1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 4)

Sramana Mitra: Capital-efficient company building that goes straight into acquisition is a very good model for entrepreneurs, especially entrepreneurs doing it for the first time. I see no problem at all with that model. I think it’s a great model.

Milos Sochor: I hope we play a big role. Like I said, Y Soft has made many mistakes and has learned the hard way. I’ll give you another example of a company that is in our portfolio. We have done business with them in Japan. They went from zero to money in the bank in three months. It took Y Soft 12 years to break into the Japanese market.

It was strategically important for us because that’s where Konica Minolta, our biggest partner, is headquartered. It is very hard to sell in the >>>

1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 3)

Sramana Mitra: I have a couple of questions on this one. What is the competitive landscape of something like this when you’re investing in something like this in your local geography?

Milos Sochor: They’re often mistaken with companies that provide Bluetooth and RFID technologies. I would move those more into the consumer space. Savio provides their technology which is called Ultra-Wide Band (UWB). It’s a very heavy-duty and precise solution. It’s way beyond Bluetooth and RFID chips. Those tags are pretty expensive. We are talking about hundreds of euros per tag. You are not able to put it on every box.

It would be for more expensive equipment or workers in the warehouse. They’re in the heavy-duty space. They do have some competition but usually, >>>

1Mby1M Virtual Accelerator Investor Forum: With Ravi Mohan of Shasta Ventures (Part 6)

Ravi Mohan: The last company is a company called Analpan. Anaplan is really taking Excel and putting it in the cloud so businesses can plan better and really model any type of business problem. How do I do my financial plans for the year? How do I do my workforce plans for the year? They’ve been growing very well. What’s common in all these three cases?

In all three cases, they had various degrees of product-market fit. In Apptio’s case, they had talked to 15 enterprises and all these enterprises had wanted the solution. We could see a clear reason why the CIO needed this solution. The CIO is getting pressurized that IT costs were increasing. They needed to justify that. >>>

1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 2)

Milos Sochor: What I just said might sound pretty big, but it’s not. By US standards, it’s a small venture fund. We started the first one with only $4 million. We have invested in five companies. We are able to do more with less money in this part of the world because of very favorable valuations.

For example in the US, that kind of money that would maybe buy you a project on paper, but we already have a company that might have 10 or 15 employees and would already have some revenue. We have invested that money pretty quickly. Now, we are closing the fundraising for our second fund, which will be a little larger. It will be about $7 million. We are looking to finance another five to seven companies in the same space.

Sramana Mitra: Tell us a bit about geography. Do all the companies need to be based in your local city or country? Is it a 

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1Mby1M Virtual Accelerator Investor Forum: With Ravi Mohan of Shasta Ventures (Part 5)

Sramana Mitra: One of my observations is, if you’re doing a pure logistics play, it’s getting harder and harder even in niche e-commerce. Amazon is so comprehensive. The big categories are all taken. The way to differentiate is with new branded products. What you are layering on to that is the notion of repeat purchase and/or subscription?

If you’re thinking about e-commerce, pay attention to these nuances. The base line of ecommerce businesses is becoming tough if you’re talking about venture scale businesses. You can still do niche e-commerce businesses in smaller categories. If you’re talking about building a $100 million business, the set of opportunities that will lead to those kinds of businesses are >>>

1Mby1M Virtual Accelerator Investor Forum: With Milos Sochor of Y Soft Ventures (Part 1)

Responding to a popular request, we are now sharing transcripts of our investor podcast interviews in this new series. The following interview with Milos Sochor was recorded in September 2018.

Milos Sochor is Managing Partner at Y Soft Ventures, a firm in the Czech Republic. Fascinating conversation about how a small region is gradually becoming a powerhouse of innovation and entrepreneurship.

Sramana Mitra: Tell us a little bit about Y Soft. How big is the fund? Tell us about your investing focus. What kind of investments do you make? Let’s get you introduced to our audience. >>>

1Mby1M Virtual Accelerator Investor Forum: With Ravi Mohan of Shasta Ventures (Part 4)

Sramana Mitra: Could you take us through a bit of the thinking for your portfolio strategy in B2C? Both trends that you’re seeing as well as where your bets are.

Ravi Mohan: Every new communications platform yields huge new B2C companies. With the internet, you ended up with Facebook. Mobile hasn’t quite gotten there yet. I guess you did have WhatsApp and Instagram. We do look there, but it’s hard to understand which ones will kick off and which ones won’t.

Although they’re very good areas for entrepreneurs to build businesses, we tend to be more conservative around backing those types of businesses, >>>

1Mby1M Virtual Accelerator Investor Forum: With Ravi Mohan of Shasta Ventures (Part 3)

Sramana Mitra: We focus a lot on that product-market fit process. Our guidance to our entrepreneurs most of the time is to figure out that product-market fit before going out to raise money. The vast majority of the market is in that mode right now. That’s just an aside.

In B2B, do you have sweet spots? Are there specific things that you are noticing or liking in what you’re seeing? If you look at your last 18 months of deal flow, what kind of trends are you seeing? What trends do you think are going to be the genesis of major venture-funded companies? >>>