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Why I got on board StarOfService

I have been involved with StarOfService since the end of 2015, so it must be about time to briefly explain, why that is the case.

StarOfService (“SOS”) is a Paris based market place for local services. It was launched by CEO Lucas Lambertini and his old friend Toni Paignant and CTO Mäel Leclair.

I have a long history of being involved in online market places with a clear vertical focus. All the way back when I did my first startup (sol.dk), we experimented with market places in e.g. cars. During my time building JUST EAT I learned a lot about the vertical focus, and it’s the same with Treatwell, ClickMechanic etc. However, many years ago (10 yrs is a long time in this industry), a colleague showed me some services, that tried to aggregate all kinds of local services in one platform, and make it bookable, ie. like the old school directory sites but with a booking and service platform on top. None of those companies made it, but it always stuck in my head, that maybe one day technology advancement and user adaptation would make it possible to create a successful local services market place that was not vertically focused.

Imagine if such a service could be designed to work for both consumers and the local service professionals. In my youth, I was used to the yellow pages phone directory, and I would use it quite a lot. Seldom would I use it frequently for the same service category, but because yellow pages were the portal to all local services, then I would use that big, yellow book every month. One month for looking for this, another month looking for that – but I always knew where to find that book, and how to use it – I would flick through the pages, find a couple of professionals offering the service I was looking for, and make my calls. Later the internet came along, and it became easier to find the relevant professionals, but the service and booking experience was still old school.

My thesis is, that for all those services out there, where there is not a high-frequent use case (auditor, plumber, tax lawyer, etc.) + where the underlying scale of the category is limited (DJ’s, event organizers, numerologists, photographers, etc.) there is a real need for an aggregater service. I don’t want to go to Google every time I need to interact with all these services, because then I will be send to a new interface, a new registration platform, new evaluation of trust both ways, etc. for every category, and even for every professional. I want to go to one service, which I trust for local services and where I can easily find the relevant and trustworthy professionals and book them safely. And I know, that most of the (typically) small entrepreneurs running these kind of businesses are also ready. They are already using digital services for accounting, tax registration, etc., and they understand that the internet should be a source of business for them. In both their private and professional life they buy and book product and services, so they should of course use the same channel to earn a living. Both demand and supply needs a market place that could make the interaction a better and more efficient experience for everybody.

How difficult can that be? Why did this not happen a long time ago? Well, because as usual, it is difficult when you get into the details. How do you bridge the use case of different verticals? How do you create economics that work, e.g. who is paying who? How do you with algorithms match demand with the right supply? Etc., etc. I spend more than a year looking at various companies in Scandinavia, the UK and throughout the rest of Europe, but even though I met some great entrepreneurs, I didn’t meet someone that had metrics I could believe in. I continued, also fueled by the fact, that an American company, Thumbtack, had made it work. It took them a few years to figure out, but around 2014-15 they seemed to have had a major break-through in their business volume and they raised significant amounts of money.

There had to be someone in Europe, that had also understood how to do it, and I badly wanted to part of that venture. Building leading international companies is what I really like to do in my professional life, and when it is in a local services market place I simply can not be involved.

Through an introduction from Guillaume Durao of ID Invest, I then met Lucas from SOS. My first call and then later meeting with Lucas I will never forget. I knew very little about Lucas before I met him, other than he was quite young, having launched SOS straight out of school, so I was surprised to see such a “solid” appearance from his side. Some would call it French arrogance, but let’s just say that Lucas had no intentions of being impressed by a punk like me. In normal circumstances that attitude would be a major turn-off for me, but Lucas managed to play it in a way so I instead got respect for him. He really knew his stuff, he was smart and stood out as a world class fighter. And I like a smart general in charge of his company, also if he has a bit of personality and edge.

In some strange way, the first discussions in the autumn 2015 went well, and we decided to move on in our discussions. That revealed four things for me. First of all, Lucas is a stellar guy. Funny and very easy going when you get on the inside – he just had to test me a bit, and after that he became one of the easiest people to work with I know. Secondly, where my first meetings with Lucas was maybe a bit on the edge, then meeting Lucas’ partner and friend Toni was a pleasure from day one, super nice guy that was all over the business. Thirdly, the SOS organisation was three guys in a room in Paris, and then another 40 people spread out over the world. Given that SOS already had very decent traffic, usage and revenue, then I had never seen such a distributed organisation run so well before. And fourthly, the metrics SOS could show were a revelation. They had made it work in France! Traffic was growing fast, they had done it with very limited money (from high profile French angels and seed money from the stellar guys at Point9) and their unit economics made sense.

