What a Day (Update)
So the cocktail party ended at 5 in the morning – and was one hell of a mingling and “friendling” session. Thanx a billion to Tommy and the amasing people Fiskebaren for sponsoring a bankrupt friend. It was a bit more then wild to get a call from Richard that he wanted to have dinner and exspected a cocktail party for the http://www.carbonwarroom.com/ people. But – who in this world would say No? Ricard and Nick (his right hand mann) told about they whole group strategy nd made lots of jokes about themselfes – and I learned some very interesting insights about Virgin – impressive story – even better then the book. It had to be very closed and small – but what a party – I think the pictures tell.I was very impressed by the 45y old major of Vancouver – who was a fantastic guy and seemed like he meant it when he talked about going green. (Off course it was also nice to get an invite for the Olympics in feb).
A term sheet arrived in my inbox
Around 2pm a very good and pro VC pinged in with a term sheet – on VERY respectable terms for one of the companies Im advising. And the phone started buzz like it had a virus – what did they mean with A, B and C – and the smiles where combined with a sting of disapointment from the evaluation. But WOW – they already have 3 term sheets. And got one more big contract Tuesday – PLUS a writer from the worlds best tech magazine did an interview on the Tuesday.
The best board meeting in my life
Today was all crazy – Everbread had its first board meeting – and the UPPER IMPRESSIVE board:
Vagn Sørensen (x CEO at Austrian Airlines)
Montie Brewer (x CEO at Air Canada)
Mr X (x Amadues)
Michael Jackson (x Skype)
+ 8 staff
Showed up at 17.00 and after rehersing and preparign for 2 weeks – Assen and I (and Filip and Ashley) walked trough the presentations like two boy-scouts at the final “start a fire without matches” test. But it went really well – and everyone got psyked when Assen pulled of the working prototype and showed result that will redefine the industry.
WOW – shitasspetfuckers adrenalin kick. And the guys from the establishment (Montie has never been in a startup before) really smiled and talked about real innovation and disruption. I cant fall down (5.36am) – it was so nice to collect a bit of the fruits from 8-9 months of hard from the INCREDIBLE techteam in Sofia/Mallorca picture updated. How can I be so lucky to be surrounded big genuine brilliant smart – and nice human beings on this level??
I didnt even mention that Flydini.com our showoff appetiser got a new design and usability total makeover at 4pm – a 200% upgrade – play with it. If you travel a lot – be carefull – its highly addictive.
Twitter Flydini Q & A:
@ML how does that help me apart showing the flights? I could just use lh.com and book there as well
Answer: GOOD QUESTION! This is only a very mild teaser – and the only place where you can get results that mix LOWCOST and OLDSCHOOL Airlines. Play with it – and you will se lots of value.
PS. On LH.com you see only Lufthansa flights – but maybe you want to use Air Berlin to get to Frankfurt and then LH to Rio?
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Answer: This is just a teaser (but I use it all the time and it gets me combinations that I cant get anywhere else (you have to be a bit geeky to really get the value). We will not do a consumer solution with return, pricing and availabilty for now. We are B2B – and a still bit secretive. Sorry – I know it like eating candy with the paper on.
The best part
During the 5h board meeting the kids came over and wanted to sleep here – and behaved like angels – went to bed without trouble and where just soo cute. I will head up to them and get 1h sleep.
I love my life. LOVE IT. Copy Paste ;)
Here is one of the few interwieves I have ever given – where i felt I had something to say:
(it here in Danish) – thanx to Ari Gold Wegther from translating.
Morten, it was your engagement in the Nyhedsavisen venture that made you famous to the general public in Denmark. So let me start by asking which digital branches you have worked in?
Hmm… this is going to be a long article. After my agency days at Neo Ideo, where we worked with all sorts of digital clients since the birth of the Internet, I’ve invested in all directions. From Browsers, Guleroden.dk and VindENHund to Kazaa, Skype, Zyb and Bullguard to Online Backgammon, iJoule and Trivop. You could say that I’ve tasted everything on the menu.
Which role did you have in these projects?
Usually, I’ve been co-founder and involved in the development of the fundamental idea, sourced the management who could drive the project and secured financing. I haven’t been particularly hands-on operationally.
The theme of this edition of MARKET is Digital Strategies. How do you work digitally on a strategic level with different companies?
I’m not especially talented nor have I studied classic strategy at Harvard. For me, the key issue is to crystallize collective ideas to collective action points aimed at the biggest possible chance of success while following the business vision. So my core strength has been my ability to create strategic value, you could say, as measured by revenue and cash flow only.
