The Up Group

Clare Johnston, Founder and CEO of The Up Group, has been recognised as one of the Young Guns of 2012 by Growing Business. 

Founder and CEO of The Up Group, Clare Johnston has been recognised in Management Today as one of the most influential young female entrepreneurs of 2012. 

Here at Up, we’ve been busy hosting a series of roundtable breakfast events over the last few months for leading digital/online Marketing, Product and Technology Executives, and we’ve been delighted with the results. Lots of lively debate with some very interesting people!!

In June, we hosted Up’s Product Breakfast bringing together Product Management Executives from companies including:

• Basekit, Betfair, Covestor, Flirtomatic, FON, Gekko, Guardian, Hotels.com, Imagini , Lastminute.com, Microsoft, Playfish, Skype, Talk Talk, Vodafone

In July, we hosted Up’s Technology Breakfast bringing together CTOs/VP Engineering Directors from companies including:

• Blue Duck Education, Geo Sweep, Harper Collins, iTrigga, Marks & Spencer, Time Out, Vzaar, Wahanda, Wiggle

In September, we hosted Up’s Marketing Breakfast for leading CMOs and Marketing Directors from companies including:

• Yahoo!, Quiet Riots, Mydeco.com, UKTV, Bet Now/Open Vantage, Betfair, My-Wardrobe, SecretSales.com, EMI, M and M Direct, Lovefilm

For full Event pictures and write-ups, please see:
http://www.theupgroup.co.uk/news_events.html

Investor Allstars Awards, Thursday 22nd September
The Natural History Museum??

The Up Group was proud to sponsor the ‘VC Fund of the Year’ category at this year’s Investor Allstars Awards on Thursday 22nd September at The Natural History Museum. The event is often described as the ‘Oscars’ of the VC/PE community and it certainly upheld this description this year – an excellent event! A great keynote from the hugely impressive entrepreneur, Heiko Hubertz, Founder and MD of Bigpoint.

The shortlist for ‘VC Fund of the Year’ included:

• Atomico Ventures II
• DFJ Esprit
• Gimv
• Index Ventures
• Intel Capital
• Nauta Capital
• Northzone
And the Winner was : DFJ Esprit
?www.investorallstars.com

Clare Johnston, The Up Group, with award winners DFJ Esprit

http://www.investorallstars.com/IAS/2011-gallery.thtml

At our Marketing Breakfast last week there was a lively debate with senior marketers from both larger and smaller businesses. It was an opportunity to discuss current trends and challenges as they affect businesses such as UKTV, Betfair, mydeco, EMI, Secretsales, Yahoo! and my-wardrobe.

During the two-hour session, the attendees shared practical solutions, such as which agencies should be used for specific tasks, as well as discussing what had worked from a strategic perspective for their respective businesses. Some of the key themes are highlighted below.

Brand
The room had a mix of marketers who had come up the traditional brand marketing route before making the transition into more numbers-driven marketing and others that had started in direct marketing. There were interesting insights shared on how brand marketing has evolved; especially if you worked for a pure play online business. From the start-up marketers, the idea that you drive traffic to your website and let excellent customer service and retention programmes do your brand work was also voiced.

Traffic
The group discussed the view that traffic can be another word for community; a community that you need to nurture with the right content and incentives. From here the discussion moved into the realm of social media and the best ways of creating loyal users who will become your brand ambassadors. A couple of attendees offered examples of where devoting time and being openly responsive to bad publicity had resulted in creating customer loyalty. Another shared that the process of changing dissatisfied users into evangelists had been introduced as a key weekly metric within their business.

Metrics
How to best measure the success of your activities was discussed at length. Everyone agreed that clarifying your objective early on is key. However, as expected given the different backgrounds of the attendees, it became clear objectives are very different if you are in online media as opposed to working for an ecommerce business. The use of appropriate measurement tools makes a huge difference. “One size” does not fit all and results can be interpreted in many ways; hence it is essential to choose the right solution for your business. The attendees all agreed on the importance of being commercially-minded and the need to create a good relationship with your CFO!

Future
The last issue of the session was that of a changing environment for marketers. From being able to influence an audience with big branded campaigns and control the media output, marketing is now increasingly about pulling together a number of streams and creating one message. The group agreed that marketers today might have less control but with more accurate measurement tools it is easier to see what you are doing right.

