 good to have you all here excited to close the 2018 edition of Slush by kind of reminiscing the phenomenal year in European tech this year, 2018, and looking forward to what's going to happen in 2019. Just to drop a couple facts of what has actually went down and why it's especially great to have these people here today is that we've had four technology IPOs or direct listings from Europe that have been valued at more than five billion dollars and out of those four Spotify and Farfetch were two so essentially 50% of the companies are represented here one way or the other or yeah as of the valuation yes that's true much more than 50% if you look at just the valuation yeah both as people who are building the companies as well as board members so all perspective represented but not just that Europe has also received a record number of funding so far as of today it's 23 billion dollars that have been invested to European tech this year and that's up quite a lot from 2013 when it was just five billion so it's five times bigger in five years which is massive so definitely there's been a lot of improvement and development but there's obviously things that we can we can still change in the ecosystem to be even better and that's that's the topic for the day but to get started of like our journey and how we got there maybe starting actually from PJU you you just recently returned to Europe but looked at Europe from the US for a long time how did you like how do you see building a company look like in in the US or US founders versus in Europe I think there is a distinctive difference on how Europeans go about building companies and and Americans have a tendency to believe in their assumptions and to basically rely on that those assumptions will hold which means that they are prepared to take a little bit more risk in parallel to things how they are or unfolding and that's something that I've tried to communicate to many of the entrepreneurs here in Europe and as the capital market has become much more complete in Europe there is no reason why an entrepreneur shouldn't think the same way in Europe yeah I I guess from my perspective or from index's perspective I think I would probably say that the difference is more in the approach to presenting rather than the ambition it's that US entrepreneurs tend to be super polished when they express their enthusiasm and their ability to dominate and to disrupt an industry and Europeans have a tendency to be more subdued and more self-doubting when they present but the ambition is usually there so it's you know it's been interesting for us because at index half our firm now is in San Francisco and half our firm is in London and it's always it's always interesting to see that we as a partnership have to adapt ourselves depending on who's presenting like when it's a European entrepreneur we have to connect the dots more and when it's a US entrepreneur we actually have to take a step back and and just remember that they're going to be painting the best light possible so it's been interesting to see those cultural differences so I guess it's believing in yourself and be proud about it yeah I mean I don't think there's any better or worse it's just a different approach yeah um companies represented here are more or less the strengths of Europe right like fashion music uh what we're known for 80 90 percent of all luxury brands come from Europe how's it been to build a company in that field from Europe and expanding to you have a ton of offices all around the world right yeah so yeah I mean when I joined we were 30 people in in London and Portugal mainly I think we had one in the US and one in Brazil which is a whole other story um and now we're 3200 in 13 offices so but I think that the starting point is you know I think obviously any company wherever it is needs something that differentiates it's something that gives it something special and definitely in our case you know if you look at all of the successful or the vast majority of the successful fashion business especially luxury online they're all in Europe and it's something that we have heritage in we have history in I think we have a and we have a connection to you know if you're going to work in the luxury space you need to be really close to the brands and they're all in Paris and Milan predominantly and so I do think that gives us a a huge edge I mean I remember I think it was our series C we went to Silicon Valley to try and raise money it was kind of Josie and I going up and down Sand Hill Road in the SUV you know it's kind of a different experience than doing it in London and you know met some super smart really brilliant amazing people who just couldn't get our business you just couldn't get it they couldn't understand why would someone spend you know three thousand dollars online for a dress and and why can't we just get Gucci to sell on Amazon I mean it doesn't you know I think there's just a they would intellectually get it but they never really fell in love with it I think the way that you know European investors would straight away right is there any other like anecdotes like that that would I don't know you felt when you went like beyond Europe where you would have like felt the differences not necessarily just in the US but I mean South America I think I mean I mean one of the you know online luxury it once you get over this question of will someone spend two thousand dollars on a dress online which had been proven by some of the brilliant European companies that launched before us it is the best e-commerce category in the world or one of it's super high prices high average order values high margins global brands global