Scandinavian Startups Exclusive

The "new" facebook opens opportunities for ambitios start-ups and facebook's further expansion, in symbiosis. Could Swedish Vacation Relation capitalize on the social geographic craze?

Facebook creeped up on everyone unexpected. It was creep, creep,more users, "facebook is overvalued", creep, creep, "why, they are valued at 10 Billion now? ridiculous!", more users, API, apps,  facebook login, creep, creep, more users, "what, they get even more money now? Idiocy!"  boom! Suddenly, facebook everywhere.

Years ago, I remember thinking about it like the alternative to myspace. That I did not like, because back at that time you had to be in college to sign-up, facebook did not allow you to edit your profile with HTML, which I personally liked on myspace, and it was elitist, which I thought was stupid, because I was using myspace for self-promotion, so I wanted everyone to see my profile.  This is an older era, the dinosaurs were roaming free.

Also, I did not have a ASMALLWORLD invite.

When was this, 4, 5 years ago? Well, here in 2010 facebook has 500 million users (probably 200 million of which are active). Which no one else has.  And which everyone else wants. Apparently the exclusivity was sexy.  And the users kept migrating. And then once all your friends are on facebook, and your future contacts are on facebook, you find yourself on there as well.

And with the like, twitter statups update rip-off and login api, the facebook is everywhere just got more, well, Everywhere.

Facebook has made a lot of smart decisions. Zuckerberg's mantra -social everything- seems to have some merit to it. After all, there was no mass user exodus when the facebook privacy "scandal" broke out.

Sure, there is no privacy online. And guess what, no one cares. At least no one willing to leave facebook. Because for most people, leaving facebook is more painful than staying on. And now that facebook allows for third party application integration and facebook logon, there are even less reasons to leave.

I was checking out a NAS yesterday. You know, one of those hard-drives you put on your network. So you can dump all that crap you accumulate online on it.  I visited an internet discount retailer and a price comparison site.

The next day, when I was looking at my facebook updates - Stockholm meetups, I'm ok, Russian terrorist attack, lots of new user pictures and videos, and Cindy had a nother cocktail party - lo and behold. I see a NAS banner. Guess facebook's ad network knows what I did last night!

You can never leave facebook.

 The numbers seem to show this is what people agree to, if not actively desire. You will take facebook everywhere you go.

Enter Swedish startup Vacation Relation.

One thing Peter Sullivan, 25,  enjoys about Stockholm is that he can ride his snowboard anytime he wants(six months of the year)- there is a slope right by their office!

Started in in 2010 by American  Peter Sullivan and Swedish David Los, the new venture has a simple idea as it's premise - socialize your vacation. After all, you want to meet people when you travel, and your desire for social mingling is on the rise when you loose the protection of your existing network.

David Los, 24,  met his co-founder in school, and they decided to put everything aside and concentrate on Vacation Relation

Vacation relation is on facebook, of course. They are right in the middle of the buzzword cross-hairs - social, geo-aware, collaborative.  They have a nice video on the front page.

Getting into the travel market is certainly lucrative. Unlike facebook and google, which live off ads, there is possibility of a direct sale (comission) - via hotel and flights booking referal systems.

Early adopters should not be a problem. The road ahead is not straight, vacation relation still has to prove it's ability to scale, secure financing and more users. They will need to grow their userbase a lot before they can compete with the bigger players, but the model is sound and potential for an ealry round of investment could be lucrative for a Scandinavian investor (or, as is often the case, an American investor interested in Scandinavian ventures)

However, the exit in the current environment is clear - they have a  better idea on the social travel than any of the sites that feed on predetermined user behavior. I can find feedback on a hotel on tripadvisor today. I can get a mayor's badge at gowalla or foursquare. But it is not that easy to see if there are any cool people on the way to my destination and adjust my plans accordingly, based on my social network.

Peter moved to Sweden attracted by the possibility of free education and "hot women on bicycles". We certainly have both of those, in abundance. When they met with David in school and decided to concentrate on Vacation Relation, they had a few lucky opportunities to pull funding from. Their economic acumen allowed a government business development grant, and personal connections secured early angel funding from a professional poker player.

Some tips from  Vacation Relation founders:

• Take a risk while young, this is the time for startups!
• Build your network and utilize it to maximum advantage
• Accept invitations to events and seminars - you never know
• Concentrate - if you can't do it 100 percent, don't do it at all
• Every obstacle can also be a possibility.

The exit to the golden brick road

And to get back to the exit- facebook has managed to pull off the genius solution to buy-outs and mergers. Seriously, talk abut  potential for viral growth at least cost.

Have the people working on the facebook platform from the start, without putting up any capital at all. We are not even talking about less than 20 thousand dollars that Ycombinator gives it's proteges. Facebook grants it's royal permission for developers to work on the facebook platform!

And when you are successful, we can buy you, and you are integrated from the start! Compare to the older business model of  imperialistic expansion via buying a successful company, buy, then spendlots of time and money  integrating.

With the new facebook model, the integration  process is less than zero. Zuckerberg has developed a time mechanism of venture capitalism - not only do you not waste any time on development and integration of a successful venture, a successful venture generates revenue by definition, without any facebook involvement, via ads and user data!

This is a promising situation for startups also - they can grow based on whatever strategy they like, a la zynga, or hope for a facebook buyout.

I hope these two enterpreneurs get funding in Sweden and stay in Sweden, or at least return to Sweden if they go to the Valley. Unfortunatley, the realities of doing startups in Scandinavia might just push them out. 

When I met them personaly, it seemd that Peter and David have their fingers on the pulse and the ability to translate it's beat into a framework that is easy to use and allows for more benefits than drawbacks. Let's hope someone monetizes on the opportunity to buy a share of this talent.