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This article was originally published by Ivaylo Simov, partner at Eleven, on our blog in year 2013.
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As we enter our 2nd year, I’ll mention a few domains that are of particular interest to us.
I’ve shamelessly taken clue from this list; however, don’t take our list as omniscient of the next big opportunities, but rather as my (in some cases our) preference for things we would love to see and eventually fund, if everything else fits into place, especially the team behind any such ideas.
So without further ado, here’s Eleven’s list, starting with some of the more obvious:
Consumerization of the enterprise
A term also popularized by Ivan Vesic from VetCloud, this is effectively SaaS for the corporate masses taking best clues from the ease and practicality of consumer apps and bringing similar levels of user experience to your everyday job. Since VetCoud we’ve also invested in Wobeek (for beekeepers), LegalTrek (law firms), GymRealm (gyms) and we expect to have many more. One of our scouts Vukasin has also delved in this direction with his TruckTrack (transportation companies). Weather its ERP or CRM or any other software that makes the company life easier, we expect dinosaur-like enterprise software companies to quickly become extinct, as much cheaper and easier to use niche solutions come to dominate the landscape.
Hard stuff
It’s the more tangible stuff from our portfolio that has so far generated the biggest interest among mentors, media and investors (this last bit still TBC).
Hardware is hard. It doesn’t matter if you call it the Internet of Things or firmware or gadgets, but combining software with electronics and good design is more challenging that a simple mobile app. There are big electronics manufacturing companies with a presence in the region, so there are engineers around, and we would love to see more of them becoming startupers.
Beautifully designed consumer goods
Just check out what sells best on Kickstarter and the likes.
For a greener future
Whether it’s green energy or just improving efficiency and waste management, there’s a big push worldwide in this direction. I personally believe that the overall obsession with more environmentally friendly stuff is hardly the most effective method to reduce our global footprint. Did you know that most families in developed countries throw away 40% of all food they buy? Do you think it is better to buy eco-friendly packaged goods or to reduce your overall waste to less than 10%? Ideally it could be both, however, the current focus is on the perceived eco-friendliness rather than the overall effect.
And a healthier life
- Healthcare is an old industry that’s ripe for disruption and there should be many opportunities in MED TECH. However beware that there’s very high perceived risk when dealing with people’s health and life, so tread carefully.
- There’s a big hype about the QUANTIFIED SELF movement, so take advantage of it.
- Maybe you’ve seen Fast Food Nation or maybe you haven’t, but we are all aware of the lack of naturalness in today’s diet. So here comes anything BIO/ORGANIC. We have carefully ventured with our first project in this category Biottery. However, my personal favorite within this space would be someone that challenges the fast food industry behemoths. It doesn’t even have to be organic, as long as it’s more traditional and more natural.
Education innovation
I do hope my children will carry tablets and not bulky textbooks to school. However, there is a fundamental need for change in the education ways (if you don’t know what I mean watch the inspirational talk by Ken Robinson). And no, I don’t mean another Khan Academy clone, although all of them are perfectly fine and we much admire what they do.
Look at some of the region’s competitive advantages:
Peer to peer
Eastern Europe (and Bulgaria in particular) is notorious for pirated content, yet apart from stimulating the proliferation of high-speed internet (luckily helped by the lack of regulation), these vast peer networks have failed to translate into viable businesses models on the right side of the law.
Revolutionizing the outsourcing industry
Again Eastern Europe and particularly Bulgaria and Romania are best in class in near-shoring, especially in IT. However, the abundance of talent in these IT-heavy businesses is also a prerequisite for spin-offs and productization of in-house developed solutions. Also, they could be a testing ground for some new and innovative outsourcing practices.
Try tackling the region’s disadvantages:
e-Commerce
Whether it is niche e-commerce or mobile commerce or means to service the growing e-commerce market, the region is particularly tough with small countries, different cultures, different languages, small margins. Anybody that can manage to navigate these murky waters should be able to excel in bigger markets.
Advertising for the new age
Even smaller and less developed on a comparative basis versus other industries, the advertising market in the region is so depressed that it has set the ground for a perfect storm, whereby we could jump over several stages of development and create new ways to promote brands and engage customers.
Some less obvious and one clearly controversial choice would be:
The underserved
I already mentioned a couple of areas under the Hard Stuff section, but there should be much more non-web/non-IT projects that are able to scale and apply lean startup philosophy and other startup concepts like actionable metrics, MVP, PMF, etc. It seems that the offline world is very neglected from accelerators and VCs alike, while there could be concepts and niches that yield to improvement in a startup fashion way.
Social venture
We firmly believe that doing good and making profits are not mutually exclusive, but should go hand in hand. We have a first one in Volofy, but we expect to see more innovation disrupting the NGO landscape in non-NGO fashion.
Profiting from vice
In recent history, the financial community has put a great deal of emphasis on the ethics and morality of its activities and investments, which has transferred to startups which shy away from certain taboo areas. As Eleven we have our own set of restrictions regarding the usual suspects: gambling, alcohol, tobacco, etc. However, because of this overall neglect, the whole vice space is hugely profitable and hugely ineffective. Because of our limitations, we cannot fund anything that deals directly with the vices, however, we would be curious to see some fringe ideas that defy the usual prejudices rather than put “right” and “wrong” labels on personal habits.
Last but not least, a few of my personal aspirations:
Reducing the complexity of choice
Simplicity is the new competitive advantage in a world of more. Articulating the personal preferences of each individual and matching it with the best product or service for him or her is no simple task, but whoever resolves it would become bigger than Google and Facebook.
Democratization of investments
SecondMarket, crowdfunding sites and the likes of Angel List are excellent examples. However, I still feel there’s a big disconnect between people with money (even regular folks with a few thousand in the bank), people with ideas and companies looking for funding. The problem is even accuter in our part of the world. I strongly believe accelerators themselves shall disrupt the traditional VC model, but there’s definitely a link still missing out there, bridging the gap between founders and money.
Mashups
or a combination of any of the above. We had a very complex message on our landing page, which is no longer there, but it’s still valid: “We share the belief that great ideas happen unexpectedly, hatched by the clash of interdisciplinary fields, often at the brink of industries, technologies, sciences, and societies. And what better place than Sofia for the next big disruption to start(up) … A place on the edge of western and eastern civilization, modern technologies and ancient traditions, hackers, and survivors, where life still has a taste”.
To better illustrate the last point with an example, our guys from Playground Energy have developed a superbly designed toy with some ingenious engineering inside (hard stuff) and while this toy generates green energy (green), it’s ultimate goal is to encourage kids to exercise (healthier lifestyle) and to learn about kinetic energy transformation (education), while it monetizes through appealing to CSR budgets by providing corporates with a green branding opportunity (nontraditional advertising).
If you have a great idea that’s not on this list, don’t be deterred. Please don’t feel that if you want to apply to Eleven, you have to work on one of these types of ideas. We admire people that relentlessly pursue their own vision. And also have in mind that the most important thing for us is still THE TEAM (its resilience, complementary skills, balance, perseverance, passion) as we’ve also witnessed great ideas executed poorly by unbalanced teams and average ideas executed in a superb way by great teams.
On the other hand, if your idea fits perfectly within any of the categories, that does not guarantee you success. On the contrary, we are more familiar with these areas and therefore more critical.
