Innovation, Startups and Venture Capital in Iceland

Interview with Pétur Ólafsson, founder of BuddyPhones and ONANOFF

In today’s multi-media content driven world, kids of all ages are exposed to sound all the time, more often than not viewing or listening with headphones. This led to a considerable amount of kids developing hearing issues due to the high volume possible through the headphones

This, in part, is what drove Pétur Ólafsson to found BuddyPhones, headphones designed specifically for children and teenagers. Their company recently raised a $1m convertible bond from Icelandic investors.

(My questions in bold, Pétur’s answers in italic

Based on the numbers from the press announcement ($4.3m revenue in 2018), BuddyPhones is probably the most successful Icelandic consumer electronic company. You just raised $1m; what was the main purpose of the fundraise?

BuddyPhones is growing globally, we’re already in over 60 different countries and have more in our sights, so we needed more working capital to drive the machine. Building an innovative global brand is in many ways capital intensive, so this round will support us in taking us to the next level of operation. 

You’re based in Hong Kong – is the operation completely there, or is anything in Iceland?

Most of our core operation is done in the China Greater Bay Area of Shenzhen, Dongguan and all the way towards Guangzhou. Our main headquarters is at our office in Hong Kong. On top of that, we have small sales operations in the Netherlands and California, and an engineering team in Japan. You can say we very much operate globally.

We have used designers and photographers in Iceland, we have a lot of talented people in Iceland and I would love to do more things back home. The dream was always to set up a brand and design office in Iceland, but we will need to wait because basing operations out of Iceland is just too expensive. 

Did you try working on this project from Iceland? What was the main factor for you deciding to set up shop in Hong Kong? Do you think you would be able to run it from Iceland? Why/Why Not?

I strongly believe that we needed to either be close to our manufacturing hub in China or our key market in the US. It would be difficult to be somewhere too distant like Iceland, especially in the beginning of building the operation and brand. There are companies that have bridged the gap to operate in Iceland, but for a small growing company like us, I chose to spend energy on being efficient in what we are capable of at this stage. Hong Kong is very well-located in terms of access to the electronic manufacturing base in China- I can be on the factory floor in the morning and then be in sales meeting in Hong Kong in the afternoon. Hong Kong is a major hub in international trade and shipping and we get a lot of international buyers coming through for big electronics shows. Overall, it is the best place for us to be based.

What has been the most challenging thing about building the company?

This is a big question, a lot of challenges have come up through the years. I think finding good people to join the brand journey is key. As founders, we can be visionaries, but we need motivated and talented people with us- from logistics all the way up to the board and investors. If you find this type of support, your chances to survive the start up phase is considerably higher.

What advice would you give to Icelandic entrepreneurs that want to build up a consumer electronics company?

This links with the previous question, I think another key ingredient that you need to build up a successful company is to be doggedly persistent over a long period of time. It’s true what people say, running a startup is a long-distance ultra-marathon, not a sprint. To be honest, I have not seen much glamour from being a startup, just hard work. Of course, it’s rewarding to see your dreams come true but it is first and foremost hard work. You also need to know and believe in the value you are bringing to your users. Steve Jobs famously said that people don’t know what they want; fundamentally he knew he just needed to add value to the end user as the ultimate goal of the project. Technology for technology’s sake is only worth a fraction compared to technology that adds true value to users.

Featured image is of Petur H. Olafsson and co-founders Bjarki Vidar Gardarsson, Yvonne Lo, Petur H Olafsson.

This post originated in the Northstack Memo – our regular newsletter about the Icelandic startup, tech and venture scene. You can subscribe below.

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