Fabrizio Capobianco (Founder and CEO TOK.tv)

L'innovazione italiana incontra l'America

Oct 31, 2013 7318 ITA ENG

If the American Dream has always meant "to make it" on one's own merits, if millions of Italians went to America first for survival and then for success, if the result of the work of our fellow citizens has always been admired in the U.S., the union between Italian entrepreneurs and the United States cannot but constitute an important part of our journey to discover the link between the two countries.

Among the many success stories of Italian entrepreneurs who realized their business in the U.S., one of those with so many beautiful messages to tell is in our opinion the one regarding Fabrizio Capobianco, who combines the positive features of the Italians and also those of the Americans: a true testimonial of the winning mix these two nations generate when they merge. Simple young person and a winner, forward-looking and optimistic, we often "get him in trouble" taking him as an example. And he, who never loses his smile, always forgives us. He will do so once again, if we task him with the heavy burden of representing the numerous entrepreneurial success stories of Italians in America, with a specific focus on innovation in the legendary Silicon Valley. The truth is that we Italians would have huge advantages, if we'd understand how great is being represented by people like Fabrizio Capobianco.

Fabrizio, when you decided to move to the United States you were already an entrepreneur, despite your young age. What prompted you to leave Italy to go to Silicon Valley, and what was the first impression of America?

I have always been a lover of the United States, as a child, when I was reading about baseball and I had them in my heart: I said I wanted to be an engineer and move to live in California, even then. I came to Silicon Valley for the first time for a month when I was 18, to study, and I liked it a lot. In 1995 I had just founded Internet Graffiti, which was the first web company in Italy, and I came here as an invited scientist at HP Labs in Palo Alto. I remember that I was brought to building 4, and the first two offices I saw were those of Hewlett and Packard, and I quickly realized that this was where were and would be born the companies that would have made the digital revolution as Google, Facebook, Apple and others. So I came back to America because I wanted to make a big company: with Funambol we came close, but I hope that the next is destined to become truly very great.

When I arrived as an entrepreneur I left my two partners in the cellar of Pavia, where Funambol was born, a bit skeptical about my decision to leave and seek American capital. I rented a house for a few months, and just after landed a friend pointed me to a company near San Diego which was interested in our product. I got on the plane and went to meet their CEO, and flying back I wrote a business proposal. The next day he advised me to change it a little bit, which I did: it was a friday morning, and he sent me back the file signed for acceptance. I had heard about this person two days before, and it was a very big project for us. I called my partners in Italy and told them about the closing of the deal, but of course they did find it hard to believe. I still had not even founded the company's branch here, there was no postal address: so, in the proposal I put the address of the rented house. On Monday morning I picked up the mail and there was an envelope with a check with the order of 30%, as agreed: about one hundred thousand dollars. In short, I realized right away why here you can implement the projects destined to become so huge: there is decision speed and performance. And for a startup cash is essential, it is an irreplaceable part of ability to take the risks that lead, sometimes, to success.

Funambol has been a great idea, an Italian success which had a good American help. You've kept your relationship with Italy, also in terms of business. How, and why?

Funambol was born in Pavia, and apart from me, engineers remain in Italy. Over the years we have taken more than 30 million dollars of American capital, and we used them to develop our software, now used by tens and tens of millions of people around the world entirely in Italy. The headquarters is in Silicon Valley because to take $ 30 million in Italy I should have probably just taken away all by myself the entire amount of the Italian Venture Capital. Today, we have an Indian CEO, a Vice President for marketing that is American and a Vice President for products that is Iranian: but 90% of employees are Italian, including the President, me. In Pavia we have 60 people, all permanent employees, and we continue to hire because we are growing well.

Here in Silicon Valley I have seen Indian, Chinese, Thai software developers: I came to the conclusion that the Italian made software is better, and that is why I stay connected to Italy also in terms of the business. It is the same for the company I created after Funambol, TOK.tv. To do business, make partnerships, find the money and prepare the exit strategy for investors, you have to be in Silicon Valley. But the place where you find smarter and harder working people who produces the highest quality software is Italy ... there is no other country in the world that combines all these elements like ours do.

