Maxellco hosts the biggest vertical farming event in the CEE. The go-to event to hear the global leaders on the future of agriculture.
Save the date: 18th November.
Maxellco hosts the biggest vertical farming event in the CEE. The go-to event to hear the global leaders on the future of agriculture.
Save the date: 18th November.
Maxellco wins direct EU-grant for Sbrick. The €200,000 will be used to develop a new product line and to accelerate the market entry. Read our Education Technology strategies here.
Maxellco is recognised as Experts to jury at the Hackathon hosted by the European Business Summit to solve the most pressing recycling and waste management challenges.
As we move forward with the new 2020-2027 Multiannual Financial Framework we expect the nature of EU funding changing. It will be more like investment proposals rather than grant-applications. In this section we walk through the most common pitfalls we see with unsuccessful funding approaches and what we can learn about them.
EU-grant applications will tend to look like investment plans. Often the ideas presented are at the level of European projects looking for grants rather than investment proposals:
a.) Business model not elaborated: tendency to describe the investment idea from the “European project” point of view, failing to elaborate on the business model’s concepts and bankability.
b.) Commercial and sustainability aspects missing from the investment proposals, due to inability to clearly define their business models
Focus more on returns, impact and sustainability. We are at next level where dreams only are not enough.
Surprisingly, often there is a clear indication that the submission was done last minute, resulting in a poor content and many elements missing or superficial.
Preparing a good application takes time!
Consider a month for the preparation of the content, to bring all internal and external inputs together in an organised format.
It is challenging to implement complex engineering challenges into the financial and business context. A successful application shall clearly describe the business model and to use a simple language without being too technical.
An investment idea needs to be clearly described. Make sure your idea is readable and understandable to a wider audience. It is better to involve people with various background to the process.
Is it technical or professional? Where is the healthy balance?
Pitch your idea to a finance guy and to an engineer. The finance guy must wrinkle her forehaed but still nodding, for the engineer it must be obvious.
The EU increasingly seeks the assistance of the private sector to proove the viability of projects. It is increasingly becoming important to demonstarte market viability this way. Absence of institutional and private sector backing: inability to show commitment of core partners and stakeholders through signed MoU’s and letters of support.
To demonstarte private sector engagement a clear declaration of interest from companies should be secured. It gives a first positive indication that the project may meet a market need. Applying for public funds only may raises questions about the commercial value of the project,
In other cases blended finance (both public and private) can be a good option for some investment propositions.
In the next level of EU-funding companies need to think beyond borders. In successful projects participants are technology providers and integrators.
Core partners are mostly coming from different regions from the same country rather than different countries. To promote interconnected technology value chains it is going to be compulsory to partner with international companies to deliver results.
The value of international networks are set to increase as well as cross-border cooperations.
The next elevel of EU-funding is set to foster international cooperations. Before, the consortium was the preferred form to manage a project by pooling the resources together and acting as a single entity. In the future each team member shall have a clearly defined scope, role and aligned within the legal entity to realise the project.
A failure to prove that the project team has the relevant experience and expertise needed for the finalization of the business plan and its implementation is a common pitfall.
A question of leadership: capacity of a project manager to develop and run a complex project.
A question of Implementation: the core team should demonstrate it has the right profiles a clear governance structure for the elaboration of the business plan and the implementation of the project.
A failure in describing their market, the main actors in the value chain, competitors and potential customers might leave your project ungrounded. You should be ready to answer the following questions:
What have you done to identify the market?
How large is the market and what could be your share?
How will you cater products and/or services to your customers? What do you know about competing products?
How will your product/service be priced?
Where can you find relevant market intelligence?
Although this question might seem obvious, it is a great example of introducing market-thinking to the next level grant-schemes.
What value do you offer for your customers?
To whom will you send your first invoice?
What is the service/product you are invoicing?
Why would your customer pay?
Take time to walk-through these questions and provide example or market reference for your answers.
To convince judges you must clearly indicate the revenue generation, the cash flow projections and the resource needed to realise the project.
a.) Cost assumptions will be used to test the validity of your cost structure (e.g. flat sales staff costs whilst revenue increase, absence of IT investment with surging revenue for a technology co, etc.)
b.) The costs structure needs to be aligned with your strategy.
c.) Benchmark your cost structure by looking at existing companies having a similar business model. This helps estimating the costs structure more accurately.
d.) Investments in assets (Capital Expenditures) needs to be considered thoroughly – usually larger at project start.
