Three messages before we get started. First, do you want to build a web app that interacts with phones? Did you know that Twilio makes it easy to do it? Patrick McKenzie used Twilio to build Appointment Reminder. It’s a web app he created that lets salons remind their customers of appointments via text messages or phone calls. Twilio allowed him to build it. How will you use Twilio to build voice and SMS into your apps?
Second, do you know someone who wants to build an online store? Would you tell them that I said Shopify is the easiest way to build a robust store? Jason Sadler used it to build I Wear Your Shirt, where he charges companies that want to hire him to wear a t-shirt with their logos. What will you sell online after you discover Shopify?
Finally, are you still coordinating projects by e-mail and wondering why you’re not productive. Check out TeamworkPM.net. TeamworkPM.net is trusted by Universal Studios, the University of Austin at Texas, the U.S. Army and other organizations. But if you’re just trying to coordinate within a two-man company or any small organizations, it will help make your team more productive. What will you produce and what will your team produce when you’re using TeamworkPM.net.
Here’s your program.
Andrew Warner: Hi, everyone. My name is Andrew Warner. I’m the founder of Mixergy.com, home of the ambitious upstart. How do you create an exclusive community online? Joining me is Internet pioneer Erik Wachtmeister. He is the founder of aSmallWorld, which has been called a Facebook for millionaires. In 2006, about two years after he founded the company, he sold a large minority stake to the Weinstein Company. I invited him here to Mixergy to learn how he built aSmallWorld and about his upcoming company, BestOfAllWorlds.com. Erik, welcome to Mixergy
Erik Wachtmeister: Andrew, thank you very much. I enjoy being here and it’s a great honor to be the first interviewee of 2011.
Andrew: Thank you. So, can you tell me about some of the members of aSmallWorld? Who are they? Who are some of the well-known members?
Erik: Well, it’s a very global platform. The age range is from 25 to 45. It’s an eclectic mix of people from the finance field, from the entertainment field, from really across the board, which makes it a very interesting group, where they can share a lot of interesting information. And they’re pretty much across the planet from the world’s largest cities.
Andrew: Can you say any of the celebrity members that are part of aSmallWorld?
Erik: We have been asked that so many times, and we’ve always refrained from dropping any names. So the answer is no.
Andrew: Okay. Why is that?
Erik: It’s easy to do, but once you start dropping names, I don’t think it’s a cool thing and people respect privacy. If somebody joins and they happen to be famous, I don’t think it’s cool to use that and to drop people’s names. It’s just a policy that we had. I’m no longer associated with aSmallWorld, but I assume that’s still the case. So if you ask me who is there, I never have mentioned a name and I won’t now either.
Andrew: Okay. I understand that completely.
Erik: You’ll have to ask other people for that or look into some of the press archives.
Andrew: Okay. I want to spend time here finding out how you built this great community, but before we get into the past and how you built it, I’m curious, what’s your proudest moment with this business that you launched?
Erik: I think the proudest moment was probably early on. I had the vision of developing aSmallWorld already 10 years ago, so I was a little bit ahead of the curve. I do see myself as a pioneer in social media, because when I was talking to people about social networking back in 2001, nobody understood what I was talking about. But I think the proudest moment really came when we launched in March 2004 and I just realized how this thing was taking off. I think I hit the nail on the head when I had this vision of creating a platform for what I call the three million people on the planet that are connected by three degrees of separation. The common notion of course being that everybody, six billion people on the planet are connected by six degrees, and the idea here was to connect a more dense network of people that had a very strong need to be connected and to exchange information around the planet. So to see this thing developing and taking off in 2004 and 2005 was a tremendous excitement. It wasn’t one moment per se, but it was more of a process to see my vision become a reality.
Andrew: In my research of your company and your background, I saw that you use phrases like “the three million people who are all connected by three degrees of separation.” You use phrases to explain who your target audience was. I’m wondering, how did you create that message?
Erik: I had the privilege of being born into a diplomatic family. My dad was the Swedish ambassador to the United States. I went to a couple of great schools — Georgetown University and INSEAD. So very early on, I had the ability to network with lots of interesting people. I’ve lived in ten different major cities around the world. So I developed a sort of network of networks, where I kept running into the same people.
When I was traveling in all the different major cities or major social resorts around the planet, I kept running into the same people who were saying, “Oh, what a coincidence. How come you’re here? What a small world.” And I realized there was a need to establish a platform for these people so they could actually connect in real time and find each other, because they were constantly looking for each other and looking for each other’s information. So I didn’t really see this initially as a mass market tool, which it of course became when you look at Facebook, but I saw it as a great service that the Internet could provide with a platform for a genuine need that was out there for a large group of people that have a lot in common.
