For the last five weeks, Northern StartUp 2.0 website has been under attack by spammers. The spamming was related to opening accounts, about 5 every hour, which has resulted in over 1000 new accounts. Less than 1% of these accounts have actually added any comments, but if they all did, the site will be overwhelmed by spammed comments.

Here are some facts about the site:

• Drupal 5.3
• Accounts are needed to comment

Based on various suggestions via Twitter and from Ixis IT (previous website development team) and CTISN (current website development team), following changes were made:

• Captcha
• Recaptcha
• Mollow
• Akismet
• Must complete all 12 fields to register with tricky new feild to catch the spammers
• Admin must approve account creation – all new accounts are blocked but this activity creates additional emails for me to address

None of the above had any impact on spam account creation! All of us are running out of ideas and wonder whether you have any further thoughts on this issue. All help is most welcome.

Don’t forget, the issue is not to identify which is spam and which is real, but to stop this happening altogether.

Update 1:

With an immediate effect, account creation has been suspended. If you wish an account, please get in touch with your phone no. and email address.

Please accept our apologies for any inconvenience

Best regards
Manoj

As you are probably be aware, Northern StartUp 2.0 has been a Microsoft BizSpark Network Partner since we launched the programme at Cloud Computing event held in April 2009 when Bindi Karia visited us.

For the first time in the UK, Microsoft is running an Innovation Academy Workshop For Start-Up Software Businesses on the 10th of Dec 2009, and I am honoured to inform you that this event will be run out of Daresbury Innovation Centre, where both of my companies are head quartered.

The course takes the form of one-day interactive instructor-led workshop covering:

- Introduction to the software industry: How it’s the same, why it’s different
- The Market Environment and its Analysis: Managing change and ambiguity
- Building Customer Value and Loyalty: Which Software Business Model?
- Solutions Selling and Managing the Complex Sale
- Software Operations: Introduction Application Life Cycle Management

This  free  workshop is designed to provide executives and managers of independent software application vendors with the business tools and knowledge required to determine their competitive advantage in their targeted value chain, bring software products to market and plan for international marketing and channel promotion.

The programme will be delivered by Agitavi Research.

The software development industry contributes in the region of £20 billion per year to the UK economy. Microsoft is committed to supporting a thriving software development industry in the UK through their partner programmes and through the BizSpark programme for software startups.

The event is co-hosted by Northern StartUp 2.0, Daresbury Science and Innovation Campus and the Northwest Regional Development Agency.

If you wish to attend this event, please contact me in the first instance. Please note that Microsoft is expecting to deliver this programme to about 20 startups, with preference given to those who have already signed up to the BizSpark programme. The sooner you apply the better chance you have of securing a place.

This week, I caught up with Mark Strefford, CEO of TheWeddingVine.com he runs with his wife, Vicki. I remember the days when Mark was thinking of how to take the first step of developing the site. I pushed him towards Drupal. TheWeddingVine.com has come a long way since then.

Manoj: What made you launch your company? Tell us about the company history and the management team. Given that your wife, Vicky is also involved in the day-to-day operations, do you consider your business as a family business, life-style business or high growth business?

Mark: This may sound like a story you’ve heard on many other wedding websites, but we came up with the idea for TheWeddingVine.com after planning our own wedding back in 2006. Victoria is a professional Wedding Co-ordinator and has run a successful wedding planning business since 2002, but even for professionals there are limited available online resources.  Although this is a family business, we see huge potential to revolutionise the way weddings are planned using the internet and see a potential for significant growth in our business.

Manoj: What problem(s) do your company solve? Why do you think your company solve the problem better than others? What have you learn from similar businesses set-up during the dot.com era?

