Sunday, July 27, 2008



Following an extensive beta test of the service during which 50,000 customers were served, Wonga.com has now launched. Wonga offers a new source of fast credit, without the long-term commitment associated with bank loans, overdrafts and credit cards.
The premise is simple, the customer inface clear and easy but the technical execution extremely complex.

Wonga is offering a service that could not have been provided pre-internet. Loan applications are processed in real time and, if approved, funds are transferred to the customers account within minutes. Its about as close to instant cash as it can be.

The service does not compete with Bank Loans, Hire/Lease Purchase or other larger amount finance packages - initial loans are restricted to just £200. When might one want a Wonga loan?
The service has been designed to appeal to anyone who experiences the occasional ‘Wonga moment’ - such as an urgent time-sensitive purchase, an unmissable social event, emergency repairs or a shock bill.
Errol Damelin, founder and CEO of Wonga, has a neat way of positioning it. "we're not the cheapest way to borrow money, but we provide a service that's much faster, more convenient and flexible than anything else out there. It's much like a black cab, which might not be an economical way to get around on a regular basis, but you get a fantastically fast, convenient and secure service on the occasions when a bus or tube won't do."

The central ethos of the company is openness and simplicity. The customer is informed of the cost in a clear way and is able to choose precisely how much they want to spend. Like in many other service industries, the Wonga customers are willing to pay a premium for a high level of service and the instant response which only it can offer.

The back end processes and the number of 3rd party integrations needed to make this all so simple for the customer has been anything but trivial. Wonga uses a sophisticated and proprietary credit decisioning system to assess every application -its only interested in lending to people whom they believe can reasonably afford to repay their loan without undue financial stress. All these features are in contrast to many internet or high street lenders who offer little or no flexibility, few or no credit checks and large fixed fees.

Errol explains: “Banks and other lenders are weighed down by tradition and complexity. People have come to expect rigid terms, realms of paperwork and slow decisions - particularly in recent times with the increasing pressures of the credit crunch. So a frequent reaction to our service has been amazement at the speed of our process."
Wonga also operates a trust system, similar to community-orientated sites like eBay, whereby new applicants are initially limited to borrowing up £200 but can increase their credit limit by using the service responsibly over time.

Errol and his partner, Jony Hurwitz, have a number of further innovations to the Wonga service in the pipeline which promise to add more value to Wonga customers soon.

Wonga employs 37 staff in London with a development team in the Ukraine, and is backed with venture capital from Balderton Capital, TAG and Kreos Capital.

Read the Guardian article which features an interview with Errol for further information.

Oh yes! Almost forgot. The company has also won a string of awards (including "entrepreneur of the year" from Credit Suisse sponsored National Business Awards, SE region) and been shortlisted for others.


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Tuesday, July 22, 2008

MyBuilder starts building


Ryan Notz applied to Seedcamp 07 with his Buildersite plan(since relaunched as MyBuilder). He came all the way through and got his funding and with it many column inches of publicity. Like the piece in the Observer. Ryan's presentations at Seedcamp will be remembered for the obvious passion and sincerity that he displayed for his project. His own experience as a Stonemason and his intimate experience of the way in which the building trade works and what a nightmare it generally is for consumers, has guided the development of the business. He has chosen the success-fee marketplace approach rather than the lead generation model believing that it particularly attractive to both buidlers and consumers because unlike the lead generation sites, MyBuilder is able to retain their builders through both the good and the tough times. Lee Dryden, a builder registered on the site says: "This site is great. I paid for lots of leads with another site and didn't get any work at all. I'm more than happy to pay MyBuilder's fee when I get work -it's fair!" Ryan says that the approach works better for consumers too. "If you want to find a great builder, you need a lot of choice. A lead generation site can only put you in touch with builders who have bought your lead. Worse, they can only sell your lead to a few tradesmen (or they'll get an even bigger drop-out rate). Consumers prefer to choose their builder based on feedback, distance, skills, qualifications and experience, rather than simply those who buy their lead. MyBuilder gets around this problem by providing an open platform where consumers can search the entire database of over 10,000 tradesmen, and tradesmen can look at and enquire about all the jobs (currently at 1000 a month and growing). It ensures a better match, with satisfied customers that come back, and tell other people about the site. The network effect with this model is powerful, and it also enables MyBuilder to publish search results of both live jobs and registered tradesmen, which helps implement valuable partnership deals." Key to MyBuilder's 'go to market' plan has been the partnership with Travis Perkins (including Wickes) who joined Alex Hoye, TAG and others in a post Seedcamp funding round. A major PLC with sales exceeding £3bn, Travis Perkins is a leading company in the builders’ merchant and home improvement markets, and is a main supplier to the building and construction market, one of the largest industries in the UK.
The Mail on Sunday covered Travis' investment in MyBuilder here.
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Friday, July 18, 2008