The Marketing series will continue throughout the year. Should you wish to get involved then drop us a line at hermione@theupgroup.co.uk.

Last week we held the first of a series of Product Management Breakfasts, where we invited a group of senior Product Management executives from both large and small web businesses to come to our offices to share ideas about Product Management.

Attendees came from across the industry, including Betfair, ASOS, FON, Guardian, Playfish, Skype, Covestor and Basekit to name just a few. Over the course of ninety minutes many insights were shared, too many to document with brevity, however for your benefit we thought we would distil some of these into key themes:

 Product Management as a new function in a company; as the Product Manager how do you prove its value?

1. Through benefits realisation. Establishing KPIs for each new product, down to each new feature. Allowing the stakeholders to see the effect on conversion or sales is key to gaining buy-in.
2. Prioritisation. Begin with the product that you think will make the biggest difference, and create a business case for it. Gaining the support of a key commercial stakeholder will help you when presenting this to the business.
3. Focus on aligning Product with Marketing, rather than Technology. The Technology should provide the ‘how’, the Product should be responsible for the ‘what’.
4. See the Product Development process as a tunnel, not a funnel. Be strict on what you’re not going to do as well as what you are going to do, and stick to it.
5. Add value through facilitation – PM should help the business to focus decision making and to facilitate communications between different areas.
6. Make the business and PM team understand the cost of each release in order to make them think about the amount of incremental value that needs to be delivered as a result of a new feature/release.  It really focuses people’s minds!

How do you effectively communicate the roadmap?

1. Throw away your spread-sheet. The product roadmap is key.  One suggestion to help manage a deluge of requests is to use the IT helpdesk to create a request system that’s visible to all internally.
2. Communicate the roadmap to your CEO with complete transparency. Talk them through the next twelve months and allow him or her to see why certain things must be prioritised.

What skill sets and capabilities do you look for in Product Managers?

1. Someone with the entrepreneurial capabilities of a ‘mini-CEO’. They must ‘own’ their product and be able to drive it forward like it’s their own business. They need vision and aspiration.
2. They must have a strong intuitive understanding of the customer and be capable of combining this with vision, research and metrics to deliver products.
3. You need someone who knows how to work with data in order to draw insights and optimise performance. It can be useful to do a maths test with candidates to assess quantitative abilities. 
4. A Product Manager needs to be able to move from big picture thinking to the detail. Attention to small details is as important as vision.
5. Technical understanding. A ‘reformed’ techie or someone who is highly conversant technically will be better placed to speak the language of the technical team and make accurate assessments on what is achievable.
6. It can be necessary to make a choice between ‘Arts’ led and ‘Maths’ led candidates. Often they will either display strengths in creativity or in understanding and manipulating data.  Making a decision on which way to go will depend on the requirements of your product.

The Product Management series will continue on throughout the year. Should you wish to get involved then drop us a line at hermione@theupgroup.co.uk.

What is Basekit and who are you targeting?

We are an online service helping to make the creation and publishing of websites easy. Both web professionals and small business owners can use BaseKit to greatly speed up website production.

What is the background of the business?  When was it founded?  How is it funded?

BaseKit won Seedcamp in 2008. I was part of the seed investment round then and took on the CEO role in June 2009. We have raised £2m from Eden Ventures and Nesta and we are preparing to raise some more funds in the coming months to accelerate our commercialisation plans.

What does the market look like? Who are the main competitors?

The space is hotting up with investors like Accel, Index and Benchmark having very recently backed similar companies. There are a few companies attacking the space but most of them from the US with a very US centric approach. While the US is important, this is a truly global opportunity and we think that BaseKit is better placed to capture it. We are already a pretty international company (12 nationalities among our staff…..I guess this is the beauty of being based in London!) with fully localised acquisition infrastructure/channels, etc.

What do you think are some of the reasons behind the investment interest in this area?

Big disruption across several markets:

• Webhosting (a $50bn+ market)
• Digital/marketing services for small businesses (a $10bn + market in US and UK)
• Web authoring software (a $5bn + market)

How is the business performing?  What are your plans for ‘10/11?

We started commercialising in June 2010 and so far we are adding (500-1000) paid subscribers every month. We see the business scaling quite quickly and we are pressing ahead with our internationalisation/localisation plans.

Why did you join Basekit? As CEO, what was your mandate on joining?

