Four months after Openfund II’s launch and three investments later (with another three pending announcement), we launch today our new call for proposals.

Entrepreneurs are welcome to submit their ideas by filling out the form by May 31. All submissions, regardless of getting selected or not, shall receive our extended reviews and feedback by June 15.

As you are well aware, we are looking for entrepreneurial teams based in Greece, with innovative ideas for software products that target big, international markets. Indicatively, we offer €50k for 10% of equity participation, on top of our continued commitment to provide support on all things an entrepreneur might wish for.

We look forward to work with ambitious entrepreneurs, turning their ideas to valuable products and successful companies. Should you have any further questions, do not hesitate to contact us.

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Marketplaces stand as a frequent topic across our startup ecosystem. They also are a topic we have some exposure and experience at, if limited. Hereby I will attempt to share a part of such understanding, addressing some misconceptions I often get to encounter.

First, a short and pretty rough definition. A marketplace is a business connecting sellers with buyers, thus enabling transactions between them. Such a connection might be hard or impossible to get facilitated otherwise, or the marketplace might provide for choice and efficiency that was not otherwise available.

A prerequisite for the efficient operation of a marketplace is providing a sufficient quantity of both supply and demand. The classic chicken-and-egg problem suggests that creating a marketplace business is similar to building two companies at the same time, thus double effort and quadrupled risk.

It indeed is tough. But there are some tips of the trade that actually render the above path feasible, and I’ll try to provide such below.

a) Get the structure right

Before you start building demand, or supply, you need to make some bold decisions on how to structure the marketplace. What information to collect from and provide for each participant, what kind of choices to enable, what participants to let early in, what kind of requirements to enforce, etc.

A very deep understanding of the drivers for both ends of the marketplace is essential as a prerequisite. If that’s in place, you should work to come up with a small number of transparent and easily comprehensible rules, and then remain consistent in their application across time.

b) Build some supply

Start from supply first. Do whatever it takes to bring in the minimum number of suppliers, who will suffice to make the proposition of the markeplace clear. Be selective on who you let in; be aware that early suppliers very much shape the community that a marketplace eventually is, along with the experience and quality of provided services.

Keep in mind however that building supply is the easy part. At the end of the day, providers will be interested in a new source of revenue and you will be judged on keeping your promise to deliver on such. So, don’t get carried away by any quick wins and great volumes on this front; it’s better to keep supply limited and make your early suppliers happy, as oppossed to a growing number of eventually uninterested providers.

c) Focus on demand

If you have got the rules right and some supply is in place, you only need to focus on building and growing demand. Bring some demand and, quite magically, you will discover that supply takes care of itself and can grow organically from now on.

So, demand is the fight of all fights. And, do not expect the outcome to be encouraging very fast; there are neither shortcuts, nor easy wins. Be prepared for the worst and start pursuing every possible way of bringing a few customers in. Your ultimate target is to end up with an experience so uniquely appealing that your early adopters would very much love to talk about and spread your word.

Do not bother about volume, but rather about learning what works and what does not at first. Such experience is what really matters, and it typically does not get accumulated the easy way. You need to hit the road, talk with prospect clients, drive them in and get your hands dirty in various unscalable ways, before you end up with a proper recipe. Since you get there, the play is yours; you can now automate and scale up the recipe’s execution.

I hope the above are of value as a rough guide to anyone building or considering a marketplace business and we very much look forward to a fruitful public discourse on the subject.

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Locish, a mobile application enabling custom tip requests to get answered by locals within minutes, is now available for both iOS and Android devices. Essentially a marketplace between advice seekers and local providers, Locish serves on demand, near real time recommendations in a fashion that has not been accomplished before.

Currently featuring more than 200 locals across Athens, the application appeals to travellers looking for suggestions on sightseeing, food, leisure and other activities, from a local they can trust. Sophisticated AI algorithms secure high profile matching, while tips are currently priced at 1 euro, with Locish receiving a small fee.

The company, founded by Gregory Zontanos & Alex Christodoulou, is the third to join the Openfund II portfolio. The initial 60.000 euro investment will equip Locish to demonstrate its core value proposition and build early traction in Athens and other destinations.

“The Openfund was our favourite option for seed funding, and, guess what, we were theirs, too”, Zontanos shared. “We are super happy about this partnership and we look forward to taking advantage of Openfund’s resources in materialising our ambitious vision”, he continued.

