised use cases for application usage, e.g. an internet provider interested in usage across different broadband packages. Maybe in the Internet age, you are what you app.

In the next two weeks we will look at getting funding and dealing with investors. Please send any tips on these subjects via email or Twitter.

• If the idea is time-sensitive, reconsider bootstrapping

Nathan Vingoe, KangaReview

When you are funded you can do more, do it faster and get to market more rapidly.  So clearly, if the idea is time-sensitive or easily copied, get funding. Funding also brings with it a network of people who have been there and done that. The greater the number people involved, the more likely it is that suitable opportunities will cross your path.

• Do the expensive work yourself

Feargal Finnegan, stealth-mode startup

It helps if you can do as much of the complex,expensive work as possible yourself and offshore tasks which can be done on the cheap, e.g. UI work.  However, avoid off-shoring companies that do not have solid technical references. My experience has been that the quality delivered can be so low that the overall cost of the software would be more expensive over the long run once you factor in fixing bugs and refactoring.

• Have a sideline

Several founders suggested having another line of income. For Sam Barnett from Struq, which tailors ads to a user’s interests, the sideline was ad arbitrage. This means buying adwords from Google and selling to Yahoo at a profit. This didn’t take much time away from the product but provided a steady revenue stream.

Stefan Richter from muchosmedia suggested consulting or selling advertising space on your blog (if it’s popular) to keep the company’s product development going. He also recommended approaching potential advertisers directly and suggesting a fixed price. This pays much better than Google ads.

• Avoid false economies

Daniel Sim, Plug In SEO

Control costs but beware of false economies. Spending a week writing an app that you could simply buy in for $30/month doesn’t make sense. Conversely, relying on a web host that makes your product too slow to use means it’s time for an upgrade. Take on free (or very cheap) debt early while there’s still ample cash in the bank. Spend everything on 0% credit cards and view your cash strictly as a reserve.

• Know when to quit your job

Knowing when to give up your job is tough. Matt Rogers from Aroxo says it’s worth talking to your employer about moving to part-time working, or even switching to a consultancy arrangement to provide you with time to manage your start-up. Before quitting make sure you  have enough cash available to complete the development cycle, even in the worst possible release timescale.

Micheal Backes from eVenture Capital Partners told us how in his first startup, the founders set revenue targets for the partners to each step in one by one from their “real world” jobs. This allowed organic growth to fuel company size as opposed to getting VC money.

• Sell early

Stefan Richter, muchosmedia

My company is a one man band and since I’m primarily a techie it is lacking some sales and marketing skills. That didn’t stop me from pulling in a handful of sales. Those sales generate small but recurring revenue which provide a valuable lifeline for any early stage company.

In fact you can sell your product before it’s even ready. Right now I am working on my next idea and I already have a few clients for it lined up, based on a functional prototype. What could be more motivating than paying customers to get your product out the door?

• Less is more

Another tip received from several founders is to keep the scope of the first release small but functional. Kimengi, which makes a text content recommendation engine, launched a blog network recommendation widget in order to get things moving even though it’s only a small part of the final system. Mathys Van Abbe from Mobypicture suggests picking a small, simple problem within the scope of the company and solving it. This will also make the resulting product easy to use. Daniel Sim from PluginSEO advises startups to focus on a few, very happy customers.

• Get a face to face working space

The founders of Kimengi are convinced that you need a consistent amount of face to face time to produce quality work so this makes it worthwhile to get an office, especially if the company has more than two people. Kimengi also came up with the creative solution of sharing their office with other businesses. Andy Gill from Chatbadge thinks that co-working spaces are ideal. The main benefit is the opportunity for networking, feedback and collaboration with other co-workers.

• It’s ok to spend money on the right people

Mathys Van Abbe, MobyPicture

Don’t focus on small financial inequalities. If one partner needs a salary while another can manage without it, then give that partner the salary to keep him in the business. The key thing is to keep motivation high and the momentum going. Pay experts if they can take some aspect of the business to a new level, e.g. design or advertising.

Several founders also said that you should only hire people (freelance or otherwise) when you are sure that you can pay them. Your employees should not have to take the same risks as you since they are not getting the same rewards .

The Nimbuzz trump card is Skype VOIP. Unfortunately the Android app doesn’t yet include this but it is available in the iPhone app. The Android application also supports many local social networks like Hyves (dominant in the Netherlands) and a nifty time-sensitive user interface which does things like detecting how long a user presses on a contact; a quick click opens the contact’s profile while a long click opens a chat window.

Nimbuzz has also released to us the results of a survey of 21,000 users which reveals some interesting differences in how people in different parts of the world communicate. In Europe and the US, users want to check who is online as well as indicate their own presence and tend to mainly communicate with people they already know. In APAC and the Middle East users communicate with a higher number of people (over 15 in APAC) and are considerably more open to meeting new people in chatrooms. In fact, globally, 53.3% of Nimbuzz users communicate with people they have met online and 59.1% have made more online friends since joining Nimbuzz, though whether that is directly down to Nimbuzz is debatable.