Andrew: But was this a marketing message that you had outside help coming up with? Were you testing different messages to see how your friends responded before you said, “Ah, this is my way of explaining who our community is”? Because I see other people try to define the community that they want to draw in. They have a hard time explaining it. They use paragraphs where you use single sentences and short words. How’d you come up with that?
Erik: Well, actually, I did test. In 2003, I did an interactive questionnaire that I sent out to about 800 people. Most of them were people that I knew and some of them were not. I got a very, very strong, resounding positive feedback that there was a need for this service. I think I had about 15 different features that people would rate and also what people would be willing to pay for such a service, and the response was absolutely overwhelming. Between the 15 features that I listed, I would say 12 or 13 of them were later developed on the site.
Andrew: I see. Okay.
Erik: So anyway, going back to your question, I think that not that many people realize that there are these people that are referred to, it sounds a little bit elitist, but there is a very strong, dense matrix of people that are traveling a lot that all know each other three degrees. I see that as a reality, whether it’s elitist thinking or not, it’s something that I’ve come to understand. I’m 55 years old and I’ve lived long enough to understand that there are certain things out there that are going on and I realized this early on that this was a major opportunity to really create a business.
Andrew: I see. I want to understand a little bit more about your background, and then we’ll get into the questionnaire that started this business that you just mentioned and what you did afterwards. First, did I read right? Are you a Count?
Andrew: What does it mean to be a Count?
Erik: It means it’s a hereditary title. It’s a Swedish title. My family is a very old Swedish family. It goes back to the early 1500s, which means my father is a Count and my son, who’s one, is a count. Certain families in Sweden have titles like that, just like they have titles like that in Austria and Germany and other countries as well.
Andrew: What goes with the title?
Erik: Not much. It’s really more of a historic curiosity. These days, it’s not like I call myself Count So-and-So. Occasionally you get that on invitations and stuff and it’s amusing.
Andrew: I saw you referred to as Count online in a lot of articles too, so I imagine that’s a big draw too. It also adds a lot of credibility to the community that you built.
Erik: It’s funny, I haven’t heard that question before, so it’s interesting you brought it up.
Andrew: You were an investment banker before. What kind of investment banking did you do?
Erik: Well, I started out with Lehman Brothers. Sad to see how that company disappeared. I was in their London office for a couple years, and then I joined the New York team doing corporate finance deals. Then I went to business school and then I joined join Rothschild Incorporated in New York. I basically worked on corporate finance deals — M&A, private placements. Then I joined a smaller company called Ladenburg Thalmann and was active for them in New York, and then I ran their L.A. operations until ’92, at which point I started my own boutique doing private placements for publicly traded companies in the U.S.
Andrew: Private placements for public companies in the U.S.?
Erik: Yeah, it was called [09:47]. There was a fantastic opportunity where, in 1993, a part of the 1933 Act was opened up by the Bush Administration, which allowed, essentially, publicly traded companies in the U.S. to do a quick private placement with non-U.S. entities. So that became a wonderful window to take advantage of. So I was very active in that area until the window closed in ’96, ’97.
Andrew: The idea was that a public company wants to raise a little bit of money quickly, they sell a small piece of themselves to another investor at a discount to what their stock is trading at in the public markets?
Erik: This is primarily for smaller companies. So let’s say you have a company with a market cap of, let’s say, $20 million and they want to tap into the public market and they want to raise $4 million or $5 million. This would be a way, without having to go through the writing of a prospectus and going through the secondary public offering, etc. All you need to do is to find a non-U.S. buyer, which meant that the SEC didn’t feel responsible for having to protect foreign investors that were eager to invest in the U.S. economy. Foreign investors actually could do this and the only restriction was that they had to hold onto the security for 40 days. So it became a very interesting sort of opening in the market and a great frenzy of activity. I did about 45 transactions in a period of three or four years. It was a very interesting period to be a financial entrepreneur.
Andrew: And then you launched I think Viking Internet?
Erik: If you look at it chronologically, in 1997, when this window closed, I actually moved to the Ukraine to do deals in the former Soviet Union. The timing was a bit off, because in 1998 the Moscow economy collapsed. That’s when I ended up going back to the drawing board thinking, “What am I going to do next here, besides doing financial transactions?”
