This post was written by Morten Lund

The Day I Woke Up Without Arms And Legs.

First of all I’m really really sorry to say that my Newspaper project did not survive – not sorry for me (I take all responsibilities) – I just hate myself for bringing other people (employees and partners) and service providers into trouble – it feels unfair and coward-like… The recession and my stupid communications over summer (we delivered the yearly report 2 months too late) killed us. The simple explanation is that sales did not meet budgets and therefore since Thursday I have been talking to the people backing me and to myself (I have personally put DKK 105 million into this project – money that I have been borrowing – VERY BAD CHOICE) – and over that weekend I had to make a hard decision.

DKK 75 million was suddenly not enough – since the price to break- even suddenly doubled – and after working 9 months 24/7 (having learned more then the previous 10 years) with an increasingly dried up (dead) financial market – I simply could not see a way to continue…..

5 REASONS for my Sunday decision

1) Budgets tilted
– and all the cash I injected after summer was sucked up by the Tax Gyus – and August salary became a problem) – the August sales came in at only 60% of budget (we were canceled off media plans due to the negative press we received in July and our job market initiative lost traction) and pre-booked sales suggested that September sales would miss budget by a similar percentage or more (and this is despite that fact that we were still selling more advertising millimeters than any other newspaper in Denmark).


2) Overall Danish (Global) recession

– it’s coming with an ugly speed – and the first thing that retailers and big advertisers will cut = advertising. Today Media Market in Borsen even talks about no difference without Nyhedsavisen in the market.

3) I’m too inexperienced
– I’m too soft, too optimistic and romantic – I did not have enough pessimistic fantasy to imagine that budgets could break so fast – and that the recession is reality – it is all very strange. My management skills are beaten by any kindergarden manager (I respect them a lot by the way)..

4) Competition
– all papers in Denmark starts every morning by carrying money to work – and we have been working for the advertisers – and with pre-booked sales for September suggesting that we may actually sell less than in May, I suddenly started to doubt whether we could make money even in a JV with another player*. Prices never go up as fast as they go down – and competition will not stop with one competitor less.

5) My EGO
– suddenly I was afraid whether I was doing this to prove myself and because of the love of changing industries. I saw all my own cash being GONE – and personal bankruptcy as an option (I’m fighting it THESE DAYS since my funds dont give any cash – my investments have no value in a stressed sale – but dont feel sorry for me -> that’s how entrepreneurs work) – and suddenly I got a wakeup call.
Conclusion: Since I invest with passion and with a naive trust in management – I should only do smaller deals.


THE RATIONALE:

Even in a partnership with Metro or Berlingske – we would not be able to make money within 12 months!
*When Svenn Dam told me that on our trip to Stockholm after visiting Metro – I started sweating in that cold way – you know what I mean?

THE PARTNERSHIPS:

Metro
We asked Metro for a sales price for the Danish operation and as an alternative suggested a JV – but they obviously have way to much self confidence with Kinnevik (a VERY STRONG holding) backing them. And despite their trouble in the stock market – I felt that they would not give up – and join our wild operation. But I really had the hope – and our talks with their chairman were very open.

Berlingske (Mecom’s Danish operation)
I have had 15-20 conversations (calls and breakfast) with David Montgomery since June – Berlingske wanted to help us to close down (but I never wanted to do so – I have really believed in this with my heart). This Irishman with 35 years in the industry has been playing me like a piano – always suggesting collaboration – potentially buying – but always just cool and impossible to get a firm agreement with. Even when we 3 weeks ago sent an offer to take over Berlingske (see my previous post on how much under pressure they are) – David has been cool and just saying: “Morten – there are no magic bullets – I’ve been in many newspaper wars and it takes a long time and costs a lot of money – but it never really changes anything…”. On behalf of Baugur and Me – I proposed a deal where we would have closed down Nyhedsavisen solvently and then I should work for Mecom out of London- as a consultant (and this is subject to a lot of speculation – since some people think that I was not allowed to negotiate about this). The fact is that Mecom probably didn’t have the interest (nor the money) – and I could not find money to shut down solvently. It actually hurts me that rumours say I have been paid to close down – I would never EVER take money to do that without then closing the paper paying everyone what they were owed. And yes we had negotiations – but hey FUCK – isn’t that pretty normal when you have lost DKK 100 million? So FUCK you idiots – using your self pity to put this out.

