Author: Editorial (Page 1 of 2)

Northstack is mapping the Icelandic startup scene

Since we started Northstack, we’ve tracked and published data on the Icelandic startup and tech scene. In fact, it is one of the reasons we started doing what we’re doing to begin with. The reason is simple: Iceland has long been a black box when it comes to data on startups and tech companies.

That’s why we decided start mapping the Icelandic startup and tech scene. We’re going to collect data from 2012 through 2016 (and hopefully going forward) on startups, funding events, people and organisations. This data will be published on industry databases like Crunchbase, Pitchbook and Dealroom. We want the data to be accessible to investors, reporters, analysts, and researchers.

We’re very lucky to have the backing of leading stakeholders in the Icelandic ecosystem. We’re partnering with Invest in Iceland, Federation of Icelandic Industries, NSA Ventures, Frumtak Ventures, and SA Framtak (Brunnur VC) to make this happen. In addition, we’ll get help with the data from the likes of Icelandic Startups and the Technology Development Fund.

The work will take a couple of months, and we see the value to the ecosystem as follows:

a) We’ll have detailed historical data so we can plot the development of trends and key numbers. This means institutions and the government will finally have data to show, and base their decisions on. Collaborative projects (like the University of Reykjavik/MIT project) will have more accurate data.

b) We’ll be able to more accurately compare Iceland to other ecosystems.

c) The data will be accessible on startup databases. This means Iceland will be more accurately represented in these important places.

d) Northstack will be better equipped to analyse and report on the Icelandic startup scene.

If you have any questions, reach out to Guðbjörg Rist Jónsdóttir who is leading the project. You can reach her at gudbjorg@northstack.is

We need your help to gauge the status of Icelandic tech scene

Northstack is working with London based VC fund Atomico on their annual State of European Tech report. You can find their 2015 edition here.

Click here to take the State of European Tech survey.

A part of the report analyses the local tech communities based on a survey of founders, entrepreneurs, investors and tech employees, and Northstack is helping Atomico by distributing the survey.

The reason you should participate is twofold:

a) The Icelandic tech and startup community needs to be properly represented in big reports like this one.

b) If we get enough participants, we’ll be able to get the Icelandic data and analyse the results, which will help us gauge the health of the Icelandic tech and startup community.

Simply follow this link to take the survey. Our partners at Atomico promised that it shouldn’t take long.

Thanks!

Plain Vanilla to wind down as TV show is canceled

Following the cancelation of planned TV show QuizUp America, Plain Vanilla will wind down most of operations in the coming months. QuizUp will still be operated.

The company has gone from no revenue to almost break even since the beginning of the year, and while that wasn’t enough to cover costs, hopes were that the QuizUp America TV show in partnership with NBC would increase usage and make the company sustainable.

When the TV show was canceled, raising funds became next to impossible, and a decision was made to wind down operations.

According to Thor Fridriksson, CEO of QuizUp, the plan was always to “go big or go home. This time around, we put too many eggs in the same basket.” He’s grateful to all staffmembers that participated in the journey, and is certain that many good things will “come of this adventure.”

How Icelandic startup Takumi is building a marketplace from scratch

Jökull Sólberg, cofounder Takumi

Jökull Sólberg, cofounder Takumi

Takumi is an Icelandic / British startup founded in May 2015. We launched in October 2015 and have been growing at a healthy rate in the United Kingdom. We feel like we have good momentum and are planning a launch in Germany this year, EU’s second biggest advertiser market. Takumi automates influencer marketing and makes it easy for Instagrammers and brands to work together.

We pay out around £10k to Instagram users every week for their work on our platform. Influencers don’t lend out rooms like on Airbnb, or give people rides like on Uber. What they get paid for is their creativity and voice on social media. Takumi has some features of a platform marketplace, but buyers are sold in by a traditional sales team. Now that we have some experience running a part SaaS, part platform company we thought we’d share some lessons.

One particularly challenging day, my co-founder Marc Andreessen said to me: “Do you know the best thing about starting a company?” I looked at him in disbelief as if to say: “there is a ‘best’ part?” He replied: “You only ever experience two emotions: euphoria and terror. And I find that lack of sleep enhances them both.”

The Hard Thing About Hard Things (which is as good as everyone says it is)

Startup culture has too much hyperbole. Quotes like the one above, as good as it is, make it sound like starting your own company isn’t basically a privilege of people in rich countries. That being said, we related to the part about euphoria and terror. I’ve had days where I didn’t just have crippling doubts about our idea, but was convinced we were about to lay everyone off within three months. Those moments are not just scary but depressing. Recovering from those lows is not a process but a flip of a switch. Often this happens within 24 hours. It can be intense.