product catalog customers who are global and obviously the internet has built an incredible ecosystem for building global businesses with those kinds of dynamics and so there's a lot of commonality much more so I think in luxury potentially than in others and and it's hard to get access to the brand so that's really what I think enable does to go global but the differences are incredible I mean you know I think you know we're talking I hear a lot of debate here around the difference between the US and Europe but if you go to China it's a I mean that is a whole that is a different world in terms of I think the you know I remember the first time I went to China was maybe six years ago thinking about you know how would we launch there and and you know I was at eBay many years before that where eBay had made it a number one priority you know it's like that a slide saying like our number one priority is China I have a slide like that as well eBay's didn't go so well you know it was not admittedly they were early and they learned a lot and you get there and you read the thing that stunned me it's changed a bit but at the time people talked about China copying US businesses in particular I think it's incredibly imperialistic view of the world I think they execute at a level I've not seen in any other country and you have to be able to both adapt to that and think about carefully can you compete and I think in our case we're able to because of the the nature of the supply base there's not too many companies who've done that we actually I think we'll be the first yeah or are the first in terms and it's a personal pet passion of mine to become the first non-Chinese internet business to really make it there and you know I think we're on a great track there it's our you know our second largest market and continues to be to be super important for us. Stefan I'd like to know a little bit more about the like everyday life of building Spotify eventually it is the biggest listing of the year from Europe and I think it's something that people waited for quite a long time to happen but what would it like if you talk a little bit more about the like what what's the rhythm within the company and the ambition level inside. Sure I'm happy to and actually I want to mention something that PJ mentioned before he got on stage which is it's fairly interesting right that from this very region you have not just one huge startup not a startup anymore but you also had a ton of other companies coming out like the the foundation of Beats Music that was bought by Apple actually came from Sweden combined team Sweden Norway titled the same thing there's a bunch of new music companies out there like Epidemic Sound for instance Soundtracker brand so they just slew our companies out there and I really think that happened and then I'll get on to your question because there was this moment in time right where you had pretty pretty big challenge for consumers you had access to music but not in a great way and clearly a lot of people were seeing that creators aren't being compensated in a fair way so those two things happened in the same time space as infrastructure came in place so you had high speed mobile networks mobile phones coming in smartphones coming in and a couple of really passionate people sorted opportunity and graphs it basically so that's really why I think it happened at that time and then I think the rhythm and the planning of the company said it's changed over the time and now I'm not with the company anymore but we tried various iterations as to how to plan and set strategy and what have you and I think what we found most useful at least in the last few years is to set up really north star goals like long-term goals so people know the long-term direction of the company because obviously it's quite difficult to detail down what's going to happen this month this quarter and these two years so basically Spotify was operating under a north star like five seven years perspective and then a two-year set of goals that really detailed and in developing those that happen sort of through the course of what's called strategy days and in management meetings and and the structure around that is really to talk about beliefs where do we think the market will be where we think the consumer will be in terms of consumption where we think the creators and the industry overall will be and from that we can develop targets basically rather than actually saying this is what the market is and just extend that because it's really about creating new opportunities and reshaping some of the some of the old yeah yeah something that I could continue from that is the success breed success like you said epidemic sound or other companies that are doing music it's not just Spotify or essentially Farfetch is just a continuum to the strong fashion and luxury history that we have in Europe so is there what could we do as Europe even better to like accelerate this success breeds success will you I think yeah we had unfortunately back maybe 15 or so years ago there was this idea of building your company and then selling it to someone and and that sort of yeah killed the the boss for many ecosystems but then maybe 10 15 years ago the first example started to to appear where the entrepreneurs and I think Daniel Ek and Martin Lawrence and are probably the most brilliant examples of that they decided they wanted to build their own company and remain their own company and that has had a tremendous effect and and implication of other entrepreneurs have looked at their quest also going forward and that you're just looking at Spotify today they have given birth to more than 25 companies