Howzat has become an investor in www.academia.edu.

Howzat has always been an enthusiast for targetted social networks (WAYN was our first investment). Academia.edu is really true to the spirit of the internet as intended by the British inventor of the worldwide web Sir Tim Berners-Lee (no: it was not Al Gore).

Academia’s CEO is Richard Price who is a Fellow of All Souls College, Oxford, where he has just completed his Ph.D on the philosophy of perception. Founded in 1438, All Souls is a very grand place which does not accept undergraduates and is celebrated for only accepting the best of the best. Famous 20th century fellows include the philosopher Isaiah Berlin, the Viceroy of India George Curzon and Max Beloff, Founder and first Principal of Britain’s only private university, Buckingham.

All Souls values excellence above all (not very politically correct - but it is a formula that has worked well for nearly 700 years). We think that Richard represents both excellence and the best of the best of British entrepreneurship which is partly why we have backed him and his team (”a great business idea is worthless unless there are great people working in the business to make that idea a reality”).

Academia does two things:

• It displays academics around the world in a tree format, according to their affiliation by university/department
• It enables an academic to have an easy-to-maintain academic webpage. A sample page on Academia.edu is here: http://oxford.academia.edu/RichardPrice

The site has only recently launched and is already creating a frisson of excitement in California where it is based:
http://www.techcrunch.com/2008/09/16/academiaedu-a-geni-for-researchers/

It is winning rave reviews from academics across the globe.

So if you happen to know a Professor, a Lecturer or anyone in the world of higher learning , do encourage them to sign up.

- David

I’m pleased to announce our latest investment, in cheaptoday.com. We have broken all our own investment rules to start a website ourselves under the stewardship of Milenko, a heroic old work chum.

CheapToday was a post-work beer inspired idea when I was living in Boston and founding Cheapflights.com with Mo and Milenko. It has taken a while but now the first version is live, which feels great.

Take a look:

Also, why not say hello to CT, our cuddly mascot and see how he changes…he even wears a dress…hang on..

We got a neat article from the Boston globe already. Shame we got in a pickle over the sneaker deal - it’s all mended now but a valuable lesson for us to learn. Deals must not only be tremendous but also very very easy to find. We will live or die by the quality of our deals.

We thought long and hard about the name. Ok, so we are Cheap, we are used to that now :-)

At HOWZAT media, we are extremely excited about the potential of CheapToday…let the adventure begin…

Love any feedack on the site.

- Hugo

The press is full of doom and gloom, so it was refreshing to step into the OMD Internet Show in Dusseldorf, Germany. 

It was exciting to set foot into what seemed like another world, in fact, not since 1999 have I felt such a buzz, energy and raw ambition.  The internet titans were all playing a game of one-upmanship with a showdown of stands that were bigger, better and grander than the next.  If that wasn’t enough the different brands were each bribing interested parties with snazzier gifts, posher drinks or the most chic snacks.  The obvious brands were there like Google, Yahoo, Microsoft but the older players like Axel Springer were also jostling for recognition and status.

It is a simple point but it underlined the optimism and opportunity in the internet media sector, particularly on the continent which is seeing faster growth rates than some of the more mature markets like the US and the UK.  It seems it isn’t just HOWZAT media that sees internet media as a once in a lifetime opportunity to invest in the structural shift to online advertising - the big guns are out but hopefully there is enough cake for the smaller ones too.

If you havn’t heard of it then the OMD (Online Media Dusseldorf) Show Website (English version available) is highly recommended internet media spectacle and networking bonanza.

- Hugo 

 
Microsoft: “Interesting to see a slick and aggressive Microsoft Stand - a statement of intent…”

Axel: “Traditional media Companies like Axel Springer didn’t leave the show to the internet brands - they were there in force”

 
Gambling: “One of the many bribes to convince you one stand was cooler than the next: A safe bet?”

I was privileged to be invited to open the Travolution/Phocuswright conference in London last week and to moderate the first session between legendary travel internet guru Philip Wolf (the CEO of PhocusWright) and brand expert Adrian Goldthorpe. It was an excellent day and really marked a coming of age for the UK travel internet industry as the standard of the sessions was a marked improvement over anything I have yet attended on this side of the Atlantic.