I was a seed investor in the company right after the team won Seedcamp. After a few months helping the founders on a part time basis, it became clear to all of us that this opportunity had big potential and that I could help greatly to the success of it as a full time CEO. 

What is your personal background prior to Basekit?

I guess I’m an active European investor/tech entrepreneur. Prior to BaseKit, I had a couple of exits with companies I ran and sold. I am also the co-founder of a very interesting fin-tech play that is doing quite well (also in London). These days I try not to dilute myself too much beyond BaseKit though. Before becoming an entrepreneur I was with McKinsey & Co in London.

What has been the main challenge since joining?

Building the company fast enough. We were 4 guys 18 months ago and now we employ 30 (some of them with your help. Thanks for that!) and there is a big sense of urgency across all our work streams.

What do you have to do to be successful in a start-up and how does this differ from a larger business?

Resilience, confidence, common sense.

The big difference with the large business world is that it drags all your energy if you want to move fast.

In the start-up world you cannot hide and there is no sense of inertia. 

What do you think is hot in the internet/mobile space right now?

Every company that is solving a problem, has got customers and can scale to a decent size is interesting to me. 

I think we should not be too biased towards trends when we make a judgement on interesting opportunities. Pack behaviour has destroyed lots of value for investors in the past.

Tell us about GeoSweep? How does it work?

GeoSweep is a new national prize game that is based on locations rather than numbers. We use a Google Map of the UK as our game-board and allow our players to select their favourite locations, known as Geos, for a chance to win £1m every day. So think of it as a mix of a lottery with Monopoly and Foursquare and you won’t be too far off!

There are similarities between GeoSweep and the National Lottery.  How do you differentiate? Are you targeting the same audience?

We looked at the National Lottery and thought “there must be a better way”. So we developed a game that was cheaper to play at just 10p per day, with better odds of winning £1m, and more fun. I mean I am an economist by training and even I find it a bit tricky to get excited about 6 numbers – but searching the whole of the UK to decide what to own as my “ticket”, be it my house, my favourite football ground, or Big Ben, is a really fun experience. Once you have claimed your land you can even personalise it with a tag-line and share it with your friends on Facebook and Twitter.

In terms of audience we are obviously tapping in to the market of online lottery players that is currently at about 4 million in the UK and growing. This is naturally a slightly younger demographic than the 20 million offline players, so it is time that they were given a 21^st century product, and not just some more old balls jumbling around in a washing machine!

There are two daily draws and you can win up to £1 million each day. Where does the money come from?

Every day your 10p Geo has 2 chances to win; the £1m GeoSweep draw and the Daily Guarantee. The Daily Guarantee prize amount depends on the number of occupied Geos on that day (although we seed this to be a minimum of £1000 every day) and selects one of those occupied Geos at random to win the cash. We also create a Prize Zone around the winning Geo that pays out 2^nd prizes to nearby occupied Geos.

The £1m GeoSweep draw selects amongst both the occupied and unoccupied Geos every day. If the Geo that is randomly selected is occupied then it wins the £1m and there are some 2^nd prizes as in the Daily Guarantee. If the Geo selected is unoccupied then there is no pay-out on that day. So early on whilst the map is relatively unpopulated the chances are that on most days the prize will not be won, but we have enough cash in reserve just in case our players have a very lucky streak and the £1m is won 5 days in a row! Over time as player numbers grow then the prize will become self seeding like the lottery draws.

With all the different games out there at the moment, why should we try GeoSweep?

Where else can you buy your dream house for 10p and win £1m every single day. I should add that pound for pound your odds of winning £1m on GeoSweep are 233% as good as winning the national lottery.

How did you come up with the idea?

GeoSweep was born out of an idea that my brother, and co-founder, Henry had whilst he was a penniless student in Brighton. It was one of those ideas that as soon as you heard it you thought “that is just so obvious, why hasn’t anyone done that already?” But we did all of our research and found that we had inadvertently stumbled upon something very new and exciting. So we rushed out a patent application and then got to work.

How is the business funded?

All of our funding has come from Angel Investors.

The business only launched very recently, how is it going so far?

We launched the site on 10/10/10 for our 10p Geos! It has been a great success and although we are yet to make our first millionaire we have already given out thousands in prizes. You need only go to London on the map and you will see that many of the top landmarks have already been snaffled.

What are your thoughts about the future; are you launching more products?

