"DreamStake- Online Platform for Digital Entrepreneurs" Interview with Robert Scoble rackspace

Rocky and I get around the world and now we're in London at the Rackspace London office seeing a whole bunch of new startups. But this one, dreamstake, helps other startups get started, get, get exposure and find investment. And we're going to learn about that and learn about what's going on in the European entrepreneurial zone right now. Who are you?

I'm Paul Dowling. I'm the founder of dreamstake. We're an online platform for digital entrepreneurs. We've been around for about three years and we've got about six and a half thousand entrepreneurs on an online platform. We want to help them to become successful and so we describe ourselves as an online accelerator. My background is I was originally in corporate life. I worked for Big Management Consultants, a firm called Capgemini. I was always on the fringe of that. I was always a bit of a maverick. I love new stuff. So I decided to break out of that and really help startups.

Yeah, well, it's really cool what you're doing. You know, we get around the world and we're seeing this wave of startups happening all around the world and it's not just Silicon Valley anymore. You know, when I grew up, that's where you had to start a company because it was so expensive and you needed to be near the innovative money. The venture capitalists that really started the Intels and the apples and the hps and stuff like that. What are you seeing happen here in Europe?

Well, I think you're quite right that the cost of technology has come right down, the cost of marketing has come right down with social media and this has enabled startups from really all corners of Europe. So we're seeing startups from Eastern Europe, we're seeing startups from more traditional parts of Europe and we're seeing a lot of it clustering around particular startup, what we call startup hotspots. So places like Berlin, Stockholm, even Tel Aviv, London, Paris, there's probably about eight or nine of these across Europe and there's a hell of a lot of activity going on.

No, it's true. I keep hearing about Berlin and Tel Aviv and London. That's why we're here in London to see what's happening and go to the web conference. What kinds of startups are you seeing happen? Because you're monitoring hundreds of startups now on your service. Do you see any trends that you're noticing?

Well, the ones that we tend to see are, I think we'd call them low capital intensive type startups, high growth potential. So they're Social media, mobile, social networks, digital businesses, online businesses, things of that kind of nature. So they're fairly quick to set up, they grow fairly fast and they tend to be exciting businesses in general.

Yeah, your service lets people say, hey, I'm a startup and I'm an entrepreneur. What does that help do? What are you really trying to build?

Well, I think what we're trying to build effectively a database of European startup. One of the problems of European startups is getting noticed. We don't have the really strong ecosystem that you have, say in the Silicon Valley. So the investor mentors are not so obvious. There aren't so many of them and it's more difficult for startups to attract the attention of those people. So what we do on our network is we allocate a rating to each startup and basically as you go up the rating system and this is a maturity guide, you get noticed by the right people. And then at the end of the process we're able to introduce people to investors in much the same way as an offline accelerator works.

So how do you rate startups? Is it just like a venture capitalist would look at like adoption and team?

And it's the same fundamental building blocks, but we're doing it at an early stage. So we're really looking at things like the number of team members, the quality of the team members, the number of pivots. Actually we've stolen some of the research from the startup genome project and basically we're taking critical factors and incorporating them into the platform. It's a fairly simple algorithm in the sense it's really about an amalgamation of all the critical success factors that determine success. It's really to sort out the men from the boys. So for example, a single person startup that hasn't incorporated the company will have a very low dream rating. Whereas a team of five or six people who've been funded, maybe been through a couple of pivots will be much higher up in the rating.

Yeah. How would Instagram score? If you put Instagram before it was purchased by Facebook, how would that score because they only had 12 employees?

Well, I think given that we are really early stage, even Instagram would have managed to get themselves a decent rating on our platform because we're really targeting pre revenue early stage business.

They didn't have any revenue.

I think their team would have because it's fairly strongly weighted towards team. And the fact that they have a team and built a team would give them a reasonable rating at least. I don't think they would probably be rated at A billion dollars. But they would have been there somewhere.

Which shows some of the tough things for investors and for journalists to figure out which company is really important to pay attention to. It's hard to do that. And that's why I like systems like yours, because it gives me another signal level to see, oh, I missed this company, I should check them out.

Well, I think that's true. And in Europe, some of the best startups could be in relatively obscure places. If you look at someone like Seedcamp who we're partnering with, they run events out in Tallinn and in Prague and various places like that. And the startups really can be in fairly esoteric areas. Like I think Farmer on is one I can think of. That's a, you know, a farming web business, basically. Yeah. And they wouldn't necessarily get spotted if it wasn't either. For online accelerators like our own or events like Seedcamp, there's no way for them to get, to get seen. I mean, I think it's becoming a little bit like the rock business. You know, you can be the best rock star in the world and nobody knows you if you're just playing in your bedroom. It's a very similar thing here. I mean, you could be the best startup ever, but it's a very crowded market and unless you have some platform to get noticed, you'll never get spotted.

