Open Ocean

We can consider investments anywhere in the world. However, we primarily focus in Western-Europe (and potentially U.S.) for the following two main reasons:

a) In these regions we can fairly well assess possible geographical/political/locational risks. I am not saying we consider other regions more or less risky than W-Europe or U.S. (many areas are probably less), it is simply that in these regions mentioned we fairly well know the possible risks that exist, whereas in other regions we most often do not. This has the simple implication, that when doing an investment, if you do not know how to estimate the overall risk, then it is very hard to define the correct price to pay for an investment.

b) We want to be active in the companies we invest in, and this typically means we want to be able to meet with the companies and their management on a frequent basis. We travel regularly in Europe (and U.S.) and consequently we regard these areas more practical than other areas in the world to work in. In summary, the closer your company is to Scandinavia / Northern Europe, the less additional effort there is for us to interact with you, and thus the more likely it is that location is not an issue.

In short: We are open to receive and consider investments regardless of location, but we want to be open with the fact that it is likely that we can not engage very actively with you in person, nor actually invest into your operation in the end, if you are located very far from us.

With disruptive technology we typically see a product or offering, which

- In a very short time (0-2 years) can attract millions of users

- The large amount of users is attracted as they get something clearly valuable, at a fraction of the costs it previously was available (if it at all was available)

- Typically the initial acquisition cost is *zero*, and it requires very little effort to get going, and you instantly get value (or save costs) out of the offering

- Additionally, there needs to be a viable business model available at some point (often it can be OK if this is not focused on initially, but it needs to be there for the future), since an operation normally needs to generate a reasonable revenue stream to be able to grow *at its full potential*

- In the online world of today, we think it is key to be *Open*. What this means depends on what service and product you are offering and how, and what your growth drivers and the obstacles you need to tackle are, but often this contains some aspects of the following:

  a) opening up your code under an open source license, or at minimum provide it for free under certain principles

  b) opening up APIs to your product or service to enable users to use your product in very flexible ways and enable them to add value (offer additional functionality) around your offering,

  c) having visible roadmaps, communicate openly and early about what you are planning to do in the future and invite feedback so users can influence what you will do

  d) having open forums and be ready to help your users - so they remain happy 

  e) Be honest and a good online citizen (as Google puts it "Don't be evil")

Do you agree? If anyone out there has further thoughts around this - let us know!

(Feel free to post a follow up question to ask for further comments)

In his blog entry, Monty presented what got him interested in investing into the Finnish Company IT Mill. Below the key points, for full story, please see the blog.

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IT mill is a still quite small but it has many of the the characteristics of a company that is meant to succeed:

• The company is profitable and has been so for a long time.

• The company knows how to growing organically according to it's profit. (This is very important to know even if one later decides to grow exponentially with the help of investments)

• The company It's has been growing rapidly the last few years (50 % growth per year for 3 years)

• IT mills founder and CEO, Joonas Lehtinen, is burning with a passion for his company, his team and his product.

• The staff seams to be really dedicated to their job and to their leaders (at least as far as I can tell from my visit to their head quarter and spending time with a lot of them in a hot Sauna with *some* vodka to get out the whole truth about the company dynamics)

• Last, but not least, they have well working stable product, that is well received by their customers and that may well be a trend setter for how advanced web applications may be built in the future.

(MySQL old-timers may recognize that MySQL AB had many similar characteristics in the early year)

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My rule for investment is that I want to provide 'smart money'. This means that I will only invest into a few companies where I believe that my technical expertise and/or my experience in building an open source/free software community provides a notable difference for the company.

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