We had a nasty surprise the other day when we went to buy our domain name. As I wrote about recently, we are going to launch our first vertical under a new brand. Migoa will be umbrella brand and we will have separate names for each vertical product. To choose the name of the first vertical, we had an internal contest. One name won by a wide margin, so we began to think about buying the domains. We checked on godaddy.com and on eurodns.com, and all of the domain names were free. So far, so good.

For whatever reason, eurodns’s site was giving us problems late on Friday evening, so we decided that we would try again on Monday. What’s the worst that could happen over the weekend, right?

Well, we found out. On Monday morning, we went back to godaddy.com and found that the domain name had been bought by a domain-squatting company. They had put up a garbage website with lots of cheap-looking ads about Brazil, inviting people to bid for the domain name. They had bought the name about 24-hours after we tried to purchase it on eurodns and had immediately placed ads on it.

How did this happen?

We reasoned that there could be five possibilities (listed in order of likelihood):

• A spy within our midst: An interesting, very “Jason Bourne” possibility that would make life a lot more intriguing, but we trust our staff and had no evidence of corporate espionage. Plus we’re not that important . . . yet!
• Lack of proper Internet/email security: I am no techie, but I think it’s important that all start-ups make sure that they take Internet/email security very seriously. It’s something that my tech team is also going on about, and now I will take it even more seriously. But who’d be interested in monitoring us (asks the naive non-techie)?
• Loose lips: Possible. Given that we took a democratic approach to naming, a lot of people knew about the various candidates and knew that all of the domain names were free. One person talks to another person . . . and six degrees of separation later, a competitor — or even worse, a domain squatter — has bought your chosen domain name for $10 and now wants to sell it to you for a few hundred — or for a few thousand — euros.
• Bad luck: Not so convincing, though very possible. Plus we needed someone to attack. Blaming it on bad luck doesn’t provide you with much of an emotional release.
• Domain squatters: The most likely explanation. According to an article on eWeek.com, appropriately titled “Whois Hijacking My Domain Research?”, this kind of thing happens a lot. When we called GoDaddy, they told us that it was impossible that a domain squatter would know that there were repeated recent inquiries about a particular name. They told us that we needed to improve our IT security. But according to this article, it might be the domain registration and “Whois” sites that are being compromised and hacked into. The author does a variety of experiments checking out domain names, waiting 24 hours and in many cases a domain squatter has registered the name and placed cheap ads on the site, just like what happened to us (and to the reader that brought this practice to the author’s attention). The domain squatters say that it’s all part of an automated process that randomly chooses names, waits 5 days to see what kind of traffic the domain gets and then releases the name to whoever wants it. The truth is that no one — other than the domain squatters — knows how they get access to the information that a domain name is in play.

But the take-home message is clear:

If you find a domain name that you like, and you have checked on some service that the name is available, BUY THE DOMAIN NAME AS SOON AS POSSIBLE if you don’t want a domain squatter to “borrow” your domain name and sell it back to you at a much higher price.

This was not the first time that we have had problems with domain squatters. When we first started the Company back in April 2006, we initially bought migoa.com and a few of the other domain extensions, not having it 100% clear what our expansion plan would be (plus, we were — and still are — poor entrepreneurs!). Once we got the first bit of cash from an investor, we checked and found that a potentialcompetitor (at that point the business plan was still a work-in-progress) had already registered our domain name in various countries, and that he did so in May 2006 — that is, 1 month after we constituted our company and way before we had even done much related to the project. The only thing that we’d done at that point was attend the Innovate!Europe event in May 2006, and it seems that it was enough to cause this person to buy our domain name. We were still working on the alpha version and had no money other than our own feeble funds, most of which went to paying employees and being able to attend the Innovate!Europe event.

In this case, I have no doubt that it was based purely on domain-squatting speculation. The strange thing is that I see this person at various networking events in Barcelona. I hope that he will have the elegance to sell us back our domain name at some point. If not, I think we’ll be okay in any case.

But again, the bottom line is the same as above: WHEN YOU BUY A DOMAIN NAME FOR YOUR COMPANY, BUY ALL POSSIBILY RELEVANT DOMAIN EXTENSIONS. Borrow a few hundred euros from your folks if you have it. The extra domain names usually don’t cost that much more, and it’s a lot cheaper to buy them now than it will be after the domain squatters attack.

Before I moved to London in 2000, I had this image in my mind that all Brits were genteel nobles who wore suits all day long, spoke perfect English and lived in 18th-century, Jane Austen-esque country estates with a staff of devoted butlers and other servants. In other words, I thought that the Brits would look and live like Mr. Darcy and Elizabeth Bennet.

But over the last few months, I’ve been appreciating just how aggressive the stereotypically stiff-upper-lip Brits are when it comes to adapting their traditional businesses to the Internet’s disruptive pull. The Brits are very thoroughly modern, and apparently more so than the country that created and initially popularised the Internet (though it should be noted that it was a Brit, Sir Tim Berners-Lee, that gets the credit for inventing the world wide web by creating the first HTMLs and web pages).

Why do I think that the Brits might get a jump on my paisanos?

First, I was skimming eMarketer yesterday, and I came across a few interesting facts:

• The online advertising market in the UK is the strongest in the world and expanding at a steady pace. In fact, Internet ads are expected to represent 18% of all UK advertising spending in 2007—more than double the percentage in the US, or in any other European country.
• Internet advertisements in the UK are among the most innovative in the world.
• The UK will accounts for more than 1/2 of all online ad spending in Western Europe, and that share will rise to 52.6% of regional online spending by 2010 (amounting to about €6.1 billion).