Before applying you should identify potential resources elsewhere or to demonstarte the lack of other solutions (e.g. national funding instruments).
a.) Generate revenues.
b.) Present an envisioned business model and contain a clear investment proposition.
c.) Manifest their commercialization path and close-to-market innovation with a clear evidence of impact.
d.) Ideas can have a public funding/co-financing component as well.
Imagine a world where there are no service centers. The entire customer relationship management is configured and fully automated with a click of a few buttons.
Client facing retail businesses obliged to manage and document every single customer interaction for the record. Think about insurance, banks, utilities, telcos or even airlines. It is business interaction at a massive global scale. Each and every customer inquiry are tracked (ZENDESK) and processed by a not-so-high waged employee who can routinely handle repetitive tasks at the other side of the world, execute steps by a carefully writing codified manual or handbook. Robotic process automation RPA takes this handbook, record the actions taken and repeats it automatically and at a massive scale. If all the process is automated from the beginning till the end the robot can be unattended. If needs exception handling it is called an attended robot.
According to Adroit Market Research the contact center outsourcing market is set to almost double by 2025 to a 131.56b globally. Hyper-automation is the fancy term capturing the phenomena and set to massively transform the service sector. The term was defined in Forrester and Gartner research reports predicting enormous growth opportunities in the future ahead. The flagship solution in this world is UI PATH (Read about the UI Path growth model) a Romania based champion, setting the torch for startups in the CEE. (Read why B2B SaaS startups can win from the CEE). UI path provides the development framework and environment to design and implement process automation tasks. It costs around $3000 per year per user to set up the RPA environment and churn out robots, a bargain if you factor the potential savings in terms of working hours.
But what is the right growth model for RPA startups?
This is not a one solution fits all case. Every customer’s system, process and workflow is unique, result or organic or inorganic development, far from being identical. There are different, often competing and mutually excluding system are in place. The beginning of a process is aligned or connected with APIs without proper process mining, and implementation as well as testing it is not yet possible to deliver a subscription based service only.
The possibilities of the problems to be solved are endless. A good strategy could be to target and focus on a very specific problem: like emails. We spend almost 30% of our working time with emails, most of them are repetitive and time-consuming. “Email tree” https://emailtree.ai/ – A new startup in Luxemburg set to conquer the space. Email tree promises the classify, detect and execute emails and replies automatically, pulling data from databases and provide assignment. Partnered with Ui Path it can provide the right quality of new and existing clientele a synergy is guaranteed. The team has participated in competitions and incubator programs to gain traction. A Microsoft, EY and Orange partnership lays the fundamentals of a success story.
Service centers typically are located far from business centers, (think about India and Asia) where wages, working conditions and economics play an important factor. Having the implementation and delivery process established Email tree found the way to bounded a onetime consultancy-like fee with a yearly subscription fee together. The business model is challenging as firms are facing both cost effective scaling solutions and make-or-buy decisions in the ever evolving enterprise solution landscape.
Just like a powerful overture when a symphonic orchestra start with base-drums at the back, to send shock and grab the attention of the suit & tie audience, the number crunching mind-trick behind Total Addressable Market metrics serves the same purpose.
When you open your business files the TAM question is likely to pop-up within a few minutes. By definition “TAM is the overall revenue opportunity for a product or service, given a 100% market share” an unlikely status in markets, an abstract figure. So what is the catch?
The Venture Capital and investment world is full of bets. An educated guess on which market, industry and company is more likely to succeed than the other. In the US the saying goes like “1 out of every 10 early stage investment is likely to succeed to balance and over-shine the loss of 9 others”. This figure recently climbed up to 1:15 or in the CEE region is even at 1:20. So the venture capitalists are betting on to find that 1 out of 10, which were selected from other 100 investment opportunities, to make or break their financial returns. An important guidance on how they analyze, compare and select companies, lies on the potential to tap into a large, growing and considerable Total Addressable Market.
This way of estimating the market size of your project is based on external and more likely macro-date to begin with. This is the most common approach when you have no track record and you need to collect all the inputs to justify your market from public data or from expensive market-reports.
