Berg Moe Media

always looking for win-win scenarios and opportunities

Category: Voices Page 1 of 2

Why a Financial Crisis Is the Best Time to Start a Company – by Feliks Eyser

Starting with a blank slate is your advantage in 2020. This year, the competition is weak. Foto: AdobeStock

Story by Feliks Eyser first published at Medium.com.

I started my digital marketing company in 2009 against the backdrop of a global financial crisis. Most people thought a young university graduate — like I was at that time — should play it safe and wait for the business climate to get better before starting a company. I’ll never forget the middle-aged business owner who approached me at a trade show and suggested I was “very courageous” to start a company in“the crisis,” and wished me well as if I were taking a trip to some dangerous place from which I would never return.

My youthful ignorance turned out to be a blessing, although the first two years of bootstrapping were painfully humbling. My business card read “CEO,” but in reality, I was sleeping on an airbed under my desk. Two years later, armed with the proof of concept for our business model and bolstered by the tailwind of the improving economy, I raised my first round of financing. Eventually, I assembled a fantastic team of hundreds of people and later sold the majority of the company to a media conglomerate. It was a great ride, and I now believe that starting my company during a recession was the best move I could have made.

Why it’s better to start a company in 2020 than in 2019

According to a 2009 study by the Ewing Marion Kauffman Foundation, an extraordinary 57% of Fortune 500 companies have been founded in a recession or bear market, even though only 31% of all years since 1855 counted as “down years.”

Starting with a blank slate is your advantage in 2020. This year, the competition is weak.

If the majority of these companies got started during rough economic periods, it suggests that they may not be bad times to start a company. A “bad time to start a company” usually implies low consumer demand and limited access to funding. But that’s mainly a problem for startups that are already established. They have to manage the decline, after all.

With no legacy costs, no draining layoffs, and no bank calling you to cut the credit line, entrepreneurs who start companies now can focus on building a great new product or service. Starting with a blank slate is your advantage in 2020. This year, the competition is weak, and you can gain an advantage that might last for years.

Ingredients for success

In the world of startups, there is no guaranteed formula for success, but you need at least four ingredients to avoid failure: a good idea, an outstanding team, enough funding, and a way to find customers.

Here’s what that looks like in the current crisis of 2020.

1. Painkiller ideas

Great ideas usually either solve a real, significant problem or make life considerably easier. Think of great startup ideas as painkillers: People need them and are willing to pay. The year 2020 will produce a whole range of “painkiller-category” problems that will translate into entrepreneurial opportunities.

Millions of children can’t attend school. How can you solve that? Visit any quarantined household with small children. Those parents surely have a litany of new problems in need of a solution. Tens of millions of workers have gotten laid off. Hundreds of thousands of urban storefronts will be left empty by shuttered restaurants and struggling retailers. What will fill the voids in 2021?

Problems create opportunities, and 2020 is not lacking in problems. It’s no coincidence that companies like Uber or Airbnb were founded and thrived after the last financial crisis. They solved real problems (“I need extra cash”) and made life easier (“I want a cheaper, easier option”) at the right time.

2. Hiring during a recession

Finding great employees has historically been one of the biggest bottlenecks for startups. Here’s the biggest reason to start a company in 2020: For the first time in the last five years, you’re going to have access to an abundant pool of amazing talent. In 2019, companies had to bend over backward to attract great people. Outstanding employees were spoiled by poaching offers from competing companies. That drove rising salary levels and the frequency of job-hopping.

Today, the pandemic has forced millions of qualified, hard-working employees to be let go by their firms. Some of them — maybe you among them — will take matters in their own hands and create a startup. Others will be thrilled to be working for one.

In 2020 it will get much easier to compete for talent and retain employees. Perks like free kombucha, Disneyland furniture, and daily yoga classes at work suddenly sound so “2019” now. This year, offer meaningful work with good pay and possibly some stock options and people will gladly assemble their own Ikea furniture to work for you. Add to that the possibility of worldwide recruiting, which the work-from-home explosion has accelerated, and your inbox will be overflowing with applications.

