Back To The Future With Jaroslav Luptak
Mapping the journey of a local event becoming the Oscars for CEE startups
This year, we are going to celebrate 8th year of StartupAwardsSK that are now known as FutureNow Startup Awards. What was the beginning of the nowadays prestigious startup competition like? There´s no one better to talk to than Jaroslav Luptak, co-founder of StartupAwardsSK and FutureNow Conference. Travel back in time and find out how it all started, what was most challenging, and what he would recommend to all aspiring entrepreneurs.
How did the idea of creating Startup Awards originate?
The idea was created by the Neulogy team after we received a request from our business partner, to work together on a business plan competition. The term ‘startup’ was virtually unknown in Slovakia at the time. I did an analysis of similar events and quickly realized that a business plan competition would not have the desired effect. Such competitions usually give fruit to a large quantity of ideas, but very few tangible products. There will always be an infinite amount of ideas, the key thing, however, is their execution. At Neulogy we were already working with a couple of Slovak startups at the time, helping them with their first angel investments. We saw that projects like this did exist in Slovakia and that they needed help and support, especially in the form of mentoring and acquiring new clients and investors.
There were a lot of successful examples of startup competitions abroad, usually also open to applications from more than one country. However, most Slovak startups at the time did not possess the necessary quality level to be successful in the international context. Thus, the idea of creating a safe environment to help our startups grow came about. From the very beginning, the competition element was not the key thing for us. We were aiming to connect burgeoning entrepreneurs with those who already have a lot of experience under their belts and are willing to help these new projects, whether with their expertise or finances.
Our goal was to create a Slovak event that would gather the entire startup community under one roof once a year, not only focusing on the community in Bratislava. It was also crucial for us that the competition had an international dimension to it, helping build the image of Slovakia as an innovative country. This is why from the very first year, the applications to the competition were only in English. People thought it was strange, the competitors hated it, arguing that only Slovak people were competing and 99% of the audience were also ‘only’ Slovak. But we insisted that it was a tool for success – you just can’t do startups only in Slovak.
Let’s go back to the first year of Startup Awards – what was the biggest challenge? Why did you decide to continue?
In the first year, the project was carried out with a very limited budget and short time frame for preparation. It was basically two people organizing the entire event on side of their full time jobs. The fact that Neulogy already had experience organizing similar events, such as the Researchers’ Night, definitely helped though. A lot of people supported us from the very beginning and were willing to help, whether we’re talking about speakers, MCs, judges. All these people saw value in what we were doing and wanted to help a good thing.
The biggest challenge was by far accumulating enough good startups. We decided to do a roadshow across the whole country, promoting the competition at local universities and startup events. At the end of the day, 37 startups applied, which was a phenomenal success and ensured there was a choice to be made.
The first year essentially had a domino effect – the winners traveled to Silicon Valley for a couple of months and loads of people read the blog posts of Michal Truban that he published from his time there. We saw that the competition had the potential to help a much larger group of people and projects, not only the winners. The community basically “demanded” that we continue. On the other hand, we mostly saw what we could improve on and the mistakes that we could eradicate. We were motivated to improve not only the event itself, but most of all its impact on the tech, business and innovation ecosystems.
What key differences do you see when you look back at the first year, in 2011, and compare it to the latest edition in 2017.
The key differences are of course in the size of the event and the quality of the production, but honestly those are not that important for me. The final gala was always mostly way to meet familiar faces, recap on the year gone by and last but not least, attend our legendary afterparty.
The real progress in my opinion took place behind the scenes of the competition itself. Startup Awards essentially became a virtual accelerator for the startups. A couple of years ago we launched the “bootcamp” which on one hand served as a semifinal round, but on the other created an opportunity for the competitors to meet investors, corporate clients and a lot of their business idols in a more relaxed, but intimate atmosphere. We are really happy that the event has really left a mark – our graduates have raised millions of Euros for their businesses and belong to some of the fastest growing Slovak companies today.
For me it’s also crucial that we helped our corporate partners manage expectations and create a system that allowed them to effectively cooperate with startups. Their support is far from just a marketing activity, proved also by the number of successful implementations our startup alumni have carried out with our partners.
What are you looking forward to this year?