What kind of advice do you give startups? Because you hold events for startups and you're mentoring startups. What are a few things that you would tell somebody who's just thinking about starting a business to think about?

I think at a very early stage, what I would say is don't, you know, don't focus too heavily on the actual idea. Focus on the vision. Get a good, strong vision and then around that vision, build a team, and then get the team to start thinking about flushing out the idea, because the idea is going to change along the route, you know, whatever, however good the idea is. And one of the things we see a lot is people coming to us and saying, I've had the best idea ever. And of course the next thing you find out is that idea is already being done or whatever. So I think the advice for early stage startups is to build in flexibility into your team and to try to solve a big problem. Don't work on the solution as the first stage, work towards creating that vision.

Well, that's really smart advice. I look for people who are building companies, not building a feature or building a product, because if you just build a product, you might hit A home run, but generally you won't. And you know, like Instagram tried to build a product for a couple times before they became public. And they had to pivot. They had to change that idea because their friends told them that was lame.

Well, I think that's true. And I think we almost accept the fact that we're going to. We've already pivoted once, we're pretty certain to pivot again because solving a problem for startups is a bit of a conundrum in itself. Startups don't have a vast amount of money. We're a platform for startups. And so getting the business model right is actually quite difficult. And you only get it right by learning. So you go a little way down the process, you modify your business model as you go along. But our vision is always the same. Our vision is always really to create great startups. And our idea is to create, we'd like to see Dreamstate creating 100 great European startups by 2015. So we want to see Europe create Googles and Amazons and stuff like that. And we want to see them come off our platform.

That's an interesting intuition. How does a tech hub like a New York, like a Berlin, like a London, like a Tel Aviv create a great brand like a Google or a Facebook? And what is still lacking in the non Silicon Valley ecosystems that needs to be built?

I think that if one was to try and create it from scratch, it would be impossible. But I think the great thing that we've got going for us now is the web. And I think that the web will make location irrelevant. So you can start to cluster around a London, but you'll have people coming in from Eastern Europe and they'll all be connected Using a platform like it won't just be Dreamstake, it'll be angels list, it will be Kickstarter, it will be crowdsourcing platforms. But what you had in Silicon Valley was you had the ecosystem on the doorstep. But the ecosystem doesn't have to be on the doorstep any longer. The investors can be in Silicon Valley, the startups can be in Europe, the inventors can be somewhere else. And it all comes together. And I think this is going to be a big change over the next 10 years, where location is no longer going to be such an important factor. Ironically, the investment world, and even the tech investment world has been one of the slowest to adopt technology in its own business. Yeah, it's still parochial in essence. And you know, I think that's what we're, we're Trying to break that down, actually. So.

Yeah, well, it's going to be interesting to see. I mean, Rackspace started in San Antonio, Texas, right. So we're a big believer in non Silicon Valley businesses. But Silicon Valley is like, I'm not so sure, because companies keep moving to Silicon Valley for a few reasons.

Money.

Clearly it's there. Talent. Right. If you need somebody who's built a 20,000 node Hadoop cluster, that kid has only. There's only a few people in the world who've done that. And they probably worked at Google, ebay, Yahoo, Microsoft maybe, or someplace like that. And that talent is probably in San Francisco nine times out of ten. And then marketing and pr. Rocky and I live in San Francisco, so to get on our show, it's easier if you're in San Francisco than if you're in London. We come to London once in a while, but not as frequently as we show up at the Rackspace San Francisco office.

I think you've actually touched on a great point there. One of the things is we have a very weak tech press in Europe. In Silicon Valley, the tech press actually helps the startups in Europe. You'll find that most of the tech press is actually arguing with itself and with each other. So it's very egocentric here.

It is there too, believe me.

Rocky.

Like that.

Yes. But here startups aren't given that leg up from the tech press. And I think it's because there haven't been that many great startups in the past, but now we're seeing some great startups and they really need pushing by the tech press.

Very cool. Where do we learn more about you?

Well, we're an online platform, so obviously you can find us on dreamstake.net but we also have a LinkedIn group and Facebook fan page and on Twitter, we're dreamstake.

Very cool. Thank you for coming in and telling me about your business. And thanks for the help you're giving entrepreneurs.

It's a pleasure.

Thanks.

Thanks, Sam.