EarlyBird And RSG Capital: Why Invest In An Agency?

EarlyBird And RSG Capital At RockPaperStartups: Why Invest In An Agency?

All the talk about investments these days revolves around startups, the investment-hungry companies still struggling to stand on their own two feet. But what if the startups is a spin-off or a part of a profitable agency? Does it pay to invest?

Get out there as soon as possible, investors agree.
Get out there as soon as possible, investors agree (photo: Luka Travaš)

Those are some questions Jure Mikuž from RSG Capital and Earlybird’s Dan Lupu tried to answer in the investor panel at the RockPaperStartup conference.

There are two main reasons, as Jure explains: Firstly, the agency is like the laboratory for the product part. The ideas come from the agency and can grow into products. The second reason is revenue – another revenue stream makes everything easier.

But there’s more to it, Dan stresses:

People who are part of the industries that are disrupted at the moment have the knowledge to attack the industry. There is no prejudice against service people – as Jura said they already make revenue and are familiar with the client – service relationship. Product people sometimes overlook the importance of this.

Just The Product Or The Whole Package?

There are two ways to invest in a startup that springs from an agency: you can either invest in both the agency and the product, as RSG did with Degordian (ex iStudio), or in the product exclusively, like it did with ShoutEm, a self service mobile app platform.

So why the different approach?

Vikotor (ShoutEm cofounder) was much better at negotiation and convinced us to invest in ShoutEm and not in Five as well, which might be a mistake on our part, as it seems at the moment. We have a good investment in ShoutEm too and it’s of course much more scalable.

But mostly, RSG invests in thick-skinned, relentless people, as Jure says:

ShoutEm started as a very different idea and it took a few pivots to get to where they are today. Those of you who know Viktor know that he’ll never give up. That’s what we’re looking for.

Hit The Market – Now!

Some startups, however, are not comfortable with pivots and want to take their time to make their product just right, as they see it. One of the big questions is whether to wait until the product is (pitch) perfect or to get out there – but both investors agree on this one: take the shortcut and get out there.

Most times, developing a product for a year or a two is not even an option, as Jure stresses:

In many industries it’s not possible to develop a product for two years. The market changes so dramatically that something that’s hot today will be forgotten in a year or so. Go to the market as soon as possible.

If you take your sweet time, someone can come up with the same idea and you’ll have to change something you’ve been working on for years, Dan added. That said, don’t isolate yourself from the world not to have your idea stolen.

Whether you’re an agency or a free-standing startup, focus on the execution, not the idea.

Leave a Reply

Your email address will not be published.

Popular

Tech

Croatian airt has an API that will enable all developers to use AI without a hitch

Croatian AI startup airt that applied for a global patent protection of their algorithm in July, surprised us with another news at the Infobip Shift conference – their platform can now be used and implemented by developers as well.

Internet marketing

Developer in a marketing hell (based on a true story)

After half a year of ups and downs, mysteries and HEUREKA moments trying to understand what 'ad groups' are and what do 'keywords' have to do with ads, I am finally confident enough to say that I know what a complete ad group should look like. At last, I pull the trigger that creates 20,000 ad groups with keywords in one hour.

Startups

SofaScore’s CTO: From student to expert who scaled a solution for 20 million users

You will not learn how to handle 20 million users at any college and few developers have the opportunity to do so. For SofaScore's CTO Josip Stuhli, who does just that every day, the first and biggest challenge was optimizing their own "machinery" to work better than Amazon's cloud.

What you missed

Startups

Mate Knezović: How I convinced my mother and my clients that agrotech is the future

From a software user, he became an investor, and from an investor – a manager. Today, Mate Knezović is the COO of agricultural production management software AGRIVI. But it’s easy to win over the younger generations with technology, what about the older ones – have circumstances changed in the last couple of years?

Careers

She’s a technical writer at Infobip, and her hobby is learning about emergency medicine

Writing technical documentation, researching medicine, and the pandemic caused by the coronavirus, might not sound... related, but Infobip's Sara Tilly has been combining them successfully for a long time. How does this approach to learning help her in her current job?

Startups

Travel companies need to free up time for customer-centric activities – through digitalization

Are travel companies aware of the need to change and why this time it is imperative, how should they plan their digital transformation and what benefits should they expect from it? We sought answers from Iva Vodopija, Head of Sales Operations at Lemax, a travel Software-as-a-Service company from Croatia.

Tech

Croatian airt has an API that will enable all developers to use AI without a hitch

Croatian AI startup airt that applied for a global patent protection of their algorithm in July, surprised us with another news at the Infobip Shift conference – their platform can now be used and implemented by developers as well.

Startups

What can international teams gain from Croatia’s first AI incubator?

In February of this year, Croatia got its first incubator for ventures working with AI, machine learning and data analytics. Sixteen startups already joined!

Startups

A day in the life of a Game Designer at Nanobit

What does a game designer actually do and how does that tie in with the world of mobile games? Allow me to explain.