At Takumi we define success by having sustained marketplace traction. That challenge repeats itself in every geography we enter however. Uber has recently called it quits in China because of fierce competition. Many on-demand startups have surrendered to grueling economics and a tightrope of worker regulation. Setting economics, regulation and geographies aside the core challenge of marketplaces is traction; increased supply and demand in lockstep.

Components of Traction

The main challenge of a marketplace startup isn’t so much the technology but making sure demand and supply are increasing over time and that buyers and sellers are coming back to transact again. We separated the problem into three distinct areas to tackle:

  • Minimum viable supply (“A good start”): before you open the doors you have to decide what the minimum viable offering looks like. Is it better to start with a list of suppliers (like Uber launching with drivers ready) or buyers? We decided to launch with buyers lined up. For us it meant shipping our app with a selection of brand campaigns so when Instagrammers signed up they had a good first impression.
  • Retained and vetted suppliers: Giving the good suppliers a good experience is important so you don’t churn out suppliers too quickly. Most marketplace platforms have varying supplier quality. We had this experience too, and to this date we still block the majority of “influencers” because of fake followers or related issues which would erode buyer trust. Getting that process right can take a while and depends on your access to quality data. A key to standardised pricing is having quality guarantees instead of letting suppliers set their own prices. In this regard we are closer to Uber than Airbnb.
  • Buyer pipeline: Building a pipeline of buyers takes time and is the result of effective sales and marketing, managing their expectations and getting the pricing right. We knew our product wasn’t going to sell itself and we’d need a good presence close to our buyers.

This was the route we chose for bootstrapping our supply and demand relationship. The details may differ for each industry or segment, but the core problem of traction remains the same: a functioning marketplace needs both supply and demand.

Pricing

We didn’t get pricing right on day one. We began by selling what is essentially campaign reach; the aggregate number of Instagram users reached by the influencers that get offered and choose to participate in a campaign. Because of the way we match influencers with brands on a first-come-first-serve basis we could not predict the total number of influencers participating in campaigns and budgets would yield an unknown number of photos, but a more or less predictable reach. Reach would still fluctuate somewhat because we would guarantee at least £40 in payments to each influencers. All in all; brands didn’t fully know what they were getting for their money.

To explain how we changed our pricing it’s important to understand what we are changing in the influencer marketing industry. Influencer marketing has historically been encumbered with laborious negotiations with each influencer. Takumi eschews this step with standard pricing based on influencer performance and reach. We would pitch brands on great influencers and powerful impressions but quickly get into complicated discussions about minimum guarantees and average reach. We needed to simplify our offering. We started rethinking our pricing and ended up with a model where brands pay a fee per post. We could not have done this ahead of time because per-image prices are based on averages we had observed by running lots of campaigns on the reach model. So in hindsight we probably could not have offered the simpler unit pricing to begin with, but goes to show how tricky pricing can be in marketplaces.

Sales

Clients don’t show up to your site with a credit card unless you’re one of very few established companies (“self-serve”). We acknowledged this on day one. Without any of the founders having any sales experience we set out to build a sales function in London. What we failed to acknowledge is just how impossible it is to sell without referenceable clients. Because of our decision to open doors with buyers lined up, we had pulled a neat trick. Those first buyers were brought in at a net loss to the company just to kickstart traction. Those clients turned into our first referenceable clients. Lesson learned: get referenceable clients at any cost! As our client roster has gotten bigger and better we’ve seen sales become smoother over the past months. Every logo helps.

Before our sales process benefitted from the referenceable clients we experienced considerably supply:demand disparity. Great influencers who had an excellent experience in the beginning due to our pre-loaded buyer pipeline suddenly experienced gig drought. Our challenge to keep our marketplace alive depended on our ability to keep our users engaged while having more supply than demand. We started to stress out a bit, but we also started to nurture our community and our relationship with influencers outside the monetary function of our platform. We hosted events, spoke directly with our core suppliers, frequently updated our app, talked about upcoming campaigns and made sure our social media was responsive. The hard work paid off and we now have a reliable group of influencers with significant revenue on our platform, producing content with consistent quality.

