Interview for MONEY Magazine

Startup, Malta, Simon Azzopardi

[As seen on Money Magazine]

  1. How would you compare the local start-up scene with that in the rest of Europe and in the US?

Over the past 24 months, we have organised several events and involved several international investors and entrepreneurs within the local community. I believe that their feedback is a good measure as to where we stand. Maltese start ups, and by this I mean start ups founded by both the Maltese and expats that live in Malta, are certainly promising. In fact, an early investor in LinkedIn, who was judging a recent start up event, described a Maltese start up project as visionary.

That said, we need to be realistic. Malta is a tiny community in comparison to any of the EU and US states and comparing such would be futile. However, what we need to do is look at Malta and understand what we can offer to the start up scene. Where can Malta add value?

This is where Malta could certainly stand out. Malta has several highly skilled technology and marketing individuals, English is the business language of choice, it offers a superior quality of life, and is all wrapped up in a tax and expense efficient package. Breaking it down, a start up that is tight on cash would be able to do a lot more with a lot less in Malta, reaching their milestones on an island offering good weather, food and social elements.

So when discussing such areas, one needs to look at where Malta’s potential markets or attractiveness lies. To whom does Malta add value? What countries could we look towards to promote Malta as a start up jurisdiction? This needs to be the conversation that government and local stakeholders need to look at.

  1. What are currently the trending start-ups?

There are a few start ups making a positive sound in the market, as well as start ups that have moved on and cannot be considered start ups anymore. Due to the size of the start up scene, it is hard to see trends.

The two emerging trends though are that we are seeing several foreigners looking at Malta as a potential start up platform, as well as a few companies in Malta where employees move on to develop their own start up. Both are encouraging trends for the local scene and culture.

  1. Are the majority of start-ups ICT-related? If yes, why?

IT start ups are certainly the most accessible. With a laptop and an internet connection, anyone can start up a business. Other industries would typically require greater capital investments and therefore greater risks.

  1. Should start-ups think big or first focus on the local market and then expand slowly in other markets?

Think global, act local. A bit cliché though this is paramount. Start ups cannot conquer the world in the first battle. Rather, they need to win the local battles before world domination. Therefore, start ups need to look at who their initial customers are going to be, and focus on wining those over, but always thinking scalable.At start up stage, being too local means that you solve a handful of customer’s problems and cannot scale. On the other hand, being too global means that what you offer will be lost in the noise of everyone offering something similar.

  1. What kind of resources do start-ups need?

Firstly, the will or hunger to want it. Bill Gates or Steve Jobs have the exact same 24 hours in a day that you have. They did something special. If you want to do something special than you have the time. Secondly, commitment. You will have hurdles such as finding a partner, looking for that first customer, or bringing in an investor. Unless you are committed and conscious of the fact that this is going to be tough, than you will give up after a few hurdles. Lastly, fun is vital. You need to enjoy what you do, and how it gets done. Starting up a business is a bit like creating a tribe or a following. You need to get people behind you and if it lacks any joy whatsoever, than why would anyone follow you.

  1. How critical is the funding element in a start-up scenario?

The question here is, what does the investment you need buy. Do you need time? Infrastructure? A team? Could you get things done without an investor? Could you part with equity instead of investment? Bootstrapping, i.e. the process of developing your product and business with no investments is too often overlooked, yet is very often the better way to go.

Another aspect often overlooked is corporate financing or collaboration. Corporates need to innovate and build new products, yet often by design they struggle to do so. Start ups are designed to be innovative and react quickly to market changes as their livelihood depends on it. This creates the possibility for an ideal partnership between a start up requiring a corporate’s credibility, experience, infrastructure, people or channels. As always, a win-win situation needs to be created and more importantly managed.

  1. What should fuel the relationship between start-ups and entrepreneurs willing to invest?

Start ups and investors, particularly in the early stages, need to get along. Entrepreneurs have vast knowledge, and not just capital, that needs to be exploited. Therefore, besides having a common understanding of commercial expectations, ensuring that the two characters are compatible is crucial.