We always knew, that if we wanted Startup Awards to be the best event of its kind, we had to keep innovating and pushing the boundaries ourselves. A lot of the times, we took steps and made changes that weren’t very popular in the beginning. Last year for example, we cancelled the various competition categories that a lot of people liked. We made the decision, however, because we felt we had succeeded in connecting the science, creative and social entrepreneurial communities with that of digital business, and also because we felt the need to showcase startups in later stages of their development as well.
The 7th year was also marked by the ‚”final act” of our “protection“ of local startups – we surmised that it was time to open the competition to projects from other countries and see whether our concept of a lean virtual accelerator would function on an international level as well. It will be a big challenge and I do not know what the outcome will be, but it is exactly these types of challenges that bring me the most joy outside of working with founders themselves.
VC or ICO funding ?
ICOs have been on the scene for a relatively short period of time and are still essentially an experiment. It is clear today, however, that you can raise funds through ICOs and that it can sometimes be easier and one can raise more for similar projects compared to venture capital funding. However, only time will tell which type of ICO design setups have a long term perspective of success and sustainability, whether product traction or from the perspective of investor return.
ICOs and venture funding are not on the same playing field in my opinion. An ICO is more about the form, whereas venture capital is more about the substance. You can design an ICO, so that it essentially mirrors a traditional VC round. ICOs also open up new options on how to design investment rounds, whether from an economic or regulatory perspective.
A lot of blockchain projects use a combination of both types of financing, or do not use ICOs at all, option for token distribution through other channels. Additionally, I think a lot of blockchain projects don’t really need their own tokens. I do however think that we will soon be seeing a lot of traditional VC investment being administered through blockchain.
What advice would you give to aspiring entrepreneurs?
Really think it through – building a successful startup can take years. It entails years of hard work and sacrifice, with a small chance of success. I invest in projects in their early stages and I know that the first years are extremely challenging for founders, especially after the initial enthusiasm wears off. The reality is far from the glitzy stories in magazines. That is why founders need real, sustainable determination if they want to succeed.
Business experience also increases your chance for success. I meet a lot of motivated young people that want to mirror their entrepreneurial idols at any cost and be successful before turning 30. However, the reality is that founders deal with billions of tiny little problems of all kinds every single day. The less the problem is new for you, the more time you save. If you want to set up a startup, it helps if you have run a business before and know what it means to own a company. If you want to build a company that employs hundreds of people, it help when you’ve managed people before. If you want to build a globally successful startup, it helps if you have experience working and doing business in other countries. Successful startups usually grow extremely quickly, which brings a whole set of unique challenges with it. It really helps if the founder has already experienced this growth in their professional life. The new generation of “startupists” has more and more opportunities to try and work for similar projects. I’m not saying that one cannot build a successful company without these founding blocks, but it increases your chance of success.
In context of Startup Awards I would recommend that founders don’t apply just to win or get a stamp of approval of a successful startupist, but rather really to focus on building business connections and utilizing the mentorship and networking benefits the competition offers.
If you could come up with/create one thing that would make people’s lives easier, what would it be?
I see my role as mostly that of an investor. My goal is to create financial products that on one hand help individual investors invest into startups in a meaningful, structured way, and that on the other hand are able to bear a larger amount of risks in individual investment thanks to diversification strategies. At the end of the day, this combination ensures a larger amount of projects that get invested into. Startups need sources of financing that is quick, flexible and capable of providing long term value.
I’m not really sure humanity needs products that make lives easier. Of course, I am not talking about innovations that help save the lives of people in developing countries, but more along the lines of algorithms that allow you to take the perfect selfie. I’m sure it would save people a lot of time and cloud storage, but is it necessary? No. I think humankind needs technologies that minimize consumption externalities while simultaneously maintaining consumer comfort.
Team Bezos or Team Musk? Would you rather live on the moon or on Mars?
I personally prefer the Earth – space exploration should mainly be an „excuse“ on how to finance technologies necessary for making our planet a better place. We should be conscious parasites that are not only looking for a new host, but maintain the original one in good shape.
Jaro has been leading the investment team of Neulogy Ventures, with a focus on SaaS and digital media. He has been working with early-stage companies for over ten years. He is one of the founders of StartupAwards.SK and Future Now Conference, the largest startup event in Slovakia. He previously worked at Neulogy as a technology transfer consultant for several research institutions. He currently serves as an external expert of the European Commission for the Horizon 2020 initiative. Jaro has a degree in Management and Finance from the Rotterdam School of Management.