It did not take us long to agree I should join the battle and become advisor and board member at SOS as well as investing in the company. It’s been 15 months now, and I have enjoyed it thoroughly. There has been lots of changes in the company for sure, but overwhelmingly positively. The company raised a decent series A round, and now there is a real organisation in the Paris office to supplement the international organisation, incl. great people in the exec team like Jean-Francois Rochet (ex-eBay and PayPal), Andy Wilson (ex-GetYourGuide and Rocket Internet), Nicolas Garnaut (ex-AppTurbo), Augustin Neyra (ex-Melty) and my old colleague Guillaume Dellamare (JUST EAT/Alloresto).

SOS wants to be the international leader in the space, and Lucas & Co. is leading the charge to make it easier for everybody to engage with local services. France is the core country now, but the international roll-out is gaining momentum. Good people, I like it!

Billedresultat for death of yellow pages

Why Nordic Makers invested in Peergrade

At the end of summer 2016, Nordic Makers decided to invest in Copenhagen based Peergrade, which  offers a SaaS platform to facilitate peer assessment sessions with students, ie. a solution where peer students will be partly or fully responsible for grading each other.  The company is founded by CEO David Wind and his co-founders Malthe Jørgensen and Simon Lind.

So why did we at Nordic Makers invest in Peergrade and David & Co?

The macro argument: innovation in education and the welfare state

The way education worked was up until only a few years ago the same model as it had been for many-many decades. The educational framework was dominated by keywords such as books, teachers in a physical classroom, the teacher preaching, etc. Classic stuff. When computing arrived, it in general didn’t drive a lot of significant change in that model for a long time, but now it’s happening. In the beginning it was about having much improved ability to search information and communicate with peers in far away countries, but now it is also students all the way down to primary school that use computers/tablets in the class room, MOOC democratizing education, robots that learn kids to collaborate and be creative, etc. And everytime there is change due to innovation, then there is business to be made. The new buzz word here is edtech. It promises lower costs and better, life long learning focused on the individual and on the topics we need most as a society. Hurrah! Let’s do that. Peergrade by definition ticks the “macro trend” box.

Edtech is a real thing, it will deliver. At Nordic Makers we believe so, and we wish we had taken our youth education in the current edtech regime. Edtech is therefore at a macro level an interesting area for us to invest in, ie. we believe it in general is a force for good, and new, great companies will be build.

Furthermore, we believe like many other people, that in order to maintain the welfare society most people in Europe fundamentally are happy about – and many people throughout the world admire – then we need to reform our societies. It is very expensive to run a proper welfare society, and since our taxes in general already are a bit too high (personal view), then part of the solution has to be to work smarter. Digital solutions provide part of the answer, so startups that can help our partly or fully state funded education systems operate not only better, but also smarter are most welcome. We believe great companies will be build to help vastly improve the way services are delivered by the welfare society. Peergrade ticks the box, since peer grading when used frees up a lot of time for professors. On average 80-90% of the time a professor spend on evaluating course work is cut out. How that extra time is used productively is another matter, but as a starting point peer grading helps professors to do a lot more research and course work in the same amount of time.

The two above macro arguments mean that Peergrade is an interesting company, but it is of course not enough.

Why Peergrade is the right concept and company

Thinking back at my own time in university (and to some extent gymnasium/high school), I am pretty convinced, that a big part of my learning was not self studying and going to lectures, but sitting with my fellow students and discussing all kinds of topics related to what we were learning (economists have a tendency to get into nerdy discussions). It helped I had some pretty sharp friends that I was sparring with. I think most people can significantly improve their learning curve by not only looking in books and listening to professors, but also engaging with your peers. And this is conceptually what Peergrade does – in an anonymous format, but some of the mechanisms are the same. You look at, what a person at the same level as you has done, and then you reflect on that and provide feedback in the form of rating and associated comments.

At first it sounds crazy to let students rate other students, and there is some debate about that. However, there is now substantial fact based evidence, that in many situations, peer grading actually provides better and more accurate rating of students. Personally, I think I would have loved to use such a system – and that personal conviction always help a bit when deciding on an investment case.