At that point, actually, I was sitting waiting for some wild boar to appear in a German forest at a friend’s estate when the idea just came to me to look at what I could do on the Internet, which in 1998 was very young. I thought the whole notion of creating a platform for people that were friends of friends of friends was rather compelling, and that’s where the whole thing started to emerge in my mind. I hired a person and we wrote a business plan several times. It’s interesting to look at the business plan I had in 1998. It’s very similar to what emerged six or seven years later.
In 2000, a friend mine called me and said, “We should meet. I have this idea.” He had the idea of creating a company called Viking Internet. The essence of Viking Internet was really to take advantage of this boom of Internet stocks in early 2000. It was, of course 1999, which then the bubble started bursting in the spring of 2000. Really, a remarkable little story there. From idea to IPO in 90 days. An idea I didn’t even have and I was in front of Bloomberg Studio, I remember it was May 10, 2000. It was the same day that Boo.com went bust, and I was being asked the question, “What do you feel about what’s going on with the market?”
The idea was there to raise a little bit of money, which I did privately, and take it public and then it would be, essentially, a blind pool that we would invest in first rounds for small Internet companies. It was obviously a tough market, since anything you touched in those days there were no second rounds. We ended up actually surviving by not investing all the cash, and the company then did a reverse merger into a natural resource company some 18 months later and my investors who hung in there actually made a little bit of profit even though we launched at the peak of the market.
Andrew: So if I understand this right, it was kind of like a venture capital firm that was a publicly traded company?
Erik: Yeah. You could say that.
Andrew: I see. And then at the end, you did a reverse merger with a natural resource company. So essentially this natural resource company was able to go public by using your publicly traded entity?
Erik: Exactly. Yeah. Some of my investors, who stayed in until that reverse merger took place, actually made about 50 percent profit on their money. It wasn’t a total disaster. It was a very good learning experience.
Andrew: Okay. Were you heading the company the whole time until the reverse merger?
Erik: Yes. No, after the reverse merger, of course not. It became a company focusing on gold resources in Africa, which I had very little expertise in. That was actually in late 2002, which is when I took all the stuff off the shelf and dusted it off that I had been working on in ’98 and ’99. My wife and I came up with the name aSmallWorld when we were hiking in northern Norway. Actually, this was the summer of 2002. The company was formed in 2003, and then we launched it in March 2004.
Andrew: What websites helped influence the way you thought about aSmallWorld before you launched it?
Erik: That’s a very good question. The number one answer actually is Orkut. Orkut is an amazing story. I think it’s really a case study that should be focused on a lot more. For those who don’t know, and I’m sure most of your viewers know what Orkut is, but most people outside the United States don’t, unless they live in Brazil or Estonia or Pakistan and India, which, funnily enough, are the strongholds of this Google company.
I’d heard of Orkut in January 2004, and at the time there was only one other player, which was Friendster. When Friendster launched, I was kicking myself because I really thought that I would be the first one starting a social networking company. When I heard about Friendster in the summer of 2003, I said, “Damn it.” I thought I was onto something and I would be a real pioneer. But of course you don’t want to be the first one out, and I think it’s very useful to see how other companies are faring.
Orkut, I think, was initially invitation-only. When I joined in January, they had 17,000 members. Most of them were the cream of the crop of Silicon Valley entrepreneurs and very successful founders of both smaller and major companies. It was kind of like a Quora but a social network, at the time. And I said, “This is really a competitor to deal with, and besides, it’s run by Google.” They didn’t focus on one thing and that was member acquisition. It was an invitation-only model where anybody could invite.
It was like a virus, with viral growth. It starts growing somewhere and you don’t contain it and you think growth is good for its own sake. Then what happened is, of course, it starts growing in Brazil. I have nothing against Brazilians. I love Brazilians. But if it becomes dominated by teenagers, who don’t even speak English, in Brazil, then I don’t think it’s the ultimate outcome that Google had planned for Orkut.
But you asked what was inspiring me the most. There was a lot of functionality in Orkut that I thought were incredibly inspiring and gave me at least some ideas that I may not have had before.
Andrew: For example, what functionality didn’t you think of that you said, “Ah, this is good. This we can use”?
Erik: I can’t give you examples right now. Actually, there’s several functionalities that Orkut has that we didn’t implement on aSmallWorld, but I think Orkut really did a good job with focusing on user-generated information and how to bring relevant information to the relevant people. The only problem is that they didn’t curate how their market developed and that really became the demise of Orkut. Except they did a great job in Brazil, but I really think they probably could have become a much more well known and useful platform.