Mark: Our company aims to give couples the resources that professional wedding planners have at their finger tips through an easy to use, feature-rich website.  The site will provide inspiration, ideas, and the ability to find wedding suppliers based on the couple’s own exacting criteria.  Victoria’s network includes a number of the inspirational wedding industry experts, and this gives our users inside access to information on upcoming trends and fashions.  In our research, we see that many of the leading UK wedding websites tend to follow a very simple and static approach for finding ideas, suppliers, etc., and although some of the US sites are starting to move in the right direction, we still see that there is a significant gap between these leading US sites and the capabilities available in other industries.  However, we’re conscious of the fact that lots of great functionality doesn’t necessarily pay the bills, so we’re constantly challenging our ideas for their commercial viability.

Manoj: Describe your products and services. What benefits do they bring? Given that weddings are rarely repeated more than once in one’s life time, how do you retain customer loyalty, or is this not important?

Mark: The latest release of the beta site provides the ability for couples to find suppliers through a number of ways.  We’re the first internet wedding website to offer a free-form tag based search for suppliers  and also the ability to search for specific products or services.  For example, if you were looking for a venue, you may want to find specific features such as a specific venue type, the ability to host a certain number of guests with on-site accommodation that you will have exclusive use of.  As the paint dries on the new site, the big drive is on now to populate this detailed information.  What’s great with our site is that we can use our community to maintain information on wedding suppliers, and provide useful feedback and reviews to help future couples find their ideal suppliers.

We see customer retention in two ways.  We aim to keep suppliers engaged with us for many years to come, and as these are currently our main source of revenue, we’re looking to build long and mutually profitable partnerships across the industry.  Although we see that most people only marry once, they are likely to recommend services that worked for them to their family and friends, and sometimes they do marry twice!  We’ll also know when their anniversaries are, and have the opportunity to partner with appropriate companies around this.

Manoj: Who are your key competitors? How do you differentiate from them? How are you currently marketing your products and services other than through your website? Is social media helping you achieve traction?

Mark: In the UK, we see our largest competitors as hitched.co.uk, confetti.co.uk brides.co.uk and yourandyourwedding.co.uk.  As you can see from these domain names, they are firmly focused on the UK market.  We see that hitched.co.uk and confetti.co.uk are mainly focused on product sales (ie. table decorations and wedding favours). Brides.co.uk and youandyourwedding.co.uk are front end website for their respective magazines.  We’re the first company to approach the market solely with the user experience in mind, rather than as a route to sell more offline products.  Based on the fact that we’re entirely an online company, all of our marketing is through low cost and no-cost channels and we’re currently making use of social media platforms such as Twitter and Facebook.

Manoj: What stage are you in, in terms of execution of your plans? What are your plans for the next 12 to 18 months? What are the key challenges you are facing right now? What help do you need if any, especially from Northern StartUp 2.0? By the way, congratulations in closing first debt finance round. Please share your experience.

Mark: We’ve just secured financing through our bank, with some great help from the NWDA, and this has coincided well with the launching of the new beta site.  Our experience has shown that raising money through the banks is significantly slower than the banks initially suggest, and in the end we managed to get the buy-in from a senior regional director who had faith in our vision and backed us all the way!  This was significantly helped by having a thorough and exhaustive business plan (with expert assistance from Roy Shelton), a compelling message and persistent and expert help from the NWDA. We’ve got a lot of things to do over the next 12 months in terms of adding functionality to the site, making sure that we stay ahead of the curve, and keeping our competitors firmly playing catch-up!  We foresee a need to raise extra capital as we go into 2010, so would be looking to develop our contacts and partners through the NWDA and Northern StartUp 2.0.  The key challenges we are facing right now is juggling our family (complete with new baby and a 10 year old), Mark’s day job and the many demands of running a start-up.  We’re also facing the challenge common to many new businesses in getting people to have faith in you when you are not an established name YET!

Michael Taylor, the Editor of the Insider Magazine, just ran another successful Deal Makers 2009 Award ceremony, which  clashed with my own, Managing Growth – Tech Entrepreneur Series held at eOffice on 12th November 2009.