When it comes to IM clients, strangely enough MSN is dominant in Europe while Facebook chat claims a large chunk of American users. Chat is used by the majority but VOIP is catching up especially in the Middle East and North Africa. Another significant, and related, difference is the networks being used to access the mobile Internet. Wi-Fi is the majority choice in the US and Europe while GPRS is still dominant in APAC (68%) demonstrating that market’s continuing love affair with mobile networks.

Currently most users are the prototypical “early adopters”, 41% of which already use mobile Internet daily. However, one trend which could signal that Nimbuzz is headed for the mass market is the rapid increase in female users. Until very recently the user base was 97% male and this has dropped to 85%. In fact, in the Middle East, the majority of users are single women who favour VOIP over chat. Since Nimbuzz is adding 1 million users a month, the company is rapidly becoming a serious force in this market to rival the likes of eBuddy (which itself just passed 1.2 million downloads a week from GetJar) and Meebo. Personally, I would keep an eye on whoever manages to enthrall those all-important female users.

• The TechCrunch Europe Guide to choosing your co-founders.
• The TechCrunch Europe Guide to bootstrapping your startup.

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SprxMobile has an interesting philosophy. They do not themselves want to become a huge global company but rather be the spark (hence their name) that sets off a chain reaction of activity in other developers and businesses. This is one of the reasons that they decided to make Layar an open platform. The company has also been receiving an enormous number of inquiries from companies and other bodies who want their own layar and this was also one of the reasons behind the decision. The first Layar developer day will be held in Amsterdam on Aug 17.

Unlike the current leader of the pack, Twitpic (over 1 million unique users), Mobypicture is not just about Twitter and not just about images. It supports audio, video and images which can be simultaneously  shared with 18 different blogging (WordPress, Blogger), microblogging (Twitter, Brightkite), media (Youtube, Flickr) and social networking (Facebook) sites. The service is also integrated into many 3^rdparty applications. In fact, Mobypicture is closer in terms of features to services like Tweetphoto or Pikchur than to Twitpic.

Groups receive particular attention. Content can be hashtagged or geotagged, thereby automatically being added to a group.This makes Mobypicture’s service particularly useful for events. Another feature called the backchannel provides a rolling update of Twitter updates and photos related to a particular tag and can be used by companies or events to track mentions. Since the introduction of the iPhone 3GS, there has also been a jump in audio content being shared on the site, e.g. 1-question interviews with the cast of Heroes.

Mobypicture’s business model involves a combination of premium services like directing content to some sites but not others, whitelabeling the platform for direct marketing purposes (e.g. a photo competition of photos featuring a particular product) and partnerships with niche publishers who will pay to be added to the roster of sites with which content can be shared.

Currently Mobypicture has around 100,000 users, 60% of which are from the Netherlands. The big issue is how it can expand beyond the Dutch market and compete with the bigger players like Twitpic. The features are certainly there as are some great promotional materials but we all know that great technology doesn’t automatically lead to great popularity. Mobypicture is banking on a combination of supporting niche sites (65% of their users post to Twitter, 35% to other services) to create stickiness and getting the right people to use the service. For example, the Traveling Geeks will be using Mobypicture for content distribution during their European tour.

CEO Mathys van Abbe has one simple rule when it comes to creating Internet products (Mobypicture is just one of his ventures). Make something which is useful even if there is only one user. Mobypicture satisfies that criterion but it’s still more fun to be part of a crowd.

However, Kimengi has some traction already. Two big names in the Dutch publishing world, Het Parool (an Amsterdam-based newspaper and ILSE Media (the biggest dutch blogging network), are about to announce the use of f>>dforward in their publishing properties. The widget is already being trialled by about 40 high-traffic Dutch blogs with a particular focus on technology blogs.

Martijn Wuite from Het Parool says this kind of content recommendation allows the paper to provide links not only related to the subject of the current article, e.g. other sports articles, but also to the interests of the user based on the preferences of similar readers. Publishers can designate particular sites as part of their network, e.g. Ajax football club fan sites for Het Parool, and recommendations from those sites will get higher priority. The thinking is a world away from some of the current “non-linking” theories spreading around the newspaper world at the moment.

But what of Kimengi’s positioning against Zemanta? There are a couple of notable differences between the two services. Kimengi has some catching up to do with Zemanta’s pleasing design while Zemanta’s roster of content sources seems somewhat less configurable than Kimengi’s. Zemanta is English-only for now while Kimengi already caters for multiple languages starting with Dutch and English. Finally, Zemanta charges for more than 50,000 calls per day. Kimengi expects to add premium services allowing companies to not only track how their brand is being written about online but also who is consuming that content.

Ultimately, Kimengi has bigger ambitions than the widget alone. In his canal-view office in Amsterdam (nice wallpaper too) CEO Lucien Burm told me that the widget is just the first step towards the highly-scalable, personalised and real-time recommendation engine on which the company is working. The launch horizon for the engine is sometime in 2010. One to watch.