a lot from alumni Spotify people and and they are raising capital they are recruiting people and the same goes probably for the Farfetch alumnus as well yeah I mean I remember you know we had the same I think it was very ingrained in European companies back when we started that your goal was to sell to probably an American company yeah that was the the standard MO and and it was only series D that we started seriously thinking about going public and I definitely you know if there's one thing I would say to all the companies here is that you should think you should start thinking about that now I mean there must be I don't know what what are the odds there's maybe 20 30 public companies here already they just don't know it yet and so you should start thinking like that and I think things have changed now but I mean the other the other thing I remember vividly was when I first met Jose it was in his shitty little cafe in East London it was my interview he spent the hour talking to me and then I think I asked him you know one of the main questions I asked him was what's your exit plan and he said I don't have one and I thought that was exactly the right answer unless you take a public but he said you know because if he'd said to me you know I want to build it up and sell it in three years what I would I personally would not have joined so I think it's very you know if you care about what you're building then surely eventually going public is the best route it allows you to to solve the problem you're trying to solve right and let me touch on one comment you said that you know you should start thinking about that road you know to IPO already earlier what in practice can the founders in the room do to kind of do things right early on I mean I think like would it have changed anything in terms of how decisions we'd have made or ways I'm not sure it would have because we always had we're always very clear on the you know the ambition was huge I mean Danny can talk to that more of the ambition was huge the market was huge we wanted to revolutionize the fashion industry and so I think that meant we were always thinking very very big I don't know if we'd thought well it's all going to be about exiting and therefore we need to spend time building relationships with potential you know people who can buy us or whatever but we just never did that you know we spent almost zero time with people who contacted us or going outbound at all but I just think it's about you know thinking as big as you can and if you're thinking about selling I mean some companies obviously are more are not candidates to go public but if you are a potential candidate public that should in my opinion that should be your your ambition not selling yeah I I mean we have two really good examples here of executives who were essential in building the stories that we're talking about I think you know that's probably the area I would say that Europe has historically had the most pushback on is not realizing the value of the team that you're building around the entrepreneur so the the caliber of the entrepreneur I think is actually very similar if not better here because of the odds of building something that tremendous here but knowing how critical the team is going to be for your success and making sure that you hire the best people who are better than you at every single job that's a that's a new learning and certainly you know it's not as fluid a market here as you know say Silicon Valley but it certainly is as New York or these other places that people talk about as potential you know hubs of of entrepreneurialism so it's just making sure that there's a culture of hiring people who are better than you in every single job and not worrying about giving up control in those respective areas but realizing that that's what's going to make you super successful there's a cliche that I often remind my entrepreneurs about like A players hire A players and B players hire C players and it's really true like if you're not hiring A players but you're hiring B players the B players are going to hire people who are worse than them in every single case and as a result of that you don't really have a fighting chance yeah I agree actually that takes us nicely to a thought I remember you said Stefan where we were preparing that you spent even 30 percent of your time in hiring to make sure you have the right people probably around there or even more so yeah I mean it's not like you'll sit there and have interviews all the time but you will seek to branch out and and broaden your network basically to find fantastic people out there for the moment when you can offer them a position to basically sell them on the vision and and get them excited and eventually hopefully get them on board so I think that's a very successful approach the other way around would obviously be higher a lot of headhunters and there's a lot of fantastic headhunters out there but I think you need to combine that actually at least when you're hiring for some certain positions that you you build that network yourself basically yep you spend a lot of time nurturing that right and again to the entrepreneurs in the room any advice from your learnings on that you know eight players hire eight players so how do you keep that bar high and actually raise it all the time what what do you need to do to make sure that the organization when you have thousands of people already you make sure that the pipeline is filled with only eight players how do you do that I mean I mean I can you know from my if I look back on the you know the eight years I mean at Farfetch my biggest mistakes have been hiring ones so they're the