The output of the research and answering the questions are an estimate based on 3-5 solid assumptions to make it look like more credible, like this: “The global market for pet medicine in 2020 worth $XXXbn, with a growth rate of X% annually. It is based on growing disposable income in welfare states, the growing proportion of what is spent on animal care, the increasing number of pets per households, and the growth rate of the past 10 years on average”
If you look closely every word has its significance:
Fire by words and back them up with data. Collect, verify and prove your assumptions with credible and reliable source of information.
These “rock-solid” assumptions are likely to support our idea to venture into the market as all the curated indicators imply a bright future ahead of us.
This is the way to build up your potential market starting from within and expanding to the horizon. It helps if you have track record, which gives your initial number to start with like: “Out of 100 software companies 3 would pay $XXX,XXX for a service like mine at the moment” This way you can start building up your model by your geography, your segment or your industry, growing out the boundaries of your current situation. “There are more than 10,000 software companies in the region”
“if I can grow the proportion of companies willing to pay for my services form 3:100 to 5:100 and increase my fees by 5% from $XXX,XXX – then I can serve a market with $XXX,XXX,XXX”
Here, market surveys or focus group discussions could have great importance further strengthening your case. Expect to invest time & effort to bring insightful results, but the output will give you a competitive edge over vast, global datasets.
TAM = Total Addressable Market, SAM = Serviceable Available Market, SOM = Serviceable Obtainable Market. TAM, SAM, and SOM represent the various subsets of a market. TAM refers to the total demand for a product or service that is calculated in annual revenue. SAM stands for Serviceable Available Market, and it is the target addressable market that is served by a company’s products or services. SOM, on the other hand, is an acronym for Serviceable Obtainable Market, which is the percentage of SAM that is realistically achieved. Identifying these subsets within an industry requires some market research to understand the proportions of each area.
It is essentially narrowing down your offering to a more manageable and realistic levels to handle market size.
It depends of course. The top-down approach if done correctly could show macro trends and demonstrate a thorough understanding of what business you are in. If you can back your vision with bottom-up numbers, it is even better making your assumptions bulletproof. Breaking down the big size into smaller manageable segments helps you and your reader to better understand your chances of success.
Is there a case where a market size is too big or too small?
After narrowing down your number significantly and you still talk about billions, probably you failed to find a right market segment for your project. This is the case when you are attempting something unprecedented in human history or simply that there is no public or reliable data available to support your thinking. In this case you need to be creative to use proxy industries or competitive insights to frame your estimates within boundaries.
On the other hand, if you end up with a Total Addressable Market with only a few millions, you might have fall on the other side of the horse. You might have narrowed your estimated down excessively or pointed towards a niche market either by geography or segment. When you end up with too small numbers try to think more broadly about how and who can pay for your product or services.
Again, the TAM game is about to help investors to make a well-educated guess about their investment decisions so help them to find you more likely to succeed.
Battery swapping technology is expected to be the game changer from electric vehicles, mopeds to e-scooters. Although it failed largely in EV’s, are swappable batteries the future for micromobility?
This promising technology aims to reduce the size of batteries, eliminate waiting time for charging and decrease the total carbon footprint of the electric vehicles.
Already for few years this technology was about to revolutionize the electric vehicles market. It did not. Few attempts were unsuccessful to establish a fully-fledged market. Category leader in EV’s battery swapping, Israeli Better Place, filed for bankruptcy in 2013. Not much happened in EV’s market since.
However, since 2013 new e-mobility services emerged on the market. Shared mopeds and e-scooters became the mainstay of micromobility in large urban areas. Swappable batteries reduce the time to charge the vehicle and reduce the use of service vehicles. Therefore, for example, a mope or e-scooter with swappable battery can be reached by a moped or even a scooter and – voilà, the work is done! This technology reduces emissions of combustion service vehicles and therefore decreases the entire CO2 emissions of e-mopeds and e-scooters.
There are already several e-micromobility service providers that use swappable batteries. They do it because they are conscious about their cost, time and carbon footprint. Aiming to provide the best quality service for their users. Skip in the US and Hulaj in Poland are just two examples of such conscious companies. Other companies are flirting with this idea and some companies are seriously planning to launch it in a very near future.