Second, there was the Wall Street Journal article that I wrote about yesterday noting that the Brits (via the BBC) have taken “what may be the boldest online broadcasting push by a large television network” by launching their iPlayer. As the Wall Street Journal notes in apparent awe, the US companies have been taking baby steps while the Brits are taking relatively giant leaps.

Finally, today, I’ve been reading Marc Andreessen’s blog (one of the best entreprenurial blogs out there) and he recounts an episode about an LA Times column by Patrick Goldstein that got killed this past weekend by his bosses. Goldstein had argued that the Times should promote itself by following the lead of The Mail on Sunday in Britain, which inserted Prince’s latest CD into 2.9 million copies, and also gives away music. Goldstein’s reasoning, as explained in a related New York Times article, was as follows:

“While the Times still is a profitable business, our revenue was down 10 percent in the second quarter while our cash flow was down, as our publisher put it the other day, a ‘whopping 27 percent, making it one of the worst quarters ever experienced.’ Times are so hard at the Times that the publisher has proposed putting ads on the front page to generate new revenue.”

It’s generally known that the newspaper industry in general is in a state of free-fall, and it’ll be interesting to see if and how the various media groups will reverse this decline. In fact, the New York Times reports that the LA Times has had many newsroom shake-ups, and its owner, the Tribune Company, is in the process of being sold. The British media groups are similarly in danger as readers move online and to other formats, but rather than trying to kill the story and pretend that nothing has changed, they’re taking aggressive steps to counter their declining businesses.

For the moment, the American media groups appear to be one step behind the Brits.

It’s also interesting to note how the Internet is disrupting traditional newspapers in other ways (apart from the lost revenue and lost circulation). Before the web 2.0 movement, a newspaper group could kill a story and pretend it never existed. But in this case, it appears that Mr. Goldstein simply leaked the “killed” story to the blogging community, and the article got resurrected after heavy-hitting bloggers like The Huffington Post, Slate, Gawker, and Marc Andreessen wrote about it, which helped get it written about in the New York Times.

As Steven den Beste, one of the Internet’s earliest bloggers, wrote on Instapundit.com. “[Some newspapers are] in the business of killing stories these days, not publishing them. But they no longer have the ability to close the gate because thousands of bloggers have dug tunnels under the fence.”

[By the way, for the non-Americans out there, the title "The British are coming" refers to the warning that American patriot Paul Revere allegedly made about the incoming British troops during his famous "Midnight Ride" during the Revolutionary War between the US and Britain for American independence. Paul Revere is almost as famous to us as George Washington or Abraham Lincoln.]

As is true of most good Americans, I love cheesy American pop culture and entertainment. When I first came to Spain, I thought it was so weird that most Spanish families only had one television set for the whole family, and in fact, a lot of families didn’t have cable/satellite tv. In my humble, middle-class family, each of us had our own television set with our own cable box. And eventually we each got our own VCRs as well. My parents reasoned that it was the best way to avoid fights over which program to watch. Family time has a very different meaning in the US.

So when I first came to Europe, one of the things that I missed most was being able to keep up with my favorite television shows, and in general, with US pop culture. I left the US for London in 2000, when Sex and the City was at the height of its popularity, and a lot of my friends would make references that I could no longer appreciate. I started to feel like an outsider (apart from the whole Bush-winning-the-election thing) and was annoyed that British TV was about 2 seasons behind. Then, of course, there were shows like the Oscars, the Grammy’s, the BET Awards and the American Music Awards on which my favorite recording artists would appear and/or perform.

My friends and family would send me “care-packages” full of magazines and video cassettes on which they’d recorded all of my favorite series, but it was an imperfect solution. I’d often have to pray that the US video format would be compatible with my UK VCR. Sometimes it was. Often it wasn’t. And then there was always something that they couldn’t record for whatever reason. My friends would be talking about the performances, shows and appearances, and I would feel like a stranger in my own country. How many Europeans can appreciate who Oprah Winfrey is, or that most people my age grew up watching her on TV, or that Tom Cruise, Beyonce and Julia Roberts regularly go to her show to chat about their lives, and that everyone talks about it the day after?

I couldn’t ask my family and friends to record every American program and send it me, could I?

So it was great when I found out that I could read most of The New York Times and The Wall Street Journal online. They keep me pretty up-to-date about politics, business and arts in the US. Then there are blogs like “Young, Black and Fabulous” and TMZ that tell me all about the trouble that my favorite celebrities are getting into, and give me the inside scoop into what is really going on in their deliciously troubled lives. Then I can go to Billboard.com and get a sense as to the music that’s popular in the US. I can then use a combination of iTunes and alternative downloading services to create CDs and play the music on my iPod (when it’s working).

That’s cool in terms of music and news generally, but until very recently, I hadn’t been able to see performances or television shows that I like. MTV and BET now show some of their awards shows and music videos online. It’s great, because now I don’t even have to watch all of the boring stuff like the speeches and artist introductions. I can go directly to the performers that I like and watch them perform.

YouTube was great for a while, but then Viacom and other media groups started threatening to sue them over copyrighted content. YouTube was cute as a start-up, but once Google got involved, the traditional media companies realised that a lot of money was at stake and that they didn’t want Google to make money off of their content. All of a sudden everyone was creating its own video player (and threatening to sue YouTube/Google if favourable revenue-sharing agreements could not be reached).