For followers of Cheapflights, there was a reassuring statement from Mr Wolf: “heart surgeons spend hours on line just to save fifty dollars” although Mr Goldthorpe believed that fast and cheap were “no longer enough”, an assertion with which Cheapflights’ millions of monthly users might well take issue.

But then Mr Goldthorpe is in the brand promotion business and it is well known just how little Cheapflights spends on branding compared with other major international travel internet sites. Like Craigs List, Facebook, and You Tube, Cheapflights has always believed that if you have a good enough product the world will beat a path to your door. And after eleven years, this still seems to be the case.

Brent Hoberman gave an interesting talk. Now the Founder of MyDeco.com as well as Chairman of WAYN in which Howzat is an investor, he described how he had a chosen a hotel in the Maldives on the strength of the reviews in Tripadvisor for he and his family but when he got there it proved that he was disappointed.

He said there was a need for a hotel review site on which you could rely more on the user reviews. I agree completely. However, he seemed to be unaware of Trivago in which Howzat invested a few months ago which strives to do exactly that: provide a more reliable review experience for its users by providing reviews from people like you. Trusted Places does the same for restaurants and this is absolutely the future of reviews, something again that traditional media does not seem to comprehend.

Brent also talked about why big companies find it so hard to innovate, explaining that management are often too far from customers and they get promoted by playing it safe and not taking risks. This is so true. Little wonder then that the great internet sites, with the notable exception of Expedia, have been launched by entrepreneurs like Craig Newmark, Jeff Bezos and of course Cheapflights’ own John Hatt.

Brent also talked (I detected with some sadness) about the fact that he had not launched Last Minute in the USA saying that his product was not sufficiently differentiated for it to catch on in the American market. Many people wonder why Cheapflights has had such success in the USA and of course the fact that it has a unique publishing platform is the real reason (that and my colleague Mr Burge’s entrepreneurial abilities - well done Hugo on your award this week as Young Entrepreneur of the Year from the British Travel Industry).

Kayak CEO Steve Hafner had the “after lunch” slot. Steve is a valued client of Cheapflights. In his address, he set out why he believed he could destroy Google, the OTAs and the UK meta-search companies, oh yes and Tripadvisor too. Nothing wrong with ambition, I reflected.

When I saw that great movie “Double Indemnity”, I was struck when the Fred MacMurray character said “We never knock the other guy’s product”. Steve has a slightly different approach. I do agree however with his assertion that in the field of meta-search, Kayak has built an extremely good product which is why we are delighted to include it in the huge range of product offerings on Cheapflights.

One neat aspect to the Conference was the wide range of speakers and attendees. It was good to see at least some of the airlines taking the internet seriously by turning up. BA’s Carsten Willert gave a stunning glimpse into the future of airline sites as he demonstrated some of the new features which BA is going to include on their website. Robert Torres of Google sparkled and handled well the flack surrounding Google’s decision to allow anyone to advertise on brand names. It was good to see Jamie Dunford-Wood on the stage. He did a great job with TravelIntelligence and has recently launched Worldreviewer.com

The audience included some of the veterans of the UK internet industry including Steve Endicott, who came out of the traditional travel industry and was one of the first in the UK to understand the power of the internet, and Nick Jones, one of the original UK search marketing expert who now runs the successful I spy agency.

Congratulations to Kevin May and Simon Ferguson for putting this conference together. As Philip Wolf said at one stage, “the online travel industry is pregnant with potential”. This conference demonstrated just what an exciting place it is to be in 2008.

- David

When 3i recently announced that they were pulling out of early stage investments, there was a lot of press coverage of just how difficult it is for early stage companies to obtain finance. Lack of suitable finance, it was suggested, was a key cause of the poor entrepreneurial record of the UK compared with the USA.

I have a rather different view.

I believe that outstanding business people and outstanding business ideas can get funding.

But the problem with the UK is that there are far too few of either - and that is to do with the lack of an “entrepreneurial culture” (how many students at top British universities want to start their own businesses?) and the worsening red tape with which the British government likes strangling early stage companies at birth.

Ask any small business and there will be a litany of complaint about employment legislation, the working hours directive, health and safety and the like.