In Malta, we certainly have a small community or pockets of entrepreneurs willing to invest. In terms of high growth start ups however, I do believe that investors often need guidance in terms how to manage their investments and expectations.

  1. Personally, what gets you excited about start-ups?

I live on both sides of the fence in that I coach and mentor start ups or corporate companies that need to think like a start up, as well as having two start up businesses myself.

This gives me deep insight into the way of thinking, allowing me to really understand the various phases and facets of starting up a business. Start ups are excited about their projects and tend to see opportunities everywhere. I find that successful start up entrepreneurs do not complain about politics and the economy but rather take control of the situation by using what is happening around them to their advantage. This energy is addictive. I get to meet interesting entrepreneurs with a ‘take over the world’ mentality.

  1. What value do start-ups give to a national economy?

Start ups deliver tangible as well as intangible economic value. Its tangible value is that, by definition, they create innovative products with a global potential, delivering employment, investments, tax expenditure, etc. Start ups also deliver a culture of openness and creativity that has a longer term value that is transferable from industry to industry. A government that invests in start ups by putting the right support behind them is investing in both short and long term. Like with anything however, investing in a start up community is only a minor element, execution is key.

  1. What, in your opinion, are the prospects for local start-ups in 2015?

The local community have built quite a bit of momentum in Malta. We have branded Malta’s local community as Startup Island and we continue to organise events to bring people together. I am confident that 2015 will see a greater interest from entrepreneurs willing to get involved, an increased number of corporates willing to support and integrate as well as government showing solidarity.

However, Malta needs to look overseas and needs to invest in overseas communities for better integration. We need to have a roadmap that reaches out to high growth start ups and integrate them into the local community. We need to develop our entrepreneurial and risk taking appetites. We need to learn that failing at a start up is not looked down upon, but rather a sign that you have tried, learnt and a step closer to success. Malta needs to act local but think global in its endeavours to build a stronger and truly innovative society.

Silicon Valley style start ups in Malta

start up Malta venue

(As seen on Times of Malta)

What do you do if you get what you think is a brilliant idea? You can either set it aside to simmer, expecting it to lay the fabled golden egg. Or else, you can pitch it to an audience, get precious feedback from your peers, develop it and launch your own start-up business.

The latter, of course, is the option that gives you the best returns. And it’s what young entrepreneurs are doing during the Malta Start-Up Weekend, a regular event that brings together designers, developers, entrepreneurs and experts to embark on a start-up journey. Around the world, entrepreneurs are joining the movement: Start-Up Weekend is a global network and part of Up Global, a non-profit charity. It is organised in various countries, building a global network of passionate leaders and entrepreneurs.

Simon Azzopardi, the local representative of Start-Up Weekend, is the physical embodiment of such enthusiasm and speaks about start-ups with passion.

“Developing and launching a start-up is a very exciting process,” he says. “During Start-Up Weekend, around 60 to 80 entrepreneurs and aspiring entrepreneurs meet to find out if their ideas are viable. Attendees are usually a mixed lot: some have a technical background while others have business experience.

“On Friday, they propose their ideas and the best 10 to 12 are chosen. By Friday night, teams are formed and for the next two days, they will work on how to convert an idea into an operating viable business and prepare their pitch for potential investors. Then on Sunday night, they present their start-up in a Dragons’ Den-style pitch.

“During the event, they also receive support from mentors and coaches, who are experts in their respective area,” adds Azzopardi, who apart from his involvement in Start-Up Weekend, is also the managing director of his own company, Tain & Able.

“This coming October, we wanted to complement the Start-Up Weekend with other events to attract a wider audience. Rather than just the weekend, we are inviting start-ups, entrepreneurs, investors and corporates interested in this space to join us. We will be joined by TMobile’s incubation hub, Hub:raum, who will also be conducting a series of workshops on lean start-up methodologies as well as have local start-ups share their experience with acquiring funding. The events will be open to anyone interested in this space, including corporates.”