JP/Politiken
I have had a couple of talk with them – but they have their Metro interest – amd they ALSO smelled that I was starting to doubt – what other reason would I have to call… (Yes I’m not too smart).

Norway
The top 3 Norwegian papers are all gongho – on trying to take over Edda – the Norweigen part of Mecom. They had designed a hostile takeover of Mecom’s loans trying to buy GBP 600 million of loan for less than face value – and that way get the control of Mecom the day they could not meet their debt governance ratios on the loans. But this was too far fetched with my wallet size.

SPECIAL THANX

– All employees
I have had +50 sms/emails from employees who lost their jobs and feel sorry for me – strange – that’s so amazing. And during “bankruptcy aftermath drinking” – no one blamed me – all positive. Thats probobly first time in history)

– Baugur and Thordis from Stodir who gave me this chance – and the most fair deal EVER and NEVER jumped out of any commitment (and I would do this again if I could guaranty a solvent closing).

– Morten Nissen Nielsen – this gyus works like no one else – a bit young in his management style and optimistic – but DEEP RESPECT.
– Simon Andersen (this guy will be BIG)
– Michael Elmhoff from distribution – who handled the closedown in Aarhus and all the violent threats from the newspaper delivery employees
– My Family and Friends – who haven’t been able to talk to me for 9 months


SPECIAL NOTE

Call me stupid – not trustworthy – whatever –  it’s OK – I fucked up. I take all responsibility. It was MY MONEY (and all I had and had access too) – and it will be 18-24 months in hell from here – but I will start and invest with my knowledge and build companies for life – and I’m scared but not stopping – Im just back to ventures without money. Sorry.

THE (SEMI) BITTER AFTERMATH – from an optimistic id(ea)iot

Nyhedsavisen have done something historic (let’s call it a DKK 1 billion gift to The Danish Democracy) – and its unfair that Berlingske and JP/Politiken gets DKK 300 million in government subsidies – while Metro and Nyhedsavisen gets nothing – cal me bitter :)

If just the financial markets would have picked up in MAY – ohhh – we could have done it. FUCK FUCK FUCK I hate to loose – and I will see my psychiatrist to get over this – and not get bitter… There are so many things that we could have done if.. if… if… :) But the fact that USA (land of the free) handed over their credit institutions Freddie & Fannie to the state sunday and Lehmann Brothers down 50% yesterday – these events can tilt the world economy :( – and all my startups are hurting from it. No money in the market.

I never in my life had a lawsuit and hope it will stay this way – but given my personal guarantees it might be hard to avoid this time – fingers crossed.

I said that I would not give up until my arms and legs where cut of – and basicly thats NOW. I followed my instinct – and failed – and I will do it again – probably not this big a deal – but lots of smaller. I’ll be back

  • http://www.clubsmalltalk.org Hernan

    Dear Morten, These are hard times for everyone, only good and passionate people like you will be on track soon! I wonder if all people could be more passionate like you demonstrated with this company. The fact is that you are in bankruptcy and your employees are sending you SMS and emails demonstrating that you are doing it right well. Sometimes, and don’t forget it, the luck is a factor that we can avoid and the financial context of these times makes the things worse than ever. You’re going to develop more projects, with or without money. Passion rules here.

    Regards,
    Hernan.-

  • http://albertolacasa.blogspot.com alberto

    I know about your post thanks to Martin Varsavsky’s personal blog (http://spanish.martinvarsavsky.net/) and i’m agree with him. Your story has affected me. You are a great example about what an entrepreneur is, and what we have to do. The best thing that you can get about this crash is the good comments of your workers.

    i’m sorry for my english. I’m sure that is not perfect.

  • rafael garcia azcarate

    So sorry Morten.
    I dislike while goog persons, entrepreneurs receive a shock like yours.
    My best wishes for your future.
    World is shaking but it was not necessary that it had happened to you.