Too bad for YouTube, but better for me, because when I went home last Xmas, I discovered that ABC (one of the main television stations in the US) now allows me to watch some of my favorite television programs like Desperate Housewives and Heroes via their website. So when I am in the US, one of the first things that I do is watch all of my favorite shows via the Internet. One of the primary disadvantages of being an expat — alienation from your home culture — had found a technological solution. (Throw in cheap SKYPE calls, messenger and email, and the problem almost disappears.) Most of these video-on-demand services offered by the television networks aren’t available outside of the US and don’t cover the full repertoire of shows, which means that I have to rely on Canal+, which does a good job but isn’t always up-to-date (and shows lots of repeats).

This background info explains why it was great to read in the Wall Street Journal that the BBC launched its “iPlayer” (the name for its video-on-demand service) last week, which goes one step beyond what the US companies are willing to do. Or as the WSJ puts it, the BBC has “made most of its shows available to download over the Internet, free of charge, in what may be the boldest online broadcasting push by a large television network.” This means that people who enjoy British TV programs can catch some of their favorite shows online, free of charge, subject only to having to watch a couple of commercials. They can watch TV at their convenience, wherever they are, whenever they want.

I was also happy to see the BBC’s cautious approach to launching its iPlayer (click on the link and look under “videos”). The BBC has been testing the product since late 2006 with about 15,000 volunteers and notes that they are in no rush to get too many viewers right now, because they still want to focus on solving any early technical problems that might have resulted from a more general launch. This conservative approach to launching has resulted in early positive reviews, with London’s Evening Standard newspaper concluding that the iPlayer’s video quality was “surprisingly good” (according to the WSJ).

As I have stated consistently on my blog, I firmly believe that companies should not launch their products until the can proudly stand behind them. If the product doesn’t convince you, how will it convince a busy consumer already using other services?

Anyway, it was also interesting to see the BBC’s rationale for this move. Most major media players are losing customers (and revenues), as newspaper readers and television viewers move online, or away from the traditional offline formats. The Internet is completely disrupting traditional media businesses, from newspapers, to television, to music, to movies, and the traditional media companies with a little bit of vision (or hindsight, as the case might be) are reacting to their declining audiences by increasing their online presence. Mark Thompson, BBC’s director general, explains the BBC’s rationale much better than I can: “It is at least as big a redefinition of what TV can be, what radio can be, and what broadcasting can be, as colour Television was 40 years ago.”

As anyone who reads this blog must know, I am a huge Beyonce fan. I think that she has an amazing work ethic wrapped up in a superstar package (extremely beautiful, great voice, great performer, wonderful at transmitting emotions while performing and singing, etc.) while still being humble and accessible. And, of course, she is famous for doing complicated dance routines in superhigh stilleto heels.

Nonetheless, even I had to admit that I found this video — and the analysis on CNN — hilarious, not because I like seeing my favorite star fall, but because I think it’s amazing the way that she got up and just kept on giving an amazing performance. No break. No pause. No time to check for injuries. No obvious embarrassment. Single-minded focus and determination. The show must go on, literally.

The best review of the fall that I’ve read is on a blog that I read religiously called “Young, Black and Fabulous”, which tracks all that’s happening in black entertainment in the US. I’ll have to translate the post from black slang into plain English, but the best part of the review is the following: “I’m just trippin’ that this chick bounced the hell back up like her weave was an invincible air mattress and kept the party goin’ without missing nan a beat. Her recovery game is on point. I know that mess had her dazed and confused…. Concert goers say she had a bloody knee and sat down to do the next set, but continued the rest of the concert full out. . . . These other chicks in the game still aint got nothing on B. ”

Translation into plain English: “I’m so surprised (tripping) that this young lady was able to recover so quickly from her fall as if her fake hair extensions were some sort of invincible air mattress that softened her fall. She continued to dance and party without missing a beat. Her ability to recover is amazing. I know that the fall left her stunned. . . . Concert goers say she had a bloody knee and sat down to do the next set, but otherwise she continued to perform at the highest level as if nothing had happened. . . . Beyonce is still the best pop diva out there.”

It reminds me a lot of my favorite episode of “Sex and the City”, “The Real Me”, when Carrie gets invited to be a model for a day, and she falls flat on her face in front of everyone because she’s wearing “hooker heels” and had been drinking too much Veuve Cliquot to calm her nerves. She gets up in front of the entire audience only dressed in jeweled underwear trying to give her best sexy looks and then takes a huge fall. For a moment, you see her trying to decide if she will just get off the stage and drink her sorrows away, or finish the show. She decides to finish the show, and the audience goes wild for her obvious courage and determination. And then she ends up being the star of the fashion show because of her chutzpah.

The voice-over then sums up her motivation. Carrie had wanted to be a model, but her stumble proved that she was just a normal person. Someone real. And “when real people fall, they get right back up and keep on walking”. I think Beyonce, a big Sex and the City fan, has obviously taken this message to heart.

One of the great things about going to a lot of international web 2.0 conferences with prominent tech analysts and well-known entrepreneurs is that you can learn a lot from really impressive and experienced people, if you are willing to listen. When you tie that into the fact that the combination of money (from investors and Neotec) and an interesting project helps you recruit top talent and a kick-ass advisory board/group of investors (Didac Giribets, Albert Armengol, Juan Luis Hortelano and Joaquim Calaf), you can start to see how a concept (vertical search) transforms into a real company (migoa).

Case in point. In deciding our launch strategy we had two options that were the cause of intense debates:

• One approach is to launch quickly, all over the world and then hope that the traffic and the advertisers will come to you. Some of our competitors have done this to varying degrees of success.
• The other approach is to launch more deliberately in specific countries with a clear sales and marketing strategy in each market and only after the product has been developed and adapted so that local users will see its obvious value.

