The beginning was a necessary scramble. Nalden was working for nalden.net. WeTransfer was in its larval stages. The file transfer world was in flux. I wasn’t getting much satisfaction from advertising. And, at the core of it all, there wasn’t really any money lying around in Amsterdam. Not real money.
WeTransfer: no money.
Nalden’s blog: not much money.
European tech in general: not exactly handing out cash hand over fist.
Large European banks don’t tend to invest in early-stage tech, so new life for any new company is tough, certainly tougher than for our Californian counterparts.
But still, you’ve got to keep pressing onwards.
At the time, we thought there was a space in the market for a new sort of company – one that would incubate ideas and potentially serve as a bridge from the simplicity and creativity of nalden.net to the effective and reliable gesture at the core of WeTransfer.com.
Like most start-ups, money was of the utmost importance to us. How would we live, how would we thrive? Should we take money from venture capitalists? What were the upsides and downsides? Was Europe the right place to be for us? I had two kids. Even at the age of two, they had a thorough understanding of the difference between wool and cashmere.
In Europe, there is some money available, but generally at a premium. There are instances of companies raising considerably more, but those deals will usually garner front-page news. For instance, the AR company Layar, founded to augment data on to your camera viewfinder, raised $14 million in 2010. It was listed as a digital pioneer at Davos, featured in Wired and TIME magazine and was the darling of the Dutch tech world for a time.
It’s not unusual for any entrepreneur to speak to between thirty and forty investors. Certainly at the time WeTransfer was starting out, many of the people we knew were endlessly seeking funding, sometimes finding cash, often failing.
No one wants to take the sort of chances venture capitalists take in North America.
Still, we tried not to be dissuaded. At the time we held firm to our belief that there was a space in the market for a new sort of company. A company that could be the hub for a type of advertising model that worked in this new age.
This minor innovation was very important to us, even from the beginning.
The new model would not be based on Big Data, intrusion or irritation, but would instead be a radically transparent throwback. Already, at this point, we felt the intrusion and data mining that was an increasing feature of the online experience was only going to get worse. So, we decided to go with our instincts. We’d be up front with people. As people transferred files, we’d utilize the full screen.
Our pioneering move was done inadvertently. We just knew it felt good at the time.
The file transfer market was not, as they say, in a good place. RapidShare and MegaUpload were the mainstays. Their business model was based upon piracy, or throttling, which is as pleasurable as the term sounds. People flocked to their sites to illegally download the latest movie, and whilst the customer was there, the sites bombarded them – like some sort of spamming machine gun – with useless banner ads.
We wanted nothing to do with them. We certainly didn’t want to compete with them. Our hope was to differentiate through quality and a respect for creativity.
If you’re too young to remember the old days of file sharing, I’ll help paint a picture of one of the most infamous examples of the industry: Kim Schmitz or Kim Tim Jim Vestor, otherwise known as Kim Dotcom.
Kim was arrested for hacking in 1994. He started file sharing business MegaUpload, a site that was shut down in 2012 for copyright infringement, reportedly costing copyright owners $500 million.
He didn’t need to raise any money from external parties. He was a master at raising it himself. After fleecing people in 2002 with LetsBuyIt.com, he was reportedly earning $110,000 a day in 2010 from MegaUpload.
Today he resides in New Zealand, in Queenstown’s most expensive leased property, facing extradition back to the US.
Because we couldn’t raise money, we had another strategy – and it wasn’t pornography or copyright theft.
Our money-making venture would run alongside WeTransfer and would be called Kuuva.com. We created a service that would stream art directly to your desktop screensaver or wallpaper.
This had potential because we believed that people would pay a premium to spend time in front of quality, curated backlight instead of the stock images Microsoft and Apple provided at the time.
Over time we believed we would be able to encourage some of the world’s premium advertisers to join, and thus we would be able to monetize the service.
Nalden agreed to start this other company alongside everything else. We’d build a platform filled with great artwork and advertising.
It would obviously – why think small? – fulfil its role as the future of advertising. We would build a fan base centred around the user’s love of art, and pay for the service by serving beautiful ads in between art.
We’d also started a design company, Present Plus.
A few weeks later, we convinced Nike to become one of the first clients within Present Plus. Nike would help us to finance this new venture and act as a showcase for our new advertising model.
They felt the time was right. There was a general backlash against the bitty intrusiveness of online advertising, with the forward-thinking employees of different companies beginning to seek out alternatives. Somewhere in these boardrooms, there was at least one voice saying: ‘Maybe we should stop it with these banner ads.’
The full-screen ad was a mildly bold gesture.
It wasn’t going to solve world hunger but it was going to, at the very least, hark back to the full-page advertising of Katie Grand’s POP magazine and the New York Times, when photographers and graphic designers knew they’d have a chance to make a statement. Nike agreed to try and work with us on a concept around full-screen advertising, outside of any of their own platforms.
At this point Bas and Nalden had asked me to join WeTransfer. I couldn’t say no, but I worried about what I had gotten into as soon as I said yes.
It was a complicated time. We had two offices, multiple products. We were hustling, trying to weave the strands together.
At WeTransfer we set forth to build up the service and ensure that, at the very least, files would keep getting transferred, time and time again. Why were we doing it this way? It all came back to money, as it usually does. Money was a pressing issue – and access to it is not equal, from one time zone to the next.
Raising the stuff in the Netherlands is not like raising money in Silicon Valley. To raise $200,000 in 2010 would probably have meant giving away 20 to 30 per cent of the business. The option was there, but just the prospect of offering up so much for so little made us queasy. That was not a deal we were willing to make. We didn’t trust what we’d get in return.
So what do you do when you’re trying to maintain control of your company in the midst of a particularly painful episode of bootstrapping? At the time, consulting seemed to be the way out for us. It would mean juggling projects, but doing all this work ensured we’d be able to maintain control. We all agreed that control was important. And it wasn’t a chore to consult. A project for a large brand that lasts for two or three months can often yield as much as $150,000. If you’re lucky, a whopping 50 per cent is margin.
We could give away a chunk of the fledgling business, or we could just keep our heads down. It was much easier to consult and work two jobs than do the moneymaking rounds in Amsterdam.
We certainly weren’t in Silicon Valley. We knew that much.
Holland is a trading nation. You can very easily start a business that buys cheap hotel rooms and sells them at a 10 per cent markup. You can start a denim brand that buys fabric at $3 per m2 and sells it for $120 a pair of jeans. It’s ten times harder to convince a tradesman to invest in a cultural business. And all the activities we were involved in, in some shape or form, encompassed design, art, community, film or culture.
We had to offer something real. The Dutch can trust the reality of a hotel room – it exists in space – or the reality of the fabric that will soon become an overpriced pair of jeans. Even at this early stage, we had to stress trust. Even though we were trafficking in file transfer and culture, we couldn’t just present business ideas on the back of an envelope.
It couldn’t be all blue sky, all the time.
Coming from this culture meant that we could bring some of its straight-shooting values into the online world. Would a Dutch enterprise act like MegaUpload and spam a user into submission? Maybe not. Instead of fighting against the culture of our home country, we decided to embrace it.
We’d go Dutch, so to speak.