hello everyone marco montemagno here
digital domination summit 2013 and
martin warszawski here with me hi martin
thank you so much for being here thank
you for having so Martin I tell you a
little bit of context and why I really
wanted to have you among the speakers at
this digital nation summit is that the
reason is the following I follow you for
a long time your blog and everything but
the moment that I really thought Martin
was warszawski is my new hero was when
you launch the phone in Italy I’m
Italian as you guess from my I live in
England but from my Italian Excel you
understand I’m not really British and I
remember one day phone started launched
in Italy and I thought this man or he is
a you know it is a hero or otherwise he
could allow anything in Italy related
with Wi-Fi with these crazy rules that
we have it easily a song and then from
that day I started to follow phone and I
know that now is super going super good
profitable but and but that’s that just
the context Marty and I want to tell you
because you know I always thought how
could you launch anything in Italy with
75% taxes and they crazy lows so this
was just my curiosity why did you decide
to start a little off the phone well we
didn’t start in Italy we’ve we’ve gone
all over Europe and Asia Brazil Mexico
Japan so we want to be the largest Wi-Fi
network in the world which we are now
I’m going to grow by hundreds of
thousands of fun spots every month and
so Italy is a country of fighting 60
million people and incredible tourist
destination certainly one of the most
beautiful countries in the world and no
matter what happens there we have to be
there right and then you you still dare
them and you you you find the way to to
by Paul every country that we been
succeeding at teaming up with telecom
operators and we so we have et phone
that’s in the UK or belgacom phone in
Belgium or zona phone important
now we have doja telecom phone we team
up with operators and operators make
phone available as part of their dsl or
fiber cable offering and we’re in
negotiations with an italian operator
indeed to do the same thing and to
launch in italy people can go to funded
comment by our phone routers and become
members also directly and italians can
do that now alright cool so I’m happy
but am i right if I say that it was one
moment I want to talk with you obviously
about business you in this industry for
a long time so I want just to get your
tips and suggestions for our viewers and
one important thing is also how to
overcome tough periods am i right if I
say that if i remember well a couple of
years ago maybe three years ago phone
got his problems and then suddenly
changed and find the way probably
because you know the mobile came and old
all the gaming came is that true yeah
fun started in 2006 and we having we had
google and sequoia and index and atomic
low and sky as investors but we almost
failed we almost went bankrupt mainly
for two reasons one is because in 2006
to 2009 the world of Wi-Fi was mainly a
world of laptops and they weren’t enough
laptops looking for Wi-Fi now Wi-Fi is a
world of some laptops but mostly smart
phones iPhones Androids tablets that
people have Wi-Fi with themselves they
are wearing Wi-Fi have Wi-Fi in their
pocket so the demand for Wi-Fi greatly
greatly group beginning in 2009 with the
explosion of the iphone and the androids
but then the other change of strategies
we went from going direct to consumers
to working with the telcos and
partnering with the telcos who
distributed millions of hot spot for us
we now have eight million growing up to
12 million this year
and 20 million next year so we have
those two demand-driven events really
change our history from failure to
success what’s the secret Martin for
your I mean in your career it is it fun
is not your first startup you did
several a successful exit and also
investing in a lot of companies what’s
your suggestion for companies who want
to scale internationally because I mean
wit phone you’re doing it very well so I
was curious to understand if you have a
formula when you say okay I want to go
global international where do you start
from well other than being an
entrepreneur myself I teach
entrepreneurship at Columbia University
in New York and also I Institute on
pressing Madrid when I’m in Europe and
also in what you do and this question
comes out a lot the odds of
entrepreneurs in general to succeed are
extremely low in fact there is a there
is a study that shows that only four
percent of companies get accepted to Y
Combinator and of the ones that get
accepted of that four percent only seven
percent uh make it you know so that that
means that it is extremely unlikely to
be successful and in that case success
is defined by these companies being
worth 40 million which is not 40 million
40 million is not particularly a high
amount for a company to be worth and so
you say I’ve been lucky in my career
that I built three companies for
companies that got to be worth over 250
million and i co-founded another one
that were to be worth over a billion and
when I look at the odds of doing these
and you say what’s the formula right
and the odds are extremely low of having
one one company that is worth 40 million
nevermind five and then five that are
worth over 250 million over 20 years but
I don’t have a formula that’s the
problem they sad the sad news is that if
I had I would totally share it it’s not
that I want to keep it to myself and
this video’s and this video will cost
millions of viewers to be watched by the
way yeah yeah you would yeah you would
have the formula too but it’s it’s a um
it surprises me every day that’s the
thing that it surprises me I when I look
around I only see problems because
running a company people don’t walk into
your office to say how well everything
is going all you hear about when you run
a company these problems challenges
things that are going poorly and yet
this is supposed to be success right
success and success so success must be