Andrew: So you had the idea. One of the first things that you do is create a questionnaire. Why a questionnaire first?
Erik: First of all, I wanted to create something that would be easy for 800 people to answer. I didn’t want to ask them to write a lot of things back to me. So the best thing to do was create a questionnaire where people could fill it in, in five minutes. and put in a one to four or yes or no to 20 questions. So make something as easy as possible and take as little of people’s time as possible and still get useful feedback that I could then draw some conclusions from.
Andrew: I see a lot of entrepreneurs start with questionnaires, and I always have this same question for them. Aren’t they going to limit themselves to answers from people who have time to fill out questionnaires? How representative can a questionnaire be?
Erik: That’s always the problem if you ask people questions. I think that if you do create something that takes minimal time then you may not have any of the adverse selection syndrome that you’re referring to.
Andrew: I see. What kind of questions were you asking and what did you learn from it?
Erik: I highlighted the 15 or so features that I wanted to develop, and I really asked for people’s opinion of how relevant they thought they were. I also asked what they thought they would be willing to pay for something like this. The answer was $25 a month at the time. It was pretty much both the mean and the average answer of what people would be prepared to pay for a service like this. At the time, of course, there were very few services. I think in 2003, when they looked at the questionnaire, actually Friendster hadn’t launched yet, so it was the only game in town that I was referring to.
Andrew: Of the features that you asked them about, what’s the one that they wanted most?
Erik: Probably to peer into each other’s networks and kind of know who’s friends with who. That became something where people spent a lot of their time, building networks and being very curious about who knows who. And having a private way of sending messages to each other. And also finding out who was where when they traveled. We developed something called the GeoLocator, which is basically a manual interface where you say, “Hey, I’m skiing in Verbier for the next week, who else is there?” Having a way, with just manual, where you can find who else is there. Having an interactive guide where you rate and rank hotels, restaurants, clubs, and services for different parts of the world where you get a filtered view. I call it the wisdom of the few as opposed to the wisdom of the [inaudible 21:55]. That sometimes becomes more useful. You may get more interesting reviews from 100 people that really know their stuff about restaurants somewhere than to just look it up in TripAdvisor.
Andrew: One of the problems that I have with questionnaires is that I often see the answers I expected to see in what people are saying. I ignore what I didn’t expect and I focus on what I did expect. It sounds to me like you do the opposite. What did you learn from the questionnaire that you didn’t expect, that made you say, “Ah. If not for this I would have gone in the wrong direction”?
Erik: I think that I just had the intuition that this was something that was needed, particularly for this audience. We’re talking about a well-traveled, well-connected group of people. I was just astounded by the fact that most of the features that I suggested came back as a four out of four. It wasn’t like I got some responses that surprised me. What surprised me was that I was head on in my assumptions.
Andrew: I see. So this was a way of verifying that you were going in a direction that other people wanted to join.
Andrew: You got funding soon afterwards. What kind of funding did you get?
Erik: Without getting into numbers, I raised money from investors who happened to all be people that I had identified in advance, who were people that I knew personally that I also thought would be great ambassadors for the company. It’s always good to have investors that are out there waving the flag. Funnily enough, I gave each of my investors an additional option. If they invited 100 or a few hundred people, they would actually get an option in addition to their stock certificates that would give them additional equity. It was something that gave an additional incentive to my investors, who not only financially had the wherewithal to make investments like this, but they were also major social connectors in different parts of the globe. That was the initial financing that I took into the company, and then I took in a little bit more money from a from a few people, similar to those people, throughout the next two years until we took in our Series A private placement from the Weinstein Company in 2006.
Andrew: Can you give us a sense of the amount of funding that you got in the first round? Just a bracket. Was it under a million? Was it a million to three million?
Erik: It was around a million. It was your classic angel round that basically paid the bills for the first two years.
Andrew: For the first two years. Wow.
Erik: Yeah. So it’s an interesting observation to make that we had, in my view, a very lean operation. We could run the company on less than a million dollars for the first couple years. And we did that, I would say, until 2006, when we took in the Series A. The company really reached its peak, in terms of brand awareness, excitement among the members, tremendous press, and we were pretty much breakeven, pretty much getting into the black when we started taking in advertisers in late 2005.
Andrew: 2005. So let’s see how you got to that. You’ve got the investors. You’ve got the idea. What do you launch? What’s the first version look like?