  • http://blog.matiu.com.ar Matias Alejo Garcia

    Your history is really touching. I am sorry your project end like this, but It’s clear that you had tried hard and you are an honest man, so, I am sure your will be back!

    Good Luck.

    [ From an argentinian entrepreneur]

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  • Suzy Q

    Så dig lige på Jersild. Respekt! og god vind frem over.

  • http://www.spotajob.dk Anders Bach Nielsen

    What a great final in the interview just sent on Danish National TV – DR1! You really left a great and very emotional impression.

    Im sorry that the project didn’t work out. Im sure though that you gave all you had and also im confident that something will come out the ashes of this small bump :-)

    Respect and all the best!

  • http://www.betgraphs.com Ulrik Nash

    Just watched you on Danish TV. You kept correcting yourself, saying your successes have been down to luck. Luck no doubt has something to do with it, but its what people like you do with luck, that paves a great track record!

    Keep believing.

  • http://www.semoblog.com Riisager

    Rock stjerne er bliver du fanme ikke :) men “rocks” gør du – super interview på DR1

    Held og Lykke
    Riisager

  • http://martinthim.wordpress.com/ Martin Thim

    Så lige udsendelsen på DR. Stor respekt og du får sgu lige en knuser fra Århus ;)

    Held og lykke

  • khalil

    I always had a great admiration for your style and your achievements.
    I don’t think you’ll be back because you haven’t left. I never had the sensation that your ventures were about money.

    I also lost all in a venture but a lot more than you that’s why
    I really understand what you feel and believe me it’s true that the sky is bluer after a moment like that.

  • http://mweaver.blogspot.com Umar

    hate him ? coz you dont know him! this is the guy who is one of the world class angel investor who invests where he believes in PEOPLE. I am a real example who came to him one day with two friends and walked the same day with handshake and half million which he delivered as he promised NO TERM SHEETS NO BS. We all fail in one thing or another it doesn’t kill us and all this negative press for sure is not going to kill him. He will bounce back faster than you think!

    Sick and tired of all the media BS and NOT giving the respect to a guy who deserves more than many who are writing AS YOU HAVE THE FACT SHEET OF HIS NYHEDSAVISEN dead pool story.

  • B.

    You are an inspiration, Morten. You’ll bounce back :) What I like about you is that you give an artsy and humanistic face to Finance. You blog and you express yourself. We need more like you!

    You rock!

  • Mark

    Business appears to be like football one scores & wins and sometimes one has to face an penalty an loses, but shit happens you know so one has to put on the old shoes again and go on for the next cool tournament make it a sure victory!

    For your critics like bloggers, writers, talkers.. your guys are often no entrepreneurs you don’t take any business risks in your lives so for your guys easy judgements keep on blogging that’s far more easier!

  • http://www.isusolutions.com Javier

    My Deepest respect, from an Spanish Enterpreneur..

    Let’s start something import-export… I’m now in Vietnam, going back to spain in a week. Let’s talk and find something out.
    fjaviersaiz@yahoo.es

  • dorthe

    “Taking a hit like a man” makes me think. I have been following the events in DK closely. Morten Lund did not take it like a man. When closing down he dissapeared and others took the task of standing up to the press. Morten was hiding and only posting on his blog, not daring to talk to journalists (except from a very few times when things was cooled down). Later on he was revealed lying about his actions.

    So, honestly guys, I like all the buzz about great entrepreneurship, but Lund acted like a crook and a whimp.

  • Jack

    Best post I ever read on any blog; thanks for sharing the pain. I’ve been through a similar experience (smaller scale) when a $7m t/o business I had went tits up and I was forced into personal bankruptcy.

    That was about three years ago and the wounds have now healed sufficiently to try again drawing on the invaluable lessons learnt before.

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  • http://www.informationarbitrage.com Roger Ehrenberg

    Morten, though we haven’t spent that much time together I believe you to be a man of intelligence, passion and integrity. And with this post, you are a man of humility, introspection and depth. Closing something down that you worked hard for sucks. I should know. I just went through the same thing with Monitor110. The lost jobs, the lost money, the lost time – if feels really bad. But it is hard to deny the value of the experience that came from the struggle. It has made me better, stronger, smarter, and it will you as well because you are open to it. All the best and I look forward to speaking about your future endeavors.