E-scooter revolution captured Europe after the staggering success in the United States. Bird and Lime the primary e-scooter sharing startups from California are now micromobility gurus quickly expanding in Europe and the rest of the world. Jumping on the trend many European startups are trying to follow through developing rapidly their e-scooter sharing services.
Is however Central and Eastern Europe (CEE) behind the trend?
One picture tells a thousand words. A quick glimpse on three maps below reveals that CEE is almost a blind spot on Europe’s fastest-growing micromobility trend.
Source: Bird and Lime respective websites (accessed September 2019) and Europe startups from Amy Lewin, ‘From Voi to Circ, we compare Europe’s scooter startups’, published on website Sifted on 15 July 2019.
American giants, Lime and Bird, made a modest entrance in CEE, appearing mainly in the capitals and more developed Polish cities. Those companies with an appetite for growth and expansion are however careless for conquering entirely this region. From the beginning of 2019, they have already secured funding of more than $700 million that ensures their profitability and rather encourages them to expand into more lucrative markets of Asia and the Gulf countries. Other Western European startups, like Voi from Sweden, secured $30 million funding to fuel its expansion in Europe.
E-scooters became the favorite solution for pedestrians in heavily congested, large urban areas. Yet, CEE, in a very thorough assessment of Amy Lewin on the European scooter startup scene, remains an area where nothing happens.
Is this region really neglected by the big companies and lacking local potential in the e-scooter revolution?
The Central and Eastern Europe is usually out of focus however, this region of almost 300 million inhabitants (EU CEE) and with steady annual economic growth has much potential. The big ideas are there, the well-educated workforce is there, and the market is also there. Several startups are already operating locally e-scooter sharing services and many more are planning to do so.
Wolf-e is one of the companies that want to make a difference. This Romanian startup aims to revolutionize first the largest city in Romania and, then expand in the region. What more, is that Wolf-e desires to establish communities of users with feedback loops to continuously improve their services.
Other promising startups are already operating in Poland. Hulaj, operating in Krakow, introduced e-scooters with changeable batteries to reduce transportation cost for changing the batteries in logistic hubs. Whereas, Volt, operates in Lodz, actively participating and supporting various local initiatives.
Moreover, blinkee.city , already a well-established Polish electric moped sharing company, forayed into more micromobility services such as bicycles and e-scooters. Blinkee.city operates e-scooters in approximately 15 Polish cities, with potential for the service to expand to other regions, especially where blinkee moped sharing services are already in operation.
Local initiatives in CEE show that the region jumped on the e-scooter hype train however, not everything is so rosy.
Funding, funding and funding is the key issue that local startups are struggling with. Not only in the e-scooter business but with almost any kind of business. Capital markets in CEE lag behind the more developed Western European markets and although 2018 hit a new record for investment in CEE, the difference between capital access in Western, and CEE region is still staggering.
Time and time again startups from CEE (Skype, Transferwise, Prezi, Kiwi.com, etc.) prove that the path towards success is more challenging for them but it is possible. Many of them had to finally relocate to Western Europe to gain funding and finally reach success.
However, in the new scene of the e-scooter revolution, the success will be measured locally. Potential is there, as the middle class is growing, infrastructure is constantly improving, legislation to ensure clear rules for this new mode of transport is being drafted. Cities in CEE are growing, traffic congestion is increasing and shared e-scooters might become the number one choice for pedestrians in this region in very short time.
Top climate scientists are alarming that climate change is ‘hitting harder and sooner’ than forecasted. In their report, issued just ahead of the UN summit dedicated to the climate change topic, they call the key decision-makers for immediate action.
Burning fossil fuels for the last 100 years almost irreversibly damaged our planet. The transport sector is one of the largest sources of CO2 emissions. Road transportation accounts for approximately 70% of the entire transportation sector’s CO2 emissions. Electric vehicles, aiming to replace internal combustion engines and be environmentally friendly, quickly failed to deliver on the ‘zero emissions’ promises. Comparison of life cycle assessment between EV and a combustion engine vehicle shows that EV’s although not emitting directly CO2, they use electricity that is, in large part, still produced from fossil fuels in most places in the world. Moreover, fossil fuels might still be used in the production of the entire vehicle and the battery. Battery, which again is from lithium, a non-renewable material. The same principle applies for all electric vehicles, including e-mopeds and e-scooters.