Even if the product conceptually is good, that doesn’t mean that the product works in the market. When we did due diligence, we checked out the incumbents: among others the world leading online education platform Blackboard. – and that is, ahm, uhm, quite interesting. When I saw this presentation of their product, I was quite puzzled. To briefly summarize: the main ed-platform competitor has fallen in the classic feature-rich-UX-poor trap. There are other players out there, that are doing a better job, but everybody is still small, and after having had my medical professor brother testing Peergrade on one of his courses, then we knew it worked really well, even though it was early days. UX was nice and fairly slick, and the advanced statistical models that helps to make fair grades and eliminate peer bias is strong and being constantly improved. Furthermore, the teams ability to use natural language processing for inferring the quality of text feedback between students is crucial for creating the solutions credibility in the eyes of it’s users. Nice!

On top of this, Peergrade has shown, that they can get users engaged and start paying in a way that is promising. It is still early days, but there rare good indications that sales metrics and net unit economics will be attractive. It probably helps, that the academic community communicates a lot across borders and institutions, so good ideas can travel fast and obtain viral effects.

Some would argue, that a peer grading solution for universities is a niche product, that could never be build into a major company. And at first sight, I agree. But then we come back to some of the macro trends I mentioned in the beginning. First of all, then we believe that peer grading could and should be an element in education also in high school and even with a few tweaks in the normal school system. Why not also at part of the new paradigm of lifelong learning which is increasingly important as part of the switch to knowledge based societies, where we all continuously have to upgrade our skill set. Furthermore, maybe peer grading as a key feedback mechanism for constant learning could be a substantial platform for many-things-educational. So yes, at Nordic Makers we can dream of David & Co. building a very substantial company that has major and positive impact on our future society.

At the end of the day, all of the above could be aligned with the stars and the moon, and it wouldn’t matter at all if the team was not someone we could believe in. Such an early investment is also totally dependent on the CEO and his team. In truth, even if there were fewer macro and micro elements in this investment case, then a quality team would tip the case towards a yes. Well, let’s just say that in the case of Peergrade, then Nordic Makers are very happy to have invested in David. He gets very high grades in our grading system.

 

Public purchasing regime as a barrier for the building of tech clusters

In most countries there are plenty of examples of the State (and it’s associated public organisations such as Municipalities, Regions, etc.) buying IT solutions that ends in a disaster. In Denmark we have a pretty long list of such failed, publicly owned IT projects.

Everybody that has been part of IT development knows, that innovation doesn’t always work, and sometimes it just goes wrong. That has to be accepted as a starting point. However, there is something else that our politicians and public servants needs to be aware of before they launch tenders for new IT systems: the purchasing and development methodology is often wrong. It is not only bad project management that causes the issues, but also the way the projects are laid out from the beginning. This causes not only bad use of our public money as well as bad solutions for all of us, but it also undermines the objective of building tech clusters, for example in relation to welfare technology. In Denmark, where I reside, our last left wing government wanted welfare technology to be a Danish export success, and so does the current right wing government, so the local industry receives government grants. But grants is not the key, customers is key.

(NB: I have invested in a few companies that sell to the Public sector – e.g. Sekoia, Famly, Peergrade as well as my own construction related company, GenieBelt – but I hope my arguments clearly shows, that my agenda is not entirely selfish).

To understand my point about how the public purchasing processes are hurting us all, then we need to look at how the projects that the State et al are buying are normally organised. They will almost always use the “waterfall development process“, i.e. first a very loooooong specification is made by analysts, then this specification is shipped over to the developers who then start coding for a few years. The actual development process will be structured in some phases, but fundamentally progress is seen as flowing steadily downwards. It is sequential and not iterative. Several years after the first notes on the specification it is finally delivered to the users.

More and more often this is not the right approach for developing systems. There are multiple problems, the first of which is that often the detailed specifications are totally out of tune when the project is finished many years later. Both user needs and technology has moved on.

In the tech startup world this is pretty obvious. After the good old .com days we have increasingly used more agile development methodologies with emphasis on iterative processes. We will try to find the MVP as quickly as possible. We look for the UX and feature set that as a minimum gives a path ahead in terms of how to achieve the core benefit of the product. Often the hypothesis is changed multiple times in the process, my own journey with GenieBelt is a good example of this, where we on a monthly basis would ask our selves, our data and our beta customers if we were on track. After the MVP we will move on, and iterate towards a commercially viable MVP, etc. etc. Always iterating, driven by monitoring actual engagement metrics, always prioritizing the important stuff and cutting out all the nice-to-have clutter. It is impossible to wait 5 years and many Millions of EUR/DKK before we know if we have something that works.

