Startups

The 48-Hour Startup


Jevgenijs Kazanins walked into a business school in Riga, Latvia, one Friday night in March with a problem: how to determine whether publicity campaigns on Facebook were getting results. Two days later the 29-year-old media planner left as the founder of a startup that could measure the clicks, customer conversions, and revenue coming from fan pages on the social-networking service. Clients of the company, now called Campalyst, include Danish brewer Carlsberg, low-cost airline Blue1, and Finnish ad agency Zeeland Group.

Kazanins created the company at Garage48, a series of weekend boot camps founded by entrepreneurs from neighboring Estonia. About 100 participants pay €25 ($35) each to spend the weekend choosing teams, brainstorming ideas, and building applications. By Sunday night the teams have working demos ready to pitch to venture capitalists.

The first Garage48 workshop was organized in April 2010 in Tallinn, Estonia’s capital. “We had lots of friends who talked about business ideas year after year, but they didn’t kick-start them,” says co-founder Martin Villig, 32. “We wanted to get them executing as well as making new connections that might lead to other projects even if the one from that weekend doesn’t survive.”

Kazanins showed up with Dalia Lasaite, 27, a former business school classmate. The pair wanted to build a dashboard for measuring brand performance on Facebook. They selected three developers from the crowd of strangers on Friday and worked on the project for almost 40 of the next 48 hours. “We knew exactly how well a banner or search campaign works, but we couldn’t tell anything about a Facebook campaign except the number of ‘Likes’ before we did this,” Kazanins says. “It wasn’t a plan to build a company. I just wanted a solution to my pain. Afterwards we realized we were on to something.”

The project didn’t wow judges in Riga, but with further development Kazanins won a €5,000 prize in Helsinki and €50,000 from London venture capitalist Saul Klein’s Seedcamp program, which invests in early-stage startups. Kazanins has since quit his day job; he, Lasaite, and a staff of six are working full-time on Campalyst.

In the past year, Garage48 has expanded outside the three Baltic states into Finland, which has a bustling startup scene, and Africa, after the founders were invited by entrepreneurs in Nigeria to do an event there. Volunteer staffers distinguish Garage48 from Startup Weekend, a Seattle nonprofit that has a professional staff and franchises the model to organizers in more than 180 cities worldwide. Garage48 has lined up corporate sponsors including Nokia (NOK) and Skype.

Most Garage48 startups are Web-based ideas such as Quotista.com, an electronic bulletin board where people post quotations they like, or smartphone apps such as Ordimo, which lets pub and restaurant patrons order food and drink online without having to catch the eye of a barkeep or waiter. Not all startups need to go global, Garage48 co-founder Villig says. Applications such as Lastehoid.net, which helps parents find babysitters in Estonia, can succeed by solving local problems.

New York venture capitalist Justin Wohlstadter, a director in investment firm Penny Black, says he was impressed by the technical talent at the Riga event, where he judged pitches. He cautions, though, that while software tools make it possible to build slick demos and publicity sites overnight, a lot more work is required to attract investors. “We like our companies to have an unfair advantage, such as domain expertise from one of the partners and a technology barrier that would take a great deal of effort to replicate, so you won’t see a dozen clones appear the minute you launch,” Wohlstadter says.

Many ideas don’t survive their founders’ return to jobs and families on Monday. Abandoned Garage48 projects include Fish2Tank, which helped users plan an aquarium, and Memoriam, a site for archiving social-media profiles of dead people. Villig says only about a third of participants seriously hope to form a company in two days, while the rest show up to gain experience or contacts. The event “is very intense,” says Ordimo founder Jaak Sarv, 32, who has attended three times. “You meet people in a work situation and immediately see how they communicate and fit into a team. It’s not just chatting and networking.”

The bottom line: Garage48 gives aspiring entrepreneurs a weekend to kick-start a new venture. Most are Web-based ideas.

Ben-Aaron is a reporter for Bloomberg News in Helsinki.

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