Toast to the New Year

Dear friends

Don’t blame the ecosystem, the trends, or the investors, the politicians, the stalled economy, or even the taxes. Skip the next free-beer parties in Berlin, stow your lumber jack shirts and your fixie bike. And don’t even spare the tiniest hope to lucky punches — it’s ’13 after all.

So that leaves YOU with hard work. Focus on the ball. Smart thinking. Execution.

Bring it on.

To kick off the year, take a minute to absorb today’s relevance of some thoughts from Soren Kierkegaard, who can celebrate his 200-years birthday in 2013.

” Any movement that shall lead to real progress, must originate from one. Any movement and change that happens by the aid of 100,000, 10,000 or 1,000 rowdy and snarling and growling and yodelling people (like the stomack’s rumbling and the winds) is eo ipso false, a forgery, a step backwards. “

Let 2013 be for all the dedicated individuals who dare to execute. Happy New Year.

Choose the Right Direction

I was asked in a recent interview, “What had been the most defining decision of my life as an entrepreneur today?” And although this seemed nearly impossible to answer at first, it soon occurred to me that one single thing does stand out. The most significant and mind-blowing aspect is, that I had no selfish expectation of gain from what I had decided to do. I chose to do it entirely because it felt right. It felt needed.

In the fall of 2005, I spent a semester studying abroad in Boston, from where also I worked on building my second company. I was immensely inspired by a couple of entrepreneurship courses I took, because they were taught by the most insightful professors I have ever encountered, and because they managed to create excitement and involvement from the students in a way I had not experienced before (or after). Upon my return to Copenhagen, I decided to organize an “entrepreneurship network of likeminded people” at my business school.

It came to be called “Stardust” and we operated under the idea to “Shoot for the moon. Even if you miss it, you will land among the stars.” (credits to Les Brown).

I teamed up with a well-connected and politically minded fellow student, Hjalte, and together we assembled a founding committee of an additional five or so enthusiastic people. I remember the satisfaction of already being part of a group that cared about exactly what I did: creating value, seeing things grow, dreaming, and impacting the world.

During the following months, we worked on the founding principles and agenda for our newborn network. It came to center around monthly events with guest speakers: guests who had successfully launched their businesses, preferably at young ages, and would share their stories with an auditorium full of hopeful, soon-to-be entrepreneurs.

And it worked. We have inspired and connected a large number of people, and Stardust still exists today and has grown into a nationwide network across universities that still inspires students to dare to become entrepreneurs, to create, and to improve the world.

On a personal level, Stardust has spawned some of my most valuable professional relationships and personal friendships: Rasmus, Stefan, Morten, Francesco, and Matteo are all co-founders and executives of our various portfolio companies.

And Stardust taught me the most valuable lesson: to do things because they are right, because they are necessary and wanted – and to believe that exceptional things emanate from unselfishness.

We cannot predict the future, but we can choose to walk in the right direction.

Why Good Ideas are Worthless Without Excellent Execution

“Let’s get one of the most creative and potent ideas for a newspaper ad ever seen, and then completely waste it on poor and talentless execution. Yeah, sure! Let’s do that.”

That must be just about the level of intelligence behind a campaign I read today, prominently and expensively placed on the second page of Børsen (the Danish “Financial Times”).

“Dear Torben Ruberg, CIO of Falck,
We would like to request some time in your calendar…”

A personal letter of introduction to the Chief Information Officer of Falck, one of Denmark’s biggest companies. Printed on the most expensive page of the newspaper. That’s cool.

The ad actually catches my attention like few ads do. It is unconventional. It is credible in some way, because it is personal and honest. It is intriguing, because I want to know what message is so valuable to send to just this one person.

And here is how this turns from being brilliant to a complete disaster: They ask me to “scan the QR code” to learn more.

That means I need a smartphone with an app installed to read QR codes. And I need to know that it is installed and how to use it.

So now the talentless people with the great idea just cut off a great chunk of the people that would like to learn more. Because they probably have no clue what a QR code is, or they don’t have a smartphone with QR software installed, or they have no clue how to use it.