Seedcamp Momentum Builds


There are 3 weeks left to get your application in to this year's Seedcamp in London.
If you are not yet convinced of the benefits or unsure of whether you qualify, check out Seedcamp and read Saul's recent post.

Part of that post read:
"At Seedcamp you know that if you apply and get through to the main week in London from Sept 15-19th just some of the folks you'll get to hang out with and get feedback from include:

the founders behind some of Europe's biggest recent exits like Niklas Zennstrom and Michael Birch plus the key folks behind MySQL, Lastminute, Last.fm, Buy.at, Plazes, Kelkoo and Zyb
the founders of some of Europe's most promising next generation businesses like Seatwave, WAYN, Moo, Spreadshirt, Lovefilm, Huddle and GlassesDirect
some of Europe and Israel's best seed and venture investors; including Atlas, Balderton, Amadeus, Index, Atomico, Northzone, Eden, DJF Esprit
experts in product, marketing and technology from Google, MySpace, Facebook, Skype, Yahoo!, Microsoft, Cisco, IBM, Sun and Oracle
folks from Techcrunch, LeWeb, FOWA, O'Reilly and the FT
plus we'll even throw in some specialists in startup legals and recruiting ;)

It's pretty intense - check out some of the content from last year. But its a lot of fun and pretty useful to the winners.

It's worth applying anyway though - lots of last year's teams who didn't make it told us how useful the application was in helping them to focus and articulate what they were trying to build."

Seedcamp is now established, thanks to the drive and energy of Saul, Reshma and the many others in the community who support it, as one of the prime engines for the start-up ecosystem in Europe.
The recognition it has received across the tech world is remarkable given its short history. Certainly those at the heart of the startup world in the US are looking at Europe in a different way - partly because of it.
During my month in SF and the valley I met a number of people keen to come over and support Seedcamp. Validation from Fred Wilson certainly helps too.

Wednesday, July 09, 2008

Fizzback tops them all!

In the month in which lots seem to have happened with TAG companies, Fizzback's winning Supplier of the Year to the Retail industry must take the top spot. Retail Week - the leading journal for Retailers runs something called the European Retail Solutions award. Fizzback won the award in the Best Use of Technology in a Hospitality and Leisure environment for their work with Bourne leisure which enables Instant Customer Feedback via a variety of channels including SMS, email and voice. This would have been almost expected given the innovative solution it offers for this environment, but to go on to be the overall winner of The Supplier of the Year - against competition like BT, NCR, Torex, Bazaarvoice etc was some achievement for a company which only launched its service less than 2 years ago. Their work with Marks and Spencer was also shortlisted. This important award comes shortly after being awarded 'cool vendor' status by Gartner. Fizzback was included in the list of "Cool Vendors" in the “Cool Vendors in CRM Customer Service, 2008” by Michael Maoz & Ed Thompson” report by Gartner, Inc. Gartner defines a cool vendor as a company that offers technologies or solutions that are: Innovative, enable users to do things they couldn't do before; Impactful, have, or will have, business impact (not just technology for the sake of technology). The report covers vendors that offer innovative approaches and technology for improving the customer experience during service interactions. The report highlights the primary importance of the customer experience and begins “Businesses expend tremendous amounts of money and energy on marketing and sales, yet lose customers by providing inferior service experiences.” Fizzback enables companies to have meaningful conversations with their customers via mobile devices. The journey begins with customer feedback at the point of experience, initiating a two-way dialogue that builds customer engagement, and ultimately drives advocacy. A unique artificial intelligence engine lies at the heart of the Fizzback system, driving large volumes of customer conversations at a low cost. Instant, tailored responses are provided to the customer, and front-line employees are alerted to take relevant action. Through an interactive dashboard, executives have a real-time insight into the 'voice of customer', including mission critical metrics such as net promoter score and propensity to defect. Fizzback is one to watch - as Fred predicted in Feb 07. Fizzback is backed by TAG and Advent Venture Partners