3. Finding funding

Now you might be thinking, “This sounds all well and good, but it will be impossible to raise any money in 2020.”

I don’t agree. But before I address why, let’s clear something up: I think the last five years were a fake environment of fundraising. It felt like anybody and their dog could raise a $1 million seed round if they walked straight and put together 20 PowerPoint slides. There was so much money available that a company was able to raise $120 million dollars to build a $400 machine to squeeze juice from a plastic bag.

These times are probably over, but venture capitalists and angel investors are still here and still have money to invest. It will undoubtedly become harder to raise funds in 2020 compared to 2019. The 2020 funding environment will favor outstanding founders. They will still raise rounds, and the mediocre startups will suffer. But who wants to be mediocre anyways?

Let’s consider a temporary shortage of capital a good thing. Less funding means the quality of entrepreneurship will rise again. Fewer dollars will force everyone to work harder and get better. In my first two years after starting up, I would think three times before spending a dime. For example, we would never pay for any sales leads datasets but instead hack together a script to scrape such data from public sites for free. This instilled a culture of frugality that lasted much longer than the actual bootstrapping phase.

In normal times, nobody needs a $50 million Series A round six months after starting their company. A lot of such rounds led to premature scaling and created more damage than value. Potentially good companies like WeWork blitzscaled straight into trouble.

Use the temporary shortage of capital to your advantage and foster a culture of frugality and wits. No business-class flights or $1,000 office chairs. The leaner you operate, the better.

4. Finding customers

When I started my digital marketing company in the financial crisis, a lot of companies had shredded their advertising budget. So needless to say, our products didn’t sell like hotcakes. But we knew there were still businesses out there that were doing well and who needed our services. Our job was to be smart and find them.

As a founder, your job in the first year is to build something that 100 people love, rather than something that 10,000 people kind of like. If you do an excellent job of creating something valuable, you’ll find those 100 people, no matter if it’s the year 2020, 2009, or 2001. That is the first stage for most startups, and during this stage, the macroeconomic environment just doesn’t matter so much. It will easily take one or two years until you have genuinely figured out product-market fit.

Take advantage of the low advertising prices as well. If you truly offer something that people need, now is the best time to attract users cheaply. With marketing budgets cut down to almost zero in a lot of cases, you’ll be able to buy low-priced ad inventory, especially in digital channels.

Here’s to the real entrepreneurs

The next couple of years in a downturn environment will be your training day. The sales you make will be the hardest of your life. The fundraising will be slow and cumbersome, especially if you’re a first-time founder. You will get scars. But those kinds of scars will make you great in the future.

Fortune hunters who are just in the game for easy money are likely to leave the scene during this crisis. But real entrepreneurs will enter the arena and stick around. Entrepreneurship is always a tough game with limited resources, no matter when you start. One of my mentors would always say: “As a founder, you have to eat concrete.” You’ll face a thousand setbacks in your journey. So you might as well start now when everyone else is too scared to join the race. You’ll have a head start.

Story by Feliks Eyser first published at Medium.com.

Techstar Startup Digest Angel Investor

A new issue of Techstars Startup Digest Angel Investor – The state of the art on startup investing – is soon ready.

modl.ai delivers game technology that accelerates game development and enhances player engagement. Foto; modl.ai

This week; Read about Danish artificial intelligence firm modl.ai that closed a $1.7 million seed funding round this week, and more…

Join more than 10 300 other investors at http://angel-investor.startupdigest.com/

🔥 Hot off the press: “Angel Investor – Issue #34 – Exit Strategy Through the Eyes of an Angel Investor”

How to develop an exit strategy? Image: z_wei | Getty Images

Angel investors take lots of risks, and obviously they get paid … but when and how?

Read this story and more at https://lnkd.in/eJqGf-5

Berg Moe Puls; 10 Entrepreneurs Who Are Showing Why Blockchain Is Here to Stay

Image credit: TimeStopper | Getty Images

Entrepreneurs in nascent industries often face challenges that seasoned entrepreneurs might not have. In the blockchain industry, these challenges have included education, adoption and external forces like global regulation. Just “selling” new technology to clients can be a challenge.