Let's talk about your next adventure. You are now what the Americans call "serial entrepreneur": after Funambol you have founded with enthusiasm another project, TOK.tv. In some ways, this idea comes from your desire to virtually shorten the distances, in your case between the United States and Italy. You already found personal satisfaction and valuable feedback from Italy in this new adventure. Please tell us something about it

In my opinion television is radically changing, because 80% of people watches it while using a tablet or a mobile phone: they do it because they are bored or want to know more about what they are seeing, and it is also an extraordinary tool to communicate with others who are watching the same program elsewhere. The tv was born social: you go all together at the bar to watch the game, or you invite friends on the couch at home. I live abroad and when I see sport on TV just my dog keeps me company, but when there's something to cheer he doesn't do it with me, on the contrary he even gets scared. I needed to share this experience, because sport is more beautiful if watched together. We then started with baseball: it is perfect because it is long, a game lasts 3 hours, looking it by yourself is boring and I know that many friends of mine are watching the game in the same moment, but I can not stay three hours on the phone with them to comment on it. Our product has a part for statistics and a part for the voice allowing to shorten the distance, and "watch" the game with friends. We had a great success last season, people were talking through TOK.tv for an average of 51 minutes, and we have about 50,000 users.

One of the worthwhile things to be told happened when, during a particularly important baseball game, I realized that at in that moment Afghanistan was the second country from which our users were connecting (almost our users are for now Americans, so the first was the US): I was excited to know that among the American troops stationed there, many were using TOK.tv to share the experience of seeing the game with someone at home in America. I liked very much the idea of being able to get the families a little closer for a while: I left Italy all by myself, leaving my family there - although of course this is a very different situations.

Another thing that made me happy is that the real motive why I had this idea was because I wanted to watch the football matches of Juventus, my team, with my father who is in Italy and my brother who is in Mozambique. And after the SuperBowl Juventus, among all the possible teams, wrote to me to propose to develop the application for Juventus fans. At first I thought it was a joke of a friend, but instead it really was Juve. We actually developed the application, and the first game I watched the first game exactly how I wanted to, with my father and my brother: it is a great feeling to share something like the passion for your team with your family members even if you are thousands of miles away and this was perfect for me to understand the impact of TOK.tv on our users. We had 100,000 users in a week, and in fact we are racing to develop the Android version because for now it is only for iPhone and iPad and Juventus fans who do not use Apple are repeatedly asking for it.

We also did a test for the Oscars, out of the sporting context: in that case 70% of users were women.

Among the things you do, you also collaborate with projects that do a great job promoting and helping young Italians with creative business ideas, such as Mind the Bridge. How would you describe, from the Silicon Valley, the scene of Italian innovation?

When I started as a startupper in 1994, the word did not exist in Italy, and even in 2003 in America a few were using it. After 2004, I put a lot of effort to promote the concept of startup, being in the heart of the startup world and trying to communicate to Italy the most important principles governing this area: the importance of the risk factor; the concept that failure is not a disgrace or only a a negative thing; the promotion of the use of capital as an essential additive for their business, because even if you give away a piece of the company, the pie gets bigger and then you profit from that; and the thought that selling the company once brought to success is by no means a bad thing. These concepts are culturally distant from the traditional Italian mentality, and therefore very difficult to absorb. So I created the Funambol Gymnasium, to help Italian entrepreneurs who wanted to come to Silicon Valley. This has been such a large success that thanks to Marco Marinucci we flowed into Mind the Bridge. Many italian startups have been here three months, and when they are back in Italy they bring back the entrepreneurial culture absorbed here.

From the Silicon Valley I clearly see the boom in the italian world of innovation and startups: a phenomenal growth of this cultural movement, which for the first time was also adopted by the Italian government which cited the concept of startup in one of its official documents. Every year I am among those who select the italian startups participating in Mind the Bridge: their quality grows, inexorably year after year, and every now and then – always more often - you see one that makes you think it could really become a big company (I invested my money in two of them, so I really believe it). They are learning how to present a company to a potential investor, how to do a business plan, how to draw a path that leads to success. In this case, the crisis has even helped a little, because among some of those who have lost or who can not find a job, some people have thought of putting together an idea, or at least try, and create its own job: startups are often born when energies and creativity are still fresh, after college, which is also one of the age groups more affected by unemployment in Italy.

This boom should not obscure the fact that startups means a very severe hardwork: I am extremely optimistic, because from this point of view each year is better than the previous. What Italy would need in this field is a great success story, one of which the newspapers fall in love and make an example out of it, one that really becomes a worldwide success: two or three young Italians who do the new Facebook and become billionaires, so that other young Italian boys and girls can commit themselves with confidence and perseverance to become like them. Here, this happens every day.

It is not difficult to understand, from what you say, that you look at Italy with love. You've recently attended an event at the Italian Consulate in San Francisco holding a presentation entitled "Why Italy". Then we'll ask: Why Italy?

Look, there are those who sometimes describes me as a brain drain, and this irritates me always a bit. It is not a mathematical equation that all those who leave are "brains", or that all the "brains" are intended to emigrate quickly: for example, at Funambol we have imported "brains" more than we have exported.