Let’s put it on the safe side and say that 75% of the target group (business people) have smartphones, out of these, 33% can actually scan a QR code, and that leaves us with 25% of the target group that can get through.

They could have provided a URL for people to type in, which even also would have allowed people to do it on their computer. But no. They just cut off 75 percent from getting access.

Next, those remaining – the 25% who managed to scan the QR code and follow the link – land on a barely mobile-optimized website with a video to play. Great. Except that the video is in Flash format. Not the smartest choice of technology, since the Flash Player is not allowed/installed on the iPhone and a bunch of other smartphones. In fact, Adobe is estimating the penetration for the end of 2011 to be 36%.

That leaves us with 9% of the target group able to both scan the QR code AND watch the video.

Lastly, for the selected few that make it through the eye of the needle – the 9 out of 100 that wanted to – they get to watch a poorly scripted and recorded video. WTF?

It’s a mystery to me how this ad ends up in the newspaper. It has been worked at and coordinated by at least 15 people. Let’s do some title BS bingo math:

  • On the ad agency side: an Account Director, a Project Manager, probably several Art Directors, a Web Designer, a Copy Writer, a Digital Project Manager, a Programmer
  • On the media agency side: an Account Director, a Planner, and probably a Coordinator of some sort
  • On the client side: a Marketing Coordinator, a Marketing Manager, the Marketing Director, and probably a bunch of other people, over lunch, of course

… Fifteen(!) people, and not one asked the obvious question: How many can actually get through? The answer would have been 9%, if anyone had cared to think that far. How can so many people be so talentless?

The ad is about to be framed here at our offices. To be the evidence of our belief that “good ideas are completely worthless without excellent execution.”

Don’t Benchmark With Average

People on average complain a lot about the difficulty of fundraising, selling, hiring talent, etc. but of course they do: nobody wants to invest in average companies, to buy an average product, or to waste their talent working for average employers.

So if you are a rock star at what you do, you should have no worries. You will find that none of the above is very difficult; it is, rather, just a lot of hard work.

Just as the weather can be rainy or cold sometimes, VCs, customers, journalists, talented employees or whomever you want something from, can seem hard to get. And for good reasons: to them, you are no more than average until proved otherwise, and average people are, on average, a bulletproof waste of time.

On the other hand, if you really are good; if you did your homework; if you have the right attitude… then they’re interested. Remember, their success rests in their investment in you, in the things you sell them, or in the jobs you get them. They have an interest in hearing what you propose to them. They need you.

So when you want something, remember to clearly position yourself as a rock star of your field. Do things thoroughly and right. And when you get turned down, remember that there are plenty of money men, customers and talent out there. “Some will. Some won’t. So what? Somebody else is waiting.” (The SW Rule of Solution Selling.)

Switching Costs

I faced a terrible situation yesterday; the WIFI didn’t reach the charming wrought iron table in the garden, under the oak tree, in the warm sun of Provence, on which my ice cold Pastis was, and from which spot I had no intention of moving away. And in that moment the need for offline email seemed of higher importance than ever before.

So I set out to give Sparrow a try. Google still don’t support offline mail in Chrome for Mac (which by the way really doesn’t make sense). I’m not really eager to go back to Firefox. Mail on my Mac was super unreliable when I set up my accounts. And people have been praising Sparrow.

Giving something new a try, whether it is a new cereal, a new social media commitment, a new job, a new horse, or whatever, comes down to a decision process in which you will in the end choose either to keep what you had, or switch to the new thing. And since getting people to switch to whatever new you are trying to get them to switch to is one of the most important ways of acquiring new customers, or employees, or users, I thought it was relevant to dwell a bit on this concept.

It’s actually a really simple equation that makes people choose what they choose. And being aware of this fact makes it much easier to solve the question: how do we get people to switch to our product instead?

People will switch only IF Value of Current + Cost of Switching < Value of New
which is the same as IF Value of Current < Value of New – Cost of Switching
and the same as IF Cost of Switching < Value of New – Value of Current.

