Thoughts in Time

I’m really happy to announce that Pikum has closed our Series A financing. It was led by Virgin (Virgin USA to be precise), and First Round Capital participated as did some of our early angel investors. We’re excited to have Virgin on board as an investor and really happy to have First Round’s continued support. Getting the round closed was different than any other financing I’ve been involved with , mostly due to the intricacies of Gibraltar law (more on that in a future post), however the team and I are now focused on continuing to move Pikum forward to launch. Here’s the copy for the full release.

Social gaming start-up Pikum closes £2.6 million financing led by Virgin USA 5 March 2008 – Pikum, an online social gaming start-up launching in the UK, has secured investment of £2.6 million from Virgin USA.

Pikum – a new kind of game created and played between friends - is the brainchild of 28-year old entrepreneur, Sean Glass, who previously co-founded higher education-focused online financial services company, Higher One (Higher One was ranked number 85 on the Inc. 500 list of fastest growing U.S. private companies in 2007). Pikum’s founding management team also includes Johannes Larcher, Pikum’s CEO, who was a member of Overture’s executive team until its sale to Yahoo! in 2003, and most recently was CEO of online education firm Academy123 (acquired by Discovery Communications in 2006).

The funding round included participation from leading early stage U.S. based venture fund, First Round Capital, who also led Pikum’s seed financing in March 2007. Sean Glass, founder and chairman, Pikum, says: “We’re working hard to build a game and platform that is easy to use and provides great competitive entertainment for groups of friends online. Having the backing of a global brand that stands for entertainment, fun, and high levels of service is great validation for what we are building.”

More details will be available later in Spring 2008. -

With friends like these… how can Seesmic fail? by ZDNet’s Steve O’Hear — “Having secured $5.5 million of funding from investment group Atomico (Skype’s Niklas Zennstrom, Janus Friis and co.), Loic Le Meur admits he didn’t need the money. And yet he’s enlisted a further twelve individual backers for his new startup Seesmic — which has been described as “Twitter for video” — the list of which is peppered with the names of some of Silicon Valley’s most successful and well connected entrepreneurs.”

I found this article fascinating for a number of reasons, and thought I’d write about three of them

1. It illustrates why taking smart money from connected people makes sense, even if you take a little extra dillution. I have heard young entrepreneurs who are hesitant to expand a round because of a small amount of extra dillution. Taking the small extra dillution while having the buy in of people with great networks who will be willing to reach out through those networks to the benefit of the business is well worth the dillution. Seeing someone as succesful as Loic do this is a clear demonstration that it is a winning strategy.

2. It’s really interesting to see the interconnectedness of the valley / venture community. As I’ve been meeting with people in London over the last month, I’ve come to realize that even in a city like London, the core entrepreneur / VC / Service provider eco system is relatively small. There are networks within the network. Let’s call places like Silicon Valley, Seattle, Raleigh Durham, London, New York, Boston, Beijing - etc… Venture Hubs. I think that within each hub, there are what I would call dominant strong networks. These are the networks of the most active, currently succcesful people. Think of them as the top tier VC’s, entrepreneurs they’ve funded, and the vendors that serve those companies (Lawyers, accountants, bankers, etc). I think that once you become part of this network (well represented by the network graph in the article) you come to realize that most people within that network know one another - that’s why I would term it a strong network. From those networks, you also have much larger, let’s call them passive loose networks. These are composed of the more casual acquainenances, employees etc. who often have connections to the strong dominant network in the venture hub, but aren’t a part of it (by being directly involved). Within each venture hub, I think entrepreneurs who can become part of the strong venture hub (by engaging members as investors, advisors, etc) have a better chance of success. I also think that when someone is moving to a new venture hub - as Loic has with his move to the valley, and I have with my coming to London - there is an opportunity to provide value with the perspective and connections one has with the venture hub one has left. For instance, one of the people I met here is starting a company in the healthcare / IT field that might be a really good fit with what Connecticut Innovations funds… and he was looking at how it might be brought to the US. I was able to be helpful with an introduction.

I’ve always been really fascinated by networks and have a strong belief that the ability to build strong relationships and help others in one’s network is a strong indicator of one’s chance to succeed as an entrepreneur or venture investor. When I start with the Master’s in Applied Positive Psychology program at UPenn, it’s an area I hope to explore / research.

3. There is a disconnect between the idea that having a strong network in order to be able to start a business, and the fact that many succesful companies were founded by young entrepreneurs who started with a very limited network. I wonder if there is a correlation between how fast the company network grows and the chances for success, thus it’s not the network size at the start of the business, but rather the rate of change of network size / number of strong connections that is an indicated. Of course, this might not work with entrepreneurs who start with a large network - so maybe the answer is to look at rate of growth of number of strong connections with the company. This could come from new connections that become strong (strong meaning having a 1 degree separation from direct involvement - board, investment, partnership, advisor, etc), or from existing connections that move into this category. I’d be interested in what others think about these ideas, so please comment / send me your thoughts.

So I wrote about why I wanted an office and why I believe an open office makes sense for a startup.  In addition to wanting a good space, I didn’t want to waste a lot of time looking for a space - it’s more important that I’m working on getting the business of the ground than touring buildings around London.  So, with agreement from Johannes on a general price range and location (cheap, but easy commute for Per, Araz, and me), I started my search.  As we wanted to find space that we could get on a short term lease, and didn’t want the hassles of getting telecom, broadband, etc we decided to find a serviced office.  I visited a number of sites last night (starting around 10pm). Easy Offices, Instant Offices, Regus…etc..  I found a couple places that seemed pretty well suited - right price range, good central location.  I filled out the online contact forms, hit submit, and went to sleep.