The dead weight of government sits heavily on entrepreneurs. Bureaucrats believe that business is there to fill in forms and comply with endless regulation and that an entrepreneur’s time is a free and limitless resource. It is up to politicians to rein in this bureaucratic fantasy - to tell their civil servants when enough is enough.

But in the UK, since 1997, we have had a government where little is understood about the pressures of running early-stage companies. Name a single member of the British Cabinet who has launched his or her own business. Actually, I have a problem thinking of any Cabinet member who has  even worked in the private, wealth-creating sector.

Let’s take one example: the Rt Hon John Hutton who was appointed Secretary of State for Business, Enterprise and Regulatory Reform in June 2007. John is a jolly nice chap, well-intentioned and bright. I knew him reasonably well when we were at Oxford together.  But look at his work experience prior to politics: Senior Lecturer in Law at Newcastle Polytechnic 1981 - 92. Can he really know what it is like to start and run a small business?

So what is to be done?

I ran across a leading private equity investor the other day whose firm invests hundreds of millions of pounds in early stage technology companies on both sides of the Atlantic.  Recognizing the success of the American “light touch model” and contrasting it to the dead hand of the UK and Brussels, he suggested the following: a two-tier approach whereby new, small companies across Europe can elect to opt out completely of the worst of the legislation.

These opt-out companies would have a maximum number of employees to qualify and, only when they reach a certain scale and - like Unilever, Siemens and so on - can afford a cadre of bureaucrats to deal with the cadre of bureaucrats, would they have to comply with the legislation.

New employees would sign up to the “opt-out” companies knowing that there was no minimum working week, no maternity or paternity leave, minimal employment protection and that it was “caveat emptor”. Those who prefer to have the safety blanket of national or European legislation can continue to work for mega-corps or companies who choose to stay within the existing legal regime. Those who want to work in an exciting fast-growth environment will prefer the dynamic option. Accordingly, they can and should reap the rewards of success.

In an entrepreneurial environment, there is no reward without risk and the dead hand of bureaucracy, however well-intentioned, effectively neuters the entrepreneurial process.

Only with a much lighter bureaucratic hand will we get an entrepreneurial culture in Europe that can compare with that of the USA.

See also article in FT “Stamina helps start-ups to sprout”

- David

…ok, so there were another 999 people there and, come to think of it, Bill didn’t even stay for the lunch (sorry for the bait and switch). Bill Gates did however deliver an interesting speech and it was a pleasure to see such a legendary figure in the flesh at yesterdays IDD World Leader Lunch at the Royal Lancaster Hotel in London.

Bill Gates did a 20 minute talk and the things that interested me most were:

• His emphasis on the internet. One of four MetaTrends he mentioned was “digitalization of the economy”. He saw the internet become all pervasive in its connections with life, work and business. Other key MetaTrends were related to the Performance of Hardware and Software breakthroughs which were allowing whole new consumer experiences to develop.
• He talked a bit about the empowerment of the individual and how cheap it was now for people to publish information. No longer is the printing press reserved for those with Capital. Anyone can have a voice and will be heard if they have something interesting to say. I think he referred to this as the democratisation of information.
• He announced a new software development called Hosted Microsoft CRM, where data and information can be stored not on your computer but out in the internet cloud. There was a demonstration showing how Outlook linked into a CRM database on the web, which was also tied into online mapping and instant messaging.
• Bill also unveiled a product called Microsoft Surface and at the same time put forward a vision of the computer disappearing into our desks or walls. Consumers would interact with these highly interactive computers with speech, pens and probably most importantly with touch. This seems to take the Apple Touch concept and put it at the core of a new way of interacting with a computer (I could not see a keyboard on the version he was demonstrating, so I am not sure what kind of computer it was designed to be - in a shop maybe?).
• Asked for tips about being an entrepreneur Bill said that “picking something you are passionate about is the most important thing”. This was the sound bite that resonated with me most during the day. Passion is at the heart of great entrepreneurialism.

There were some lame questions, especially over his charitable donations, which is a bit rich given his enormous generosity and intentions with his vast wealth. 