ones I've learned the most from and then the most painful because they take two years to fix you know if you get it wrong by the time you've hired the person and then you see how they go and then you obviously want to give people a chance give them some important feedback it's not working then you exit them then you start the process I mean it it takes time especially in Europe where there's a little bit less flexibility around around you know the way labor laws etc etc work I mean but and to me I really think the this there's the scalability is a lot more around kind of process and how you use that to drive consistency but I think the core principles certainly the ones I've learned I mean the two big things I always remember you know I remember when I first joined Farfetch one of our investors then told there were two key roles he wanted me to hire and I said what's the budget and he said he gave me a number which I knew was about half what it needed to be and I said to him well look you know I you know I was still learning and so and I said I wanted to impress him so I said okay I'll I'll try and do that and I hired two people at that level and I got people at that level you know the labor market is incredibly efficient you're not going to get someone who's a role that's a 200 grand role for 100 grand or 100 grand for 50 it's just and even if you do it's a once in a you know it's a dream situation so I think you have to be realistic decide what you want the market price is that and if you can't afford it then change your change your plan and I have never regretted over hiring I've never regretted hiring someone more expensive more senior more experienced I have really regretted doing the reverse right yeah and I think that's why also you know diversity is so important in the early days in an organization I mean I remember the early days of Dropbox when we invested basically Drew and Arash had hired all their best friends from MIT you know they were fundamentally all engineering or math whizzes from MIT and so the benefit that they had was that they could work really quickly and they could get things done the problem that they had is that no one had seen other things than the other person and so it was a very monolithic culture that served them super well in the super early days but quickly became a problem and so you know when when Andrew and and I do give the far fetch folks a ton of credit for this this notion of over hiring this notion of like hiring people from all these different types of backgrounds and all different levels of experience has really served them well in terms of being able to just like augment the team and capture so many different experiences that prepare you for a lot of a lot of stumbling blocks that you're going to have going forward well not now I hope but you know I think in the early stages of any venture that the the magical phase is going through 50 60 70 employees that's when the CEO cannot or the founders cannot work directly with everyone they have to start working through others and that's where the the true character of the company starts to show and and that's also I think where we as venture capitalists have the biggest value to add to to to understand to to help the founders in navigating that really important transition period where they have to let go of control just as Danny said and where they have to start hiring up and to actually understand that maybe their next hire will will make maybe even 30 40 50 percent more than they make themselves I don't know if EJ will agree with this but as far as I'm concerned I tell my entrepreneurs I'm a glorified recruiter fundamentally yeah I spend most of my time interviewing talent and evaluating talent that is that that is what makes companies successful I was literally just asking like how much do you work like over your work with the companies is hiring but you already answered the question there you go yeah just what I think the other the other thing that I think it relates to how you interact with your your investors is you know I think ours and I give Danny a lot credit for this never really put us under pressure to hire fast it put us under pressure to hire the roles but not to do fast and and earlier on one of the the people I hired that didn't work out I actually I did feel pressure to hire it fast and I made the decision I remember you know Danny and a couple of other members of the board saying look don't if you're not sure don't do it and I did it and it was and I should have trusted my gut it didn't work out I lost two years um and and and everyone has a different perspective on this but my advice is to take your time on hiring I'm a very much a high I've become very very gun shy on hiring if if they're the right person I'll hire fast but you know some of the most critical people I've hired have taken the role has taken nine to twelve months to fill and I'm really glad I did it but it was it but you're also opportunistic of course if you see someone you don't go through a whole phase of evaluation that's going to be month months long yeah because I think also as you get you know into the business more and more experience and you've got people around you who can help you know exactly what you're looking for right I know exactly what I what I want it's about finding it so if you find it you just you make the move and you go yeah one last question on the topic towards Stefan because I know you've hired people in so many countries because you need to have a lot of local offices to have the local deals and so forth yep any learnings from from that when you go and you know there's a variety of cultures languages how do you