Erik: Well, it was PHP based. It looked very basic. The whole idea was to have a number of features, which we did. I think in the first version, we already had 10 out of 15 features. We had your network, your messaging system, a city guide, where we started with 40 cities. We selected 40 cities around the world, including some resorts, to make it feel a little bit exclusive because we’re not that interested in places like Akron or Tampa or maybe not even Lyons in France. We were going for the 40 most high-profile, cosmopolitan centers as well as resorts in the world. We had everything from New York to Punta del Este to Aspen to Moscow, Tokyo, etc. And then that number grew to, I think, 70. We had most of the features that are on the site today already at launch.
Andrew: How long did it take you to build the first version?
Erik: I was surprised how quick it was. It was about four months.
Andrew: Wow. How did you find developers who can work that fast?
Erik: The interesting thing was that when we launched, I thought it was going to be a test. So on March 16, we started testing. I said I’d expect about 50 e-mails, and by the third day we were like 400 e-mails. The test just grew. It was kind of an alpha version that just stayed an alpha version. It was remarkable to see the consistency in the numbers. We were growing by two percent every day. We were doubling every six weeks. And it wasn’t like we were just trying to make it grow as much as possible. The challenge was not to grow as much as possible because we made it more and more difficult for people to invite.
It’s an unusual animal, this thing that’s invitation-only because you’re in charge of the growth. The key is to filter and to keep, contain the growth the way you want it. So we developed this algorithm. In the first two weeks, anyone could invite who was invited, but then you needed like three people in your network. You had to have people connect to you before you could invite, and then we introduced more advanced algorithms to determine who the people were who could actually grow the network in different directions, really to avoid the Orkut problem.
Andrew: How could you tell who would be right to trust with the invitation?
Erik: You want to keep some kind of congruence of members. It’s always good to have people from different parts of the world, from different disciplines, and to make sure you have people that enjoy each other and have some kind of commonality in outlook. I got a lot of criticism for creating this thing [inaudible 29:04] was against the Internet of creating something that was completely open. But I said, “Hey, this is just like real life, you know?”
When people have dinners at their homes, just because you’re walking by outside doesn’t mean that you can just walk in somebody’s house. People enjoy the intimacy of having private men’s clubs in London or nightclubs or country clubs or whatever. On the colossal World Wide Web, there was a need for a sense of intimacy where people could let their hair down. I think I was really spot on. Because of the intimacy of the community, people were much more open and much more accessible between each other.
Andrew: But you still need to recruit, and I’ve seen when I researched you that there were articles in the early days of your launch that would mention lots of other sites and those sites all disappeared by the later articles. They had the same goal. They wanted to be exclusive and they had the understanding of the benefits of exclusivity. People could be open in an exclusive environment. They’re more valuable to advertisers. They could potentially pay subscription fees. But you were able to recruit properly where they just couldn’t get interest. What did you do that they missed?
Erik: I knew that there was an existing community that I basically wanted to just acquire. I was capturing an existing audience that was already connected.
Andrew: But how do you capture that audience?
Erik: Andrew, you have to understand that the first thing you need to do is understand that there is an existing network of people that are already interconnected with each other. Most people I guess in America may not understand this, because most of these people are connected internationally, and I guess people in Europe are a little bit more international by the nature of the fact that they live in countries that are surrounded by each other. So it’s kind of an international web of people that are already connected with each other that had this need to find a platform so they could communicate.
To understand that is the first thing, and the second thing is how do you capture the audience? Well, you have to invite the right people that are also viral and will keep inviting the people so you’re actually capturing this audience and you don’t end up just capturing the teenage Brazil market.
Andrew: What are those people like? Who are these connectors who are quality connectors and are willing to bring their best contacts into your network?
Erik: You know, it’s not that they are millionaires, which was something you said in the beginning.
Andrew: You know, I actually didn’t like that I said that in the introduction either. I thought that that was a weak way for me to describe what the community was. I needed a shorthand and I went for it, but you’re right, that was a weak way for me to describe it. So who are they?
Erik: It’s a sophisticated audience. You could call them sophisticated, culturally diverse, professionally diverse, well-educated with a very high index of global travel, education. I think half of the members of aSmallWorld have a master’s degree and 95 percent have a college degree. So, a well-educated and a well-connected group of people.
Andrew: But what is it that gives them access to so many people? More than the other members of your community. What is it about the connector? Is it that they have certain jobs that give them access to many people? Is it their personalities? What have you found about these people?