In the end, we decided to follow the second approach. After all, as I repeat often on this blog: You only have one chance to make a first impression, so try to look pretty. Both VCs and potential strategic partners want to see that you are able to realise “inspired execution”. (I’m borrowing the term from a blog that I read recently, but I don’t remember which one.) Of course, they want you to dominate the world, but they want you to do it one step at a time, with a clear plan in mind and with an aspiration to excellence. And when you’re working with limited resources, it’s essential to prioritise.

In plain English, this means that in a winner-takes-all environment like the Internet the key is to have a product that demonstrates relatively quickly that it is a potential winner. But please note the emphasis on “relatively”. The goal should not be to push out a rushed, poorly conceived product just to show that you can do it first; the goal should be to create something that’s built to last — something that can justifiably be described as innovative, better than the competition, scaleable, and most importantly, that takes the users’ needs and wants fully into account.

We’ve been lucky that a lot of VCs, tech analysts, traditional media companies and other entrepreneurs have been willing to push us to define the nuances of our strategy. The feedback has really helped us to hone our game plan before launching. I emphasise this point, because after launching it becomes a lot more difficult to change your business plan and product. So while it’s important to be flexible and willing to adapt to changing market conditions and opportunities, it’s also important to have some sort of vision before dedicating substantial resources only to find out later that you’ve gone in the wrong direction.

Some people have complained that we are taking too long to launch migoa. My view is that we should launch when the product is ready, not when the blogging and analyst communities demand it. In my humble opinion, a lot of our competitors launched too early and are so confident that they are already out of public beta. But most of their products don’t inspire me, and it’ll be interesting to see if their users disagree with my assessment. After all, I’m hardly impartial. In fact, I’m sure that a lot of our competitors will only improve their products with time, particularly if they get (more) funding, but the key question is whether they’ll be able to recapture users who were turned off after the first visit. Only time will tell.

In terms of what we’re doing at migoa, we are focused on creating brands for each vertical (we’re focused on three verticals — real estate, jobs and cars). Migoa will continue to be the umbrella brand for all of our vertical search products, but each vertical will have a separate identity. To choose the name for the first vertical that we will launch, we got the entire team involved in the process. Everyone could submit as many names as they wanted, as long as the relevant domain names were available. I was happy to see that the team took the task seriously! For about 24 hours, we were all on godaddy.com testing out our skills as naming experts.

This little exercise helped to demonstrate the good and bad of democracy in action. On the one hand, you get lots of candidates and, if you’re lucky, the active participation of all members of the team. On the other hand, there is the risk that a compromise candidate wins, instead of the most brilliant and original candidate. In the case of our voting process, we saw a lot of varied candidates. Some names were real losers, but then again, each member of our team had very different theories for what makes a good name (hence, the danger of the compromise candidate). I even learned during the process that that are guides and companies specialised in naming that charge enormous sums of money. Who knew? In any case, there was one candidate that blew the competition away in each of the voting rounds, and it will be the name of our first vertical to be launched in September.

Unfortunately, I can only release the selected names once we have bought all the relevant domain names. But I’m guessing that issue should be resolved relatively quickly.

It seems like that my post from yesterday generated a bit of bad blood from Carlos Blanco. Not totally unexpected, though it wasn’t my intention. I was only offering my honest opinion about what I perceived as a pattern of uncalled-for attacks, but in any case the conclusion was that in this case he was right about what he said on the panel (even if the form was less than ideal).

I have posted a comment on Carlos’s website letting him know that I stand by my opinions, but my intention wasn’t to offend him, or to request an invitation at First Tuesday to speak, or to have him mention us at events, or whatever. I think that we are probably our own best representatives as we are the entrepreneurs that started the project, and in any case, I’m not sure how much value it’d be to have as your representative someone who’s said very publicly that he wouldn’t invest in you. It just doesn’t make much sense. We’re not looking for Carlos to become our de facto spokesperson or to use First Tuesday as our preferred launch forum, if that’s what he was concerned about.

In any case, this issue is dead for me. I have to focus on our launch and on our business, and not on exchanging emails or posts. So I’ll post here my response to Carlos, which I hope will put the matter to rest.

And as for his comments about my kissing up to Intercom, etc., I don’t think he understood the message. I hope that someone understood my somewhat esoteric reference to Gods 1.0 — it was to differentiate the Old Testament God (in my parlance, God 1.0) from the New Testament God (God 2.0). God 2.0 is much more collaborative and friendly, and a lot less judgmental and angry than his Old Testament counterpart. His vision is to share and invite as many people as possible to share paradise, rather than his Old Testament counterpart who was often very angry and only spoke with regard to his “chosen people”. My view is many of the so-called, often self-appointed Gods of Internet are more 1.0 than 2.0, both in their use of technology and in their outlooks. But maybe the metaphor was too much of a stretch . . . .
In any case, here’s my response to Carlos. I’m confident that he will post it on his site as well. (I’ve written it in Spanish since Carlos notes that maybe I don’t understand the language well enough.)

————-

Carlos:

Hablamos cuando quieras sin problema alguno — con alcohol o sin :). El objetivo de mi post no era hablar de ti — era reflexionar sobre una charla en la que tu eras uno de los ponentes y concluir que estaba de acuerdo contigo en tus comentarios. Si, he dicho que no me ha gustado mucho el comentario que hiciste en Loogic ni tu manera de tratar a la gente en ciertas ocasiones. (Por cierto, como bien dices, no era necesario hacer un post ni en repuesta a la mia ni tu comentario en Loogic) pero para mi es casi igual.