find the people with the same mindset and culture um I mean it is a challenge obviously as you move into a new market but and we've tried so many different versions and sometimes there were European people being kind of sent out to markets and to to get going at least with recruitment process and what have you but I think the winning recipe is actually to find someone local on the ground that's ingrained in the culture they have the network already otherwise you're going to find yourself with a pretty long ramp up until you actually can scale the business so that's my strong advice build that network locally as soon as you possibly can and potentially hire someone local to run that market if that's your business model basically and that's your operational model yeah great um then moving to a little bit different topic around the time of let's say probably 2017 2016 for both of the companies when you know you're already past definitely past the start of phase more like a growth company a true proper business but still venture back and privately held so not publicly listed um I like to learn a little bit more about kind of the board working with the board how often does the board meet um what kind of how does the relationship change with the entrepreneurs or how what is it like at that stage of a company when it's not anymore finding the product market fit but it's already a real business um so if we start from the like the change of the relationship with the founder is it different at that stage when you're already a growth company than it was before yeah well I think the the trust that you sort of build over time and and then you also find your own role in that mix and I would say that I had had a very different role uh being the board member for at Spotify than I had for instance at iSubtle um it because it depends on how that personal relationship plays out and what the the the characteristic of the founder team is and I think that uh Daniel and Martin uh they they sought some very specific advice and and also inspiration rather than strategic decision making and and so I took it as my role to serve up inspiration for them to find something that really could add to their thinking process because if I'm acting more like like an auditor uh for them then they won't appreciate it and they won't need it because they are probably their own worst auditor or best auditor as I would say yeah yeah yeah I I mean I think I think that's right there's there's no rule of thumb um I do think that what changes over time is that in the beginning you're you're spending as much time as possible and everything happens in between board meetings and as the companies get more and more significant they are surrounded by great executive teams and so you know your job becomes I think more making sure that that the boards are are being helpful and some really important strategic decisions but that fundamentally you're not in the weeds trying to help manage the business I mean certainly in our case at at index we you know sort of pride ourselves on the fact that we're not operators if we were we'd probably be helping you know building companies but we definitely aren't so I think that that's a big transition that happens over time yeah how about Andrew and Stephanie both had like fairly high leadership roles in the companies you still have and you had um how was how did board role like show to you or how did you work together or do work together I mean I mean in terms of the board I think my main frustration I think as it's um as the years have gone on is certainly in our case we we did we've done a lot of funding rounds and so the team just gets bigger so you know in the early days the board is this kind of like it's a team it's a working group and actually you can you can you can really select people based on are they going to work well as a team just as you'd hire an employee and that's not the only factor but it's a big factor actually as time goes on the types of investors but fundamentally the size you know I think team dynamics exist no matter what the setting is and so you know laterally certainly pre-IPO I think we were 14 people in the room something like that you can't have a proper working session with 14 people in the room and anything and I think it was a real shame to me because you're wasting you know brilliant brilliant people with great experience but you know and you deal with that stuff outside of it but I think you know you you have to change how you manage it when the team team grows right how about in your strategy well um so yeah so my experience um it's more of a conversation I guess so presenting the updates of the strategy and the work that it's been doing um and more of a conversation then sort after specific strategic advice if you like um so that that's my experience yeah and we uh in the uh in the specific example of Spotify and and when when Stefan was running the business development side that was probably the one of the most important roles that the board members have because we were interacting with the startup community and Spotify was one of the most most active acquirers so if there was a startup who wanted to get in touch with the the the business development unit for either strategic uh commercial agreements or even for M&A discussions that was our role to be the funnel and qualify such discussions and and that that worked really well I think yeah and I think actually more of the action on mine at least was outside of the meeting to have access to to that um everyone does one on the board for opening doors or just being a sounding board that was for me the more important part actually right and how much