We started Takumi in the image of a marketplace but over the past months we’ve seen that what we have is a SaaS/platform hybrid. We acquire buyers very much like a SaaS company, targeting a recurring business pain point. On the other side that demand gets automatically matched in on-demand fashion. For this reason we’ve had to pick and choose our growth metrics and strategic thinking. I believe identity is crazy important in the early days. Figuring out what kind of company you have helps you communicate internally and externally.

Coming from an engineering background I have a couple of things that are specifically targeted to founders with an engineering background:

  • Like human resources or team management, you should not innovate with the sales function of the company. Read some books on sales and learn from the best. Startups are experiments, and just like in scientific experiments you want to test just one variable, which is your core business idea. Do yourself a favor and make everything else boring and efficient.
  • Coming from an engineering background, I enjoyed experiencing other kinds of victories. Landing deals is to sales what shipping is to engineers. Learn to celebrate both and in unison.
  • Bridge gaps. Engineers should act on the assumption sales knows more about the product then they do and sales should work on the assumption engineers know more than they do. The founders job is to facilitate empathic exchanges and base the product roadmap and development off that.
  • Slack killed the flatscreen dashboard. Bake stats and events into Slack directly and use TV’s for something else. More actionable and visible. Especially if you have two locations like we do.

Further reading

Jökull is co-founder and leads product development at Takumi in Reykjavík. You can find him on Twitter.

Iceland may punch above its weight, but let’s keep the facts straight

Yesterday, the web journal Red Herring posted an article titled Iceland’s Startup Scene Punches Above its Weight, which discusses the Icelandic Startup scene. While it’s good for the Icelandic scene to receive coverage like this, we feel it’s important that what publications write accurately reflects the ecosystem. There were several issues with the article, some of which we have highlighted below. We’ve also sent the publication Red Herring a message, in regards to this article.

The article starts with an overview of Iceland, and then turns to discuss the Icelandic startup scene. The discussion starts with singing the praises of Bala Kamallakharan, founder of Startup Iceland, and his efforts. While Bala deserves much praise for his diligent and generous work, we think it’s important to note that the Icelandic startup scene and community is not built by one man, but by a big group of people.

Below, we’ve highlighted some of the factual errors or misleading paragraphs, and explained in better detail.

[Bala] added that before Startup Iceland there was no VC network in the country, but that now there are four groups looking to invest in local talent including NSA Ventures and Frumtak. Now, says Khamallakharan, foreign investors are taking notice.

While it’s true that we have four active VC funds (Brunnur, Eyrir Sprotar, Frumtak 2, and NSA Ventures), the statement that “before Startup Iceland there was no VC network” in Iceland is not true.

Frumtak was founded on December 23rd, 2008 and its investment period started on January 1st 2009. NSA Ventures have been active since 1997, when it was founded. Investment funds like Brú Venture Capital and Brú II were active in the mid 2000’s.

A recent freeze on foreign investment – Iceland’s attempts to stave off the boom-and-bust culture that caused its economy to cave in eight years ago – might put off some of those VCs.

There’s absolutely no freeze on foreign investment in Iceland. What we do have, are restrictions on the outflow of capital from Iceland. These measures, that are called capital controls, are also not recent. They’re from late 2008 / early 2009.

VC’s that want to invest in companies in Iceland have bypassed these regulations by investing in parent companies that are located outside the restrictions. Thus, the investors own a company, for example, in Delaware. That company owns all IP that is produced. Production is in a subsidiary that is located in Iceland.

The government limits the flow of the Icelandic króna overseas and has strict rules on how foreign currency is to be used, and that has literally forced some of our biggest successes to move their HQ overseas, so they can circumvent some of these restrictions,” Jonsson said.

While the capital controls are bad, we don’t know of any of our biggest successes that moved their HQ abroad. The only company that comes to mind is CCP, which is relocating their top management team to London, because they have an international operation. However, CCP is still investing heavily in Iceland.

What is lacking, added Gould, is a network of experienced mentors: “Startups that have grown beyond Iceland can contribute back to the ecosystem by joining boards of younger startups, mentoring less experienced entrepreneurs and extending their experience and international network back to the community which fostered their initial success.

It’s true that Iceland doesn’t have a big network of experienced mentors. We mainly don’t like the phrasing in this paragraph, because although the network of experienced founders isn’t big, it’s there, and they are very generous and active in helping startups in Iceland.

Attracting talent, however, is not a problem in a country whose dramatic landscape, liveable towns and work-life balance – “one of the best in the world” according to Kamallakharan – are putting it on the map.