My decision was based on:

Anticipated Value of the New (Sparrow) – Value of Current = offline access to my emails – priority inbox feature
Anticipated Switching Costs = $9.99 + lost time to install, setup and learn to use + lost efficiency

Which made the decision look like this:
IF offline access to my emails – priority inbox feature > $9.99 + time to install, setup and learn to use + lost efficiency THEN switch to Sparrow, or ELSE keep Webmail.

So, remember that the value of whatever new you offer people not only has to be better than what they currently have, it has to be better than that plus the cost of switching.

And my decision? I have chosen to stick with the Webmail interface and live without offline access for now.

Tragedy of The Commons

I left Istanbul yesterday terribly impressed by the size and energy of the city, and terribly annoyed by a constant plague of taxi drivers who nine out of 10 times would waste our time and spoil our good moods with creative detours and “suddenly I do not speak English” hand gestures. For what? Hustling us for a couple of liras; less than would pay for the bitters in the night’s first Manhattan.

This illustrates one of my favorite theories of economics: That the individual’s over-exploitation of a resource eventually damages it for everyone. It is a favorite because it tells the dirty truth that most of us are terribly opportunistic – that we care only about our own fame and fortune, and frankly do not give a damn about the wealth and health of people outside our circles.

Of course, the individual taxi driver does only care about getting the number on the taxi meter as high as possible. No repeat business, with tens of thousands of taxis in Istanbul. No brand to sustain, as all taxis look the same. Zero risk of repercussions. And no reason to be the only righteous driver in Istanbul. But the city should care; I bet being hustled by taxi drivers is on the top five list of things that visitors recount about Istanbul. And that simply cannot be good for business.

I don’t blame the players, I blame the game. Because right now everyone loses; visitors get hustled, so they spread bad vibes about the city, which eventually means that fewer people travel to Istanbul, which then will impact the drivers and their families and everyone else depending on tourism. That is the tragedy of the commons.

And the rules CAN be changed. How about taking inspiration from London, where a taxi driver risks losing his job for taking detours, and New York, where the installed GPS maps drag a line that easily reveals detours? Or how about simply removing all regulations and letting the liberal market make sure that the best taxi companies prevail, to the benefit of everyone.

It is not too hard to come up with solutions that are better than doing nothing. And since being hustled by taxi drivers is the first and last impression gained of the city – to and from the airport – maybe it is worth caring about.

Time Value of Time

The time value of money is one of the basic elements of economics. Money today is worth more than the same amount of money tomorrow; because the money could have been invested today and yielded a return by tomorrow.

Also, people will have more or less rational reasons for preferring to have money today, rather than tomorrow.

The same applies to time. Time is money, and therefore the same bias towards preserving time today, rather than winning time tomorrow applies. Yesterday though, it was clear to me that the irrational side of preserving-time-today-bias is a much stronger one than that of its money counterpart: A major part of my belongings had been re-located to various bags after a period of traveling, and right then, when I was unpacking and about to put jeans and t-shirts back in their respective drawers, it struck me that for three full years since I first put my things in these drawers, I had kept my jeans in the one above my t-shirts. This, at least to me, is completely counter-intuitive, and it has been bugging me a bit almost every day since I for some reason applied this counter-logic.

Finally, yesterday I switched the contents of the two drawers, and was so happy this morning to intuitively open the right drawer, when going for a pair of jeans.

I guess the big question is: why didn’t I change it right the first time it bugged me? A five-minute exercise to save me three years of counter-logic annoyance…

Memories

I had the wonderful privilege of joining my colleagues for a dinner at NOMA recently. It’s always an out-of-this-world pleasure, in every possible respect.

The second course (counting starts from the end of close to ten amazing appetizers) was a chillingly cold dish of sea porcupine, cucumber in its own ashes, and horseradish snow. It caught me off guard and sent me straight back to the early springs on the stony beaches of the north coast of Sealand (the Danish island where Copenhagen happens to be). It was literally like the cold days of March, with the wind blowing from the north and waves as high as a man, where we would fight logic and sanity and run into the icy water, so as not to bear the shame of being last in. And just when my head goes under the water, in my memories of those days – that’s where the dish by Redzepi & Co brings me back to!