Georgios Kasselakis, partner, stated: “30% out of one billion travellers globally are already using their smartphones to obtain travel information, most of them from antiquated, if not questionable, sources. Locish is on a mission to turn locals’ insights into common knowledge for them, and we believe they can make it.”

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Workable is strengthening its position as Europe’s leading contender in the fast-growing hiring tools market with a fresh investment round of €600,000 led by the Openfund. A cloud-based applicant tracking software, Workable is a new way to collect, review and hire people that buries the resume in favour of candidates’ online profiles.

Workable enables employers to look at candidates in the full context of their online presence. “We pull together context from candidates’ social media footprint, information about past employers, education and skills and deliver it in a form that’s easy to review and decide on,” says Workable’s CEO, Nikos Moraitakis. “It’s no longer about the impression the candidate wants to make with their resume, it’s about the information the company needs to make the right hiring choice.”

Business to Business (B2B) Software as a Service (SaaS) is growing and companies are switching to cloud software for hiring. Applicant tracking systems are the interface they use to manage everything from sourcing, job adverts, candidate screening, testing, internal workflow and collaboration. Candidate information and interaction is moving online.

“As a team of product designers and developers, discovering Workable was a magical day for us. Not only is this product beautifully designed, the effort that has gone into crafting such a great user experience really shines through. It has streamlined our hiring process, improved our ability to screen candidates, and kept feedback and hiring status altogether. The most exciting thing? It’s just the beginning of what’s possible with this product… We can’t wait.” says Sam Mathews, CEO of Neverbland and a noted authority on business software design.

“Cloud players with a fresh approach will contest a multi-billion euro space,” says George Tziralis, partner at the Openfund, an Athens-based seed fund for technology companies, like Workable, that serve the global market. “An innovative European contender for this space is both welcome and overdue.”

The United States’ nearly 6 million small to medium-size enterprises (SMEs) have already spurred the creation of SaaS ventures including JobVite, SmartRecruiters and The Resumator. While Workable is already competing for American clients with these firms, it also has a 24 million SME market in its own backyard, the European Union.

It’s time to move on from the car crash of PDF resumes and long mail threads. Workable recognizes that the people you want to hire have structured, honest, readable profiles on Linkedin and other professional networks. It’s an applicant management, screening and collaboration tool designed for a world of contextual candidate profiles, natural workflow and online communication between the candidate and the hiring team that you may actually want to use.

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Two months after its beta launch, incrediblue, a booking service connecting yacht and sailboat owners with sea lovers around the globe, announces today its official release and a €100k seed round by the Openfund.

Currently listing 200 boats in 35 locations, with fees ranging from €25 to €1.000 per person per day, incrediblue’s unique fleet is growing rapidly. Popular destinations across Greece, Croatia and Turkey are already being served, along with various hidden gems in places like the Azores. Incrediblue also recently welcomed small boats to navigate cities like Amsterdam and Berlin.

For the first time in the industry, guests are able to directly connect to boat owners, review boat profiles with real photos and book online in a simple and secure way. Payment options provided include bank transfer and credit cards. Boat owners can register their boats for free and use incrediblue’s easy to use platform to manage their prices and bookings. Incrediblue is free for guests, while boat owners’ charges are limited to a commission per booking, that remains significantly lower compared to the broker industry standard.

Antonios Florakis, incrediblue founder, said: “Most people perceive boat related activities as a luxury. Incrediblue is on a mission to empower everyone to enjoy unique, safe and memorable sea related experiences, anywhere in the world”.

Openfund, a pioneering early stage venture capital fund, officially announces its first investment of €100k in incrediblue. George Tziralis, partner, added: “Incrediblue already serves as our holiday mode of choice. We are excited to be working together with a great founding team to bring this service to a much broader audience and change the sea tourism landscape.”

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We are happy to share the conclusion of the first call for proposals of Openfund II, or 7th overall.

Following 5 Call for Proposals (CFPs) executed under the Openfund I, we distinguish between a conceptual one (CFP 6) which counts the proposals seen during the preparation of the Openfund II, and another one explicitly launched when the new fund was announced (CFP 7).

As with every previous call for proposals, we can now share some trends and insights regarding the quantity and quality of submissions, complete with statistics.

Team demographics
The charts below depict the evolution of the proposals volume over time. Notably, the couple of latest CFPs that are now under review process received in aggregate twice the number of submissions of the next best performing CFP. Another interesting trend is the increase in the average team size, from 2.4 to almost 3 members. Teams now encompass more Founders and more diverse skills, a development we consider positive.