Para mi el tema ya está muerto.

Todos tenemos cosas mucho mas interesantes e importantes que hacer, y realmente nunca he pretendido ser un ponente en First Tuesday. Ya hemos hablado con todos los inversores y muchos de los bloggers, tanto aquí como en el extranjero, así que si vamos a First Tuesday es mas para ver la opinión general de los otros emprendedores/inversores que asisten.

Por otro lado creo que no has entendido bien el post y mis comentarios de Grupo Intercom, etc. y no has entendido por que he llamado al post “Gods 1.0″.

En cualquier caso mi intención no era provocar una discusión publica sobre nuestra relación profesional casi no existente, era hacer una reflexion sobre mi experiencia hasta el momento en el mundo de Internet en España — “the good, the bad and the ugly”, con VCs, con otros emprendedores de Internet, etc., todo como una reflexión de varios comentarios expuestos ayer, y repito — al final, la conclusión es que estaba de acuerdo contigo en muchos puntos.

Y como tienes tantas ganas de probar la web, espero que podamos tomar una cerveza donde podrías darme tu feedback sobre la versión beta publica que lanzaremos durante el mes de septiembre.

Por cierto si quieres alargar esta conversación, mejor que tomemos esta cerverza que mencionas en lugar de hacer mas posts. Cuando quieras quedamos.

Un saludo

Gary

Today I attended a mini-conference sponsored by La Fundació Barcelona Digital called “Inversors en Projectes de Base Tecnológica”. In general, I think of this phrase as an oxymoron–that is, that the concept of “investor” and “technology-related project” seem to be contradictory, at least in Spain (in my experience). We’ve been lucky at migoa in that we’ve obtained money from both the government (Neotec) and from business angels (Albert Armengol and Didac Giribets). But I think that our experience is more the exception than the rule.

Surprisingly, Carlos Blanco was an eloquent defender of this proposition. I say “surprisingly” not because I don’t think that Carlos can be an eloquent defender of Internet projects, but because my very first encounter with him (and with other Internet entrepreneurs in Spain) was at a First Tuesday event where we went excitedly to meet other Internet entrepreneurs and where he ended up trying to convince us that our project didn’t have much merit and/or that we weren’t the adequate people to try to do it and/or that we didn’t know what we were talking about and/or that we should hire someone who did (he recommended Ivan Martinez who, as it would later turn out, is his new partner in Synerquia). Since then Carlos has attacked us publicly on one of Spain’s most-read tech blogs (Loogic) before we even began to be known in the blogosphere. He argued that we were silly because we thought the project would easily attain a lot of traffic, despite the competition of other classifieds portals, and that he WOULDN’T invest in us — the original emphasis was his. Even in the conference today, Carlos mentioned both Properazzi (as an example of a project with an international team) and Trovit (as an example of a project with international aspirations), but for some reason he’s not as generous about offering a kind word about our project. To each his own.

I must admit I find this approach somewhat shocking, because one would assume that the host of an entrepreneurial forum trying to help foment a favourable ecosystem for entrepreneurs would be objective publicly and not attack projects still in early development by young entrepreneurs (particularly if a few months later he’d announce that he’d invested in a potentially competitive project). If he doesn’t want to invest in us, that’s fine. We never asked him to. We’d never even spoken to him before the First Tuesday event. But in my opinion it’s counterproductive to the idea of First Tuesday that he felt the need to attack us publicly in this way, while completely misstating a conversation that developed over a couple of hours.

For the record — it was 4 months ago, so I only write this as an FYI — our view was that marketing is a challenge for any Internet project — even YouTube had trouble garnering initial traffic. But we didn’t feel the need to spell out our entire marketing strategy at a public event with someone who was attacking us and who we weren’t courting as a potential investor. In addition, we admitted publicly at that event that any VC that invested in us would probably want us to hire a senior of VP of sales and marketing–that’s how Ivan’s name came up–and we mentioned that we’d been meeting with potential candidates long BEFORE the First Tuesday event. In fact, the “A” in GOA stands for an initial business partner who in fact is a Marketing Director of a multinational company with a large presence in Barcelona. When the time came to start working full-time in migoa, he decided that he’d prefer to keep his current job. In short, marketing has ALWAYS been one of our priorities.

For our part, we’ve been quite happy with our efforts to date. You always want to do more, and you always feel afterwards that you could have done it better. But more than anything, we believe in ourselves. Plus I think that we’ve done a decent job at getting our message out there. Time will tell who was right, but I really could care less about proving that we were right vis-a-vis an Internet personality. My job is to make migoa.com successful by proving that we offer a better alternative than our competitors.

Anyway, based on his harsh and in my view unwarranted, unprovoked and unjustified public attack of our project, I’m not always so disposed to give Carlos Blanco the benefit of the doubt. But I found myself agreeing with a lot of what he had to say today. Again, I don’t always agree with his personal style (which seems to be to attack rather than to seek the readily available diplomatic alternative), but if nothing else it often makes him the centre of attention (which might be the point) and in any case livens up sometimes monotonous conferences. So we all knew we were in for a treat when he began a comment noting, in not so many words, that VCs (venture capitalists / fondos de capital riesgo) that want patents and other intellectual property protections only do so because they are unaware of how things really function in the Internet world. On the one hand, I could empathise with the target of his comment — Ferran Lemus, board member (consejero delegado) of HighGrowth (one of Catalunya’s most prominent VCs). Ferran seems like a kind, elegant, diplomatic gentleman but it was obvious that he was very, very annoyed by what was perceived by many in the audience as an almost personal attack — you could hear the murmurs, snickers and whispers from the audience members. And I, like Ferran, didn’t enjoy being called “ignorant” or “unaware of how the Internet world works” — or otherwise being targeted –by Carlos in front of the rest of the world and without any obvious provocation.