We have a dramatic landscape, true, but asserting that attracting talent in Iceland is not a problem is a stretch. Just recently, the government was lobbied by IGI (Icelandic Gaming Industry) to give foreign specialists a special tax discount because the companies in IGI had a difficult time attracting talent.

While we appreciate coverage of the Icelandic scene, we think articles should be fact-checked. Feel free to reach out to us, we’re happy to!

 

Why did we create the Nordic Startup Awards?

Kim Balle, Co-Founder & CEO, Global Startup Awards

Kim Balle, Co-Founder Global Startup Awards

People often ask us why we created a Nordic Startup Awards show. My own family and friends often ask why I spend so many hours on an award show which is surely not a high income project for me. The answer is simple: it is important.

Put your ‘big picture’ glasses on for a minute. We live in a unique time where entrepreneurship and innovation have never been more important. It is a time where technology-, hardware- and software-driven companies change our world in all aspects of our lives. The development is now moving so fast that our societal institutions have a hard time keeping up. This is only the beginning. We have entered the era where an entrepreneur can decide what direction the future will go.

The Nordics should take a leadership role in determining this future. We already have a history of creating amazing innovation not only in terms of technology, but also through organization at the societal level. This is something that is admired around the world. It should be our aim to maintain this status and improve it in the future.

The Nordic Startup Awards are not only about trophies and events. They are about something much bigger. I see the Nordic Startup Awards as a platform or a vessel which can be used to positively impact the regional startup ecosystem by connecting the national ecosystems and showcasing role models and success stories among ourselves and the rest of the world. The end goal is to become such a strong and relevant platform that we can go far beyond the “startup bubble” and into people’s living rooms. (Similar to Eurovision, just more relevant and without the corny music.) With such a strong platform, we can influence and inspire the Nordic people to keep innovating. With interest on such a high level, we can also connect all the stakeholders with politicians and ensure that we, in the Nordics, will have the right conditions to bridge possible gaps between startups and innovation.

The impact of recognition and success stories

In addition to the importance of creating a platform to showcase Nordic entrepreneurship, recognition is the core fuel for the Nordic Startup Awards. I know from my own experience how hard it can be to build a company. When you are working in a startup, you are driven by a passion which can be compared with a wild fire. It is almost impossible to put it out. But every single founder, lead developer, community builder and investor has hit the wall. That dark place where you almost forgot the “why” and the fire is reduced to a small flickering flame.

From Nordic Startup Awards 2014. Image courtesy of Nordic Startup Awards

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

I know what a big difference a simple pat on the shoulder from someone of esteem can make when building a company. Recognition can lift you up to go that extra mile. It can be an inspiration for others to see that it is possible to succeed even with the most difficult odds. I have no doubt that the effort demanded to build a startup can be compared to the effort needed to win an Olympic discipline. We need to celebrate it.

This is also why quality and high standards is so important for integrity of the Nordic Startup Awards. The trophies need to mean something.

Part of something bigger

Finally I want to mention that Nordic Startup Awards is also part of a growing network. Since we launched Nordic Startup Awards back in 2012, we have expanded to Central Europe with Central European Startup Awards and to South East Asia with Asean Rice Bowl Startup Awards. And after this summer, we will launch Startup Awards India.

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

From Nordic Startup Awards Grand Finale 2014. Image courtesy of Nordic Startup Awards

Our global expansion means we will be able to connect Startup Awards alumni from across the worlds. The winners of each regional competition will represent the best startups in their region. We plan to launch this initiative in  the coming year under a umbrella we call the Global Startup Awards.

From this work, we have already learned the strength of the Nordic region and the strong brand it has worldwide. We can be a role model for these rapid growing ecosystems. The Nordic Startup Awards will help connect Nordic startups to new markets, talents and technologies, and position the Nordics become a global leader in technology and innovation.

Join us for the Grand Finale

Back in 2014, Iceland won Startup of the Year with Plain Vanilla, which elevated Iceland to a heavyweight in the Nordic startup scene. People were wondering who Plain Vanilla was, since the name was not as well known in the other Nordic countries back then. But the numbers spoke for themselves, and Plain Vanilla was a sure winner. (Here is recent interview we did the the founder, Thor Fridriksson).

Since 2014, the startup ecosystem in Iceland has grown even stronger with the help from community building organisations such as Icelandic Startups. It became clear to me when I visited Icelandic Startups during their Golden Egg competition. I was blown away with the high startup activity on Iceland.

