Founder of highly successful Italian blog platform, Splinder, acquired at the end of 2006 by Dada, Marco Palombi is one of Italy’s notable innovators and a role model for the entrepreneurial community.

Marco Palombi

From the moment the conversation began it was obvious why, bucking every trend and stereotype possible, Palombi emerged with an innovative start up at a time when many were pulling out of the market. Not only did he choose to start up in a difficult climate, he chose to start up in Italy when infrastructure, backup, support networks and funding for start ups were virtually non existent.

When he sold Splinder, it counted 5,2 million unique users per month in a country with a population of 50 million people and, at the time, an internet penetration of less that 33%. The numbers speak for themselves; safe to say is a true Italian start up success story.

Why did you choose to start up during the dot com crash?
The bubble had burst when Splinder launched, but for me this was an opportunity, not a barrier to success. There were lots of very talented people around who found themselves without work. Although analyst perception of the market and funding conditions had caused the bubble to burst, nothing had really changed. People were still going online. Costs were down too and open source was changing the development process.

What preceded Splinder?
Tipic Inc., a US company based in NYC with a development team in Italy, is the second start-up I founded and sold. Tipic creates Instant
Messaging (IM) and Content Management Systems (CMS). In 2001, we invested in Open Protocol services and Open Source Software adopting Jabber for the IM and Drupal as a CMS. I sold Tipic Inc. along with the proprietary elements of the platform that powers the Splinder brand.

What was the start up climate in Italy like at the time?
Virtually non existent. There was no venture capital, angel investor, media or support ecosystem in place. This is something that is slowly changing now but at the time the only group of people who really understood the concept were the bloggers. When you start a company you look for an exit strategy which is generally selling to the large media companies. We turned down many relatively small offers at the time, which reflected the business climate, because we knew Splinder was worth more.

You developed Splinder in Italian. This bucks another perception that you need to develop in English if you’re looking for a good exit. Why didn’t you localise in other languages?
Our development team was based in Italy and we had the advantage of being first to market with an Italian-language product where users’ knowledge of English was not particularly high. Another reason for not expanding into other localities was that we were leaders in Italy with a staff of 5 people. I bootstrapped the company in 2001 when nobody wanted to invest and localising in even just one other language would have meant hiring one person per country. A 20% staff increase which for a start up of this size is significant.

How do you see the climate for start ups in Italy changing in the near future? Is it different now?
There are two considerations to take into account that are particular to Italy. First is technology. US and UK companies are in a more competitive market space and invest in technology more so than Italian companies. So in the US and UK, companies are buying and investing in technology produced by start ups, which consequently enables them to organically grow and reinvest. This is not so much the case in Italy. Organic reinvestment is lower.

The other consideration is cultural. Working in a start up environment means saying goodbye to your previous salary and, until recently, the concept of the entrepreneur hasn’t received the same recognition and status as perhaps in other nations. First generation entrepreneurs are often not taken seriously. In the US, for example, 70% of young people said they were interested in becoming an entrepreneur, where as Italians tend to opt for fixed employment. We need to increase visibility of successful entrepreneurs as role models to change this misconception.

How do you see this effecting the Italian economy?
First generation entrepreneurs shake a market. They take the risks that are needed to drive a sector forward. The only economies that will thrive in the 21st Century business climate are those which have a dynamic, risk taking, first generation entrepreneurial sector.

Can Italy respond to this challenge?
The first wave of successful entrepreneurs are now reinvesting in new start ups again. Larger media and technology companies are also now looking at acquisitions, so it’s an interesting time to be in the market.

Company Index: Dada

Company Index: Dada
 

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