Read this story and more at Berg Moe Puls.

Norway newsflash!

Shifter, Norway’s go-to for startup and tech journalism, has started producing a fun and informative weekly newsletter.

To get a behind the scenes look at news from the local scene, check out the latest Roundup and subscribe to support the journalism of our friends in the ecosystem!

Do you see any win-win opportunities based on my profile?

Me to the left at a kickoff in Riga

First, I would like to invite you to sign up for my Newsletter “New Venture Insights” I will send you my ebook “12 Reasons Why I Love Estonia” as a small intro gift :). 
 
Let me take a minute to give you a short introduction to what I do;

My LinkedIn profile sums it all up; I have more than 30 years of experience with funding, coaching, and growing companies and great ideas to the next level. Have an extended global network of people in both the seed funding and venture capital world. I consider myself as an entrepreneur by heart and is always looking for win-win scenarios.
 
Currently, we have invested in a few startups and are now engaged, taking them to the next level. Feel free to follow my journey at my blog, Berg Moe Inc.
 
I am also the owner of Gründerklubben (The Norwegian Entrepreneurs Club) and Bangkok Entrepreneurs, the largest entrepreneurs networks in both Bangkok, Thailand, and Norway.

Our goal is to build the world’s biggest global entrepreneurs club and support forum. We now have 147 500+ people in our network and are planning to grow fast. 
 
I am also curating Techstart Startup Digest Angel Investor  – The state of the art on startup investing and Berg Moe Puls – A global approach to entrepreneurship and funding of startups.
 
Feel free to send me an email to berg@entrahouse.com if you have any questions regarding my networks, new ventures, and business opportunities. 
 
Best regards, 
Berg Moe
+47 970 25 340
+66 9486701027

Techstars Startup Digest Angel Investor #40/17

Pitch training. Picture: Adobe Stock

Pitch training. Picture: Adobe Stock

Every Friday we send out a newsletter to more than 8800 Angel Investors around the world, once in a while I post some news here so you maybe can see the value of subscribing. Here you have some of the posts I have been reading the last couple of days and hope you find some relevant stories. Sign up for Angel Investor Startup Digest today.

Startup Angels Debuts Marketplace Platform: ‘We’re Trying To Make It Easier For Potential Investors’

Dustin Blitchok – Benzinga.com

– An $11 trillion opportunity for venture capital funding exists in plain sight, according to Startup Angels CEO Leslie Jump.

This Tiny College Produces 5 Times More Entrepreneurs Than Stanford

Jessica Stillman – Inc.

– Looking for an off-the-radar choice for a budding entrepreneur? One investor has a suggestion.

Comprehensive List Of Venture Capital Funds Managed By SIDBI That Have Catalysed More Than 500 MSMEs And Startups

Shweta Modgil – Inc42

– Everything You Need To Know About The Multiple Venture Funds Managed And Funded By SIDBI Targeting Startups And MSMEs.

Valley tech startups struggle to secure capital, organizations try to fill gap

Samantha Pouls – Azbigmedia.com

– Spencer Thomason’s tech startup beat out 63 others at this year’s Venture Madness competition.

The 50 Most Influential Women in UK Tech 2017

Clare McDonald – Computerweekly.com

– Sherry Coutu, Angel investor; founder and executive chair of Founders4Schools; Silicon Valley Com.

Deal of the week: Home61

Katie Roof – TechCrunch

– The team is announcing a $4 million round led by FF Angel, the early stage investment vehicle from Founders Fund.

Turning Good Into Gold with Cryptocurrency

Marco Lin – Hacker Noon

– It’s time to break with convention. Today, stock market convention dictates that company profit equals investor profit. Societal value seemingly has no place in this crude equation.

Angel Investor Startup Digest

17192652_1834613303445115_765076333146783240_o

Every Friday we send out a newsletter to more than 8000 Angel Investors around the world, once in a while I post some news here so you maybe can see the value of subscribing. Here you have some of the posts I have been reading the last couple of days and hope you find some relevant stories. Sign up for Angel Investor Startup Digest today.

