Category Archives: Venture Capital

Facebook and the Turkish Developer Community

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Facebook-turk

As of today, there are 11,818,880 users on Facebook who live in Turkey and are over the age of 18.  This figure is according to the self-service ad module on Facebook.  I certainly concede there are many duplicate accounts in this figure, but I think it would be safe to assume that there are over 8m unique Turkish users of Facebook.  In fact, comScore estimates 5.5m average daily visitors for the month of August 2009.

This is enormous traffic.  To put this in perspective, MSN Turkey estimated the Turkish internet user population at 12-14m in August 2006.  As far as the Turkish market is concerned, Facebook is now nearly as big as the entire internet was just three years ago.

As an venture capital investor focused on the Turkish market, this makes me extremely excited.  It should surprise no one that almost everyday, I receive a business plan for a Facebook app-driven venture that plans to capitalize on the strong engagement Facebook enjoys in Turkey.

Or should it?

The previous paragraph is a lie.  I am amazed at the way Turkish internet developers are ignoring this enormous potential.  When you look at the most popular apps on Facebook, there is not a single Turkish app.  The same is true for app developers.

Two weeks ago, a Turkish app named Senin İçin jumped to the top of fastest growing apps list, with an MAU of 681K.  This week, they are nowhere to be seen, having only grown to 815K.  Very notable, though, is the presence of another app, also named Senin İçin! (BTW; I thought FB would filter out apps with the same/similar names.)

I think Facebook represents a phenomenal opportunity for Turkish developers.  Facebook's growth in Turkey has proven that viral growth works here, with the right incentives and hooks.  Zynga is showing everyone that you can attain revenues thru FB apps.  I would bet that at least 5% of Zynga's reported $100m+ revenues are coming from Turkey.  How many Turkish internet companies can boast of similar revenue traction?

I will be keenly watching to see if the Turkish developer community wakes up to this opportunity.

Image credit:  Taylanbey

European Tech Tour – Web & Mobility Summit

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ETT_Logo_Home This year I am on the selection committee for the ETT Web & Mobility Summit.  My focus will be mainly on the startups from Turkey and the region and I am looking forward to helping some of the great companies that have emerged from our geography get more European exposure.

If you are an entrepreneur, I strongly suggest applying to present at the summit.

I also have a guest blog, in Turkish, on Webrazzi on the topic.

Ideal Term Sheet

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There was a post on AVC last week (inspired by a post by Chris Dİxon) on what type of issues are important on early stage VC term sheets.  Both posts and the comments are must-reads for any entrepreneur looking to raise venture capital.

On the heels of this conversation, came a draft first round term sheet published by TheFunded Founder Institute, laying out what they see as standard, acceptable terms.  It's great to see that a FFI, which specifically supports founders, has put out terms that are fair.  I think this document can be a starting point in many funding situations.

The Incumbent Question

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Everytime we have an entrepreneur pitch us, a version of this question comes up: "What happens if BigCoXYZ decides to enter this area?"  We usually know the answer, and already think it's a stupid question, but it keeps coming up over and over again.  Then, the same question gets brought up in the investment committee meetings.

In doing what we do, you have to learn to be comfortable with the incumbent question.  In the following video, Kevin Ryan does a good job explaining what we think.

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Grou.ps Funded for Growth

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Grou.ps, in which I am a happy angel investor, has just announced a new tranche of financing from Golden Horn Ventures to help fund its explosive growth.  Grou.ps founder and CEO Emre Sokullu has been hitting all of his milestones since Grou.ps's Series A about a year ago.  This kind of growth is expensive and this new chunk of capital will allow Emre to focus on monetization opportunities, including tools for moderators to charge for their networks.

Congratulations Emre and the GHV team.

PS. This is also reported by Webrazzi in Turkish.   

13 Brilliant Tips from Paul Graham

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I'm a Paul Graham fan.  I think he brings clarity of thought to a fairly soft area: Entrepreneurship.  Here are his 13 things to tell a startup.

1. Pick good cofounders.
2. Launch fast.
3. Let your idea evolve.
4. Understand your users.
5. Better to make a few users love you than a lot ambivalent.
6. Offer surprisingly good customer service.
7. You make what you measure.
8. Spend little.
9. Get ramen profitable.
10. Avoid distractions.
11. Don't get demoralized.
12. Don't give up.
13. Deals fall through.

To this, especially for startups in Turkey, I'd add:

  • Don't wait.  You are usually the only barrier to getting going, not lack of funding or time.
  • Pick depth.  Shallow markets are a problem in turkey.  If you go too niche, you may never get to even "ramen profitable".  Turkish market, in many cases, is itself a niche.  Be careful diving in, as the water may be too shallow.

You can read further thoughts on these at Paul's blog.

Corporate VC

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Today I had a meeting with someone who works at a Corporate VC firm, which invests capital from the balance sheet of the corporation.

Historically, I had thought corporate VC's are a bit disadvantaged, since it's very difficult for the professionals to be compensated in the same way as VCs with a typical GP/LP structure.  Their compensation resembles business developement teams more than investment managers.  I am generalizing as I am sure there are exceptions.

However, this particular firm I met with just approved the same investment budget for 2009 that they invested in 2008.  This is very interesting at a time when many VC funds are haggling with their LPs and facing uncertain prospects.  I am sure that the 2009 budget for this firm will have significantly higher purchasing power than the same amount they invested in 2008.  This could be a huge advantage.

It should be interesting to watch leading corporate VC firms like Steamboat Ventures and Intel Capital through this recession.

PS. There was also talk of Google formalizing its VC activity.  I had not heard much about that lately…

Back to Blogging

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I have been having a tough time blogging lately.  A few weeks ago I
made a resolution to blog shorter and more frequently, and so far, I
have failed at this.  Maybe it's because I have developed a certain style of writing and can not shift that easily.

It also definitely has to do with my work schedule.  The downturn in the market has caused us at iLab Ventures to focus more intently on our portfolio and I am now involved at a higher level with the operations across the portfolio.

Nevertheless, blogging has been a critical tool for me in doing my job.  It helps me track my thoughts across many facets and participate in the global conversation on venture investing.  As my posts decline, I feel I am missing out on a part of that conversation.

So, once again, I resolve to blog more frequently.  I am also considering blogging in Turkish from time to time.  It makes a lot of sense to blog in the native language of my home and principal target market. I will have to see if it feels natural.