There is no Internet “God” in Spain, which with few exceptions is still light years behind what’s going on in the US. Even when I’ve met with successful serial entrepreneurs with amazing CVs who are multimillionaires in the US, they’re gracious and helpful, rather than attacking and condescending. They have nothing to prove to me or to anyone else. Their success speaks for itself. For example, we met with David Risher, once Senior VP of Sales and Marketing at Amazon during its start-up and early expansion phase (and before that a senior executive at Microsoft in the early 90s) when he first came to Barcelona, and he agreed to meet with us based solely on an email invitation, invited us to a coffee (at Starbucks, of course), gave us pointers (we admit that we still have a lot to learn, and even more 1 year ago!!) and introduced us to other useful contacts who had years of experience in successful Internet projects and in fact contemplated investing in our project / joining the team as a founder to occupy the role of director of sales and marketing. Suffice it to say that the person we talked with about joining our team is a prominent member of the Spanish Internet community and runs one of Spain’s most successful and international Internet businesses (and has done so for most of its history since the Internet bust in 2000), but he was the kind of person that we went to dinner with him and his wife and spoke about a mix of ITunes, IVideos, American television, Britney Spears, Spanish entrepreneurial culture and racial politics — all over 2 pitchers of cava sangria and with a lot of “buen rollo”. With this person and with David, our conversations focused on how we could and should structure our marketing efforts, and these conversations began long BEFORE we attended the First Tuesday event in which Carlos attacked us. From what I hear, I’m not the only one to receive such treatment from either David or Carlos.

For the sake of full disclosure, I must admit that I am quite fond of HighGrowth. They paid for our trip to Helsinki, where we presented at the Easy Conference. They served as our coach and mentor there. And they have always been very kind and supportive of our project. I think that they are one of the VCs in Spain with which I’d feel most comfortable entering into some sort of agreement. They’re not sharks. They’re real people. And they tend to ask us hard questions that force us to advance our own understanding of our own business, but they find a way to do it without being condescending.

That being said, in my humble opinion, Carlos was right in two points he made with which Ferran disagreed:

• that Spanish VCs still have a huge learning curve, particularly when it comes to the Internet; and
• that Grupo Intercom is a great Spanish success story, but perhaps they shouldn’t be used as a filter for all Internet projects.

As for the first point, many Spanish VCs and business angels with whom I have met DO focus a lot more on intellectual property protections than their foreign counterparts. Most ask many hard questions, but knowledge of the Internet sector is not generally as deep or as experienced in Spain as it might be in London or in other European capitals. It is particularly true that investors without prior experience in the Internet space — or whose experience seems to come mostly from reading horror stories in newspapers about the Internet bust 7 very long years ago — don’t fully take into account that intellectual propery doesn’t need to be an Internet company’s most important asset or key to success. (Note, for example, that Google’s annual statements reveal that Google pays a license fee to Stanford for their search technology and they pay some sort of fee to Overture for their advertising technology. This doesn’t make Google any less of a tech company. Likewise, what patents do YouTube or MySpace or Facebook have that are key to their success?) Moreover, a lot of start-ups simply don’t have excess capital to invest in intellectual property protections.

By contrast, when we meet with foreign VCs, most ask three key questions: i) why is your team better than your competitors; ii) how is your product different and better than your competitors’; and iii) do you have traffic to demonstrate that you might become the market leader in your chosen markets? The focus is on beating the competition by hook or by crook, and intellectual property undoubtedly has a role there. But team, product and traffic/market are the key elements. And while they always ask about our technology, the focus is not so much on intellectual property (what legal protections do you have for your technology?) as it is on product differentiation (why is your technology better?).

Secondly, given their relative lack of comfort with Internet projects a lot of Spanish VCs appear to use their connections with some of the founders of Grupo Intercom as a filter for Internet projects, which might inadvertently serve an incubating function for Grupo Intercom (which in itself is a start-up incubator, with the difference that they often require that they are majority shareholders of the start-up and their initial investment cap is quite limited — less than €500.000 if I remember correctly). Antonio Barros is involved in many ventures related to online classifieds, from Bonsai Venture Capital to Grupo Intercom to connections of varying degrees with various business angel groups, and Antonio is personally one of the nicest people that I’ve met in the Spanish Internet space — he always remembers your name and your last conversation, and he always seems pleasant and willing to share his experience without being condescending. And in all fairness, Infojobs is still arguably the most successful Spanish Internet product, with proven turnover and success. Even Schibsted, the online classifieds giant in Europe, refers to Infojobs as one of their star products in all of their portfolio. And when we went to the First Tuesday event on online classifieds at the beginning of the month (Carlos didn’t invite us to present), most of the speakers had some connection to Intercom and/or Anuntis (Infojob’s parent company) — that is, Intercom and Anuntis have generated a new breed of entrepreneurs who think that they can do it better than their mentors at Intercom.

All of this is wonderful for the Spanish Internet space, particularly with regard to the online classifieds sector.

