Rocket Internet, what's coming from over the pond and the future of AI

Dear Antenna Friends,

Welcome to the first newsletter of 2024, and what a year it has already been.

No sooner had it started, when we were met with news that Greg Miall (ADV MD) was heading off to pastures new. Greg has been instrumental in the development of Antenna Digital Ventures and the powerhouse behind many of our successes. He will be sorely missed, but we look forward to continuing to build great things on the platform he helped construct.

What is Greg up to, you may ask? Well, he has put his money where his mouth was and is building a start-up, Gaggl, where TV meets the creator economy.

Due to the number of new sign-ups, here is a quick reminder of what we do at Antenna Digital Ventures (ADV):

ADV works with exceptional consumer-facing digital scaleups looking to expand into new markets. We are a Greek Family Office, owning major media organisations across Greece and Central Eastern Europe and have a strong track record as both investors and operators.

We leverage our media assets and balance sheet to assist companies in expanding into the region, offering media support, expert personnel, and capital. This support is designed to help you succeed in a region that might otherwise go unconsidered, despite its potential reach of 120 million people.

We're looking for outstanding companies with a proven track record of customer success in the UK, US, or Western Europe. If your company is ready to seize this opportunity, tap into 120 million additional customers, and become the top choice in CEE, we want to hear from you.

For further info on what we do, click - HERE

What does the crystal ball say?

Despite the macro environment taking its toll on many industries in 2023, 2024 looks like it could actually be a stellar year.

Companies have been forced to stretch their capital, revenues are major focus and even the “P” is being looked at (Profit). Companies are having to more with less to achieve their growth targets. ADV’s offer of expanding into new geographies without raising additional capital resonates very well with ambitious CEOs meaning enquiries are strong for ADV.

The Imitation Game or Not?

The great Oscar Wilde is famed for saying, “Imitation is the sincerest form of flattery”, but copying, as you will have learnt as a child, is frowned upon. We’re seeing a resurgence of EU versions of US growth businesses, but where did the model start?

Back in 2007, three publicity-shy brothers, the Samwers, developed a copycat startup model that has gone on to deliver some of the top-performing investments in Europe. Its name is Rocket Internet.

Their “copy fast-growing US companies and sell” model proved very successful and helped them achieve billionaire status. Previous ventures include Alando (eBay copy), StudiVZ (Facebook copy), CityDeal (Groupon copy), Paymill (Stripe copy), Delivery Hero, and Zalando to name but a few of their 100+ portfolio. The issue is Rocket Internet have long suffered a lot of backlash for their model.

I was describing what we do to a partner in a VC fund recently, and they said, “Oh, like rocket internet”. I said, “Yes, similar, but with one key differentiator: we are a partner to your portfolio, not a competitor.”

Maybe a rebrand is in order “ADV is Rocket Internet+”

What else is coming from over the pond?

If you believe the IMF (not the Tom Cruise one, the less exciting but hopefully more helpful one), AI is coming for your jobs !!!

With the tone of a mill worker shouting about machines taking their jobs, in some ways, they are right to worry, but it’s not necessarily the mill workers but the managers instead.

The IMF declared that AI could impact 60% of jobs in high-income nations, 40% in emerging economies, and 26% in low-income countries. BUT and its a big but, the report talks about “impact” not take or replace.

The report's tone is very much that AI will augment roles and hopefully improve them. There were a few “safe” roles as well, such as Lawyer, Surgeon, and Judge.. Phew, says everyone in Surrey.

What else does AI offer?

ElevenLabs.io hit viral status and unicorn status almost simultaneously when their software was used to translate the flamboyant Argentinian President’s Davos speech with high precision (I am told - my Spanish is not great).

The future of AI is definitely upon us, but as with all change, there will be casualties. Ultimately, it offers a huge amount of potential success and improvement in people’s lives.

It is also great for memes.

Everyone (on TikTok) is equal, except some are more equal than others.

It has been discovered that TikTok applies different and preferential status to certain accounts over others. Initially, you might think, who cares? Why shouldn't celebrities have a more important account? But it is slightly darker than that. According to internal messages seen by the Guardian, TikTok moderators have been encouraged to be more lenient, and therefore, it matters who says it more than what is said. With over 1 Billion users, TikTok is a highly influential platform that can sway and steer the views and opinions of nearly 13% of the world’s population. Playing with a straight bat seems the very least they could do.