Going forward we have an awesome pipeline of new features and products. When you have a map as your game-board, and an awesome and inventive tech team, there is just so much that you can do.

Our strategy is to use the UK as our creative test bed and quickly move out and partner to gain access to new jurisdictions such as the US – wherever there is a Google Map we aim to give them a GeoSweep.

What is your personal background prior to Roboreus? 

I studied Economics at the LSE and then worked as an economic consultant before becoming an equity trader. GeoSweep is a lot more fun than any of that….

As a first time CEO, what has been the main challenge so far?

I previously had next to no experience of managing people before so it has been a pretty steep learning curve. Something that I learnt early on is that making the right hires is about the most important thing that any business, particularly a start-up, can do.

Is the whole team located in London? In your experience what is key to building the best team?

We have the core team here in London and then use an excellent outsourcing company called DataArt that are based in Russia and the Ukraine.

To build the best team possible you just really have to go the extra mile, read that extra CV, do that extra interview, work with the very best recruiters….

What do you think is hot in the internet/mobile space right now?

Am I allowed to say www.geosweep.com ? It is obviously all about location right now, and the prevalence of location aware devices is opening up some really cool opportunities to look at old things in new ways.

What is Covestor?  Can you explain to us the business model?

Covestor provides the world’s largest online investment management platform. We pioneered social investing which allows you to follow the real trades of any great investor. Our site allows you to see how proven investors manage their own money in their own accounts. Then, with a Covestor Mirroring Account, set up your brokerage account to automatically mirror each strategy selected, trade for trade.Investors can subscribe to a growing set of highly respected professional money managers as well as non-professionals with proven track records – with all securities purchased in the client’s name and held in custody at an independent broker-dealer. Covestor, an SEC registered Investment Advisor, charges clients a simple management fee for each subscription and shares these fees with the managers.

Covestor has some very interesting investors in the UK and US, can you tell us a bit about them and how their involvement benefits the business?

 We are very fortunate to be funded by Amadeus Capital Partners (London), Spark Capital (Boston) and Union Square Ventures (New York), all leading firms with great track records.  Their involvement has been enormously beneficial, for example in finessing our strategy by applying the wisdom gained building highly scalable consumer internet businesses.

 How developed is the market you are operating in? What does the competition look like and how do you plan to differentiate?

 The recent financial crisis highlighted that consumers’ trust in financial institutions continues to ebb away.  Our competitors are these institutional behemoths and include firms such as Fidelity, Vanguard and Oppenheimer. With a lack of transparency and poor performing products with hidden fees, these institutions have failed thus far to embrace the web to innovate their product offerings and re-engage retail investors.

 At Covestor, trust, transparency and openness are at the heart of our proposition.  Clients can mirror experienced investors, see exactly what they’re holding and how it’s performing, 24/7. And all without any hidden fees.

 Can you tell us about how you founded and built the business? What have been the biggest challenges?

 At the outset we had a clear vision of the business we wanted to build.  The complex nature of what we were taking on, in a regulated industry, meant it was necessary to plan for, and evolve through, a series of stages to create the investment management platform we have today.

 Along the way our challenges have been numerous so here are just three.  First, we’ve had to prove that smart investors are willing to share their real investment activity in public view. Second, we had to figure out how to structure our business keeping it within a regulatory framework that was set up decades before the rise of the web.  And third, we’ve had to be creative in recruiting our world-class team, given that we can’t quite compete with the excessive salaries and bonus schemes offered by traditional investment houses.

 Where would you like to see the business in the next five years?

 To become the de-facto platform for investors to manage their assets.

 What was your experience of founding a business like this during a recession? How did it help and hinder you?

 In many ways, building Covestor during the recession has proved advantageous.  We’ve been able to uncover some remarkable investment talent – investors who have thrived during turbulent markets – and provide access to this group of high performers to our clients.

 What do you think are the main ingredients of building the best team?

 Leadership, empowerment, team spirit and when hiring, not accepting second best.

 Outside of your market, what is ‘hot’ in the online world right now?

 Location based services (LBS).  Foursquare and Gowalla have blazed the trail in this space with the early adopter community and Facebook Places will take the concept of checking in mainstream.  But we’re only at the beginning of the innovation and adoption to be seen in this area and I’m interested to see how both the privacy issues and business models play out as LBS go mainstream.