This is why it is also super exciting to invite everyone to Iceland for the Grand Finale. On the 31st of May at the Nordic Startup Awards Grand Finale, hosted by our amazing country partner (Icelandic Startups), we will bring together talent from across the Nordic startup scene to the Harpa Concert Hall in Reykjavik, where companies will compete to be the best among the Nordics. The winners were selected through an rigourous process and announced at the national events (you can see a list of the national winners here).

We can’t wait to announce the winners in the beautiful surroundings of Harpa. 

Then event is fully paid by the amazing local sponsors and it is free of charge.

Signup here.

Kim Balle is Co-founder of Global Startup Awards / Nordic Startup Awards, Owner of DROBE and founding member of IoTPeople 

 

Why we’re doing a hackathon: to increase FinTech innovation

Einar Gunnar Guðmundsson. Corporate Entrepreneur at Arion Bank.

The Icelandic banking infrastructure is unique. This statement may sound awkward in light of a total collapse of the Icelandic banking system in 2008, yet what I mean is from a standpoint of something else. Most banks globally today are highly focused on payments, trying to improve speed where individuals and companies transfer money. Money transfer may take up to three banking days between banks even within the same country or city. The US still heavily relies on checks for money exchange. In Iceland it happens instantly and has done so for almost 20 years. If I transfer money to my wife who has an account at a different Icelandic bank than I do, she only has to push F5 on her keyboard immediately after I make the transfer, and the transfer amount is visible on her bank account. How is that possible? Well, it’s simple. There is a common core banking platform for all the Icelandic banks (jointly owned by the commercial banks).

Good infrastructure may have slowed innovation down in Iceland

For the above mentioned reason, Icelanders have had little need to improve payments. Only in the past year has Iceland seen new money transfer products like Aur and Kass, where you only need a mobile number and registered debet or credit card within the app to transfer money between individuals, regardless of who your commercial bank is. It’s like Danske Bank’s Mobilepay, the Swedish Swish or the Norwegian Vipps.

My point is that, until now, there has been relatively little urgency in developing either great Icelandic consumer or business financial applications.

Arion is hosting a hackathon to speed up innovation

Arion Bank is the first bank in Iceland to host a hackathon. Arion Bank’s FinTech Party is the first hackathon where hackers from established IT companies, the startup community or universities can work on several APIs to hack and develop new financial services.

While hosting a hackathon is no news in itself, the Arion’s FinTech Party is Iceland‘s first FinTech hackathon and several APIs will be available (see below) to participants, who can hack away for 30 hours on June 3-4 2016 in Arion Bank headquarters.

Who should participate and why?

Participants are likely to be established IT companies, startup companies and university students (computer science, engineering, business)

There are three primary reasons for participation:

  1. Products developed may lead to a revenue generating business opportunity for participants
  2. Code / IP and therefore potential revenues belong to the participants
  3. Meeting new people and guidance from the API providers is valuable. And fun.

Arion’s FinTech Party offers several APIs

We at Arion Bank have been working a great deal with with Icelandic startup ecosystem since 2012 since the bank owns two business accelerators, Startup Reykjavik and Startup Energy Reykjavik, where the bank invests seed money in exchange for an ownership stake. Understanding how startups approach problem solving, along with international digitalisation trend/changes in banking, has lead us to hosting the hackathon. We have also offered several companies to offer their financial APIs in our hackathon. They are:

  • API Arion Bank –
    • Transactions on debet and credit cards
    • Claims – initiate a claim to a unique personal ID number that shows in that person’s / company’s internet bank
    • National registry – Lookup in the national registry by their unique ID number
    • Currency valuations
    • Links to Arion Bank‘s sandbox and Github
  • API Valitor
    • Payments – Send and receive a payment with a virtual credit card
  • API Meniga
    • Datadump on the fast food industry. All transactions over a 12 month period in Meniga’s database related to the Icelandic fast food industry. Data is non-personalized.
  • API RB
    • Mobile banking services
  • API Kodi
    • Market Data – closing day price of listed equities on the Nordic equities listed on the Nasdaq OMX
    • Link to API Kodi descriptions
  • API Advania
    • eSignature

All APIs in the hackathon are open REST APIs.

We are quite enthusiastic about these different APIs, since a combination of them, or seperate ones, gives the hackers vast opportunities in developing great products. Real products or features for real customers, consumer or business ones.