Luckily I didn’t sleep in. At 8:30 AM I received the first call from a rep from one of the services asking for further details (start date, # of people, type of biz). They sent more options and I picked a couple that I thought would work to arrange viewings. One in particular caught my eye - the wonderfully named “utopia village”.  I emailed the agent to see if I could see it today. 2pm - Met araz at Chalk Farm tube stop - closest to the utopia.   We walked around the area.  Shops, pubs,  couple blocks from the park - Nice!   We met Ben - the manager for the property and he gave us a quick tour and showed us what was available.  Great light, right sized space - perfect for our operation…Short negotiation and an hour later we had a deal on an office. We move in Feb 1.  Now I can focus on everything else to get done .

With my arrival in London and Per’s starting January 20th, we’ll have our key three people in London (Araz has been here all along!). Araz was ok working from home, but now that we’ve got a team, I wanted us to have a shared 1st life office space. As a startup, I think there are a number of things to look for in a physical office environment. I’m a big believer that the physical space one occupies affects one greatly - from how one’s home life is to how productive one is at work. I think that small startups are best setup with open plan workspaces. When I say open plan, I mean desks without cubes… This can be distracting as the company grows, but headphones are a great way to create a “personal space.” There are a number of reasons I think it works well:

• It promotes collaboration - with 3 people in a small space -there’s no choice!
• It creates a culture of open communication - There are no secrets with open space.  You’ll know what people are up to and vice versa.  If you have to have a compensation discussion you can do it in a dedicated meeting space.
• It makes it easy to quickly problem solve (and there will be problems) - if I don’t know the answer, I can ask someone without knocking on an office door or worry if I’m bothering them - I can see if I would be right away!
• It creates the right culture of “Us” vs. the world - We’re in it together - we can easily see that!
• It makes for easy knowledge transfer - A whiteboard is essential for keeping top priorities in an easy to view format
• It’s cheap - hey - you’re a startup - unless you got that Aeron chair at a yardsale, don’t waste $ on your office or your furniture. Desks are easy to get cheap, or make… cubes… not so much, and separate offices - not even close.

Today I went by Higher One to wrap up some last small details and to clean out my desk. I have really enjoyed my time building Higher One with Miles, Mark, Casey, Dean, Rob, and the rest of the team. We have been lucky to also have a great group of investors who believed in “3 college kids starting an online bank for students in March of 2000.”…I am really proud of the team we built in the marketing group too and know that Lisa, Don, Shannon, Kelley, Katie, David, Andrea, and Brad are going to continue the great work that I was able to help them start on with Higher One.  I will miss everyone and thank them for continuing to consider me part of the Higher One family as it continues to grow!  Of course, with an ending comes a beginning and I’m super excited about Friendent and moving to London. I’m off to London again tomorrow - I’ll be meeting more of the Pikum team there for a couple meetings.   I also may stay my first night at my new digs (on an air mattress no less!).

I got back from the UK wed evening. Today - Thursday - both the movers are here, as is the snow.  They got here at 7:30AM. Luckily that felt more like 12:30.  Since we’re moving to a smaller place, not all of us our stuff is going, however there is still a large volume of stuff that is being packed and moved.

I’ve got to say, there’s a lot to be said for hiring experts. There is no way I could pack like these guys.  Fast high quality packing is no joke. 147 boxes later, I feel confident that our stuff will arrive undamaged at our place in London… All this and they finished before the snow really started to come down.

Today Araz and I got together with Carrot Communications on our messaging outline for the launch of the business. It was an enjoyable session with all of us coming to some key conclusions about how we’ll segment our market and the subtleties of our message.  We’ll be refining the messaging and using it as the backbone as we launch in early 2008.

After a brief stop back in the U.S. for the annual Higher One holiday party and a board meeting, it was back across the pond.  This time of year is terrible for flights.  I do have to say, my first flight on a Boeing 777 was pretty pleasant.  American Airlines has more leg room than Virgin in coach, and although the service wasn’t as good as Virgin’s, it didn’t matter as I was fast asleep for 90% of the flight.  It feels good to be heading over for a 100% work focused trip.

I’ve been traveling non stop (London, New Haven, London, New Haven, Virginia…) so although there’s been a lot I’ve written about on the way, I hadn’t had a chance to post it… So I’ll be posting a number of entries from the last 3 weeks. Lots going on as we get closer to our move and as I have been finishing up at Higher One and ramping up with Friendent (now Pikum - more on that in another post). Exciting times. Hope that everyone who reads this is enjoying the holiday season with friends and family and best wishes to all for the new year.

So when I’ve told people that I’m moving to London, generally I get comments about the weather.  Being here today, I have realized I don’t understand the weather. Here’s one example.  We left our hotel and it was overcast, but not raining at all. We got on the tube (underground), and when we got out at Oxford street it was pouring with rain (that sounds like England right?).  We went in to a shop for ~15 minutes. We got out and there wasn’t a cloud in the sky.  10 minutes later, it was back to partly cloudy, and after meeting with Araz (the first UK team member with Friendent), I walked back to the tube in the rain!  If my life here is anything like the weather it will be fast paced, varied, and interesting