like one of those pain paintings that
when you look from very close all you
see is failure but when you look from
far away you see success I don’t know
okay ah did you investing tumblr or I’m
wrong because if you investigate a
tumblr I mean not the bay bad period for
you I think in this moment with this
Yahoo opposition right yeah tumblr
tumblr was invested in tumblr I met
David Karp and he was 19 and a high
school dropout okay and I invested at a
valuation of 2 million now the company
was sold for 1.1 billion so yes a tumblr
was my first angel invest investment
that got to be worth over a billion and
I did mentor and help David Karp who I
think is brilliant and plus a super nice
person to be with really nice um he
the question is why would I invest in a
19 year old high school dropout right
which is what I did when young when I
invested with him also become the answer
is because I thought he was a great guy
but especially because I love the
product because I’m a blogger myself and
I love tumblr as a product but how do
you encourage you also professor first
I’m curious about your grades because I
know that now students give grades to
the teachers so I’m curious about your
grace but I’m sure you’re going right
but the the second point is that
sometimes are there are students that
are not a students they are probably
horrible or maybe they drop out early
but they great talk to entrepreneurs on
the other side you have maybe a students
that are not great entrepreneurs so how
can you pick the right person why do you
say David Karp is good and but it’s just
maybe at high school he was not really
considering the genius or anything near
to it well I’m probably the professor
with the worst grades that my students
ever had so I can empathize for kidding
me i didn’t have horrible rates at it
it’s a 3.3 average in America when I was
in college and maybe 3.5 when I was in
graduate school which makes you somewhat
a good student maybe sixty percent I’ll
but certainly not the professor level
student goes professor tends to be 95 99
percentile students and so I think in
entrepreneurship which is what I teach
grades are meaningless in fact I got a
somewhat mediocre grade when I took
entrepreneurship right so i invented a
new system in my class in which i don’t
give grades the i create a marketplace
where I give a million dollars or Euros
a virtual money to every student who
joins the class and they have three
investment rounds and the students are
both be seized and entrepreneurs but not
in the same class in some classes their
pcs in some other
classes they’re entrepreneurs and they
invest with each other and there’s a
formula and the result of the game is
the grade so I I don’t grade them they
grade each other through this game I
love it it’s a sort of like how do you
say monopoly the game where you play or
something like yes it’s a it’s it’s not
like monopoly it’s like monopoly
innocently multiple you buy properties
and you hope that other people fall into
them and and you make money here you
pitch a business and you hope that other
students will invest with you out of
their portfolio and will choose you as
the most likely business to succeed
interesting ah Martinez a couple of
things more you’ll often talk about
Europe silicon bubbling these kind of
things by the way for people watching
this video there is a great talk from
Martin about exactly this topic I will
link it below the video and in this
moment you know everyone talked about
crisis and I’m an entrepreneur for the
last 15 years so I always see
opportunities even in tough periods but
I was um I was really shocked by the
fact that for instance in Italy I so
one-third of the population don’t even
keep money in the bank anymore because
they don’t trust back anymore and they
probably right so the question is what
you suggest to business in this period
if you really have you know your song
they come to us a daddy I just go with
my business but it’s a tough period and
i would love to use all the digital
opportunities to do my business but what
what’s the best tip and suggestion you
would give to him to to overcome this
period well the good news for
entrepreneurship is that our economic
times are actually good for business
they they are good for new businesses
they’re good for entrepreneurs because
in bad economic times your potential
employees have less
the choice to join large firms and
they’re more likely to join you in your
crazy new company so I see a negative
correlation between the state of the
economy and the state of
entrepreneurship okay and I think it is
a good time I think down terms are a
great time to start a business and some
of the most successful Silicon Valley
companies like Google we’re starting in
a down turn right and yeah it’s also
statistic that a lot of Fortune 500
companies they basically started in a
period of recession or depression so
it’s always good time last question
Marty and I let you go um if you invest
now in 2013 today there are specific hot
sectors that you’re looking for or you
invest in just you know great people
that you consider that that can build a
great company do you have any particular
i have no i have expertise and i have
sectors that are really looking to
another’s that I don’t for example i’m
not very i’m not a good specialist in
e-commerce i’m not interested so much in
e-commerce and not which is so common to
invest in e-commerce but i am very
interested in hardware as a service or
hardware or businesses that require a
piece of hardware to deliver a service
would like fun which requires a piece of
hardware to deliver a global Wi-Fi
network but the best example of this is
a company that i invested a few months
ago it’s called smart things smart
things it was extremely successful
kickstarter project we got Jeff here
among the speakers i love smart idea
okay so that that gives you a sense
excellent Marty thank you so much
marking Bartowski founder of phone good
luck for everything okay thanks for having me bye bye
