Why care about the Food tech innovations that come from Europe?
BlueCart was recently invited to speak at the 2016 Seeds and Chips conference in Milan. We usually take advantage of most opportunities to increase awareness around our product and, given the traveling time and cost, this was not an easy call.
While booking my flights, I heard things like “What can a European Food tech conference teach a US based startup?” On the contrary, Seeds and Chips was an incredibly refreshing surprise.
The conference was extremely well organized and was aimed at an international audience. It had simultaneous translations for multiple presentations. Across the hall, you could attend discussions aimed at entrepreneurs, investors and industry experts. If your interest is in tech, farming, food, sustainability, or even a combination of the above, there was certainly a panel or a presentation targeting your interest.
While navigating through the conference floor, I met incredible entrepreneurs such as two BlueCart similes, Soplaya and Diretto. They both have slightly different business models than BlueCart but face a more technology adverse population. Kudos to them for going after such a difficult market. I also met the founder of Homebiogas, an Israeli startup converting household compost into cooking gas. All-in-all, the diversity of ideas and innovations shown by entrepreneurs was in some sense was higher than those you could expect in a US based conference.
In order to understand the types of food “start-apes” (Italian for startup) there, you need to understand the significant disadvantage these companies face. VC funding is largely unattainable in Europe (relative to the funding levels available in the US). I spoke with a couple of startups seeking funding and they all had planned to visit the bay area seeking funding. Some mentioned a couple of Italian based VCs, including Innogest, whom we spoke with as well. However these VCs have the luxury of facing no real competition from other VC firms due to the small size of the venture industry in Europe, and as a result, they are extremely selective.This specific funding environment creates a filtering or prerequisite mechanism that shapes companies from the very first day.
After speaking with dozens of entrepreneurs, there were some recurring traits:
Path to Monetization
While companies like OfferUp are processing over $12B of GMV, and can “afford” to walk into their 5th year with no revenue due to healthy VC backing, startups at Seeds and Chips either had an ongoing source of revenue or had an immediate plan to monetization. This has its pros and cons! A focus on revenue can have a direct impact on growth, but it can also help startups understand the viability of their business model early on.
As Dan Lyons mentioned in his New York Times rant, many US based startups have a “mission to change the world”. To an extent, I must admit that I am guilty of this. We hope to fundamentally change the way certain industries operate and generally define success with very ambitious goals. I attribute this to a combination of factors. One is the obvious optimistic outlook of entrepreneurs. And two, is how VCs screen potential investments in the US, seeking startups that have the ability to return the entire fund on their own.
As a result of these major differences, the pool of entrepreneurs and the types of innovations at the 2016 Seeds and Chips conference in Milan was incredibly refreshing.
PS: BlueCart won the 2016 Seeds and Chips award, for incredible growth and fastest growing startup.
Watch Konstantin's presentation here.