Although EV’s running on electricity produced from coal might have a similar carbon footprint as traditional combustion engine vehicles, EV’s running and produced from renewable electricity are significantly more sustainable. The European Union has a target of at least 20% share of renewable energy in its energy mix by 2020 and at least 32% by 2030, with a further goal to achieve carbon-neutral economy by 2050. That means the EV’s ‘fuel’ will be soon, in most member states, renewable with zero or close to zero CO2 emissions.
Renewable electricity to power sustainable electric vehicles
EV’s production and battery production is, however, another issue. Most of the EV’s and their batteries are produced in China and the USA. Both countries with not the best climate track record and without any sound promise to increase the share of its renewable electricity in the near future.
Electric vehicle production and battery production for five major electric vehicle manufacturing regions in 2017.
Source: By Nicholas P. Lutsey published on ResearchGate
That means that EV’s and electric batteries produced and used in the EU have, and definitely will have significantly lower carbon footprint in comparison to the internal combustion engine vehicles and even EV’s produced and operated in other regions with less sustainable electricity supply.
The same principle applies to all electric vehicles such as e-mopeds and e-scooters. The study that created a sound bite in the news during summer, claiming that electric scooters are not as eco-friendly as they seem, assumes that the scooters are manufactured in China and transported to the United States. Therefore, correctly pointing out the impact on global warming dominated by materials used, manufacturing and transportation. Now, if the research would assume e-scooters manufactured and used in the EU, especially vehicles with increased lifetime and with reduced collection and distribution distance, the results would be, not so surprisingly, much different.
For many, one of the main motivations for becoming an entrepreneur is to get rid of the management and regain the control over their professional lives. Even though the corporate world can offer a plenty of good opportunities and a high level of social and financial security, it often gets a golden cage for people with various talents. “I am my own boss” – say those, who manage to escape the helter-skelter of calls, meetings and project evaluation session. The self-confident it sounds, the harmful this sentence is. Let us to present a few good reasons to get rid of this common place.
We spend at least a good quarter of our lives in a position where we are told what to do and where the rules are quite straightforward and foreseeable. As students, trainees and interns we see an environment which is not too difficult to adopt to. As employees, the rules are requirements are well set again, and this has a plenty of advantages. In case the management is in its place, the tasks are already clear and transparent, goals are set, and what is left is more than often only prioritization or minor optimization, most commonly only because the leadership want the workers to feel a bit of control over the job.
Those, who exit their workplaces, find themselves in a completely different situation in their own enterprise. Sometimes, there are very hard decision to make based on very little experience and too few data. Apart from the actual work to be carried out in order to deliver some kind of a product, there is a lot of organization to do. These seemingly unproductive processes can be really stressful when there is a time pressure to sell more. In a corporate environment being overloaded with tasks is possible to be reported to the management. However, in your business you are the manager and if you cannot get rid of the employee mind-set, this is the point where you entered into the circle of self-blame, stress and burn-out.
“Being your boss” is a self-realizing prediction as it projects that you are still someone who requires a leader and needs to be told what to do. However, in your own business you cannot be a producer or a doer, since what your business demands the most is a leader and a manager. Instead of being you own boss, you should rather say “I am the boss I want to have”.
Even this little play with the words can put a huge amount of weight from your shoulder, since you can stop worrying about the actual production. If you can incorporate a “boss” mindset instead of the employee one, you can see yourself and your productivity from a different perspective. Instead of being a worker, trying to keep up with the deadlines and struggle with fatigue, you can consider yourself as your own human resource and see your own performance from above. Instead of blaming yourself for not being productive enough, you can start thinking on how to manage and utilize your given performance the best. Instead of desperately trying to produce more, you can focus on optimizing your processes and create yourself the best possible environment to work in.
Moving from employee to a leader is not a one-step process. Even though today’s world of work requires an entrepreneur mindset form basically anyone, leading a company cannot be compared to the work of a team leader. This kind of role requires a mental and technical skillset which can only be gained in practice. This requires time and huge efforts.
Do not expect yourself to turn into a perfect leader from one day to another, and do not think that your are alone with the tasks. Feeling overwhelmed, overworked and overstressed, do not hesitate to ask for help. Consultation, ventilation and coaching can all be very useful during the process. Do not hesitate to ask for help and assistance – this is not weakness, it is a way of saving time and very important reasources.