Investor Spotlight: Peter Read on why Berlin “floats his boat”2012-07-31 16
Peter Read is a London-based Angel investor with his fingers in nearly every notable Berlin pie. MoviePilot, Gidsy, EyeEm, Loopcam, Wummelkiste, ChicChick Club, Readmill and CircleMe have all benefitted from his investments and/or advice and he is described by everyone we meet in the Berlin scene as a standup guy. He has also just completed the Zurich Ironman competition and has been enlisted as a startup advisor by Deutsche Telekom.
Here Peter explains to us why Berlin “floats his boat”, why the Swedes have it sewn up, why entrepreneurs are mad to his ultimate investment secret weapon…
Hi Peter, you’ve worked in London and LA in the digital entertainment industries. Why has Berlin caught your eye?
PR: It just tickles me whats happening in Berlin right now; I love working with entrepreneurs and it just floats my boat. And the kind of entrepreneurs in Berlin at the moment are just extraordinary.
Do you think Berlin businesses have nailed that spirit of collaboration that you used to see in Silicon Valley?
PR: It’s a big deal isn’t it? I’ve lived in California for a while, so I’m used to the Silicon Valley open structure. But when you come back to Europe it’s not as open and collaborative. But I think people in Berlin have figured that out. This is the way that internet businesses are built – we all win if everybody else wins.
There are people who are making extraordinary things happen in Berlin – Christophe [Maire, right] is at the hub of everything I do there. I’ve done many deals with him and with Stephan [Glänzer, left] at Passion Capital, and it’s taken us into some very interesting places.
Within the seed investing game in Europe, they’re the best. If those guys and/or Team Europe are involved, I’m usually in!
What kind of projects are exciting you right now?
PR: So I’m obviously excited about all of the ones that I’ve invested in! I think that EyeEm is a cracker, and I love what Readmill, Gidsy and Moviepilot are doing. They’re all just brilliantly original businesses. They’re creating new business models and contributing in a pretty interesting way.
But new business models aren’t exactly a safe investment. What’s your criteria for sinking money into a project?
PR: I don’t really look for safe. I look for great entrepreneurs – it’s all about the execution. You can spend way too long squinting at the business model or just actually get on with it. The idea may pivot, but it’s all about speed then continued acceleration. And I’m not frightened of putting the pedal to the metal.
There’s also something happening, bizarrely, around the Swedes in Berlin. Obviously there’s Alex and Eric [Wahlforss, from SoundCloud) to start off with... And then if you look at Henrik from Readmill and Tor from Loopcam. The Swedish contingent are in a way very emblematic of what we were talking about – companies doing cool, collaborative stuff.
One of the things detractors say about the Berlin scene is that it's built on too much hype. And that some of the products, such as Amen, aren't sustainable. How do you feel about that?
PR: I think it's too early early to pass a judgement like that. I think that Felix [Petersen, CEO of Amen, below] and Co. have got great backers, and they’re very talented people. That’s what counts.
In the meantime they’re making tremendous contributions towards the ecosystem – Felix is a co-investor in a bunch of stuff that I’m in. And it’s very valued. So that’s a good thing in itself, bringing a lot of energy to the scene anyway and I think that should be applauded.
How did you get involved in becoming an investor? Was it something that was always on your road map?
PR: I’ve always been passionate about working with entrepreneurs, but I realised fairly early on that I wasn’t one myself. You know, it’s fully personal – I’m passionate about my kids. I have three gorgeous daughters who mean a ton to me. My wife’s an oil painter, she’s just not of this commercial world. And I figured out fairly early on I wanted to maximise the time I could spend with all of them, and minimise the risk to the family, that being an entrepreneur was just a risk or a set of risks that I just wasn’t prepared to take.
But I love the early stage, so I tried to figure out a way in which I could be helpful and help other people take risks, by providing capital and some guidance around strategy and corporate development and introductions to potential partners, biz-dev and all that kind of stuff.
You’ve got to come at this appreciating and respecting that the entrepreneurs are putting the house at risk, their finances at risk, their relationships at risk. Once you’ve been through your own internal process and realise that it gives you much much more respect for the people who do.
Do you think it helps having a partner that’s an artist and not in the corporate world?
