When creative people think globally and start connecting the dots, interesting projects always come up. In this case, I’m talking about Danny Mola, who contacted us a few months ago to tell us about his startup, Kolau. Born in Spain, Danny has spent years living in San Francisco. From there, he wants to reinvent the way SMEs do marketing, especially when it comes to Google positioning. Kolau offers algorithms that optimise AdWords campaigns for its users and clients, while developing related educational content.
As you will see throughout this interview, Danny has his own views on the startup panorama. Among its concerns, youth unemployment is also high priority, and this is an area in which Kolau has launched its own initiative.
I’m interested both in your personal and professional background. Could you share “your story”? How does someone from Balaguer, in Lleida, land in Silicon Valley?
I arrived to San Francisco in 2001 and the Valley still hadn’t believed that it was the world’s technological center, although it already was since HP, Google and Cisco decided to start here. The dot-com bubble burst in 2001-2003, which had an impact on the Valley and its startups. It was here where the bubble was created and where it was suffered the most.
I enrolled the Catalan Institute of Distance Education to study a Baccalaureate degree while traveling, and I graduated in San Francisco. The Bay was already starting to be seen as a technological center as a result of the dot-com movement, which I found fascinating from the beginning. I took the exams at the Consulate General of Spain in San Francisco and studied at the Starbucks at Powell and O’Farrell in downtown San Francisco. Like it or not, when you study at a Starbucks you listen to many conversations, and it was not until the end of the last decade when those related to startups started ringing more often.
By 2008, following the financial crisis, the startup ecosystem was re-established in the Valley and this time it took off with much more strength than in the late 1990s. By 2010-2012 a second bubble burst, when ratings of pre-revenue startups were cut in half. In January 2016, Foursquare managed to raise only half of what was expected, a fact that in San Francisco circles was considered as the proof that the bubble had burst. At the Launch Festival in May 2016, I spoke with Jason Calacanis, a startup movement guru considered the #1 angel investor of Silicon Valley. He told me that the pre-revenue startups that managed to be valued at around 5M-8M, depending on the experience of their team and their idea, now were valued at half, if that. If Foursquare certified that the bubble had exploded, Jason Calacanis confirmed me that it had been so. But this is the bubble of funding, not of the startup ecosystem, which stays in shape and thriving and shows no signs of being a bubble. Instead, it’s more a philosophy on how to do things.
Many SMEs have exceptional products but fail to market them, because of a lack of resources or skills. Is Kolau the solution, at least in the digital area?
Kolau is the solution to create more web traffic. Turning web traffic into customers remains the responsibility of the SME. If the product is presented in an effective way and the website is minimally optimized, there will be conversions.
Educating SMEs so that they convert their incoming traffic and retain active customers is something we also put a lot of emphasis on our marketing blog. We try to make the Kolau user “do it himself”, without having to depend on agencies or third parties. Education is part of Kolau’s system.
I’ve read about Kolau taking part in the television show Shark Tank. How was the experience?
Being chosen to take part in Shark Tank was initially a surprise, as Kolau was still in beta and hadn’t been officially launched yet. It’s a leading television contest in the United States and, although usually the physical and technological products are the ones that stand out, we managed to enter the audition and reach the finals.
What is Kolau’s business model?
It’s free unless you connect your Google Adwords account and have a budget over 50 euros per month in AdWords. In that case, the cost of the Kolau optimisation engine is only 19 euros per month.
Typically digital marketing agencies would manage not only SEO aspects but also campaigns involving social networks, affiliates, content creation, etc. Do you plan to create algorithms for other platforms such as Facebook or Twitter? I wonder if agencies are allies rather than competitors.
That’s a very good question. In fact, a quarter of Kolau’s business comes from agencies, since the AdWords optimisation engine saves them time and money. Although there is an opportunity to enter Microsoft Bing, for now our effort has focused exclusively on Google in general, and in AdWords in particular.
Kolau, being a platform and not an agency, has neither the capacity nor the interest in dealing with something that technology can’t do, such as managing a social network channel or writing posts on a daily basis. However, it’s something that we hope Kolau users can do for themselves following Kolau’s philosophy: “do it yourself.”
I find it interesting that living in San Francisco you have still preferred bootstrapping to outside investors. Why is this?
I have a motto: that entrepreneur who seeks to be accepted by an incubator or accelerator or who looks for an angel investor from the beginning is unable to be an entrepreneur and should be replaced immediately from the startup management.
I must admit, however, that it is difficult to avoid following the startup trend. The easiest thing is to enter the ecosystem, attend conferences, meet some of the top CEOs or founders of the startups of the moment, meet angel investors, send them powerpoint presentations, sign up for networking events and try to get to know consultants in incubators, accelerators, etc. This is something that all startups do, at least the ones I know. In fact, it has become a full-time job. In the end, maybe, and hopefully, the accelerator, incubator or investor accepts and invests. Now you have more money than you need and less percentage of the company than you’d like. It was never an option for Kolau.
How are you promoting Kolau? They say the shoemaker’s son goes barefoot.
Content, content and content. Our main source of web traffic is the content of our blog and our new academy, where we discuss topics in detail. For that matter, we see how SMEs do want to “do it themselves”, but there was a need for a platform to give them the necessary tools with no prior knowledge required to use them. Our AdWords section, in general, and the article on how AdWords works, in particular, are the most popular ones.
Are there any metrics you can share (number of SMEs using the platform, billing, countries you’re in, etc.)?
One metric we can share is that, during the last six months of last year, users of Kolau generated 450% more volume of business than in the same period of the previous year.
Youth unemployment is one of your main concerns. As Catalan and Spanish settled in San Francisco, how do you see the situation in Spain (where the youth unemployment rate is around 40%) and what changes are required?
Indeed, in 2016 the unemployment rate of people under 25 in Spain stood at 42.92%, with a total of 613,900 unemployed youths. Although in 2016, occupancy slightly increased among young people aged 16 to 19 (17,000 employed), it did not change in the group from 20 to 24 years of age.
In my opinion, the solution is to train young people in programming and web development, for two reasons:
- Not only there is full employment in the programming or web development sector, but in the European Union, there are 900,000 vacancies that can’t be covered.
- You can work from home. Many programmers work from home even if they live in the same city where the corporate offices are. It’s a trend that has become the norm. This means that young people no longer have to depend on whether there is a vacancy in their municipality, since they can work for any company anywhere in the world.
The Youth Guarantee program, lead by the European Union and supported by the Ministry of Employment, offers free training through the Chambers of Commerce to unemployed young people. However, most of its courses are made by service sector subjects, and there are only a few programming courses, most of which have very few vacancies. For example, within the Young Guarantee, the Chamber of Commerce of Valencia has no places for programming or web development, and the JAVA distance programming course at the Youth Institute has a limit of 73 positions. With more than 600,000 young people unemployed, public aid to reduce youth unemployment in Spain through training in new technologies is clearly insufficient. In light of the inertia of official bodies in Spain, Kolau has created its initiative regarding youth unemployment, #YouthCanDoIt2020, to help unemployed young people from Balaguer and Elda directly as well as, indirectly, all young people in Spain, breaking myths about programming and bringing it closer to those who had never thought about a career in this industry. We want unemployed young people, in general, and those from smaller cities, in particular, not to depend on whether vacancies arise or not in their municipality. Programming is an industry where you can work from home, no matter where that is.
Which book or article would you recommend to other entrepreneurs?
Any book that isn’t about entrepreneurship. I think that the more unique the process and the product is, the more possibilities it has to succeed. Reading about it makes it more difficult.