But Oriol and I were unpleasantly surprised when we first started speaking with business angels and investors, and then found out that many of them were discussing our business plans with their friends at Intercom. OK, it’s well-known that most VCs don’t sign NDAs (non-disclosure agreements), but they shouldn’t speak about our product with a potential competitor (depending on how you define competition) or strategic partner that we hadn’t yet approached. Either they are business angels/investors or they are incubators for Intercom, but there should be full disclosure at the beginning. Intercom should not be converted into the old-Testament “God” (God 1.0??) of Internet. We heard back from a few of these sources that the project was promising but that contacts at Intercom had said that it’d never work, if for no other reason than because Intercom would never allow us to crawl their site. (By the way, a lot of vertical search sites DO in fact crawl Infojobs, and the vertical search sites will generate more traffic for Infojobs — it’s free SEO. In any case, Intercom is no longer in control of Infojobs.) We were also told that the experts’ view was that the project was too ambitious in scope (which to me is a strange argument given that most VCs want you to become the next Google). It was therefore a bit surprising (not really, but . . . ) that we read recently on Loogic that Intercom is planning to launch a vertical search engine for jobs outside of Spain (a fact confirmed to us by Antonio at the recent Investment Forum sponsored by CIDEM).

Makes sense. When you see a potential competitor in the horizon, your first instinct is to kill him, not to help him grow stronger. And a lot of VCs senselessly give that God-like power of start-up life and death to Intercom and other “vanguards” of the Internet establishment who would prefer to kill technological innovation (and thus maintain their current competitive advantages) rather than foment competition and potentially die in the process. I can understand it from the web 1.0 company’s point of view. It makes less sense from the VC’s point of view, given that they are always complaining that they have too much money and not enough good projects. My view is that they should stop relying on outside web 1.0 “experts” with little interest in supporting future competitors (particularly, if these vanguard web 1.0 companies have little or no economic stake in such competitors) and focus on hiring and training internal staff that can be objective in their analyses.

As an aside, I think that La Caixa does a good job of this via Jesus Monleon, who is another experienced entrepreneur who has always been supportive — even defending us along with Walter Kobylanski against Carlos’s attacks on Loogic. Jesus is the entrepreneur’s friend and defender. He’s realistic without being condescending and without ever promising you anything. He just seems genuinely interested in fomenting a favourable ecosytem for entrepreneurs, and he never condescends to us, even as he gently urges us to launch soon.

In any case, I just ask that the business angels and VCs give us this information before they waste our time and give away potentially confidential information.

The other interesting comment from the conference was about the speed with which a start-up should launch. There is a frequent phrase here that “hay que correr” — you’ve gotta move fast, because the Internet world moves fast. I really liked the comment made by one of the entrepreneurs (I think it was Miguel Solá) when he noted that you’ve got to run, but you can only run once you’re fully prepared. The race is a marathon, not a sprint. In my humble opinion, a lot of Spanish Internet projects launch without fully having a product that can generate good word-of-mouth and without any apparent marketing/financing plan. They apparently do it for the pure love of the project, which is great, but not if the project isn’t sufficiently mature, ambitious or “prepared” enough. In my view, you’re only sowing the seeds for your own eventual demise. Most projects need financing if they are to reach their full potential, and access to financing only comes if you meet certain pre-conditions. In the US, there’s an expression that “you only have one chance to make a first impression”, and that’s been our motto. Other vertical search engines have taken different approaches to mixed results. Some still haven’t gotten material financing. Others have launched but have generated little buzz/user satisfaction. In the US, the time between starting a company and launching a public beta (at least in the vertical search space) was often quite significant (more than 1 year in most cases), so we’re not so frightened by the fact that we will launch later than a lot of our competitors. Our goal–and our duty–is simply to create something that will be worth the wait. If we can do that, both the buzz and the financing should come as logical (though not guaranteed) next steps.

June was certainly a very busy and exciting month! I like to travel, but even I am getting a bit tired of (low-cost) airlines. I’ve been to London two times, plus took a trip to Helsinki (the first time I’d been there), and before the week is over, we’ll be going to another European capital to meet with potential investors. At the beginning of June, I traveled to London for 10 days partly for pleasure. When I lived in London from 2000-2001, I found it profoundly lonely, expensive and wet. I’m from NYC, so impressive world capitals didn’t necessarily impress me at that stage of my life, particularly when the city is very cold, very expensive and the people are very insular. So when I got a job with a major UK law firm in their Barcelona office, I didn’t have to think twice. Waiting 10 months for my work visa (it’d taken 3 weeks to get it in London) was a bit ridiculous, but after living the horror of September 11 from London, I decided that life was too short and moved immediately to Barcelona, where I waited for 3 more months before my visa was conceded.

I’d been back to London for an occasional weekend, but not really for any extended period of time. What a difference a little perspective (and about 5 years) makes! This time I found London was really quite awesome. It rained 6/10 days (which counts as “good” weather there), but what most impressed me was the range of things to do. That, and the fact that a lot of my Yale and Harvard friends have since moved to London (friends make a big difference). In Barcelona, the pace of life is great (and relaxed), but London is a fast, exciting city, at least if you are willing to spend a few bucks. I saw Harry Potter (naked) on stage, took in a reinterpretation of Cabaret, had (very expensive) high tea at the Lanesborough Hotel, almost went to a concert with Enrique Iglesias, hung out every night with some of my best friends from high school and college and — best of all — went to see Beyoncé live in concert. That really was the icing on the cake. Her concert was amaaaaaazing (said with the appropriate dumbstruck US accent). And as the FT remarked in their review of her concert, she has the remarkable ability to seem effortlessly beautiful, talented and gracious. In the reporter’s words: “Beyoncé wears her dazzling celebrity with the ease and lack of irony that only the very rich, the very beautiful and the very successful can muster, but she underpins it with a work ethic reminiscent of James Brown.” In any case, London really provided me with so many (English-language) cultural experiences that I haven’t been able to enjoy in Barcelona. It was a great escape to a world capital, despite the crappy weather and extraordinary expenses.