digital domination summit 2013 and
martin warszawski here with me hi martin
thank you so much for being here thank
you for having so Martin I tell you a
little bit of context and why I really
wanted to have you among the speakers at
this digital nation summit is that the
reason is the following I follow you for
a long time your blog and everything but
the moment that I really thought Martin
was warszawski is my new hero was when
you launch the phone in Italy I’m
Italian as you guess from my I live in
England but from my Italian Excel you
understand I’m not really British and I
remember one day phone started launched
in Italy and I thought this man or he is
a you know it is a hero or otherwise he
could allow anything in Italy related
with Wi-Fi with these crazy rules that
we have it easily a song and then from
that day I started to follow phone and I
know that now is super going super good
profitable but and but that’s that just
the context Marty and I want to tell you
because you know I always thought how
could you launch anything in Italy with
75% taxes and they crazy lows so this
was just my curiosity why did you decide
to start a little off the phone well we
didn’t start in Italy we’ve we’ve gone
all over Europe and Asia Brazil Mexico
Japan so we want to be the largest Wi-Fi
network in the world which we are now
I’m going to grow by hundreds of
thousands of fun spots every month and
so Italy is a country of fighting 60
million people and incredible tourist
destination certainly one of the most
beautiful countries in the world and no
matter what happens there we have to be
there right and then you you still dare
them and you you you find the way to to
by Paul every country that we been
succeeding at teaming up with telecom
operators and we so we have et phone
that’s in the UK or belgacom phone in
Belgium or zona phone important
now we have doja telecom phone we team
up with operators and operators make
phone available as part of their dsl or
fiber cable offering and we’re in
negotiations with an italian operator
indeed to do the same thing and to
launch in italy people can go to funded
comment by our phone routers and become
members also directly and italians can
do that now alright cool so I’m happy
but am i right if I say that it was one
moment I want to talk with you obviously
about business you in this industry for
a long time so I want just to get your
tips and suggestions for our viewers and
one important thing is also how to
overcome tough periods am i right if I
say that if i remember well a couple of
years ago maybe three years ago phone
got his problems and then suddenly
changed and find the way probably
because you know the mobile came and old
all the gaming came is that true yeah
fun started in 2006 and we having we had
google and sequoia and index and atomic
low and sky as investors but we almost
failed we almost went bankrupt mainly
for two reasons one is because in 2006
to 2009 the world of Wi-Fi was mainly a
world of laptops and they weren’t enough
laptops looking for Wi-Fi now Wi-Fi is a
world of some laptops but mostly smart
phones iPhones Androids tablets that
people have Wi-Fi with themselves they
are wearing Wi-Fi have Wi-Fi in their
pocket so the demand for Wi-Fi greatly
greatly group beginning in 2009 with the
explosion of the iphone and the androids
but then the other change of strategies
we went from going direct to consumers
to working with the telcos and
partnering with the telcos who
distributed millions of hot spot for us
we now have eight million growing up to
12 million this year
and 20 million next year so we have
those two demand-driven events really
change our history from failure to
success what’s the secret Martin for
your I mean in your career it is it fun
is not your first startup you did
several a successful exit and also
investing in a lot of companies what’s
your suggestion for companies who want
to scale internationally because I mean
wit phone you’re doing it very well so I
was curious to understand if you have a
formula when you say okay I want to go
global international where do you start
from well other than being an
entrepreneur myself I teach
entrepreneurship at Columbia University
in New York and also I Institute on
pressing Madrid when I’m in Europe and
also in what you do and this question
comes out a lot the odds of
entrepreneurs in general to succeed are
extremely low in fact there is a there
is a study that shows that only four
percent of companies get accepted to Y
Combinator and of the ones that get
accepted of that four percent only seven
percent uh make it you know so that that
means that it is extremely unlikely to
be successful and in that case success
is defined by these companies being
worth 40 million which is not 40 million
40 million is not particularly a high
amount for a company to be worth and so
you say I’ve been lucky in my career
that I built three companies for
companies that got to be worth over 250
million and i co-founded another one
that were to be worth over a billion and
when I look at the odds of doing these
and you say what’s the formula right
and the odds are extremely low of having
one one company that is worth 40 million
nevermind five and then five that are
worth over 250 million over 20 years but
I don’t have a formula that’s the
problem they sad the sad news is that if
I had I would totally share it it’s not
that I want to keep it to myself and
this video’s and this video will cost
millions of viewers to be watched by the
way yeah yeah you would yeah you would
have the formula too but it’s it’s a um
it surprises me every day that’s the
thing that it surprises me I when I look
around I only see problems because
running a company people don’t walk into
your office to say how well everything
is going all you hear about when you run
a company these problems challenges
things that are going poorly and yet
this is supposed to be success right
success and success so success must be
like one of those pain paintings that