This week will serve to strengthen the local start-up scene.
“The local start-up scene is a bit dispersed. However, the community spirit is getting stronger. There is a phenomenal interest from abroad, especially from Nordic countries: entrepreneurs from these countries find Malta to be very affordable and they are also attracted to the local lifestyle.

“There is also a strong interest from other Mediterranean countries: in most of these countries, the economy is suffering, whereas the Maltese economy is doing well. Just last April, for instance, we had several start-up pitches from Italy. Other entrepreneurs from North Africa and Egypt in particular are also looking towards Malta as a potential space where to incubate their ideas.”

Failure is not the end: just a lesson learnt in the process to try again
There is a lot of value in incubating start-ups in Malta.

“Given its small size, Malta is the perfect test-bed: if you fail here, it’s not the end. We also have good quality, English-speaking human resources and enjoy access to other markets. Moreover, start-ups incubating in Malta bring fresh thinking, new skill sets and the potential for the development of intellectual property: this further generates the local economy.”

Various studies show that around 85 per cent of start-ups fail, not only in Malta but also in most countries. What contributes to the success and sustainability of a start-up?

“First of all, finance may seem essential, but it isn’t. Of course, it’s good to have the capital, but without it, you can still achieve a lot. Not doing anything because you don’t have the financial strength is just an excuse.

“For me, the two essential ingredients that contribute to start-up success are community and entrepreneurship.

“Community is everything. Locally, we tend to be very jealous of our ideas and are afraid that someone else might steal them. In fact, during Start-Up Weekends, most attendees find it difficult to share at first. But then, they see others pitching and discussing their ideas and they follow suit. We need to recognise that the community is invaluable in helping you pitch and develop an idea.

“Entrepreneurship is also important. The essence of entrepreneurship is the drive to try, fail and try again until you succeed. Failure is not the end: just a lesson learnt in the process to try again.”

Azzopardi is finalising the details for the Start Up Week, which will start on October 13.

start up Malta venue

“The event will be held at Microsoft Innovation Centre, Skyparks Business Centre and as previous years, everyone is welcome to join, irrespective of age, background or idea. All you need is drive.”

For more details, visit www.startupisland.org

Innovation, the new average

Innovation

[As seen on Times of Malta, 21st November, 2013]

Innovation is an overused and abused term. From political figures to businessmen, innovation, as a word, is thrown in as part of their remit or mission statement. Innovation has been so overused that as a term, it today has a negative effect or, worse still, means nothing more than mainstream or average.

In fact, when I read a press release, mission statement or advert and the word innovative appears, I immediately understand it to mean an aspiration rather than a fact. Even though that company might have something worth shouting about, the term simply doesn’t do anything for me.

When entities, political or commercial, use the word innovative or any of its variations, what they are trying to say is “we think it is new and worth taking a look” or “look how clever we are”. Statements such as “Our innovative solution” or “innovative design” adds little value to the subject and is a case of blowing one’s own trumpet.

Innovation in its entirety does not say much about value add. Then what is all the fuss about?

Innovation that matters exists when it is used as the tool for successful entrepreneurship. It is a process of solving a situation or challenge in a different way, even if that innovation is a minute property of the problem. The measure of innovation, would be the change or impact on positive results within the delivered solution.

Therefore, innovation is a process or tool that delivers potential new products or services that can reap financial, or otherwise, rewards. So yes, worth fussing about. A country with a culture that values innovation will most certainly increase their chances for economic growth.

An interesting challenge exists in developing a behaviour that is entrepreneurial and innovative. Such shifts in behavioural patterns to develop these qualities are often the most challenging, as a lot of its makeup has to do with culture.

Interestingly, because innovation is a process, it can therefore be planned. It most certainly is not some eureka moment, or flash of genius, while sitting in a dark room smoking an intellect’s pipe. Innovation comes about through the constant challenging of a status quo, whatever that may be.

The most important aspects of being innovative are essentially understanding how innovation is derived, and after, how it can be validated.

Eureka moments for an innovation happens after a process of recognising a potential solution to a problem that has never been done before. Commonly, the problem is seen from different perspectives, in different domains, through a rigorous challenging process of questioning and through research. Yet the key point in all this is not only the process, but the strict focus on a single idea or problem.