The graph above shows the cumulative collection of submissions over time. As with every previous CFP, most Founders took the maximum allowed time to refine their submission.

Founders Demographics
After 3.5 years, we are now able to take a look at the proposals in greater depth.

Initially, the Openfund was designed to address the lack of seed funding in the Greek market. With each passing CFP however, the inflow of proposals from other countries increased. So far and on average, 56% of the proposals originated from Greece.

This changed dramatically with the 7th CFP under Openfund II, where we announced that we would start investing only in companies registered in Greece or whose Founders would relocate here. Now, focusing on a smaller pool of talent, we managed to attract more proposals than ever before, more than 80% of which came from Greece.

Despite clearly stating our criteria for funding, the persistence of a significant number of proposals originating outside the borders indicates that seed funding is still a problem for Europe. It also suggests that Founders are more willing to relocate than previously thought, in order to secure resources for their startups from a trusted source.

Founder skills
It is interesting to note the distribution of skills in startups, based on the self-evaluation of each Founder. The graph below provides data on the entrepreneurs having applied in all CFPs so far. Brighter colours indicate higher scores, at a scale of 1 to 5. An interesting fact is that confidence in the Founders’ business and technological skills fuels most startups.

Over time, we also find more complementary teams applying, meaning that there is at least one individual with a high mark in at least one of those skills. Most importantly however, we can now correlate the team composition with the likelihood to succeed in getting funded.

Through the CFPs 1-5, there were 3 evaluation steps:

• Submitting a proposal,
• Being called for an interview, and finally
• Presenting for the Openfund executives and investors.

The radar graph above provides some insights on the average team skills that made it to each step.

It seems that a strong educational background seems to initially earn the Founders more attention; however the successful teams do not score significantly higher than others on paper qualifications.

On the other hand, a (self-reported) strong business background stands for better chances down the evaluation path. Moreover, the successful teams score a comparatively low average in technical skills with usually just one strong technical leader. It also serves as rudimentary verification of a trend that we have often seen: teams that are too reliant on the technical prowess of the Founders are found lacking in other aspects.

Submission size
Another interesting observation regards the impact that a detailed proposal has on our tendency to further engage with a team. As documented, we typically collect submissions which we then forward to our mentors. They in turn, submit their feedback which is compiled and returned anonymously to the Founders.

Naturally, this data refers to previous CFPs, as we have not completed the review of the collected proposals.

As expected, writing more increases the likelihood that we’ll spend more time with a project proposal and increases the chances that mentors will want to engage in providing more feedback as well. What is difficult to depict in past data is the also higher than expected chance that an exuberantly lengthy proposal gets rejected early. In principle, including template text or not to-the-point arguments greatly reduces the reviewer’s interest in providing any feedback.

Funding range & maturity
The table below shows the distribution of maturity in the latest couple of CFPs. More than 56% of the submissions in total have a functional prototype to showcase during the various review stages.

Apparently also, having a prototype proves that the team can work together and increases the chance that it gets further consideration.

Next steps

During the next days the Founders that have submitted their proposals will start receiving feedback. The application page will remain open and Founders can submit, however there is no time guarantee as to how soon we will reply.

At this point, we’d like to thank all the Founders for entrusting us with their ideas and putting a tremendous amount of hard work in preparing for this call. We will do our best to come up with quality feedback and reaffirm our excitement about the investments that will come out of this process.

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We are happy to share a template of the term sheet for pre-seed and seed financing that Openfund will be offering to entrepreneurs.

This template shall not be treated as cast in stone, but rather as indicative of what founders shall generally expect from an Openfund offer, while each deal remains different.

The template is built in the spirit of what works better for the company, rather than for the fund or for entrepreneurs alone. We believe this approach works in the long term and we hope that this spirit is clear across the document.

In the Openfund, we are confident that transparency is of value to entrepreneurs and investors alike, as well as to the community at large. We hope that in sharing this document we are contributing to the evolution of our ecosystem towards maturity.

Will 2013 be the year of the startup here in Greece? There are reasons to hope so. After years of events, discussions, brainstorming and prototyping, many teams seem to be on the cusp of starting real businesses. The funding bottleneck for IT-based ventures has now been removed, as four new early-stage funds are at last ready to start investing.
All of these funds, naturally, are looking for one thing: global potential. We will not be funding copycat businesses targeted to the Greek market, however good the execution; not even copycats aimed to the broader Balkan market. Market size is too small, and exit possibilities are very limited.