Michael in his weekly column argues that private equity needs to get back to its venture capital roots. The Good news is that LDC is making a change in their investment criteria by wanting to invest into early stage businesses. So Michael thinks this is a good ground for celebration, especially as LDC won one of the awards he gave them.

Disclaimer 1: I am jealous as I could not attend the event. So you know why I am taking this attitude!

In my view, just like any industry, you see companies changing their strategy from time to time. Whilst LDC is speaking about lowering their investment criteria with the hope of netting the next Google (why is it that they all pick Google as the one to beat?), which is great news for Northern StartUp 2.0 community, there are others who have got tired of early stage investment, and changing their strategy by targeting companies with stable revenues and profits, but could do with an injection of new ideas to revive growth. In fact, just over the last two months, I have spoken to two tier-1 VC houses from London on the same topic.

So whilst we should be jubilant on one hand of LDC’s decision, we should be less happy on the other hand with my friends from London! In essence, we have equilibrium, one going down and two going up, well almost!

Disclaimer 2: As I cannot be a friend of Roger Cashman (he is way too cool and hangout with only the A-list), I decided to be friends with Michael, as Michael is the second best thing to Roger!

Extract from Michael’s article on his website

“Eales told Insider that although LDC only makes investments below £5m on an exceptional basis, he was keen to see technology developed in the UK and not lost abroad. “I am considering plans to set up part of LDC to invest in special situations,” he said. “I would like to develop LDC downward. We could still do all the things we are already doing but could also do SME investments.”

As if to dampen our enthusiasm, Eales cautioned that plans for the shift were in the embryonic stages, but as he outlined further ideas of how it would work, it rather suggested progress was being made. “The level of due diligence we carry out on our current investments – between £5m and £50m – would not be appropriate,” he said. “We would need individuals with specialist industry knowledge to explore the business for us.”

I can only say, bring it on! as we, the Northern StartUp 2.0 community got the experience and know-how and the odd failures (1 under my belt) to help LDC reduce its risk exposure! But more than anything, it would be a blessing to add another brand to the community. Whilst the EV Group and Liverpool Ventures (now gone!) invested in to early stage tech businesses in the past, we have seen our new friends, A2E Venture Catalyst investing into another NS20 tech startup and making two more offers. Sorry, I cannot reveal the names here!

Whilst Northern StartUp 2.0 has engaged with Aquarius Equity Partners, I do not believe they have invested into any startups from the NS20 community. In fact, I believe their interest lies in heavy research based (IP rich) companies than software startups.

EV Group and YFM Private Equity have always been supporters of Northern StartUp 2.0. However, it seems I have annoyed EV Group with my last newsletter, so I now need to rebuild our relationship! All I want to say about this issue is, whilst I may have jumped the gun a bit (my analyst days coming back), we cannot just talk about the upside! We must talk about failures and learn lessons, if not, how can we ever learn?

Of course, Michael is operating at a level much higher than me, rubbing shoulders with the top elite of corporate financiers delivering news whilst trying to entertain the not-so-entertainable chaps such as me!

Disclaimer 3: As far as I know, I appeared at least 3 times on Michael’s flagship product, the North West Insider

Just to conclude, it is great news to hear that LDC’s new strategy. EV Group has also geared up with recruiting two staff from now closed Liverpool Ventures. In addition, they now have offices in Preston, Manchester, Leeds and Birmingham.

Disclaimer 4: Given my big mouth and Michael’s charming network, don’t you think it makes sense for us to work on a project together?

From my side, I would love to see lot more entrants in the market, from single investment partner to multiple. We need to create competition within the venture capital market place. We need to change our attitudes, and see technology businesses are worthy of the news as well as investment. Just to close this, you all should be attending Northern StartUp 2.0 events and supporting my efforts in building the ecosystem (shameful plug!).