Angel Challenge Bergen Finalists

Angel Challenge Blog

– Over the past 2 months, 20 Angel Investors have worked closely together with 6 startups screening, mentoring, and evaluating them to decide which one to invest in. Here are the companies…

Digital economy profits from angel investors

Martin Cash – Winnipeg Free Press

– The recent spate of workforce trimming by some of the Winnipeg’s largest corporate entities – Great-West Life, IGM Financial, Manitoba Hydro and Bell MTS – is not a signal that the economy is collapsing. But it does provide another warning bell of sorts that significant change is occurring – the digital economy is shaking the foundations of legacy industries.

The difference between investing and speculating

George Beall – TNW

– With Bitcoin cracking $2,500 per coin recently, it seems everyone has an opinion on what the future of the cryptocurrency is and whether it is a worthwhile investment. The hard truth though is that no one with an opinion on bitcoin is making an informed decision.

Paris has never been closer to toppling London as Europe’s tech hub

Shona Ghosh – Business Insider Nordic

– Paris is maturing into an impressive startup ecosystem, attracting foreign talent and funding. Research shows France received more VC investment than Germany in 2016.

Distributions of Outcomes and Angel Investing

Scott Shane – Small Business Trends

– This week I want to recount the story of a high volume early stage investor who described to me his experience with an inefficiency in a gambling market that he sought to exploit.

Deal of the week: Boom Fantasy

Finsmes.com

– The company, which has raised over $3m in total, will use the new funds for product advancement and player enhancements. In conjunction with the raise, Boom Fantasy has acquired Draftpot, a company that had raised $3m in funding, to double its user base.

Indian Startup Fundings Of The Week

Meha Agarwal – Inc42

– This week 12 startups raised about $215 Mn in funding altogether.

12 Reasons Why I Love Estonia

12-reasons-why-i-love-estonia_side_1

Sign up for my updated weekly newsletter “New Venture Insights” and receive my new ebook “12 Reasons Why I Love Estonia” (5 min read) with the confirmation email.

Sign up at https://app.convertkit.com/landing_pages/39338

How TED Talks killed my pitch

After been massively inspired by Chris Anderson’s great book released May 4, I have decided to ditch most of what I had preached and sold as the only true way to successful investor pitching. TED Talks is a must for everybody who are speakers, planning to do a talk or simply want to learn more about public speaking.

41WteoLHzjLChris Anderson has worked behind the scenes with all the TED speakers who have inspired us the most. He has in his book shares insights from such favorites as Sir Ken Robinson, Amy Cuddy, Bill Gates, Elizabeth Gilbert and dozens more — everything from how to craft your talk’s content to how you can be most effective on stage. 

Learn more about the book and read other reviews at Amazon.com

I just wish that I could have had the opportunity to read this book before I did my TEDx talk in Bergen in 2014. Yes, I was informed about the format and did not extend my limited time of 18 minutes, but I was not well prepared, and my thru line was unclear. I also did som repetitions throughout the presentation. I had a lot of very positive feedback on my approach, and many of my predictions regarding the decline in the oil and gas sector in Norway have come through, but I am hundred percent sure I would have done better today after listening to TED Talks Audible version for totally 450 minutes.

The main idea behind a 4 – 7 minute is to cover most of the stuff that investors traditionally are looking at in their screening. The main subjects are the business concept, business model, team and why it will succeed, niche of the market, competitive advantages, uniqueness regarding intellectual property, traction, simplified financials, capital need and exit strategy.

My focus in preparing my next investor pitch will be to tell as story, concentrate at giving, unlocking empathy, stirring excitement, sharing knowledge and promoting our dream. Is it possible to do this and the same time gives the investors what they want? Yes, I think so. If I can provide the audience with the desire to learn more and meet us in the next break or networking, I believe that we have succeeded.

 

Page 1 of 2

Powered by WordPress & Theme by Anders Norén