From London, it was off the same day to Helsinki to participate in the Easy Conference from 5-7 June 2007. The official title was “The INTRO Investment Forum, the second transnational EASY event. The event was organised by SITRA, the Finnish Innovation Fund, and we went as the guests of the Catalan VC, Highgrowth. It was a nice gig — all expenses paid and the chance to meet European business angels. We traveled with Mercé Tell and Jaume Solà, who are both young, relaxed and nice. They really tried to help us network and make contacts, and more than that, it was just plain fun to hang out with them. My Catalan-comprehension abilities certainly got a workout — even in Helsinki — but I still had a pretty nice time. We ate reindeer and saw the sun set every night at about midnight before rising again at 3AM. I’m not sure I have immediate plans to go back to Helsinki, but it’s nice to say that I went. As for the EASY conference, I think that it’s moving in the right direction, but I don’t think that it yet rises to the level to the main conferences such as Red Herring, Global Innovate and Essential Web. The key to any conference from an entrepreneur’s perspective is access to finance and generating buzz for your project, and it remains to be seen how effective EASY is in that regard.

Finally, last week, we went to Essential Web in London. The event was amaaaaazing. With all due respect to Red Herring and Global Innovate, Essential Web was a dream from the entrepreneur’s perspective. It was at an IMAX theatre, so the effect of speaking before a huge screen half of which had your presentation and the other half of which had your image was really cool. I literally felt larger than life, my moment to be a superstar like Beyoncé and Jay Z. More than that, the other speakers were a veritable “who’s who” of European start-ups, including such companies like Quintura, Extate, Garlik, Jaiku, ParkatmyHouse, Seatwave, etc. A lot of these companies are already very, very well funded (in some cases with investments of more than 9 million pounds sterling), so it helps to give you a little bit of perspective of what’s possible with a European VC. Sometimes when we meet with a Spanish VC and talk about valuations, they say: “This is not the US. The US is crazy.” It will soon be very difficult to make the same argument, because we are, after all, in Europe, and the major European VCs are already attempting to follow the investment paths of their American VC brothers and sisters, which means realistic valuations taking into account the market potential for a truly international product. In any case, a lot of the buzz was around Jaiku, and it was funny to see how the VCs jumped on the CEO’s bandwagon. For his part, Petteri of Jaiku went to the event dressed as if he had just come back from Sonar — totally relaxed and super “moderno” as we say in Spain — and still seemed a bit surprised that he was receiving so much attention. It worked for him. He seemed totally natural and comfortable with himself, without any ego-tripping or superstar complex. Very unassuming. Very nice. What surprised me most about Essential Web is that it was the first event where it seemed that investors were actively seeking to do deals. In fact, it was rumoured that one of our major competitors was in talks to get a major investment from a major VC. (Sam Sethi said that he might post about it today on his blog). We met the guys at the conference and wish them all the best. They’re very young (early 20s), but their technology is excellent. If they get funding, it will be a good sign for all of us that the vertical search market is about to get moving quickly within Europe. I’ll be the first one excited to see what valuation they’ll be able to get. It should set the benchmark for the rest of us.

All in all, Essential Web was a very concentrated and highly successful effort — 1 day, 28 main pitching companies, high-level executives from Google, Yahoo, News International, Index Ventures, 3i Group, Accel, Advent, etc.; a power-house event with powerhouse people. And unlike some other conferences, it was free for the participating companies! Usually, event sponsors require the winning companies to pay hefty fees to participate, but Library House should be congratulated for running a first-class event without exploiting cash-starved entrepreneurs. For anyone who’s interested in more information about the conference, I’ve uploaded a copy of the delegate booklet to this post.

Almost as successful as Essential Web was the OpenCoffee event the next day. There was a good mix of entrepreneurs, VCs and corporate executives there trying to make things happen. We had a few interesting conversations with Sam Sethi of http://www.vecosys.com/. He came over to congratulate us for us presentation and gave us some inside scoops as to the UK vertical search market. He should know. He used to be the main contact for TechCrunch UK before he had a well-publicised rift with Michael Arrington. We also had a time to chat with some potential strategic partners (of multinational companies) that were impressed by our presentation and wanted to discuss possible ways of working together. If during my first trip to London I’d been impressed by the access to global icons, on my second trip I was impressed by the access to corporate and technological innovators. The truth is that London presents a very, very compelling ecosystem.

Meanwhile, back in Barcelona, we’ve been chugging along with migoa. June was also a good month for us in terms of national press, both offline and online. We’ve been in Expansion, Cinco Dias, Loogic, Error 500, etc. All in all, it’s been a good month of media coverage. Our international exposure and participation in various conferences means that we are in the very fortunate position that major media companies throughout Europe are contacting us to talk about working together and possible investments. It’s still way too early to take any such talks too seriously (or to enter into any more details), but it suggests that we might be doing something right.Essential Web.

Hopefully, I’ll have something more interesting to report after I get back from our next trip, which will take place at the end of this week. And I think the sum of this post is that networking matters and it works! You don’t have a good product if no one knows about it, and it’s funny that at these conferences we keep bumping into the same people. They all tend to be very powerful people from Google, Yahoo, MSN and from the VCs, but the point is that the more they see you, the more you network with them, the easier it should be eventually to make something happen from a funding point-of-view. As we say in the US: You’ve got to be in it to win it!