Please read page 6 and 7 of:

The headline is “leaders of the region’s £16 billion digital and creative industries are intensifying their efforts to establish the North West as one of the world’s most innovative production centre’s for digital entertainment and new media”.

As part of the initiative to grow regional output by £1bn from Foreign Direct Investment (FDI) by 2015, the North West Development Agency (NWDA) is in the process of establishing a number of Media Enterprise Centres (MECs) where production companies, broadcasters, small digital companies and universities can collaborate. Phase 1 includes opening of the MediaCityUK in Salford Quays and Liverpool Innovation Park later this year.

The article further states that the sector currently generates 16% of Gross Value Added (GVA) and 10.6% of the workforce. Clearly, some outstanding figures, and NWDA and others are to be congratulated for their vision and execution. Article also states that the creative industries cover 18 market segments from advertising and design to television and publishing. At the heart of this is £300 million a year GVA from computer games industry.

However, the article does not extend to mention any internet based companies such as our own Northern Stars. Does this mean that the NWDA do not see the potential upside that Northern Stars could create? Just imagine the birth of Bebo, Skype, YouTube and Last.FM in the North West. Companies such as those cannot be ignored. Problem is that at present, none of the Northern Stars have attracted significant opportunities to warrant the attention of NWDA. The number of startups has not reach the critical mass. At present, there are a small number of companies. The most successful digital product based businesses to emerge out of the region are Freeserve, Plus.net and recently moneysupermarket.com, all of which were setup during the dot.com era.

Instead of complaining, I believe it is our duty to create the next wave of giants. In this process, Northern StartUp 2.0 continues to serve those companies that are taking the initiative. And in this process, it is vital to understand the needs of Northern Stars beyond the need for capital injections. What help would you be needing?

An issue that I have not successfully resolved is the dividing line between the North and South of United Kingdom, from the perception of Northern StartUp 2.0. The services provided by Northern Startup 2.0 is for the digital startups in the North of England. At present it excludes Midlands and South Wales due to the perception that companies in these regions may well be aligning themselves with the South instead of the North.

Danny Dorling of the Sheffield University argues that drawing a line is near impossible. You can read his article here.

Click on the image for a detailed map

So the questions are:

1. Should we treat startup companies which are located above the line but below North West, Yorkshire and Humberside as Northern Companies?
2. Secondly, do they want to be treated as Northerners?

Appreciate hearing your thoughts on this subject.

I am happy to report that we had the best Northern StartUp 2.0 event ever on the 15th of July at KPMG Manchester. In case you missed it, here is a teaser:

At the core of Northern StartUp 2.0 is the Northern Digital Entrepreneurs, that is people like me (Founder of edocr), Anish Kapoor (Founder of Yuuguu) and other Northern Stars. The purpose is to serve their needs, mostly in the areas of:

1. Capital injection
2. Exposure
3. Reduce loneliness – You are never alone in your journey to hit that massive Vision

We address Item 1 above by bringing Venture Capitalists. Here is a list of VCs we have entertained:

1. Liverpool Ventures/Merseyside Special Investment Fund/Liverpool Seed Fund – North West (Liverpool)
2. Enterprise Ventures/Rising Stars – North West (Preston, Manchester) & Yorkshire and Humberside
3. YFM Private Equity – North West (Manchester) and UK
4. Advent Ventures – South East (London)
5. DFJ Esprit – South East (London)
6. Seedcamp – South East (London) and Europe
7. MTI Firms – North West (Manchester) and World

We now need to expand above by exposing Business Angels and Debit Financiers to Northern Stars.

Item 2 is addressed through providing a platform for short pitches, and on-line (private messaging) and face-to-face events.

We have also started to campaign to both Regional Development Agencies and the Central Government. So, do let us know what specific help you require.

On 15th, we had great line up of panelists from New York, London and Manchester. See event page for more details

I would also like to make a request. Please check the website before writing that e-mail. Check the FAQs on footer. Your time and my time are both precious.