Intellectual Property belongs fully to participants, not to the bank

Different banks may take a various approach on hackathons. Some decide that whatever code is written is theirs but give the participants some perks to sweeten the deal. We understand that for most developers, the right motivators need to be in place. That‘s why any code written will belong to the participant teams, i.e. the Intellectual Property belongs to those who write the code. Arion bank will have a non-exclusive right to use the applications for twelve months and a first right of refusal to buy or use should they be commercialized. Those are fair terms for both sides.

Let’s hope all of the above leads to growth hacking post hackathon. Happy hacking!

The author is a Corporate Entrepreneur at Arion Bank. He occasionally blogs at http://einargunnar.com. Find him on Twitter: @einargunnar

Sling’s First Year in America: Lessons From an Icelandic Startup

Through the years, companies — not only tech startups — have grossly underestimated the cost of selling and developing businesses outside of their home market.

So a year ago, when a small Icelandic tech company, Gangverk, decided to start investing in sales and business development by opening an office in New York City, it was (and still is) risky business.  Worse yet, the software product we aimed at launching and selling wasn’t ready and had no users.

Helgi Hermannsson, co-founder & CEO of Sling

The idea we had in opening an office in New York was to investigate if there was a real market for a SaaS product we were developing called Sling, www.getsling.com, find helpful American beta test customers for feedback, create go-to market partnerships, and start a dialogue with possible future investors. Basically: research the market and build contacts that would benefit our business.

So we went from one office in Reykjavik, Iceland to also having an office on Broadway in New York City (to be fully accurate, rented desks inside a co-op space).

We believe you need to sit at the table and have a presence in America to be taken seriously there, and we want to share our experiences from our first year in New York if somebody can learn from it.

Woody Allen says “80% of success is showing up.” Let’s hope he’s right.

So what is Sling?

Sling is a SaaS (Software as a Service) workplace communication and shift scheduling software for non-desk working industries.  It’s super simple to set up and use.  You go to www.getsling.com, create an account, and invite your employees to join. Boom: in two minutes you’ve got your own company intranet.  It’s available both on the web and as iOS and Android apps.

From day one of developing Sling, before we wrote the first line of code, we’ve been in touch with potential users and customers, trying to gather as much feedback and input as possible.

Screenshot of Sling. Image courtesy of Sling

Sling was released in Beta tests with selected restaurant and retail store customers in March 2015, and we dropped Beta in July.

Everybody we meet loves the concept of Sling, but it’s our goal and challenge to get them to love the product Sling. There’s a great difference between the two.

Our product team is busy every day, tweaking things and listening to ever increasing customer feedback coming from all over the US.  Although Sling’s focus industries are retail stores and restaurants, we serve a variety of businesses including coffee houses, bars, hospitals, hotels, security companies, call centers, music venues, zoos and more.

So how has the first year in America been?

We’ve generally felt very welcome in New York, but we found out quickly that nobody in Manhattan was waiting for us or for a new SaaS software communication solution to hit the market. That doesn’t mean people don’t need such a product or love the concept. But getting customers to commit to and actually start using the product hasn’t been easy.  The main trouble is getting the decision makers’ attention and time.  The hurdle after they say yes is to get the entire company on board and up and running making full use of Sling. The second part can be as tricky as the first one.

Planning with the Sling Team. Image courtesy of Sling.

Planning with the Sling Team. Image courtesy of Sling.

It seems that in America everybody is selling something. Because of this, managers with decision power create a strong force field around themselves that won’t let new sales teams in.  To overcome this bias, we’ve had to write endless emails and make many, many cold calls to get attention and meetings.  These are all well-known sales difficulties, so in a sense, it’s nothing new, but for a small company coming from a tiny market (Iceland is 1000x  smaller than US in all economic aspects), it’s hard.

As the year has gone by, we’ve developed Sling quickly in response to customer feedback, and it’s become easier to manage as we go. We’re in touch with a growing potential customer base and go-to market partners, whom we make sure are following our progress.  Progress matters also to our American customers, who credit us for our efforts. If you’re honest, polite, and make sure not to close any doors, you can always come back in 3-6 months with an update and try to pitch the sale again. The American dream in this sense is alive and well.

Some advice: be yourself, or at least don’t strive to be an overcommitted, fast-talking “sales guy” (you know the type). Your customers know what you’re trying to do is difficult and respect you for your efforts, so speak the truth. Honesty goes a long way.

Time is the worst enemy of startups, but you have to stay in the game to build trust and connections and keep your head high.  If you’re feeling down, listen to Whiskey in the Jar by Metallica and Thunderstruck by AC/DC before meetings. Try to keep your energy up, drink a lot of water, and get enough sleep. And please, stay away from junk food.

