INTERVIEW

Mike Edelhart from SocialStarts: CEE countries should copy the Israeli startup model

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PODIM, this year in its 35th year, is one of the largest conferences on entrepreneurship and innovation in CEE region. PODIM 2015 that will take place in Maribor, Slovenia on May 13th and 14th and will focus on collaboration between startups and established companies. The conference will be visited by more than 600 startupers, entrepreneurs and investors. We’ve had a chat with Mike Edelhart, lead partner at SocialStarts fund.

podim2015 Mike Edelhart SocialStarts

On PODIM, you’re going to talk about startup management for professionals. Can you tell us a little bit more about your lecture? What are PODIM attendees going to learn from it?

​Well, I don’t lecture. I talk. As someone who has led start-ups, evaluated tech and start-ups and invested in start-ups, I’m going to share my views of what differentiates really great start-ups from ordinary ones and what are the fundamentals of positive, and not so positive, entrepreneurial experiences.​

Can you name your top 5/favourite investments from your portfolio?

​We have made more than 160 investments from our current funds and nearly 200, all told, including our angel investments. We were the first investors in Pinterest and are extremely proud of all Ben and his team have accomplished. More recently, we were the first investors in Boxed, which is, essentially, WalMart on a SmartPhone. We think Chieh has done a fabulous job; he has grown into $10M+ in revenue and more than $100M in value in under 2 years. We sold Lucky Sort to Twitter only months after investing, a great outcome. We are proud to be investors in Mashable, the next-generation news site and Simple Reach, the analytics platform that helps drive Mashable, Elite Daily, Upworthy and dozens of other publishers, both new-wave and traditional. But, in truth, I love all my babies.

​You’re a partner at SocialStarts, naturally you will be looking for new investment options on PODIM. How well do you know regional startup scene (apart from Slovene companies Zemanta and Povio that are in your portfolio) and what attracted you to come to Maribor this year?

 We have many investments with origins in the Baltic region and Europe. We believe deeply in the emergence of borderless markets and so want to understand as much as we can how the world of tech works in different parts of the world.

​While talking to startups from different parts from the world – do you see any differences in their way of work, how they see innovation and disrupt?

​Yes, definitely. My partner and I have strong roots in Israel and Japan. We have 3 members on our team with backgrounds in greater China. All of these markets have different world views, investment approaches and consumer behaviors. They also have distinctly different styles for approaching code development. But, increasingly, we see start-up teams flowing across borders and cultures and we see companies flowing across borders in new ways.

What would you advise to startups coming from such a small country like CEE countries?

​Copy what Israeli start-ups, and Israel as a country has done in this area. They have been great a supporting a start-up culture and in finding ways to, essentially, use their small country as a beta site for the world market. They also have done a good job of developing venture money in the country and strong ties to investors in both Asia and the US as a basis for growth.

​How do you see the future of native advertising?

​We don’t use the word advertising at the fund. We think it is a term whose value is much more in the past than in the future. We believe the future of marketing will be in ever more tailored, dynamic and analytically-derived communication. That communication will be at least two way and in some cases one-to-many and many-to-one. It will involve a wide range of content and experiences, often curated and constructed immediately before delivery. That is certainly content marketing…and maybe that is even native, but I’m not sure native to what. Regardless of the words used, we are extremely bullish on getting the right content and experiences to the right people at the right time.

​What is innovation for you?

​Innovation is the backward-looking historical name for successful risk. If, looking back, that wacky idea worked and produced value, it was innovative. If it didn’t, it was insane. We don’t think entrepreneurs should think in terms of innovation. They should think about human beings, human behavior and where what they are doing fits in that construct.

​What are the key trends you see in the next following years on your field of expertise (media, marketing analytics, social platforms, mobile commerce and Internet of Things software …)?

​As long-time denizens of tech, tech revolution, and media, we know we can’t predict the future. So, we don’t try to guess what will happen next. We respond to the opportunities we find and to the patterns seeing many opportunities indicate to us. All that is a way of saying we know any predictions we make are almost certainly wrong!

Given that caveat:

Media. Increasingly, everyone can be a creator at some level. Media will become more real-time, more varied in type, more immersive. Traditional publishing and channels will be overthrown by more diverse, data driven forms of media distribution, mostly focused around mobile.

Marketing Analytics. We stand poised on the era of predictive analytics. We will know what people are likely to do before they are aware of it. This turns marketing on its head. The tech will precede business’ ability to fully utilize this shift by many years.

Social Platforms. Facebook has shown the power of connection in semi-public space. Now we will see a vast generation of narrower, deeper, more consequential social platforms on mobile. Around passions, problems, family, locality and other targets separating those really close to us from everyone else. We will also see increasingly purely visual social platforms. We call this the Visual Vocabulary. Words are increasingly a side-dish, with images at the heart of communication and connection.

Mobile commerce. The new natural outcome for what once might have been editorial behaviors is now a transaction, not an ad. The line between publishing and commerce is going to vanish. The impact will profound on both media and merchandising.

Internet of Things. We will have upwards of 50B devices interacting on the Net within 5 years. That is 8X as many devices as people on the Net. That fundamentally changes the purpose​ ​and character of the worldwide network. Today it is common for person-to-person connections to happen, mediated by software. In 5 years the common activity will be device-to-device communication on behalf of people. That is a really, really big shift. All of software needs a rethink in the face of that change.​

Which gadget would you take to a desert island? Name 5 apps you can’t live without.

​I’m a geeky old logician. Can’t help myself. What kind of island? Is there power, water? What kind of weather? Am I alone? Would affect what I’d do. In truth, I’d bring a firestarter and the kit for making a still to ensure I had water. Once over the Maslow line, I’d want my guitar. Can’t do without music. There are no apps I couldn’t live without, nor anyone else either. If Facebook vanished tomorrow, I’d find a way ,as would most of us, to replace those behaviors and connections elsewhere on the Net. The key thing for me is my (large) family. I’d want to retain the apps and devices that allowed me to stay in connection with then, wherever they might be, from my lonely, little island.​