Tech viewpoint on funding start-ups
Two years ago, my agency, London Advertising, was offered a loan facility of £4 million to buy a social media shop to grow our in-house "digital" capability. Being adverse to debt, my business partner and I thought we should do something a tad more creative.
Instead, we decided to launch a competition with a £100,000 prize to fund a new digital agency in partnership with us. We tapped into the Government’s Seed Enterprise Investment Scheme, which was widely unknown due to the furore over the "pasty tax".
We then persuaded The Times to be our media partner, the Prime Minister to launch it at Downing Street and 12 brands including Aston Martin, Samsung and Warner Bros to sponsor it. For the final pitch, we persuaded Getty Images to give us a live brief to promote its video library to the creative community, who know it for stills but few associate it with video.
Two grads, James Kirk and Kenneth Moore, presented an idea for an app they called Twideo that would automatically turn text into a video message.
Even though we had intended to fund an agency, we decided on the spot to invest the £100,000 in the app, giving James and Ken jobs and shares and making us accidental tech entrepreneurs.
We incubated the start-up in our offices and secured a significant seven-figure investment, which enabled it to recruit a team of 16 to build the app.
We had intended to fund an agency, but decided on the spot to invest the £100,000 in the app
Eighteen months after the original idea was presented, we launched Wordeo (as it became) on 14 January.
If timing is everything, then we were fortunate that all the trend forecasts predicted that the hot sectors for 2014 would be social, video and messaging. Wordeo is all three.
In its first week, Wordeo was awarded both Number 1 Best New App and Editor’s Choice on the App Store, with the likes of Stephen Fry using it avidly.
We have had more downloads in the first month than Snapchat had after six – however, the truth is that this is more a testimony of the time and hard work for any app to iterate its product to secure market fit and to build a strong user base. Fortunately, we have a talented management team to do just that.
The opportunities to involve agencies and brands in what has been described as the ultimate native advertising and user-generated content platform are hugely exciting. So what are the lessons for an adman wanting to move into tech – accidentally or by design?
- Follow your instincts. Be brave.
- Take risks.
- Have good friends and even better lawyers.
- Read the tax code and The Lean Startup.
- Wordeo might be an accident but, as Buddhism teaches us:
"Things happen for a reason." So if you don’t do anything, then nothing will happen.
Michael Moszynski is partner and chief executive at London Advertising
This article was first published on campaignlive.co.uk
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