In America, it’s all about the intro. If somebody makes an introduction, you’ll get the meeting and attention, so a good network is gold.  Well-respected managers and brand names can do wonders in getting you in front of potential new customers and partners. Ask people for help – you’ll be surprised how helpful good people are.

FullSizeRender (3)

NYC. Image courtesy of Sling.

Being in New York has also helped us better understand how Americans do business in general and build up our contact list.  It is a fact that software decision making is splitting into the hands of different mangers and divisions and away from one central CTO buying office. From our vantage, we can tell you that department heads within large hospitals in California and Georgia autonomously found Sling and implemented its use. The same likely happened when airport baggage handlers of one of the major airlines started using Sling. I’m pretty sure they didn’t call headquarters for feedback

With the fast evolving software world poking around in every business model on earth and trying to find ways to take over “conventional” companies’ business and revenue streams, there’s a changing attitude inside huge companies toward cooperation of smaller companies and teams.  They know that they have to take part in the Zeitgeist or become Kodak in 10 years.

In the past months, Sling has signed on hundreds of company accounts in America with many great customers.  Software products are sold online all the time without companies meeting face-to-face, and the same is true for Sling. We’ve never met 25 of our 30 biggest users.  We’ve chatted with some on Skype, asking for feedback after they started using Sling, but some have never replied to our emails or calls, which is fine.

How much has this sales and business development cost us?

New York is an expensive place to be, and it might not be the best fit for your company, especially if you’re trying new things and exploring what works for your product.

The total sales/business dev. cost of our first year (besides salaries, which would have been the same if we worked out of Iceland) has been around $140,000.   We’ve spent this money on rent, travel, a variety of testing sales related activities, a tiny budget on Adwords (which works well) and Facebook ads (which didn’t work so well — if anybody knows how to do it right, please contact me).  We’ve also tested content marketing with mixed results, hired a sales intern (didn’t work), hired an expensive fast talking sales advisor/consultant (mixed results at best) and hired a part time PR guy (didn’t work).  We attended the big NRA restaurant trade show in Chicago in May last year (which worked very well, it cost about $15,000) – see the photo below of our booth (we played a bit out of our league, as we where surrounded by big tech companies).

The booth. Image courtesy of Helgi Hermansson / Sling

The booth. Image courtesy of Helgi Hermansson / Sling

We benefited from this conference with a couple of great partnerships and sale – for example, US Foods where our company is partnering with an 22,000-person organization with deep roots inside the restaurant industry. We also made first contact with the company that licensed Sling for $2.5m early this year at this conference.  In a perfect world, we’d attend all key trade shows every year, but it’s expensive.

We got a buy offer for our company last year, to which we said “no thanks!” (we’re having too much fun).  It ultimately strengthens our belief that we’re doing something right, even though we can’t see into the future and might regret it greatly later ahaha.

We’ve found out that good sales people in America with the right connections are very expensive.

We had the opportunity to speak at a cool tech conference with big names from the restaurant industry.  This taught me that I need to take public speaking classes as it seems to me that all Americans can rock the stage as if they were giving a TED talk!

We’ve learned that it takes time to convince big brands names to work with us but it is possible and it is often not easy to find the right person to talk to inside big corporations.

So what happens next?

We have a rock solid product, that our current customers love (they send us “I love Sling” emails) and has the potential for continued growth in a variety of industries around the world.  But it doesn’t matter if we don’t have the resources to keep on going, to be able to hire more smart people, and test things out in order to keep moving forward every day.

Sling Boarding Shool. Image courtesy of Sling.

Sling Boarding Shool. Image courtesy of Sling.

I’m endlessly fortunate to be backed by the best tech team in the business, all of them much smarter than me.  I feel the responsibility and pressure to deliver as the company is investing in me being in New York.  Nothing beats the feeling of going into a product demo with a customer knowing we have a fantastic product they will like and use.   And the true drug of selling is doing live product development with my team in Iceland in front of a customer in New York – it’s pure magic.

We received $500,000 in pre-seed funding from two investors based on the concept and idea of Sling.  When I look at our old investor deck today, I can’t believe what they were thinking.  It’s a shadow of what our product has turned out to be.

Our investors are pressing us to spend fast (the American way!), but we’re trying to make the money last as everything takes longer than expected, and we have to be able to stay in the game.  Our funds will last until next year, though our dinners for the last months might be mac and cheese. But, hey, we shouldn’t complain. We’re the fortunate few who get the chance to take risks.