What are the most common and serious strategic hurdles for companies that want to create an online business? I’m not sure I know what strategy actually means. In my view, it’s simply about aligning vision and execution, since everything in my universe is about sales – everything. I have a presentation entitled: ”Don’t overstrategize.” I really believe that is crucial. Many, especially large organizations, invite me to their strategy sessions. Usually, there are big white boards and heaps of candy on the table with an implicit demand that A STRATEGY MUST BE BANGED OUT AT ALL COST HERE AND NOW. That’s pretty hard to achieve in such a mad rush.
Are there strategies that you have experienced as particularly strong across different industries? Keeping it simple – that seems to apply frequently. I’ve noticed that a winning formula can be the combination of simplicity, an easily digestible message, uniqueness with a twist of rebellion mixed together with radical transparency. Especially because the Web is more ruthless and transparent than anything else we’ve seen historically.
Now when we dig in to specific industries, which strategies you applied have been really successful? I’m hitting a dead-end on this one. Sorry to disappoint you, but after having founded and funded more than eighty-eight companies, I don’t think that there is just one cookie-cutter solution or strategy that works for all.
Strategy is typically a flexible concept. In your opinion, how do you get the most from strategic work process? I’m thinking here of development and implementation respectively. You need to go back to basics and apply simplicity and honesty all the time. Employees and customers should be able to grasp your company strategy in two sentences, while they are interrupted by an SMS, email or tweet, for example, or before they drown in the pompous and patronizing propaganda that strategies often end up being. Personally, I had my most important strategy experiences, or lack of it, this year:
1) with Richard Branson, who asked me for advice when considering to enter Formula One racing. Of course he didn’t ask me because he thought I knew anything about that business in particular. Branson was just testing a gut-feeling that he had and soon afterwards acquired the Honda team based on common sense and maximum leverage of the Virgin brand. And most importantly, he made a swift and definitive call. No mucking around with twenty-five McKinsey guys running around doing SWOT analyses and plodding through a tediously slow, handicapped strategy process.
2) I’ve been fortunate enough to spend some time with Puma’s CEO, who came to the job 16 years ago with revenues at €200 million euros back then. Today, after having been at the helm during all these years, he has lead the business to €3.5 billion in annual revenues. Puma’s strategy has been quite simple: bone-hard work and focus on shifting from sport to fashion. Easy to grasp for everyone around him.
3) In Germany, Bionade started from scratch and created a new category of organic soft drinks that did not exist before. Peter, their CEO, shared their remarkable company history with me over a couple of buckets of red wine. Bionade’s evolution was not a properly planned strategy at all. In fact, the plan was rooted in the acute realization that their family brewery would not survive the global beer battles and consolidations. So the new business direction was an alternative to being acquired or bankrupted by the beer industry’s major players. Twenty years of innovation and development were kick-started by this difficult yet fortuitous fact. Fortunately, the family matriarch, who owned the brewery, gave her sons a free hand to experiment with 100 per cent organic brewing of strange and deliciously flavored soft drinks.
So, basically, this was a crisis-driven process, rather than the result of careful strategic planning. Dr. Oetker announced in December that it is taking a majority stake in Bionade and will provide six-hundred sales people along with their beer distribution channel in support of the company. As a direct result, they are poised to break the 200 million units-per-year ceiling. Is that strategy or just pride and consistency?
”The public wants to be seduced: millions of Danes play lotto daily, even though statistically speaking it is completely idiotic.”
It’s ten years ago that the so-called Dot.com bubble burst. What’s your take on changes in the e-commerce landscape and on doing business online since those days?
Nothing much has changed, except that the Web has proven that it can generate real money now. For example, JustEat earns DKK 20–25 million selling pizza in Denmark alone this year. But it does fluctuate. We’ve had a global bubble in the meantime, which just burst and left a global mess, and we’re probably going through another bubble during these recent months. The public wants to be seduced: millions of Danes play lotto daily, even though statistically speaking it is completely idiotic. The winner appears on TV, but if you showed the scores of losers, it would take a year of non-stop broadcasting to parade all of them on the screen before finding a winner. TV will remain forever popular and Lotto will become illegal. It’s not hard to draw parallels for the Dot.com or stock markets. All Roskilde bank clients loved that bank, even though nobody know what the hell was going on inside. Now the situation is reversed, because people discovered that stock markets are a lot like Lotto. Any deviation from the interbank-rate can quickly result in massive financial losses, even to the point of losing your shirt entirely. Same for the Dot.com arena, where some very talented – and lucky – people made enormously successful companies that bled money yet appeared to be perfect strategic fits for established corporations. The hysteria was self-perpetuating: at some point, Framfab was worth more than Ericsson and AOL duped Time Warner into a merger – the cat was in the bag. On the other hand, some blue chips were clever enough to buy pre-revenue companies and turn them into fantastic businesses. That’s just how it is in times of upheaval. Dot.com is something people can understand now and there is clearly money to be made in this space. That was not the case back when investors blindly jumped on the gravy-train, lured by greedy aspirations, tons of hype and the adventure of the unknown. It’s true that a few exceptions confirm the rule. Like Google, for example, which didn’t have a revenue model for several years after it launched. Call it strategy or opportunism. Was it a mistake that Brin and Page embarked on a venture without really knowing how they would make money? They took enormous risks and tested boundaries to the very limits of their investors’ pain threshold. Now that is called Venture – the definition of real Risk Capital.