would you say that at that like stage how often were you involved or today work with the board is it daily weekly monthly if it's daily I think there's a problem probably I mean I mean we started monthly we always had quite always had quite long board meetings because they were useful and they were working sessions now it's more I think we're doing five or six a year so you know and they do get a bit more formal a bit more governance and so on but you still but still I mean we just had one last week incredibly useful strategic discussions but there's a lot going on and I guess it depends how active it is yeah right when we were on 2019 for the last five minutes we have um what are your expectations what what do you think 2019 will be remembered of in European tech yeah I think that the European ecosystem really is delivering and has the capacity to continue deliver really really well we have a complete capital market that supplies these this enormous entrepreneurial talent so I'm extremely optimistic at the same time I think that there is a looming financial market perhaps correction and that that we should as VCs and also entrepreneurs keep a good look at because if that hits it actually hits the the smallest fastest growing entrepreneurs the most and and we should be prepared for that yeah why do you think it hits the the smallest youngest or smallest entrepreneurs the most well because most of the time when that has happened before the funding activity even if it's available actually slows down quite a lot and those who are were tailoring their growth plans for access to capital when the market slows down they will be hurting and that's why I think we should uh yeah advisor companies yeah I guess from so so this might be a disagreement I sort of feel like I'm really excited and happy when our companies get to a point where they actually have to worry about macroeconomic issues you know I'm sorry that you do but I'm also happy happy for you um most of our entrepreneurs are not in that situation you know they're still growing their companies they're still pretty small and they still should be growing at 100 irrespective of of macro climate um I also think it's very healthy because it separates the folks who are doing it because it's the most popular and exciting thing to talk about and you end up with the best caliber of entrepreneur and teams who are really dedicated to it because this is this is their passion this is like a religious errand that they have to transform a business that they're going after so yeah I mean I definitely think that we have to be aware of market corrections and expect them and expect that our companies have enough money in the in the on the balance sheet to weather storms but it's actually super healthy for the ecosystem um for 2019 I guess you know what I what we're looking for is um on the consumer team of index because we do a lot of enterprise software and you know enterprise software I mean open source actually has been a theme that came out of Europe it was actually one of the first companies that we invested in post-crash was my SQL in Uppsala um but uh actually uh I think Martin Mikos is here Finn did an amazing job building and and and uh developing that company but we've we've found uh you know what are the areas that are going to be exciting to invest in and the consumer side sort of the thinking is that it's just going to get I was telling PJ this that we think that it's going to get just more messy that consumer companies are going to have to have more people and they're going to have to have inventory and they're going to have to have leases and they're going to have to have physical sort of representations of what they're about and so the opportunity is going to be there but it is going to be not not as clean as it has been for for entrepreneurs and for investors in terms of what we could invest in over the last decade plus right so not that scalable or at least more capital intensive as well yeah yeah what Andrew or Stefan um maybe more of a general observation it's not really 2019 it's more broadly and I think with the oldest success we've seen in in Europe all these companies coming up like two companies we talked about here there's there's a slew of great companies out like Taxify I guess and there's there's a bunch of them out there and what I think is happening in the in this sort of wave after a success or a listing etc is there's a lot of executives and founders coming out of that being excited about helping the ecosystem build more companies and be sounding boards invest in seed runs and what have you know that that's incredibly exciting I think um and that would should mean something for 19 20 21 and onwards definitely in terms of scaling this yeah yeah I just I know we're out of time but um you know we when we went public a couple of months ago in New York you know the actual the day itself was was amazing it was a you know definitely one of them one of if not the biggest days in my professional career and that was a Friday and then Monday we're back at work and we're working hard and I think that's how you want it to be and so you know we view that the 10 years the IPO is like the end of the chapter one you know it's the first 10 years the next 10 years are going to be more exciting than the first 10 is definitely our view and so 2019 is the start of that all right looking forward to catching up 28 2018 then all right thanks a lot uh thanks for the audience I guess what's remaining is the announcement of the slash 100 pitching competition winner so thanks again and we'll move forward to the final piece of the program thank you thank you thank you thank you