Atli, my partner and world’s best CTO likes to say, “Make it happen.”  I agree — we have to keep a razor-sharp focus and move forward every day, making every moment count as our window of opportunity closes.

If you’re still reading this, thank you for your time, and please find us in New York or Reykjavik for a chat over coffee.

Helgi Hermannsson is founder and CEO of Sling, a SaaS workplace communication and shift scheduling software for non-desk working industries. If you have questions or thoughts, reach out to him through email – helgi@getsling.com.

Iceland Q1 2016 Funding & Exits Report

The first quarter of 2016 starts off with a $13.4 million disclosed in fundings in seven funding rounds.

Comparison to Q1 2015

The number of investments more than doubled from the same quarter last year (from three to seven) . Total amount invested, however, fell drastically, only due to one massive investment.

Last year’s Q1 totaled $99 million in three investments, according to The Nordic Web’s analysis. This huge amount is almost entirely due to a $98 million round in Verne Global. Other investments in that quarter were Kaptio ($900K) and Datasmoothie (undisclosed).

In this case we shouldn’t use the amount invested as an indicator of the health of the community due to the Verne Global’s outlier investment.

Overview

The first quarter of 2016 totals $13.4 million in seven rounds. The size of one of the rounds was undisclosed.

q1-2016-funding.001

Round sizes

Unlike last quarter when we had the $30 million CCP round, this time around we didn’t see one huge round that eclipsed all the other investments. We had a healthy split of three small rounds – under $500K – and three above $1.5 million.

q1-2016-funding.002

Who’s investing?

Like last quarter, the majority of the investment is from outside of the country. QuizUp’s $7.5 million round is almost solely responsible for that. The ratio between funding from within Iceland and outside it is as following.

q1-2016-funding.003

Exits

We recorded one exit this quarter. Swedish Enzymatica acquired Icelandic Zymetech through a non-cash issue of approximately 20.9 million new shares. At the time of purchase, Enzymatica was trading at 3.35 SEK. That translates to an approximate value of 70 million SEK (~$8.6 million).

Please refer to our analysis for Q4 2015 in regards to our methodology.

Norðurskautið covers the Icelandic Startup and Tech scene. Follow us on Twitter or sign up for our mailing list to keep up to date. You can also join our Slack community – http://bit.ly/slack-is

Nominations are open for the Nordic Startup Awards

Who are the startup heroes this year? The nominations for the regional finals of Nordic Startup Awards are open. Do you know what the Nordic Startup Awards are? Nordic Startup Awards is a series of events in the Nordic countries, connecting and paying tribute to the Nordic startup ecosystem. The competition brings together all the sectors in the ecosystem, awarding startups, investors and accelerators to office spaces and journalists.

Salóme Guðmundsdóttir, CEO Icelandic Startups

Salóme Guðmundsdóttir, CEO Icelandic Startups

Nominations for the awards are open until February 29th. We encourage you to nominate those who you consider to be true startup heroes and deserve a recognition. You can nominate anyone in the following 13 categories; 1. Best Exponential Startup, 2. Best IoT Startup, 3. Best Newcomer, 4. Best Bootstrapped, 5. Best Social Tech Startup, 6. Best Business Angel, 7. Best Investments Company, 8. Founder of the Year, 9. CTO Hero, 10. Startup Media of the Year, 11. Best Office Space, 12. Best Accelerator Program and 13. Startup of the Year.

When we close for nominations, a national shortlist will be announced. Then you will get the chance to vote your favorite – your vote will count with the votes of a regional jury. The regional winners in each category will be announced during an Innovation lunch event in Reykjavik on April 26th. The Icelandic winners along with the other Nordic winners will be announced at the Nordic Startup Awards’ website and again you get the chance to vote.

We are extremely proud to share with you that the Grand Finale will be held in Iceland this year in partnership with Icelandic Startups. We are looking forward to meeting our Nordic startup friends and celebrate this year’s results on the 31st of May.

Awards that have gone to Iceland since its start two years ago are Plain Vanilla as the Startup of the Year 2014 and Startup Reykjavik, the best accelerator program in 2015.

Nominate here.

Salóme is CEO of Icelandic Startups, an organization that helps startups by accelerating their businesses and connecting them with experts, investors and leading startup hubs abroad. Icelandic Startups are a organizing partner of the Nordic Startup Awards.

 

Page 1 of 2

Nortstack – Reporting and analysis of the Icelandic startup scene