There is a lot of advantages of this model, e.g. we will quicker get to the core of the problem that needs to be solved, and we will quicker start to challenge various hypothesis on what the solution should be. Less risk of spending years of coding on something that makes no sense. Furthermore, the ultimate solution will in general be better, because the specifications are constantly being updated based on real user engagement, and not what an analyst believed some years ago. And that is also the way we should build welfare tech solutions to the public sector.

Why are not more public tenders based on this development model? I don’t know for sure, but there is some rigidity in the system. Also, the big and well-established players in the market (which in Denmark would be KMD, IBM, CSC, etc.) has an interest in keeping the public sector in this development cycle, since their entire business system is tuned to these kind of processes. But if it doesn’t change we will stay where we are: huge specifications that are partly irrelevance, year long projects that are delayed and too costly. The big guys should learn from the small innovative startups to earn their right to keep on serving our public sector.

But the problem is actually even bigger. In our part of the world (Denmark/Scandinavia/Nordics) we have a unique expertise in welfare technology. This can be used to create internationally leading tech companies, that based on the (small) home market export our state of the art solutions to the rest of the world. But one of the pre-requisites of this is, that we actually have a home market. A market where we fine tune the commercial PMF, where we start to build scale and recognition. If we can’t offer our startups a home market, then it is very-very difficult in the welfare tech space to build an internationally leading company. Since the public sector has monopoly power on big parts of the welfare system, then we need politicians and public servants in charge to recognize this issue, because otherwise we are missing a significant opportunity – on top of making it worse for our own public sector.

A concrete example will make it obvious what we are dealing with. 3 years ago, the newly founded company Famly launched a platform for communication and administration in the daycare/kindergarten/nursery sector. PMF was found, the team started selling after a while, and now they have sold to more than 200 institutions in Denmark. This summer Famly received a couple of Mio. EUR for their growth in UK, DE etc. There are other players in the market, but Famly is the Scandinavian company moving the fastest due to a super slick product with some of the highest engagement metrics I have ever seen.

All looks pretty good, because there are another couple of thousand institutions in Denmark alone, which will be a solid home market to support a growth journey where tens of thousands of these customers could benefit from the platform in the coming 5-10 years. But then something happened last year: a public IT company (Kombit) decided that it was about time that the Danish municipalities should have a solution for their nurseries. Instead of asking the existing providers on the market, they instead made a looong specification, and have recently put the project up for tender. In total the project is planned to last 5 years, and costs several hundred millions of kroner (7,4 DKK = 1 EUR). Almost all Danish municipalities have signed a contract supporting this project, even before the specification was finished. And I am sure, the municipalities did it without really checking the market.

So now this market will freeze, because the municipalities (which are 90%+ of the customers in Denmark) will wait until 2020 (!) before they can get a solution they need TODAY. And then they will pay a lot of money and get a product I bet is worse than if they had asked existing providers to start delivering TODAY. Plus of course a monopoly has been created for this kind of solution since all the municipalities decided they would be part of the tender.

On top of this, the existing startups are excluded from the tender, since it is stated that in order to be considered as part of the tender, then a provider needs to have DKK 250M in revenue, equity of 200M and be profitable over the last three years. They might as well have written: “all startups, fuck off!”. Sorry my bad language, but I am a tax payer and voter in this country, and it is demotivating to see this unfolding.

I dare to argue, that if the municipalities today choose to buy from the existing providers, then they would not only get a solution immediately that would provide clear value, but they would also ultimately end up with a better solution by 2020 at a lower cost.

The public sector in the Nordics is about half of our economy. If the public sector does not design purchasing processes that are supporting the development of tech clusters, then we are shooting our selves in the foot. In some sectors this is more important than others, in welfare tech it is totally essential.

UPDATE: just to be clear, there are plenty of good examples, where the public sector in Denmark/Scandinavia works well with small, progressive companies. In GenieBelt we have several forward looking customers among the municipalities as well as government agencies, and Sekoia could not become a success unless many municipalities/kommuner took a bet on the solution a couple of years ago. The point is, we need much more of this!

