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What low barriers to entry and 20% unemployment do to competition

Today it is Saint George. In Catalonia (Spain) we celebrate this by giving a rose to our wives/girlfriends/prospects and they buy us books (how about a Kindle instead?). The fact that a high percentage of men are going to buy roses that day leads to thousands of street stands where people start selling with just a small table and a bucket full of roses.

This is normally quite a profitable venture where the average Joe can make a few hundred Euros just for some hours work. There was a big difference today though. Too many people were selling. I spoke to a couple of the stand owners who said that they still had over 75% of the roses left at 2pm. One of the ones I spoke to was going to lose over 500€ that day if the sales did not improve substantially. Another one said that he had never seen so many rose stands than this year (he actually had 4 stands at a very short distance from his) and they had actually reduced the price to 2€ per rose (they usually sell from 3€ to 4€) cutting his margin substantially, if he could manage to make a profit that is.

Maybe it is my undercover economist hobby that leads me to come to these conclusions but I think high unemployment (in Spain it is c. 20%) and extremely low barriers to entry (a table) are a recipe for vast competition.

miniSeedcamp Barcelona

I am not going to write a full review of miniSeedcamp Barcelona, you know I never write more than three paragraphs anyway. You can find good reviews here or here (second link in Spanish). But I wanted to share something I found really interesting with regards to the mentoring sessions. For those of you that do not know about Seedcamp it is a seed stage start-up competition where selected teams get to pitch and have various mentoring sessions with VCs, successful entrepreneurs and sector experts. The mentoring sessions are 45 min long and are great opportunities to get feedback from people that have more experience and are more knowledgeable than you.

We had four mentoring sessions and in all of them we asked similar questions, which were the biggest issues or challenges that our start-up was facing (except the session with @fdestin where he guessed all our questions just by telling him what our business was about, impressive!). What I found interesting is that our mentors were successful professionals with years of experience yet they gave completely different and opposed answers to our questions. My take on it is that this is because they base their answers on their personal experience which is different in each case. However, for the entrepreneur this can be disconcerting and confusing. When you ask a question you would expect to get the “right” answer but I guess the whole point is that there is no “right” answer, there is only the answer you choose to act on.

At the end of the day the ones leading the project are the ones that need to make the decision, whether they have asked experienced professionals for advice or not.

PS Special thanks to the @seedcamp team for the opportunity and help

Publicy. Or why private information is too public.

During the last three months I have been discussing the Facebook privacy changes and have seen them myself while looking for new friends’ profiles and information. Facebook effectively took the information that had been trusted to a limited group of people and made it public. This post is not about how evil Facebook is or how unfair the privacy changes are (many blogs and class action lawsuits are already dealing with this). What I find more intriguing is the reaction of most users to these changes.

Most people I have discussed the issue with (the average internet user, not professional geeks) did not know of the change. But what surprised me is that they did not really care. When informed that their profile was now public and that strangers could view their information and photographs most people’s reaction was “so what”. Society has gradually changed its approach to privacy to a level where the word itself lacks meaning. If your private life is public it cannot be private anymore.

At the last MLove Wintercamp the issue was part of one of the workshops and one of the ideas that came out of the afternoon was to enhance education on the risks of making personal details public. From theft to stalking and fraud the risks of making your information public are wide and proven and people should know them.

What is your take on Privacy? Should private and personal information remain private or should it be available to everyone? Should people know more about the risks and dangers of public information? Vote!

How big is my cheese (aka market)?

“I know some people who would use this!”

I have heard this before, many times, many of them in my own head. Many companies and projects are started because some people or companies might use your idea. But before we get into spending long hours, sacrifice our time and efforts and embark into creating a company we need to look at our “realistic” market.

Not enough entrepreneurs do this (me being one of them) when assessing a new opportunity.

What do I mean by “realistic”? A market that you can get to easily and cheaply (I will talk about CAC, Customer Acquisition Cost, in another post later on).

Think first bottom-down of your market and then work out the realistic market by looking at what part of that market is really a potential customer. I cannot provide you with a guide of how you need to filter your market but an easy example would be a company trying to sell services to small companies online. The overall market is all the small companies but the real market is the small companies that engage actively online (which in Spain is much smaller than in other European countries). It is an obvious example but you get the picture.

If you are thinking of starting a company or a project based on a need you have identified first try to understand how big it is. The real one, not the imaginary billion dollar market that your emotions and enthusiasm want you to believe…

Can we keep up?

Google just launched their new service, Buzz. When we just thought we could barely cope with our Twitter, Facebook and Linked In feeds here comes a new service bound to overload us with even more information. In the end all we want to do is to communicate with the people we know and follow people we know and people we find interesting.

It would be great to do this through a single tool with everything integrated (if Buzz integrates Twitter, Facebook and Linked In fully then it could really become the best feed management tool around). But the question is, do we want this integrated with email or do we want to keep this separate with tools like Seesmic? Personally I found it quite annoying to get Buzz messages together with my email (I have created a filter with the word Buzz to avoid this).

Up to you to decide…

Fear and Desire are dangerous emotions

Do not worry, I am not going to start giving you a long rambling post about how to overcome your emotions or why I think you should adhere to the latest self-help book cult that everyone else is reading. I just watched a film that made me think about these emotions, especially after I had a serious talk about the future of our business with one of my partners.

Fear

Fear of losing what you have, of not having money, of not being popular, of being without a job, of not being accepted… I could go on and on but you get the picture. This is the same fear that paralyses us to do what we really feel we should do. But once you let go, or get into the habit of overcoming your fear, because you can never really stop feeling it, you can really start being free and enjoy life (not as in going to the beach but as in loving what you do).

Desire

This is another powerful feeling that prevents us from achieving our goals. We all want a new car, a new home or that new gadget that just came out but sometimes we prioritise these things over our real dream or that goal that we are really passionate about. “I really want to own a nice car even though I should really save to *Insert goal/dream here*”. It is up for you to decide if you want to have 5 minutes of happiness when you buy that thing you really wanted instead of investing for a lifetime of deep-down-no-matter-what-happens happiness of owning your own destiny. Like someone I knew used to say “You pay an expensive price for giving in to your weaknesses”.

I actually had a list of more mundane stuff to write about but I just felt it right to post about this…

Intro

I have created this blog to share my thoughts on different subjects and share my experiences and the lessons learned. I will try to limit my opinions and subjective thinking and will support when possible any statements with references and real information. This blog is not about me but my contribution for anyone who is interested in the subjects I will cover.

I encourage comments (especially if they bring another point of view to the table) and will try to answer all the questions and engage actively with anyone who wants to develop the subject further. There will be a post every time I have something I think is worth sharing. It could be three posts in a week or once a month. I will try to keep it simple and try to write as few words as possible to get the point across.