Erik: Well, being a connector could be that often they are connected from a very early age. They may have gone to an international school. They may have grown up, like myself, in a diplomatic family, have international jobs, worked in different cities, have multiple homes. People who have worked in London, New York, Paris and who are outgoing people and are successful tend to develop connections both socially and professionally and enjoy that.
It’s not like if you look at LinkedIn, which is like an office party, very dry and a lot of sales people. I didn’t want that feeling. I wanted more a feeling of people enjoying getting together. I think the best analogy is like a wedding party, where people met up in an environment where people come from different backgrounds and they have some [inaudible 33:33] to each other in different ways.
Andrew: We talked a little bit about the revenue that you thought about when you launched. You said that in your questionnaire people said that they would spend $25 a month to be members. I also saw that there was a Harvard study on your company. I don’t know who did it. I don’t think it was Harvard, the school. I think it might have been students who studied aSmallWorld. They said that, in the early days, you thought about ads and job listings as revenue source one, transaction fees on sales that are done on the site as a second source of revenue, and subscriptions as a third. Of those, essentially, not three but four really different revenue options, ads are what you went with. What happened to the other three? What happened to subscriptions, for example?
Erik: I had a lot of visions for the company, and many of them were not executed on. Unfortunately, what happened in 2006 was that the person who then became CEO of the company came from a great sales background. [inaudible 34:38] Early on we talked a lot about developing a freemium model and a model for lead generation, etc. But the only revenue sources of the company that were developed were really banner ads and e-mail campaigns.
Andrew: I see. So you’re saying it’s because the person at the head of the company had a sales background and was more comfortable with that source of revenue.
Erik: Yeah. I think that’s probably a good conclusion.
Andrew: All right. Fair point. You said that the Weinstein Company did a Series A investment? I always heard it as a buyout of the company. I didn’t realize it was a round of investment.
Erik: It’s funny because I think one of the reasons for that is that Harvey Weinstein has a big ego, and I think he kept saying that he bought the company. But no, he did a very traditional, large minority stake investment in the company.
Andrew: I see. Okay. You said earlier that you didn’t have the same control that you had before. How did your control change?
Erik: When we did the deal with Weinstein, there were a number of rights, and one of the rights they had was to be able to appoint a CEO after 90 days if we couldn’t agree on someone. So, he had the right to appoint himself. The company had a right to appoint a CEO even if it was somebody that I thought we wouldn’t have. And they had a number of very strong members on the board that eventually led to the fact that when the new CEO came on, I realized that I had lost control of the company that I had founded.
This became more and more evident. I stopped being active in the company about two years ago when I realized that there really were diverging paths and diverging views on how the company was going to developing. Just as you alluded to, revenue models was one of them. User-generated content versus editorial was another. I thought that we were very unique having a fantastic audience to deliver user-generated information as opposed to creating a magazine where we would tell our audience what’s cool in New York or whatever. So a lot of stuff like that made me see that there were different visions for the company, and I basically got less involved. Since 2008, I’ve really not been involved much in the company.
I’d like, if we have a few minutes, to talk a little bit about what I’m doing next, because I started a new business six months ago. I have a very strong passion for this space.
Andrew: That’s Best of All Worlds. Is this your way of redoing the social network now, with complete control, complete artistic and business freedom?
Erik: I’m sorry. Can you say the question again?
Andrew: I’m sorry. Looks like we might have lost the connection there for a moment. Is the idea behind BestofAllWorlds.com to create what you couldn’t do with aSmallWorld? To give yourself an environment where you have more control to see your vision through?
Erik: Obviously, yes, but the reason I’m creating Best of All Worlds is not to create something that I have control in, but I see that there’s a huge need for . . . if you look at Facebook today, you read this morning that they have a $50 billion valuation and I read articles that Facebook will have a valuation similar to Google’s today in a couple of years if they develop different revenue models they have. I think the conclusion is that the market has become established with Facebook as an almost-monopoly with a valuation of maybe soon to be hundreds of billions of dollars.
If you look at what you can do on Facebook, I think they are great at indexing the social graph of people around the world. But having done that, I don’t think they fulfill the needs of all people at all times. I think what you can do on Facebook is relatively limited. So what I’m doing, I’ve created this company, Best of All Worlds, which we hope to launch in two months, is to provide services that are actually not available on Facebook, not available on aSmallWorld and really aggregate . . .
Andrew: For example? What kind of services?