Some recent press coverage on Fizzback: Retail Week Customer Service Manager The Retail Bulletin Mobile Today
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Wednesday, July 02, 2008

An Illuminating Month

The south side of the Googleplex building in M...As regular readers will know I very seldom muse on the 'state of the nation' or other lofty and worthy subjects. I leave this to the philosophers and commentators in our ecosystem. My posts generally relate specifically to TAG companies. Excuse this piece but it seemed necessary after spending almost a month in the 'theatre of dreams' which is the Bay Area of San Francisco. Normal service will be resumed soon.

A month in San Francisco and 37 meetings has given me some real insights into what has made The Bay Area of San Francisco - or more precisely, Silicon Valley the technology crucible for the world. Its instructive to look at which of the elements are replicable elsewhere and which are uniquely SV.

Key elements:
1. Culture: emanating from the gold rush 1848 when the surge of prospectors arrived from all corners of the world, the ethos is liberal, open, diverse, multi-cultural and the sense of opportunity is pervasive.
2. Lifestyle: the weather helps as does the natural beauty of the bay, the ocean and the mountains.
3. Size: The city is surprisingly compact, the population relatively small, the valley is accessible by 2 fast moving freeways and once there of course parking is plentiful, immediately outside the relevant office. All this makes for intensive interaction, there is a high concentration of tech start ups with easy accessibility to one another. The tech industry is extremely important to the city, the region and even the state. Its a significant driver of economic growth and activity.
4. University: Stanford is a major factor – its school of entrepreneurship is focused towards making engineers into entrepreneurs. Some of its programmes [eg Prof Tom Byers' Stanford Tech Ventures Programme and the Entrepreneurial Thought Leaders Course] are turning out some of the best new entrepreneurs around. Just another example of the focus on Entrepreneurship is The Mayfield Fellows Program (MFP) which guarantees an automatic summer job at a start up. The Mayfield Fellows Program (MFP) is a nine-month work/study program at Stanford University designed to develop a theoretical and practical understanding of the techniques for growing technology companies.
5. A very active angel community and an informal‘investor club’ capable of rustling up a $1m seed round with a few phone calls in an hour. More angels are joining this community every time there is a significant exit or a group of Google execs cash in their options.
6. Of course, lets not forget that the US is still the largest market in the world - for most products and services. This is a fundamental factor.

All above factors attracting some of the best and brightest in the world.
Including a number of Europeans. Brits, French, Scandinavians, Spaniards etc.. Many in the Euro ecosystem wonder how one competes with all this. In my view its a not a matter of competing its a matter of creating.
Its also a case of Europe joining the global ecosystem and not seeing itself as separate. In the old economy it was a zero sum game – for every winner there were losers. In the New Economy we are thinking about creating or reinventing markets, disrupting old and inefficient methods and processes.

We in Europe can certainly play our part. Here are some of our fundamentals:
1. Creativity: Home to and heart of some of the great entertainment (eg music) and advertising industries. Great literary traditions. For the new web companies – which are global in reach and capital efficient - content, design and style is becoming ever more important (aren't the Apple style gurus all Europeans?)
2. Core engineering education: High standards pertain all over Europe - lacking in commercial and entrepreneurial sophistication - but with strong engineering traditions.
3. Low cost, highly efficient development capability across eastern Europe and easier access to India.
4. London – the most culturally diverse city in the world - with multi-lingual resources. Europe generally tends to have a more global outlook from day one - knowing that the home markets are small(er). Look at Israel - not much is developed for the home market - much has been world beating.
5. More advanced mobile technology and infrastructure than the US.

Things for us to work on:
Collective effort needed. - Create centres of excellence – shared working spaces - Develop further the great networking and learning hubs: Seedcamp, Opencoffee, conferences, first Tuesday. - Stimulate, encourage, help the Universities create world class entrepreneurial education programs and enable them to share the economic advantage.
Stimulate and encourage more cross pollination with US companies - both East and West Coast.
We can learn a lot and gain easier access to their big markets by partnering or locating commercial operations there.



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