 

TechBBQ – supporting the Danish/Copenhagen/Oresund tech community

Copenhagen & the Øresund Region (what some of us now calls “Greater Copenhagen 🙂 ) has seen an impressive progress in the strength and breath of the tech scene in the last few years. International recognition has come from companies that have established leading, international positions (JUST EAT, Zendesk, Unity, Sitecore), but plenty of other companies big and small are also getting funding and attracting talent like never before. No need to mention any names, but there is plenty.

However, there is no need to rest on the laureals. The best way to keep growing our industry is to participate directly in building great companies with great teams and products. But there are elements around the eco-system which also matters a bit. One of the things I felt was missing some years ago was a big conference where everybody could meet once a year, celebreate successes, learn from failure and the international investors knew they could meet everybody in one go. Therefore I teamed up with Martin Bjergegaard, Esben Gadsbøll and Daniel Laursen to create such a conference, which we decided to call TechBBQ.

We were ambitious from the beginning, though we had no money, but with a free venue (thanks to Dansk Erhverv for letting us use Børsen!) and a lot of volunteers we managed to get 300 people gathered to a great day in Copenhagen in May 2013, our beta product had been well received. That was the start – lots of positive feedback, an event like this was definitely needed. Paris has Le Web, Helsinki has Slush, Madrid has EEC, etc. and Copenhagen should have TechBBQ as the one day a year, where we would all be together in the real, physical world.

In May 2014 we had an improved program and 600 participants, but still not with international swung. Then May of this year we raised the stakes and rented the magnificent Opera House in Copenhagen – an iconic building at the waterfront built and funded by one of the biggest Danish entrepeneurs 10 years ago. This, together with a great program including speakers and investors from all of Europe, did the trick. It was no longer a skunk-works event but an “almost” fully fledged conference that really gave a good impression of what happens in Copenhagen/Denmark/the Øresund Region.

TechBBQ is not the only piece of infrastructure that has seen the light of day in the last couple of years, other notable mentions should go to e.g. CPHFTW, various new co-working spaces, a big increase in volume of meet-ups, increased activity from smart angels, etc., but in it’s own way I believe TechBBQ can play a role in making the community stronger, connecting people, facilitate learning and ultimately support better companies in the future.

We are looking forward to organising TechBBQ 2016 – even though it is really a pain and a logistical nightmare, but what the heck!

OperaTechbbq15 2

 

 

Why the Apple iWatch might be targeting your home

I normally doesn’t comment on various tech hype issues on this blog, but I will make an exception with the Apple iWatch because it is related to something I have spend a bit of time on, and where I have a personal interest: the intelligent home (& car) of the future.

There has been a lot of hype re this watch, and commentators/bloggers/journalists has pointed out it has emphasis on social communication and fitness with a bit of payment thrown in, while others has talked about it being a luxury fashion object. Well, I’m sure all of that is right, and those arguments will help to give iWatch an initial momentum the first couple of years, but I also think there is a much bigger category Apple ultimately wants to target in the 5-10 year perspective. Everybody agree, that Apple is not just launching a watch but a device that will be a platform for a future, massive business. Fitness is not a big business in the eyes of Apple, payments is pretty big, but even bigger is the category “everything-I-put-in-my-home”.

I am getting quite a good insight into the world of Construction, professionally through Geniebelt, and privately because I’m doing a bit of work on my farm. Especially the latter has made me look at how we will change the way we live in and interact with our home. For 100 years (or so …) we have gradually been adding all kinds of electric gadgets to our homes, everything from lighting bulps and practical machines (the refrigerator probably being the most important one) to entertaimnent products (TV, radio, etc.) to modern day machines connected to the internet (PC, iPad, etc.).

Now all the craze is about the internet of things, whereby we will connect everything to the internet, so we can get loads of data on our environment, machinery and home in order to live a more convenient life. How awesome, imagine that all the gadgets in your home talked to you, and you could manage them all. Control lighting in all of the house with the touch of a finger, increase ventilation/temperature a bit before getting out of bed, turn off the TV when the kids forgot to when sitting in the next room, open the door when the repair man needs to get in but you are shopping, change the music from 1Direction to Pink Floyd, start the coffee machine while still moving the lawn, turning off the alarm before going downstairs in the morning, etc, etc. – endless use cases.