Erik: Let me just tell you the mission statement. It’s really to aggregate the most interesting people on the planet that are relevant to each other. They don’t have to be wealthy, but they should be interesting to each other. They can come from all walks of life. To aggregate interesting people who are relevant to each other with interesting information and with interesting services that are available online. Services meaning applications and latest technologies, whether it’s geopositioning or augmented reality. The scene of social media and technology today [inaudible 39:57] is so incredibly [inaudible 40:00].
Andrew: Erik, I’m sorry. We’re starting to lose the connection. Do you happen to have something running in the background that might be using your bandwidth? iTunes, for example, or Outlook?
Andrew: Or even Chrome.
Erik: I’ll quit my Outlook.
Andrew: Okay. What I’ve found is that Outlook and iTunes tend to take a lot of bandwidth in the background. I usually ask people to turn that off, but we had such a great connection in the beginning of the interview that I thought we could just get started.
Erik: Let me just see here. No, it wasn’t even on. So I’ll do a force quit. Nothing is running. Here we go.
Andrew: Great. Thanks. Oh, by the way, speaking of these apps, I noticed that you have your phone number online, you have your Skype name online, you have your e-mail address online. I’m so surprised. Someone who lives in more of an exclusive community, I’m surprised has so much of his information online. Why? Why do you have it all up there?
Erik: Well, first of all, I do have numbers that I’ve not posted. I have certain numbers that are public and certain that are not. I’m an accessible guy, and I’m in the business of being very accessible. That’s why my Facebook network was very small a year ago, and I decided to accept a lot of incoming connections.
Andrew: But even your Skype. What’s the benefit of being accessible by Skype or having a Skype username available online like that?
Erik: What’s the benefit? I think it’s easy for people to connect to me, but it’s also easy with Skype to talk to people. I’ve had a lot of people, not harass me, but a lot of people who I don’t care to communicate with or don’t have time for, then you can block those people. So it’s not a big deal, really.
Andrew: And the benefit of having an open Facebook account where people can connect with you? What’s that?
Erik: I use the privacy functions of Facebook pretty well, and there are lot of things that you can’t see. Actually, if you’re in my network, I don’t think you can see my wall.
Andrew: I use it. I opened myself up to everybody, partially, to be honest, as a marketing technique. I need, at some point, to market to people. I need to be able to reach out to them and tell them what I’m working on. If I have them as friends on Facebook, I can do that. Do you do the same?
Erik: That’s exactly the reason. I’m launching a new website, and of course I’m going to be open. I think there’s a lot of talk about people being nervous about showing where they are. I don’t really understand that, people having this worry that people can find out where they are. Unless you’re onto some strange business somewhere where you’re not supposed to be, I’m perfectly happy for people to find out that I’m in Stockholm right now, in a certain part of town. If I’m traveling somewhere next month, I can turn off whatever functions that I use that geolocalize me.
Andrew: Okay. I’ve got just a few more questions about aSmallWorld that I’ve been wondering about. First is the .net. Why get a domain name that’s aSmallWorld.net instead of getting one that’s a .com?
Erik: We started with aSmallWorld.info, and then we got aSmallWorld.net and then we actually got asw.com and then we paid a lot of money for smallworld.com that never was used, but it works as well. It’s a question of price, really. Everybody wants to have .com. Funnily enough, aSmallWorld.com was never acquired because it was owned by some company and I can’t remember what happened there.
Andrew: So why then launch a site when you don’t have the .com? What was the calculation that you made that said . . .
Erik: It was really never a problem. When we first launched, it was .info, which was terrible. Then we acquired .net two months after the launch, and it never really became an impediment. Of course, I don’t know if it would have been much different if we had the .com. For an invitation-only site, people couldn’t join from the Web anyway.
Andrew: I see. So having a .net and making it even a little bit harder for people, if it’s an exclusive site, becomes a benefit for you, I see. Why wasn’t .com ever used? I went to aSmallWorld.com before this interview, and there’s nothing on there, not even a landing page.
Erik: aSmallWorld.com or SmallWorld.com?
Erik: aSmallWorld.com was never acquired by the company. SmallWorld.com was,. So that bumps you to the site.
Andrew: I’m sorry?
Erik: SmallWorld.com just points to aSmallWorld.net
Andrew: The other thing then is, you said that Harvey Weinstein got a lot of attention in the press, essentially for hinting that he owned the company. I never saw you address the sale much at all. I didn’t see you in the New York Times talking about the sale. I didn’t see you talk about partnering with Harvey Weinstein. Why were you so quiet about it?
