WebJam, web startups and the trouble with cracking Europe

UK web startups are like rock bands. Not because they all rock, although some do, but because many want to make it big in the US.

But the British invasion doesn’t look like it’s going to happen anytime soon. Last.FM and Bebo are more like Oasis and Blur, than The Beatles and The Stones. Noticed in the US, but hardly game-changing.

So what of our own backyard, Europe?

Well, I recently interviewed Yann Motte the London-based French, CEO of WebJam who prior to setting up the social network platform with Spanish and English co-founders, spent many years leading business development at Yahoo! Europe.

Yann Motte, ceo of WebJam, bringing social networks to business

A good person to ask about the challenges of building a web startup in today’s post-crunch world, but also a chance to pick the brains of someone who knows all about the cultural challenges of extending web applications and services across Europe.

Building Yahoo! in Europe

Yann joined Yahoo! in 1998 when it was only a few years old.  With just 300 people worldwide, he was one of the first business development managers in Europe.

On leaving in 2006, he was VP of Product Management for Europe.  By then Yahoo! France alone employed 500 people.

It’s perhaps these early pioneering days that confirmed his taste for starting a business on the web, leading to the creation of WebJam almost a decade later.

As he says:

One of the reasons I joined Yahoo! was because of the amazing entrepreneurial feel, especially in Europe.

As the business grew it inevitably became more corporate and Yann observed, with occasional frustration, the oscillation between US headquarters letting European subsidiaries off the leash only to have second thoughts and rein them back in again.

It’s not the culture, it’s the branding and pricing

Yahoo!’s and Yann’s experience of managing European growth, reflects ongoing concerns about how European web startups can effectively scale across the continent.

Nils Hammar one of the founders of recently sold Kindo, described developing a multi-language site as like “dragging a big heavy anchor behind you”.

And questions about why it’s so damn hard to build trans-national web businesses in Europe was also raised by Sarah Lacy on a panel at the recent Techcrunch Europas.

Yann believes for web applications that are platform based, beyond the obvious language challenge, startup CEOs should spend less time changing the product for different countries and more time concentrating on differences in the perception of the brand and the strength of its competition locally.

This and getting the pricing right for different services in different territories.

And these two elements are the very essence of the European challenge.

Language isn’t a huge problem. Cultural differences aren’t the key. The real challenge for any web company is launching a brand over and over and over again with the right price proposition in each European country. That costs.

Costs that US startups aren’t going to incur in the same way, if they want to reach punters in California, Texas, Nebraska or New Jersey.

Building WebJam

After Yahoo! Yann set his mind on working in a startup environment again.

What he didn’t know was whether he wanted to work for an existing startup, or take on what he describes as the “blessing and the curse” of creating a business himself from scratch.

He chose the latter having brought together a team of co-founders who combine creativity, technology, marketing and business development skills.

A solid foundation for WebJam which acts as a software as a service social publishing platform for businesses and organisations. A Ning for business, if you like.

Tick tock

What WebJam doesn’t have, however, is Ning’s huge VC funded pile of cash ($75 million) in the bank to help navigate the recession and grow through it. It is, however, funded by Versailles-based VC firm I-Source.

Is the timing for such a startup, which counts Random House and Yamaha Music as customers, problematic?

Yann says this is something he’s learned the importance of:

It’s all about now finding the right momentum for the vision we have. What’s always difficult for a startup is the sense of timing.

WebJam is already generating revenue, but he recognises that one of the key issues they need to address before the end of the year is whether and to what extent they will need additional funding rounds.

That depends on how aggressive a strategy WebJam will take. Slower organic growth might be the right move in the current economic climate.

On the other hand Yann sees an opportunity for startups in Europe to grow rapidly across the continent, while many US web businesses are refocusing on their own core domestic markets.

In the short term, however, WebJam’s focus is squarely on building revenues in the UK.

Although marketing budgets may be under pressure at the moment, Yann believes his startup will float on a rising tide of business interest in social media as its ROI becomes better understood.

Buzz and engagement with customers are the most commonly cited benefits of social media. But behavioural data and good old traffic are also important.

Yann clearly sees social media breaking the search hegemony of Google and helping to diversify spend away from SEO and SEM.

Certainly savvy online marketers are going to be looking for alternative ways to spend their online budget to build brand and community as well as immediate return.

With a robust team, VC funding and revenues already flowing, WebJam looks well placed to take advantage of this shift if and when it happens.

Alex is the founder and editor of SmallBizPod, the UK's first podcast dedicated to small business, start-ups and entrepreneurship. Alex writes about topical small business issues, entrepreneurs and anything else that catches his eye here on the small business blog. http://www.smallbizpod.co.uk