PR: Yes, completely. She’s the smartest person I’ve ever met. And she’s chose to apply her smarts to oil painting and be amazing in that rather than chase the hurly-burly world of commerce. When we lived in LA it was just so great to have an oil-painter wife and also kids who weren’t part of that LA scene. And yeah, I got to go to some of the cool Hollywood parties, but I also go home and read stories to my kids.
Are your daughters the ultimate focus group?
PR: Absolutely! I’ve got three daughters so when you’re being an idiot they say “Dad, you’re being an idiot”. They’re my secret weapon in investing. They are 20, 17 and 14 so they’re digital natives. They were the ones that when Loopcam came out, were like “Dad, this is sooo cool”.
If they say it’s cool then I know it’s a winner. If I show them something that they just don’t get, it really makes me double back.
How many investments do you have on the go at the moment? Or at any given time?
PR: I have about 25-30, something like that. They’re all pretty small. My mum and dad were teachers in Africa, so I don’t come from family money so I spend what I earn. I do ten deals a year in the £10k-£20k bracket.
And do you advise on most of those?
PR: Just when it’s requested. Again, it’s just whatever I can do to help. Some, like the Gidsy guys, know exactly what they are doing. I try to be helpful, but I’m not an advisor there.
Whereas I’m an advisor at EyeEm and I love that. Because that’s really quite a tangled area. There are lots of photo sharing apps. And the guys have just out-executed everyone else. So if I can help at all, it’s to make business development introductions for them.
There are a lot of homegrown apps here in Germany that haven’t globalised yet. What do they need to do to make that leap?
PR: Well funnily enough, I’ve been asked to be an advisor to Deutsche Telekom. The CEO has stated very publicly that Deutsche Telekom is determined to be a better partner to entrepreneurs from outside Germany, specifically Silicon Valley entrepreneurs who are trying to enter the German market and/or trying to do a deal for access to broadband subscribers and to encourage businesses within Germany to break into the US.
I like when a big company starts to lift their weight. If you’ve got big, old telecom companies and big, old media companies actually figuring out, harbouring, or requiring, or just contributing to the earlier stage nimble ecosystem it’s good for everybody. And I like being part of that.
What do you think the most common mistake that you see entrepreneurs make?
PR: I think it’s speed, or lack of it. It’s probably the one I see time and time again. Entrepreneurs underestimate speed and continued acceleration. So you’ve got to go fast. You’ve got to innovate fast. You’ve got to disrupt fast and then, after all that, you’ve got to accelerate.
As soon as you’ve actually shown that you’ve got a cool business, like Moviepilot or Soundcloud; then you’ve got to innovate even faster. And that’s tough.
If you’re onto something good you’ve got to keep going. If you haven’t got the energy or the speed for it: recruit a team that has. Because that is absolutely, unfortunately… the velocity of these things is the really scary thing.
Have you have any expensive regrets?
PR: Oh God, yes! And if anyone tells you they haven’t, well, I’d love to meet them! But I always regard the mistakes as mine and not the entrepreneur’s. The entrepreneur is just doing their job out there on the front lines. So maybe we weren’t the best investors or advisors for that entrepreneur of that type. And maybe we should have done more to surround her or him with people who are better suited to the task. There isn’t an entrepreneur that I’ve backed that I wouldn’t back again.
And what do you think your biggest success has been?
PR: Actually, you know, I think that Tobi [Bauckhage, above] from Moviepilot, is leading of one of the teams of which I’m most proud. Not because I’ve done anything in particular, but I’ve just seen them really take a successful German business and they’re right in the middle of transforming it into a global winner.
What excites you in future technologies or platforms?
PR: I’m really interested in technology that applies to experiences. And I think technology has been very cleverly applied to product here. So if you were going to recommend a movie to me and I’m going to go and spend €100 getting a babysitter and buying my wife dinner and going to the movie, you really have to get that right.
And that’s what Moviepilot is doing. What Readmill is doing for books. What Songkick is doing for gigs. And what Gidsy is doing recommending truffle-hunting in Bolivia.
This is an exciting new area in the application of consumer internet technology towards discovery, recommendation, personalisation for offline experiences. And that’s really powerful stuff.