Erik: Actually, that’s not true. I did quite a few interviews when this took place. This was in May 2006. There was quite a lot of press about it, and we made joint press releases and so on.
Andrew: Where you said, “Harvey Weinstein is an investor or Weinstein Company is an investor in our business. We haven’t sold, ” and so on.
Erik: Right. Exactly. Yeah.
Andrew: And then did you sell in 2009 when the Weinstein Company sold?
Erik: No. I did not sell any shares in that transaction. It was a discrete transaction between the Weinstein brothers, who had earlier acquired the shares from the Weinstein Company, who then sold to a group of investors in Switzerland.
Andrew: And so you still own your shares in the business?
Andrew: But it’s a small minority share, so you don’t have much control of the business anymore?
Erik: Yes, it’s a minority stake and I don’t have much control of the business. I’m dedicating all my passion to this new company, which I can tell you a lot more about. And if any of your viewers want to follow me on Twitter, I’m on ErikWW. E-R-I-K-W-W. On Twitter.
Andrew: So it’s @ErikWW . . .
Erik: No, ErikWW at Twitter. E-R-I-K-W-W.
Andrew: What can you tell us about the business now before it launches even?
Erik: Again, the opportunity really is to create an aggregation of services online to give people access to things that they don’t find on Facebook and that they don’t find elsewhere. So, as I said before, the mission statement really is to aggregate the most interesting people, information, and services online.
Andrew: We’re listening to your story about aSmallWorld so that we can learn from your experience and bring it to our future companies. You lived through it. What are you going to take back from your experience at aSmallWorld and bring to Best of All Worlds, the new business?
Erik: I think I’ll stay very close. The key really is to have the right partners. If you have a baby, something you’re passionate about, keep it close to yourself and involve people that you trust and that you think really can know your core audience and have the same vision. It’s very important to have the same agenda and for there not to be any conflicts of interest and different agendas.
Andrew: I see. So who have you brought in as partners this time?
Erik: We have three very interesting investors. We took in seed financing in the fall. One of the key investors in aSmallWorld invested in Best of All Worlds. He’s a French individual. We also have a leading Polish entrepreneur w ho sold his company to a big NASDAQ company five years ago. And we also have a prince from Saudi Arabia. These three people are also very much involved in the strategy of developing the company and its market.
Andrew: Can you say which prince?
Erik: I’m sorry?
Andrew: Can you say which Saudi Arabian prince?
Erik: It’s not public, but he’s one of the HRH royal highnesses of Saudi Arabia with a close relation to the King.
Andrew: I started out this interview by asking how can you create an exclusive community online. Do you have any advice for anyone in my audience who wants to create an exclusive community? What would you advise them?
Erik: I think that you may want to look at a specific niche where people have things in common and where people have an interest to exchange information between each other. Exclusivity doesn’t have to be an end-all.
Andrew: Sorry, it looks like we have a little bit of a lag here. That’s why it sounds like we’re talking on top of each other. It’s not that we’re being disrespectful to each other. It’s just that there happens to be a lag somehow in the connection here.
All right. I’ll give you the final word. How can people connect with you and how can they find out about Best of All Worlds, your new business?
Erik: I’m going to be a little bit more candid when we get closer to launch. We hope to launch in the first quarter of this year, which is probably I would say in the February or March time frame. I’ve been a bit quiet on Twitter, but I’m going to be much more vocal in the next few weeks. So I think Twitter will be the best way to connect with me, which is E-R-I-K-W-W. Or you can actually login for early access and register for early access on BestofAllWorlds.com by just going to www.BestofAllWorlds.com.
Andrew: Actually, I’m sorry. I’ve got one other question. You and I met through a program called Faces of Scandinavia. What’s your connection to them?
Erik: Right. They contacted me as somebody that they wanted. I spent a lot of time in the States, half of my life actually, and this is really to promote Scandinavian countries for U.S. tourism. Some people thought that I would be a good face to represent Sweden, so they contacted me and I did a little interview with them.
Andrew: All right. Well, I can see that. I’m grateful to them for making this introduction. I’m grateful to you for coming here and doing this interview, and I hope that you and I will get to do another interview in the future about your new business.
Erik: That would be great. I’m looking forward to it, Andrew. Thank you very much for having me on tonight.
Andrew: Thank you for being there, and thank you all for watching. Bye.
This transcript brought to you y www.Speechpad.com.
The transcribers are working on it.
Ping me if you think it’s taking us too long.