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“Every early-stage startup should make as many mistakes as possible”: Interview with Mike Borras, co-founder of Tupalo

This week we had the chance to interview Mike Borras, the co-founder of Tupalo. This Vienna-based startup was founded in 2007 by both Clemens Beer and Mike Borras, and has since grown into a profitable business that attracts millions of users around the world. Their local search community enables you to discover, review and share the best local businesses with your friends.

If you’re interested in creating an online marketplace or community, how to overcome common startup challenges, or starting up in Vienna, then read on!

When did you and your co-founder Clemens Beer have the idea for Tupalo and what made you sure it was the right one?

Clemens and I started prototyping several different ideas during the summer of 2006, shortly after Rockstar Games, the company we were at previously, closed their Vienna office. Tupalo.com was one of our first prototypes and the one that really resonated with our friends circle and immediate family. As more and more of our immediate social circle began using the service, we realized that there was certainly momentum for this type of community in Vienna. With this in mind, we focused more of our efforts on the concept, and eventually began working fulltime on the product and company.

How did you finance the startup phase of Tupalo.com and who invested?

Our initial startup phase was bootstrapped by Clemens and myself from of our own savings. Several months after our initial start, we were awarded a technology grant from the city of Vienna, known as the Departure Fund, which helped us to fund the next year of our growth within Vienna. In 2009, we closed our first round of investment from a small group of private angels and European Directories, one of the largest yellow
pages publishers in Europe. Since then we’ve grown immensely and are today a profitable business which runs off of our own cash flow.

What were the main stumbling blocks that you came up against during the first few years and what would you have done differently?

Oh we’ve stumbled many times a long the way, but of course all were learning experiences. I think every early-stage startup and young entrepreneur, especially in Europe, should make as many mistakes as possible. Don’t be afraid of failure and go out of your way to make mistakes, then learn and adjust, and continue. If I could go back, one of the things I would have focused more on was balancing our focus between product development and revenue generation. As with many young startups, it took us a year of product development and an empty bank account before we began implementing
some of our revenue generation products.

What makes Tupalo.com unique or better than other local search communities out there?

As with any community, you have to have the right mixture of data, community and user-experience. From a community perspective, in cities such as Vienna,
and Rotterdam, Netherlands, we have thousands of people coming to Tupalo.com everyday and adding their ratings, reviews and experiences around those cities. This, together with our focus on a crisp, clean user experience and impressive data quality
(over 10 million business listings and growing) in our core market countries I believe puts us ahead of the local search pack.

Right now Tupalo.com is available in 8 languages. Are there any plans to enter additional markets in the near future?

Absolutely, we’re constantly evaluating which new markets we should support. Currently we’re live in Austria, the Netherlands, Finland, Denmark, Poland, Sweden and the US, with operations in Vienna, Rotterdam, Warsaw and Stockholm. We expect to officially launch in 2-3 new languages and 5-10 new cities around Europe this year.

In addition to the browser-based version of Tupalo, you have a free app to download for both iPhone and Android phones. How important is the mobile space for Tupalo.com and are there any new app-versions or mobile-features forthcoming in 2011?

Extremely important. Currently, close to 250,000 people per month use the mobile web and app version of Tupalo.com, and this is growing rapidly. We have both iPhone and Android applications available to our community, which we will launch new updates for in summer, focusing more on gaming elements and rewarding our most active users. We’ve talked about WP7 and Blackberry versions this year, which are just talks at the moment. Additionally, we’ll be recruiting more developers with mobile experience throughout this year to join us in Vienna full-time.

Where would you like to see Tupalo.com in about 2 or 3 years?

By means of geography, we’ve focused on reaching deep communities within large metro areas of our core countries. By this time in 2014, we’ll be present in over 100 cities around the world, with marketing operations on the ground, all headquartered in our building here in the centre of Vienna. Our growth model sees us rolling out across Europe and then on to other larger markets both East and West, so I’m confident we’ll achieve that.

How many people are working for Tupalo.com at the moment and and how do you support your corporate culture?

We currently have a headcount close to 20, with 13 people full-time and we’re
always looking for new people to join the team. Culture and environment are naturally very important topics for us. The founding team and also many of the people on the team have worked in some way for US-based startups, so, we’ve modelled our office environment and corporate culture very much on a traditional Silicon Valley startup.

Full time team members all have stock options in the company, as well as tons of small perks. From top of the line Apple hardware, to copious amounts of free coffee, to ‘20% time’ in our monthly ‘hack weeks’, to TGIF team meetings (with a variety of beverages), to our team Amazon programme, where every full time employee can order up to €50 of books, hardware or software that help them in their daily work at Tupalo.

What has your experience of Vienna been, when it comes to being a location to start up a company?

Overall positive. From a quality of life perspective, it can’t be beaten. Vienna is a very vibrant, progressive city which is still somewhat affordable, safe and clean, with an incredible social system. Taxes are high for small businesses, but then again, this is the case for most other cities around Europe in this respect. The tech community is very small, so it remains fairly accessible, with everyone knowing each other, and lots of information and advice flowing freely between everyone. This can sometimes lead to issues in recruitment unfortunately, but nothing too severe.

From a financing perspective, though, I believe Vienna and Europe as a whole have a long way to go in catching up with the US. Primarily, seed funding for getting your startup off the ground comes in the form of government grants and/or seed contests. Such contests, like Seedcamp, are great of course, but I think there is a gaping hole for next-stage financing. Startups looking for that next round after a seed-round, say in the area of €250K+, unfortunately have little to no viable funding options in Vienna or the surrounding markets. This leads to many startups having to relocate to London or the US in order to continue down the venture path, which sadly leads to an entrepreneurship brain drain locally. However, longer-term, this could have some benefits, as founders of successful startups may come back to Vienna eager to act in an angel capacity, funding small startups at an early-stage and providing them with the advice and international network necessary to grow from Vienna. I think the next few years will be very exciting, so let’s see.

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Thomas Ohr
Thomas Ohr
Thomas Ohr is the "Editor in Chief" of EU-Startups.com and started the blog in October 2010. He is excited about Europe's future, passionate about new business ideas and lives in Barcelona (Spain).

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