As technology companies become the new superpower of communication and, more influentially, news, their policing will become increasingly important. They have the power to become both political and societal weapons. But what is the answer? A big governmental “thought police” would be terrible, but allowing them to police themselves feels all too close to letting the Post Office police themselves — look how that turned out.

What’s the future of live streaming? Netflix made a play.

What did Netflix get the highest-paid actor of all time? - His name, apparently.

Dwayne “The Rock” Johnson was recently appointed to the board of TKO, the rights holders to WWE and UFC. As part of his deal he secures $30m of TKO stock and the rights back to his name “The Rock” which has been held by the WWE for many years.

This all comes at the same time as Netflix made a major move into live television, signing a $5bn, 10-year deal to gain access to WWE’s hit show, RAW.

Has it come full circle? Is Netflix moving physical with live events?

Adoption curves may soon be measured in hours.

It took Netflix 3.5 years to acquire 1m users, Facebook took 10 months and Chat GPT (5 days), who were knocked off the top spot by Threads, who took just one day to acquire 1m users.

As digital adoption rates continue to rise, launching and securing market share is becoming faster and faster. However, there is a downside. It is very likely that high adoption rates come with customer fragility, exposing startups to losing market share overnight to the next bright and shiny thing that is released.

How to keep customers?

So, you have built a business over many years, and you have a vast and loyal customer base, but extracting the most value from each and every customer requires innovative thinking.

It appears Carta may have been a little too “innovative” with their ideas and are now in hot water over their recently exposed business practices.

In January, Karri Saarinen, founder of Linear, published a thread on X exposing that a Carta employee had contacted one of Linear's angel investors, telling them Carta had a “firm buy order” for the angel’s shares in Linear.

As Karri puts it, “As a founder, it feels kind shitty that Carta, who I trust to manage our cap table, is now doing cold outreach to our angel investors about selling Linear shares to their buyers.”

Over 40k startups entrust Carta with keeping their cap tables safe, yet it appears they have been using the private details of share ownership to approach potential buyers or sellers.

Karri offered some reasoning for Carta’s motivation to do this. He claims Linear is paying $10k/year to Carta for their software. But that’s nothing compared to the $100k they could have made from their 2% transaction fee on secondary sales.

Tut Tut, to say the least.

🚀 Interesting Insights:

• The great Rory Sutherland strikes again - “You can largely explain the decline of advertising in a sentence. Media agencies know how to make money from media in the absence of creative; creative agencies don’t know how to make money from creativity in the absence of media.”

• British Court answers an eternal question - How much potato does a crips contain? And people say I get distracted from the pressing issues!

• Tick Tock, Tik Tok - where do all the deals come from? A few years ago, Harry Stebbings of 20VC fame bought Good Future Media, an on-demand media company, to help scale 20VC. Harry gets over 80 deals a month through their social channels now.

• This is a man's world — but 50% of it is owned by women. Swedish VC Fund Feminvest is targeting investments in majority female-owned startups. They have won approval from the Swedish FCA to raise a €8.8m fund.

• Boeing Down - Boeing remains under fire for a litany of safety and production concerns, loose bolts, delayed shipments and even a discarded wrench under the floorboards.

• Making it Raine - Our good friends at Raine successfully closed one of the largest deals in UK football history. Raine have quickly built a reputation as the Rainmakers of sports deals.

• Free (Steamboat) Willie - The original versions of Mickey and Minnie Mouse have finally entered public domain after more than 95 years.

• iPhone on sale to combat in CN - Apple, king of disruption, is facing falling CN sales. A Jeffries analysts found iPhone sales dropped 30% year-on-year in December. Apple has reacted by offering a limited-time-only $70 discount ahead of the Lunar New Year, a rare move saved for truly dire times.

If you have any thoughts or questions or want to chat, hit reply—we're all ears.

Wishing you at least a hint of Spring in the air.

Cheers,

James and the ADV Team

PS - Make sure you are signed up for the newsletter - HERE.