when you look from very close all you
see is failure but when you look from
far away you see success I don’t know
okay ah did you investing tumblr or I’m
wrong because if you investigate a
tumblr I mean not the bay bad period for
you I think in this moment with this
Yahoo opposition right yeah tumblr
tumblr was invested in tumblr I met
David Karp and he was 19 and a high
school dropout okay and I invested at a
valuation of 2 million now the company
was sold for 1.1 billion so yes a tumblr
was my first angel invest investment
that got to be worth over a billion and
I did mentor and help David Karp who I
think is brilliant and plus a super nice
person to be with really nice um he
the question is why would I invest in a
19 year old high school dropout right
which is what I did when young when I
invested with him also become the answer
is because I thought he was a great guy
but especially because I love the
product because I’m a blogger myself and
I love tumblr as a product but how do
you encourage you also professor first
I’m curious about your grades because I
know that now students give grades to
the teachers so I’m curious about your
grace but I’m sure you’re going right
but the the second point is that
sometimes are there are students that
are not a students they are probably
horrible or maybe they drop out early
but they great talk to entrepreneurs on
the other side you have maybe a students
that are not great entrepreneurs so how
can you pick the right person why do you
say David Karp is good and but it’s just
maybe at high school he was not really
considering the genius or anything near
to it well I’m probably the professor
with the worst grades that my students
ever had so I can empathize for kidding
me i didn’t have horrible rates at it
it’s a 3.3 average in America when I was
in college and maybe 3.5 when I was in
graduate school which makes you somewhat
a good student maybe sixty percent I’ll
but certainly not the professor level
student goes professor tends to be 95 99
percentile students and so I think in
entrepreneurship which is what I teach
grades are meaningless in fact I got a
somewhat mediocre grade when I took
entrepreneurship right so i invented a
new system in my class in which i don’t
give grades the i create a marketplace
where I give a million dollars or Euros
a virtual money to every student who
joins the class and they have three
investment rounds and the students are
both be seized and entrepreneurs but not
in the same class in some classes their
pcs in some other
classes they’re entrepreneurs and they
invest with each other and there’s a
formula and the result of the game is
the grade so I I don’t grade them they
grade each other through this game I
love it it’s a sort of like how do you
say monopoly the game where you play or
something like yes it’s a it’s it’s not
like monopoly it’s like monopoly
innocently multiple you buy properties
and you hope that other people fall into
them and and you make money here you
pitch a business and you hope that other
students will invest with you out of
their portfolio and will choose you as
the most likely business to succeed
interesting ah Martinez a couple of
things more you’ll often talk about
Europe silicon bubbling these kind of
things by the way for people watching
this video there is a great talk from
Martin about exactly this topic I will
link it below the video and in this
moment you know everyone talked about
crisis and I’m an entrepreneur for the
last 15 years so I always see
opportunities even in tough periods but
I was um I was really shocked by the
fact that for instance in Italy I so
one-third of the population don’t even
keep money in the bank anymore because
they don’t trust back anymore and they
probably right so the question is what
you suggest to business in this period
if you really have you know your song
they come to us a daddy I just go with
my business but it’s a tough period and
i would love to use all the digital
opportunities to do my business but what
what’s the best tip and suggestion you
would give to him to to overcome this
period well the good news for
entrepreneurship is that our economic
times are actually good for business
they they are good for new businesses
they’re good for entrepreneurs because
in bad economic times your potential
employees have less
the choice to join large firms and
they’re more likely to join you in your
crazy new company so I see a negative
correlation between the state of the
economy and the state of
entrepreneurship okay and I think it is
a good time I think down terms are a
great time to start a business and some
of the most successful Silicon Valley
companies like Google we’re starting in
a down turn right and yeah it’s also
statistic that a lot of Fortune 500
companies they basically started in a
period of recession or depression so
it’s always good time last question
Marty and I let you go um if you invest
now in 2013 today there are specific hot
sectors that you’re looking for or you
invest in just you know great people
that you consider that that can build a
great company do you have any particular
i have no i have expertise and i have
sectors that are really looking to
another’s that I don’t for example i’m
not very i’m not a good specialist in
e-commerce i’m not interested so much in
e-commerce and not which is so common to
invest in e-commerce but i am very
interested in hardware as a service or
hardware or businesses that require a
piece of hardware to deliver a service
would like fun which requires a piece of
hardware to deliver a global Wi-Fi
network but the best example of this is
a company that i invested a few months
ago it’s called smart things smart
things it was extremely successful
kickstarter project we got Jeff here
among the speakers i love smart idea
okay so that that gives you a sense
excellent Marty thank you so much
marking Bartowski founder of phone good
luck for everything okay thanks for having me bye bye
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