Investor to keep close eye on Irish start-ups

GUT INSTINCT told Stefan Glaenzer that online music service Last.fm was one to watch and its sale to the CBS network in 2007 turned his initial investment of well under half a million pounds into £22 million profit.

As someone who started his first company straight after college, Glaenzer will speak at next week’s Dublin Web Summit on “the beauty of entrepreneurship”.

A former DJ with a PhD in foreign exchange risk management, entrepreneur and angel investor Glaenzer is a curious mix of risk taker, artist and academic. Perhaps this is what makes him so good at backing winners in the digital start-up space.

He will keep his eyes peeled for Irish talent while he’s here.

“I’m very much looking forward to getting a sense of the Irish start-up scene. I’m not looking for one kind of company in particular but, usually, if you spend a day talking to lots of entrepreneurs, you come away with some pretty cool ideas. That’s my expectation for the web summit,” he says.

Asked whether Ireland’s economic and political turmoil will put off investors, he dismisses it as a roadblock compared to hurdles start-ups faced in the late 1990s.

“I actually think the time has never been better to start a company in the digital space. When I started [auction website] Ricardo.de way back in 1997, it was quite expensive to set up a company. These days all you need is a disruptive idea, the big vision, and you can begin by borrowing money from friends and family. So I think it’s a perfect time.

“Passion is the word. You can have lots of ideas and ways of executing them, but what differentiates the real entrepreneurs from the others is passion; passion for success, passion for disrupting or passion for the underlying technology. This adds the last 5 or 10 per cent that’s needed to make any start-up a global success.”

There might be a perfect time but not a perfect formula for spotting a good investment: “Entrepreneurship is like football. You can’t win every game,” he observes.

Has he had any regrets when it comes to investing in the right or wrong company? “Tonnes! The reality is that I’m investing from prototype or early traction onwards and it can be really tough to judge whether something can be successful or not. I think there have probably been a couple of missed calls but, on average, I’ve been pretty successful.”

One way Glaenzer has of keeping track of new investments is the London incubation hub White Bear Yard, which he visits on daily basis.

“I’ve been an entrepreneur far longer than an investor, so my heart is still on that side, even though I’ve been investing for the past three years.”

The White Bear Yard space houses nine start-ups and has nurtured Last.fm and Skype. Glaenzer is paying attention to a start-up called Rebate Network. The excitement in his voice is audible when he talks about the reinvention of the humble coupon and the emergence of business models from the likes of Groupon and MyCityDeals.

“From a business perspective, I’ve never seen anything like it. You’re talking about the first digital marketing innovation ever,” he explains. “I’ve never seen anything growing that fast. Ten or 12 years ago, the dotcom boom produced big page view or user numbers, but at Rebate Network we’re seeing a similar explosive growth based on revenue and big margins.”

“Deal of the day” or coupon websites are nothing new, but Glaenzer says these sites have successfully bridged the gap between online and offline.

“These sites lead you towards the real world. Not even Google managed this with Ad Sense. It always claims it has the long tail of advertising but, in reality, that’s probably only partly true because most of Google’s money is earned by the big guys whereas the success of the ‘daily deal’ space is down to the individual.”