The questions seemed pre-scripted but I would have liked to have asked him: what things would he do differently if he was starting Microsoft with the experience he has today and more generally as an entrepreneur. I would also want to ask him, given this internet “all pervasiveness” about the issue that big businesses seem to have with being successful on the internet. Big business is finding it very hard to make the transition and more often than not large companies are having to buy innovation through acquisition - how does he see that big companies need to change to embrace the internet? Can they change and grasp the huge shift that is happening or is acquisition the most likely path?

With thanks to Mike Crosby at HCBC who invited me along to the lunch.

- Hugo

I’m flattered to be asked by EyeforTravel to participate in a new event at their London Travel Distribution Summit on 20/21 May. This innovative event promises to be a Dragons Den for the Travel industry.

On the panel are:

• Dick Porter, Co-founder & Director, STA Travel
  Dick started STA Travel in the seventies and grew it into a US$1.2 Billion organization employing 2600 people in over 90 countries. Now on the STA Travel board he devotes his time to finding and funding start ups that could replicate such a massive growth.
• Jason Katz, Founder, KP Capital
  UBS’s youngest Managing Director, now runs his own private equity fund devoted to investments in the global leisure sector. Jason was involved in the Hilton and Thomas Cook transactions as well as selling lastminute.com to Sabre and Active Hotels to Priceline.
• Gerry Samuels, CEO, Travel Capital
  Gerry co-founded Gradient Solutions that was acquired by Sabre. Travel Capital invests in companies, with funding requirements ranging from MBO/MBI down to early stage funding. The investment capital is sourced principally from Travel Capital’s Founders, and from anetwork of partners within the institutional private equity world.
• John Kent, CEO, youtravel.com
  John has been a serial entrepreneur and has managed to build value both as an executive and as an entrepreneur. John founded youtravel.com in February 2006 and the business is expected to reach a turnover of €70m in its first year of operations. Previous positions include lastminute.com UK MD, travelbargains.com CEO and Medhotels.com

…and myself. It promises to be huge fun and very interesting. For more information visit the EyeforTravel website.

Up for grabs is £7,000 of media exposure, so that the winners, no matter how small, will become known by the industry. 

- Hugo

trivago is a hotels and travel reviews website based in Dusseldorf, Germany, with over 2m visits a month and over 40,000 members. It is predominantly active in Germany, Europe’s largest internet market (www.trivago.de) and Spain (www.trivago.es) but it has also recently launched in a number of other countries across Europe.At a time when user reviews and social networking are proving such an exciting area for new media, it is great to find a company that does both so effectively and in a sector (travel) with which we are very familiar.

tivago’s founders are internet veterans with a tremendous entrepreneurial spirit. So we are very excited by this addition to our investment portfolio and to working with them.

For more information, please read the press release. And, if you feel minded, do add your own hotel reviews!

Do you still need persuading that the internet is causing ongoing, massive and permanent disruption to media usage?

Can you guess how much extra time Americans spent online last year?

Well, the Compete.com Blog  (late last year but which I have just come across) puts the growth in total time spent online at a staggering 24.3% year on year. 

This is a very significant year on year increase. And it has happened in the US market which pundits often claim is a mature one. It suggests that the internet’s role in our lives is still rapidly evolving, being used in ever more new and compelling ways.

The internet has changed the way we  research, consume entertainment, work and communicate with each other. Traditional media is losing the battle to provide relevant information to consumers. With this pace of change, it would appear we are still only at the start of this media revolution…

An interesting article from FrostFire lists their top 70 web 2.0 startups.

FrostFire: Top 70 Web 2.0 List

It is interesting to see that the UK still dominates the European list of start-ups. Unsure if this is access to funding, the bright lights of London as a vibrant internet hub, the development of the UK market or bias on behalf of the reporters: maybe a little bit of each. I am certainly speaking to a lot of exciting start-ups on the continent and believe there is also huge potential outside our great city.

There are certainly a great diversity of interesting companies on the list and it makes for exciting reading. I’m sure there is bigger and better to come too.

On a more selfish note it is terrific to spot both Zoomf - property search engine and TrustedPlaces - restaurant reviews & local recommendations both on the list. Keep it up you two!

Oh and happy new year all. Here is to a terrific 2008.

- Hugo