    Cheers,

    Roger

  • Al

    hey, Thanks for this letter! good luck and hard work will keep it up…

  • http://www.gogelmogel.com/blog/he Uri L.

    damn…really sorry to hear this.
    big respect and handshake for being an adventurer and dreamer.

  • khalil

    # 61

    Small rectification.
    In my comment I say:.. I also lost it all and a lot “LESS” not a lot “MORE” than you ;)

    I know it’s not a competition but i wanted to make that small rectification.

  • http://www.peanutlabs.com Ali – Peanut Labs

    Incredible Story Morten. Very brave to put your heart into something, lose, and then have the guts to tell the story this openly. My sympathies are with you. Without a doubt, you will bounce back, and in a year or two one of your start-ups will hit a home-run filling up your account again. Keep your chin up.

  • http://www.freddestin.com Fred Destin

    Somehow I missed this — so sorry to hear. Defying gravity is hard to do and takes time I guess. Best of luck with the next endeavour, just give yourself some time as we are heading into a full on 3-4 years of dark night. Our parents had a war or two to deal with, my grandad ha to rebuild twice in his lifetime; if the worst that happens toour generation is that we get wiped out financially, that won’t be too bad I guess, relatively speaking :-) Best of luck with the next one, don’t put the bar too high and build it slow.

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  • SadStory

    Pathetic that you actually have your arms and legs.

    I am a quadruple amputee looking to another person to share the story.

    You abuse the title – you are the top story when searched for “no arms no legs”

    fuck you and your stupidity.

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  • Lykke Jensen

    Så dig i aftenshowet…
    Det er lysten der driver værket, og den har du stadigvæk.
    Jeg glæder mig meget til at se hvad du finder på, at kaste dig over i fremtiden!
    Det er vi mange der gør!
    Den ypperste respekt for dig og din lidenskab.

    Lykke

  • Rikke

    Kære Morten
    Sympati og masser af respekt herfra – så dig på DR her til aften – du er et sejt og empatisk menneske…….møghamrendeærgerligt, at dit projekt kuldsejlede..
    God vind til al din fremtid – du skaber – og inspirerer en ganske almindelig lønslave som mig!

  • Slaven Marinovic

    Morten,

    that´s life: a rollercoaster ride.
    Just do it.

    S.

  • Slaven Marinovic

    Morten,

    please send me a mail with your contact details.
    I am a journalist from Hamburg and I am interested in doing
    an interview/article with/about you.

    Thanks.

    Best,

    Slaven

  • http://gonzague.me Gonzague

    I saw your Le Web Speech, I loved it and I love this post even more.

    Because someone, everybody whom understood you .. knows you’ll be back ;-)

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  • http://www.worldpensionplus.com Svend Bojsen

    Kære Morten

    Jeg kan godt li dig og din indstilling til at skabe nyt. Respekt !

    Jeg har et godt tilbud til dig hvis du sender mig en mail adresse.
    Solskinshilsen

    Svend

  • Werner

    Hi Morten,
    I am curious about existing and future business models that can survive and thrive on the internet. Currently very few exist. To this end a formed a group on the subject at http://groups.google.de/group/business-models-for-web?hl=en, feel free to join, watch, contribute (and you would have plenty to contribute), and get friends who are interested to join involved.
    I’ll quote this posting at that location too, hope you don’t mind.
    Regards,
    Werner

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  • http://www.wix-france.com Anonymous

    Hi there ! If you need someone to make your product or service be developed in France, don’t hesitate to contact me. I’m based in Paris core next to the “Champs Elys

  • http://www.enroutes.com Blog voyage

    Good luck for your project.
    I will follow you on twitter.

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    ,:, I am really thankful to this topic because it really gives great information *;’

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  • http://www.pikavippitieto.com Mika

    Very inspiring story. I hope as an entrepreneur that you’re doing well already – never give up!

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    I enjoy the efforts you have put in this, regards for all the great blog posts.

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    I have to admit that your post is truly interesting. I have spent a lot of my spare time reading your content. Thanks a lot!

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