When I talk about Italy and the fact that there is no better place in the world where to make software, a lot of people do not understand: these are not just words. I bet with Funambol tens of millions of dollars on this concept, because I really do believe it, and now with TOK.tv I'm doing it again, and I have no regrets at all. We have people in Ragusa, in Cagliari, Rome, Milan and several other places that make the highest quality software, with a positive mindset very different from what the television wants to make believe it's the Italian's average attitude. We are a country of entrepreneurs, one in which the rate of companies by number of inhabitants is the highest in Europe: the Italians I see want to stand out, to compete, to show that we are strong.

Yet in Italy meritocracy somewhere exist: in soccer. In soccer those who play are the best, those who are in better shape; not those who has a famous surname or is paid more or is older (actually, is the contrary). And it works this way in Serie A as like as when a bunch of kids play at the oratory. This is why I say that in Italy, out of sports, what's lacking is the spirit of team competition: a company is like a team and should therefore have the same meritocratic rules that work in sports, where the best are promoted and athletes are judged by the results, and above all everybody is in the same team and have to work together towards the same direction. In the high tech field this is how it goes, and startups are the companies which are giving jobs in this economy: the old ones do it less and less. It's a cultural issue: for example, it is wrong to consider the entrepreneur, by definition, a thief who robs and exploits others.

From the regulatory point of view, what are the top three things you would do if you had the power to introduce reforms in the Italian legislation?

I do not know in the details Italian regulations, honestly. For one thing, it would help to solve the problem of payments, although it seems to me that a little has already been done: being sure to get paid, and in a short time, for the work that has been done is essential, is crucial, especially for a startup.

The biggest and most difficult problem, but also the one that really needs to be faced and solved, is the issue of flexibility in the labor market. The current job market, and in particular the high tech sector, in which the vast percentage of startups operate, is completely different from that for which the actual Italian laws were drawn. Software engineers should not have the same contract of a metalworker or a machinist! These are two very different worlds: what was born as a proper protection in a world, in the other one becomes an unsuitable weight. This is demonstrated by the Silicon Valley: I here have a contract "at-will": both sides have zero days notice and no indemnity at the end of the contract. I understand that in Italy many think this is a nightmare, but the employees here in Silicon Valley are the happiest in the world: all "at-will", while companies keep hiring, and salaries keep growing. Maybe here is an excess, the American model is perhaps too abrupt in the opposite direction, but the sense is that in areas such as high tech too much protection becomes a burden and causes lack of growth. It seems to me that in Italy somebody is trying to do something in this regard, but we should do more, even culturally, to broaden the flexibility. We need a safety net, but not holding back companies. Especially the high tech ones.

This concept is also linked to another one, which is also very important, that scares any foreign investors: to liquidate a company that is not good. Here, companies are closed in half a day, when you realize that they lack the ability to move forward. Who has invested wants to go forward to the next project, not to drag in attempts and negotiations that take no account of the reality of things: usually, seven out of ten startups do not make it. It is the concept of risk, which is contained in every business, everywhere. If you do not recognize it, investors do not come.

Which advice can you give to young Italian entrepreneurs who are reading us, or to those who are still not entrepreneurs but feel they have ideas that could give life to a business, in case they wanted to try to develop their company in the United States?

First, you have to come here with a company that already exists: then you can come here to expand and invest, to find a new market. There are people here who know very well how to help to do so, M31 for instance. You have to be here if you want to capture this market, and maybe find someone who can buy you, when you'll be successful.

For those who want to do startups and fundraising here, let me be clear. I have seen many, but those who have managed to be financed in an important way, at least over a million dollars, are very few. It is not easy, there is a lot of competition and sometimes in Italy they think of Silicon Valley as the fantasy place where dreams come true easily: it is not so, there are many venture capital but also many startups. They undoubtedly should have the right idea and the desire to stay here and "become Americans." Of course, although sometimes with the Italians is not so obvious, you have to be able to speak English well and this thing should not be underestimated. The decisions of venture capital are not based on thin, secrets and complicated algorithms, but on the impression you do: the initial seed investments are guts decisions. If you do not speak the language well, you are strongly disadvantaged.

So first of all you have to come here and learn, and this I recommend to everyone, immediately. Take your suitcase, come here - where there are also very beautiful places, attend the summer school at Mind the Bridge and participate to barcamps; you have the Gymnasium, you know the dynamics, you are together with other Italian and international startuppers ... I assure you that at the end of this period you could tell a lot about yourself and your business idea, which is a very important thing, even if in the end you decide to stay in Italy. Everything here moves at a higher speed.

Then, if you are convinced, if you are realizing what you have learnt here, it would be good to gather some money in Italy - between business angels and other opportunities to get started - and come here only when you have "traction". When you come here you have to be ready to sell, at the beginning of your acceleration. You have to get here with a million users - possibly international, not just Italians, you must already be a bit successful, to interest American investors.

You may be interested