A little hesitantly I told my colleagues, afraid they would ask me to slow down on the wine… but quite the opposite – they appeared to be truly intrigued by my sudden memory-travel. And they told me to keep them posted if something else happened to trigger the past.

A few magical dishes later, we get to the most amazing experience of food in my life. Those are big words, but I’ve no doubts about it.. And as a devoted preacher of the power of simple, I’m happy with the coherence of elements: something as simple as cauliflower slowly cooked for hours with pine and a bit of a vinegar sauce to add some sour. The warmth of the dish and the scent of hot pine perfectly reassembled that of the pine forest which my parents, sister, brother, and I would stroll through on the warm July days of the endless school holidays in my childhood, to get to the white and sandy beach.

Happy memories. But also terribly fragile. It is a rare thing to eat sea porcupine, cucumber ashes, and warm pine tree, and to be honest I would love these best moments of my life to come back more often.

Bali Climbing and Coffee

Padang means beach. And when you say it twice, it means beaches (Indonesian is said to be a straightforward language). Padang Padang is a world-renowned surf paradise, and I had my first surfing experience there a few days ago!

I had also done some research and found that there should be some rock to climb. And there is. We have already spent many great days at this beautiful overhanging wall.

Rock climbing brings you into conversation with other climbers. And they are typically very interesting people. We got talking with an Italian guy who was in Bali to attend a Coffee conference (he was biologist working for Illy—one of my definite favorite brands, by the way).

Most interestingly, he told us that we do not know very much about coffee production compared to other agricultural yield. The reason, he said, is that coffee is mainly produced in developing countries, with little direct benefit to the coffee brands from investing in research.

This statement should be combined with a fact about coffee that, honestly, surprised me a bit: coffee is the second most valuable commodity exported by developing countries, after only oil, with more than 75 million people depending on it. And as a worldwide traded commodity its value relates to two-thirds the value of wheat.

It fascinates me that there are still products left (as basic as coffee) that have not undergone heavy commercial research and development. It is somehow freeing that some things are just what they were many years ago. But it also tells the story that big opportunities still exist in low-tech areas, and in developing countries.

Read this interesting article about coffee: http://www.entrepreneur.com/tradejournals/article/198849799_1.html

A little more detail on the rock

The rock is limestone, 50 meters wide, and 10 meters high. Almost the entire surface is smooth—only a few areas remain sharp and jagged. The routes and problems are all overhanging and grade from 6a to very, very difficult.

If you happen to be around, it is located to the left when you get down on the beach. It is the only yellow rock there and very easy to find. Location here, on Schock’s World.

The Power of Instant

Recently I started writing more (partly because of this blog), and needed a reliable solution for proofreading. Earlier, we had used freelancers who had been recommended by someone we knew, and it worked fine. You called, agreed on how to do the job, sent the text and got it back with edits and comments, received an invoice and paid. Great.

But now I have started using a web service called Wordy instead. I upload/copy the text to my account on the website, select a few options and approve the payment from my credit card that is saved with my account. Wonderful. Everything just got much simpler. Plus, I receive my proofread texts in less than 30 minutes, no matter the time of day.

So, the initial features are great and much better than the alternatives, which means that the 30-minute delivery time is really a little unnecessary. Or is it? Although I did not actually care if I had to wait for a couple of days or a week for the proofreading previously, I simply cannot wait any longer than 30 minutes now! And it is not really because I need the texts that quickly; I could easily wait for a couple of days. It just feels right to get them right away, now that I can.

In other words: I believe in INSTANT! Maybe it works subconsciously, maybe it is an irrational effect; but nevertheless, it adds a substantial feature to the product that old-school competitors cannot match.

This experience of ʻinstantʼ makes me particularly happy because one of our companies, Opeepl, sells consumer surveys that are delivered within the hour (even big ones including many questions that are answered by several thousand respondents). More than ever before, as I used Wordy for the first time and immediately became addicted, I felt the significance of the impact that Opeepl will potentially have on its customers.