The name of the game is global reach, out of a Greek base. So how can we plan for that, how can we educate ourselves, what type on networking do we need, what kind of partnerships abroad? By “we” I mean the founders and employees in the ventures, but also investors and advisors.

Here is a way to think about these issues. There seem to be three generic strategies to expand out of Greece.

1. The immediately global business. If the service can be developed and delivered from anywhere to anywhere, as in some software-as-a-service (saas) models, it does not matter if you are in Greece and your user is in Ohio. The hard part is in devising something which appeals to users in distant regions with no need for localization. If you have that, regional offices are not needed, and strategic partnerships, if needed, can be built from afar. Among the Greek startups that I know, Workable HR fits into that model. It has a niche saas product, which meets a recurring need of companies around the world and can be equally useful to any mid-size employer of tech-savvy English-speaking people, whether in New York or in Helsinki. In such cases, international associates are useful mainly in getting early feedback for the product, and in getting the (web-based) marketing campaigns right in each market. Beyond that, it is up to management to decipher signals from the web and react accordingly; but they can do that mostly from Greece.

2. The plug-in route. If the venture is developing new technology in the narrow sense of ‘technology’ (e.g. a new recognition algorithm, such as that which drives BlindType and Fleksy) or an app that could be an enhancement of a dominant application (such as a Pinnatta to be added on a major communication platform like MSN or Skype), then growth may require that they become part of a global hub so that they can plug into the networks of coopetition there; and at some stage, to be acquired by a major US based player. To assist in such cases, our community may need good links to Silicon Valley players (investors or advisors). Sometimes the right hub may be Silicon Alley, or Silicon Roundabout, or Silicon Glen.

3. The roll-out. Most marketplace models bring together groups of suppliers that are based in one location (country, city, or neighborhood) with local or international consumers. Taxibeat, Incrediblue, Dopios, Cookisto all fit here. Many content providers, such as review sites, are also location-specific. So good ‘hybrid startups’ such as these will start in one or two locations, formulate a good version of the product by trial and error, and then roll out to more locations, one by one. In each location there will be need for marketing, sales and localization that can only be done in situ. If you are a large company by the time you begin your international roll-out, then you can hire successful local executives to do this for you. But if you are small when you attempt it, then you can only offer risky equity or bonuses; which means that you need to work with entrepreneurial types, not corporate officers.

My guess is that very few concepts that we’ll see in the next couple of years can be ‘immediately global’. Several will require the plug-in route, and most will require roll-outs. This, then, could be the biggest challenge to our community: to develop and perfect roll-out techniques for small companies with innovative models, across a wide range of national contexts. This is not an easy challenge: historically, becoming multinational has been the province of large companies with established products. But our ventures are constrained by our small home market, and so they will have to try to expand early.

To succeed in roll-outs, the community will need to exchange experiences, to share contacts in interesting markets, and to develop horizontal expertise that will be useful to several different ventures. This is the area where cooperation within the Greek startup community will be most critical. If we can pull it off, this could be a characteristically Greek model of global reach. (Greeks are well placed to understand both developed and developing country contexts – but that is a subject for a separate post).

The alternative is to devise products that require minimal local business development, more along the ‘immediately global’ model. There is a tradeoff here between depth and breadth, but whoever can do both multi-locality and scaleability can be hugely profitable.

Entrepreneurs should think how their model fits into these three categories, and then plan for expansion accordingly. Investors and mentors should develop capabilities to be able to help them in each of these strategies. At Openfund, we hope to contribute significantly to this effort.

With a new team of partners and €10 million under management, Openfund II officially commenced its operations on Friday, November 30, in front of a 400 people audience in Open Coffee Athens.

Along with the European Investment Fund, which serves as the Openfund’s major investor under the Jeremie program, Openfund enjoys the participation of 11 private investors.

Moreover, 50 world class mentors join the fund to assist entrepreneurs on all issues related to the formation and growing of successful technology companies.

Leveraging on its track record, Openfund aims to become the partner of choice for entrepreneurs creating software-enabled products targeting international markets.

The fund will work with entrepreneurs in two stages: a) pre-seed, starting from an indicative investment size of €50 thousand to turn an idea into a product and b) seed, with an investment of up to €500 thousand, to focus on turning an existing product into a well working business.

Openfund intends to partner with up to 25 pre-seed and 10 seed stage companies within the next 3 years. Seed stage entrepreneurs may apply around the year, while the call for proposals for the pre-seed stage is now open and will remain such until January 31, 2013.

The application form and further information are available at http://theopenfund.com