In fact, even when an innovation is deemed noteworthy and is launched into a market, it will most likely be a cyclical process of tweaking and re-innovating. This is due to the fact that once a solution is launched, customer data can be gathered and used to develop solutions of fit within a market, or in other terms, innovations that add value to a market.

This is no newly discovered scientific process of deriving innovation.  Sir Alexander Graham Bell was not trying to invent the telephone but rather was making improvements to the telegraph in a cyclical fashion. The interest and persistence in such improvements came about due to his mother’s gradual deafness which resulted in his research in acoustics.

The process of labelling an innovation comes with customer validation. Proving it within your market fit will deliver the necessary positive change for it to be felt, measured and therefore quantified.

The technology industry has understood this clearly. It understands that innovation is felt mostly once it is used, as value can be transposed or associated with such an innovation. Therefore, tech companies offer 30 day free trials and other taster forms in order to prove its innovation and value and then win the sale, without ever mentioning the term innovative.

So when should we use the word innovative? Innovation is like proper management. Every company needs it, though writing it all over your office walls is nothing more than cheesy.

In Malta, innovation through the entrepreneurship model is beginning to emerge. A quietened murmur of tech start-ups can be heard within the economy as well as an increasing availability of individuals with entrepreneurial spirit. It seems that the stars may be lining up for Malta’s emergence as an entrepreneurial society, which means that the likelihood for real innovation to be seen will be on the increase.

Lessons learnt from a startup weekend in Malta

Malta, the little island in the Mediterranean, shed some light over the weekend on its potential through the StartUp weekend held at SmartCity.

Being the first ever start-up event ever held in Malta, I was not sure what to expect, in terms of both turnout and ideas.

I was pleasantly surprised in the end as the weekend offered the coming together of several individuals that showed a huge amount of both passion and technical ability.

Startup weekend Malta

Being a mentor for the weekend, I honestly feel that I have learnt a huge amount from the teams that were present. Some of which being:

Ideas are seeds to value

Everybody has heard of the saying ‘ideas are cheap’. In truth, ideas are what they are, an expression of interest on a particular subject or problem with underlying suggestive motive to influence change or improvement. Though ideas may deliver little value, they are however seeds in our minds that allows us to develop concentrated thoughts on a particular subject. During the initial idea pitches, most of the ideas were cheap in that it offered little value to anything other than highlighting a ‘could-be’ problem and a makeshift solution. That said, once a team was thrown together focused on problem and solution for an entire weekend, both the problem and the solution was defined and structured and therefore become of value. True, an idea is cheap, but so are seeds. Give it enough time and energy and that seed can become something great, even if the seed isn’t perfect in any way.

Energy is contagious

“You are the average of the five people you spend the most time with.” True. Put those five people in a room full of energy and doing great things, and that average will improve multiple times over. Energy and passion is contagious and comparing the difference between the shuffling of feet when entering the startup weekend, to the energy of the room at the end, it was clear that the little community over the weekend worked on developing each others momentum to be better. Truth be told, some of the energy was excitement for the after beers, but then still, you can guess what conversation revolved around at the watering hole.

Malta has huge potential

Last but definitely not least, was the eureka moment by seeing Malta’s potential in a tangible manner. Malta boasts a thriving financial sector, global leaders in the igaming scene, a popular tourist destination, and yet tech is not considered to be a pillar of its economy. The start up weekend taught me that we have the essential pillars to become an ICT hub delivering innovation through start-ups. I knew we had excellent technical people. I knew we had some of the best designers on the island. I knew that we had specialists in key verticals that are essential to solving industry problems. I however did not know we had a community willing to come together and share ideas, take risks, and look at the world as being full of endless possibilities.

Malta certainly has the potential to be great within the tech industry, for both locals wishing to start up a company and take over the world, as well as for foreigners looking to relocate to an up and coming jurisdiction that has a lot of potential in terms of ideas, talent and infrastructure. What about tax reasons? Well, that is just the cherry on the cake.