I’ve lived in the Venture Capital world since I pinched an edition of Denmark leading financial paper, Børsen, on my own newspaper route and hungrily consumed every article about Michael Mathiesen and a few other real pirates and risk-takers who created new companies and business models in the late-eighties and early-nineties. The rationale behind this is not the worth of each individual business (investment), but the sum total of ten high-risk investments yielding one or two big winners that profitably pay for those firms that are bound to fail. Although this might sounds totally crazy, especially when coming from a fringe-lunatic like me who just lost everything on one supersized investment and admittedly cannot make a proper return on a range of smaller ventures, there’s nothing inherently wrong with this concept. But it’s difficult at this junction in time to see the bigger picture. When even blue-chips like Maersk hit rock bottom, all those ridiculous cliches such as due diligence and prudence that that company has fostered sound pretty empty… is there anything left to believe in?
If we fast forward ten years, which successful business trends do you imagine the future holds? Software and technology double in performance capacity each year. I believe we’ll start seeing things that we can hardly imagine today. The core fabric will be a Twitteresque integration that allows us to measure everything and twitter in small nerdy groups about our main interests. Business models? Don’t ask me. Twitter and Spotify, both investment opportunities I missed when burning cash on my newspaper fiasco, are great examples. They don’t make a dime yet they’re growing massively in size and scope. These types of shops are changing the way we do stuff. Chris Andersen, the author of Free, was just in Denmark, and the cover title of his new book exactly illustrates what the Internet is really about.
What’s your experience with creating a business by giving something away for free?
Skype started as freeware and today generates USD750 million dollars. When something is new and disruptive it has the power to revolutionize consumer behavior, so its pretty smart to start by giving it away free. Consider it as a kind of sampler or teaser, if you will, that people gradually adopt in their daily lives until it becomes essential to them – at which point you need to be ready to deploy your payment model.
What should be free and what shouldn’t? No idea. But be very careful to avoid giving your stuff for free when you could have charged for it. Bits and bytes have the advantage of being cheap to duplicated and transport without any material degradation of quality.
Do you believe that it’s possible to earn money in the long term on something that ultimately can be digitalized?
Yes. But the innovation does not only come from the ability to digitalize things. We now have social software that makes good sense. Not just an ERP-system located in the cloud, but social online applications created beyond the cloud. Of course, that is monetizable, just look at online-dating.
A buzz word heard a lot in Internet business discussions is “affiliate”. How do you interpret this concept?
It’s genius. But just like black market money changers and side street brokers, among whom I’m sure there are some decent characters, affiliates are a mixed batch. You really need to define your performance metrics before you buy any traffic from affiliate vendors. Most of them cannot measure conversion rates or the performance impact you need to know. Also, marketing managers typically believe that they are artists and would rather stroke their Pantone color charts than a complex excel sheet. And they end up losing out. When everything is possible, it’s always the metrics masters who come out on top.
Can you imagine that the ability to create and optimize affiliate partners becomes a competition parameter in itself and therefore a future differentiation factor? Affiliate, SEO, AdWords, partnerships and content-driven attention are obviously the way forward. When you acquire a user, by which I mean a potential customer, for free through a search engine, you’ve achieved your goal and you think you’re fat and happy. But if you don’t know what you want from that user then she/he is just eats up your server capacity and it doesn’t matter that they were delivered right to your business’ doorstep. Measurement and performance metrics are the absolute key to online success. Creativity is cheap. Creativity is a commodity that can be bought anywhere.
It is fair to say that the proliferation of digital possibilities is about to drastically change all types of business. Which segments are most threatened, according to you, and what can they do against it?
Sure, I believe there are some traditional industries that are threatened by this development. That’s inevitable. So let’s use the glass is half full/half empty analogy here: Digitalization is both a massive opportunity and a huge challenge (read danger). However, in many industries, we’ve seen the incumbents and established players beat out the smaller companies. Case in point: TDC has swallowed ALL ISPs in Denmark over the years.
Finally, any advice on what to look out for in the near future? I’m laser focused on enterprise cloud software and search. You know, I don’t have time any more to tool around with a whole bunch of wacky consumer apps, like I did when I was loaded with bling. Besides, I don’t feel like a successful person who is in a position to recommend anything to anyone. It’s time to call my lawyers and hear how my personal bankruptcy proceedings are going!