I am obviously not the first to spot this trend, but the question I have asked my self the last year is, how should I manage all these connected devices and sensors? The first answer would be “your smartphone”. Well, yes – and no! When I’m at work, I sit with my iPhone (just got my new iPhone 6, love it) and it is always within reach, just in case some very important person called me to say very important things. However, when I’m home, then I’m home and don’t want to be a slave of the phone. It might be on another floor than me, and definitely in another room. So, it is not convenient for me to use my phone to manage all my home gadgetry – it’s no better than getting up from the couch and walk to the light switch/try to find the TV remote controller/go to the Spotify speaker/etc.

But, if I had a watch on my arm, that would all be very different. I would in most cases be ok to wear a watch at home, very different than running around constantly with the in-size-ever-increasing smart phones. I think ultimately this is a key use case that Apple is gunning for. The interface needed to manage pretty much any device and sensor can be fitted to an iWatch. Look at the remote control for the Apple TV – isn’t that already perfectly designed to the iWatch?

From Apple’s perspective, the calculation goes like this: we are the most valuable company in the history of mankind, so how can we grow even bigger in a meaningful way? They need to address absolutely huge markets in order to move the needle, so putting together a cunning plan to be the platform for the intelligent home of the future sounds about right. And throw in the ability to also operate your car using an Apple platform plus some payments etc. and they are pretty much only missing energy, weapons and drugs.

This is a very long term vision for Apple, and it does take the power and stamina of a company like Apple to pursue such a vision. It will take a long time and lots of investments before Philips Hue lighting systems, Samsung smart fridges, Danfoss thermostats, Nilan ventilation , big Sony’s full-monty-system or small Form’s smart sensor and a few thousand other companies accept Apple is the gatekeeper to their products and services. But the watch idea is solid, and it makes sense to get started early on, and avoid positioning the watch right now as the interface to your home, because that position would disappoint consumers. The key thing for Apple is to 1) start building a general use case for the iWatch, while 2) working hard on getting a lot of partners onto their platform – something they tend to be pretty good at. Gradually the brand and use case is being build with a position in the upper end of the market at first, apps are being developed by the relevant suppliers and Apple is building momentum as the platform to integrate all the stuff you want to interact – including all the devices in our home, which as an aber-dabei will be much more than people realise today, e.g. the intelligent toilet to check your healt status. And in the beginning it is anyway mainly affluent people who are going to invest in this stuff for the house, so price points at $500 and up makes sense.

I think – and hope – that this is an integral part of the real plan behind Apple’s big push behind a product category, which in it self is tiny compared to phones & computers. This is not about watches, fitness or luxury products, it’s the first major assault from Apple’s side in the future battle to run your house and all its smart devices. This will be fun and interesting to watch. And “no”, I don’t own any Apple shares.

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The takeaway market place and distribution

In a few months it is 2 years ago I left mighty JUST EAT and the online takeaway industry. I have not spend much time on the industry since I left, it’s important for an old CEO to let his old company move on. But now it is a while ago I left, and I have been thinking a bit on, where this industry is heading.

In some ways a lot has happened in the industry, i.e. more consolidation, a couple of impressive IPO’s and continued uptake of mobile usage. In other ways, the industry is very much it’s own self, i.e. same business model, same service and same issues scaling such a market place. It is therefore relevant to think about, what is the next big thing that can really disrupt this industry in the next 5-7 years. And it’s not mobile, because mobile already happened and is just fueling more growth for everyone now that all the big players have managed to make mobile a core part of their product road map and service offering. It’s the same service wrapped in a more accessible format. Great, will make penetration go faster and longer, but not upsetting anyone except those smaller players that didn’t adopt.

There are a couple of other areas where I think disruption could come from, and one of them I have been talking about at such an early stage, that most of my old colleagues believed I was joking or just mad. It’s distribution – the logistics of getting the food from the restaurant to the consumer. As anyone involved in the takeaway trade will know, the main operational hassle of running an online takeaway market place is not cooking food, running the website or running marketing campaigns. The hassle is to make all the moving parts work together, and the cog in the wheel that causes most trouble is distribution.

The big chains have their own logistics departments, that often does a very decent job, but in most countries the sector is completely dominated by small, independent takeaway restaurants that are struggling to operate small, sub-scale and inefficient delivery operations without technology, focus or professional management. This causes lots of pain for the consumers, and their main complaints are mostly related to exactly delivery, e.g. “where is my food?”. Too often great food entrepreneurs/restaurant owners get into trouble because of the logistics, and that also mean that too many restaurant owners decide not to do delivery food at all. In some cases, this has been spotted as a business opportunity entrepreneurs, who have build RDS’s (Restaurant Delivery Services) who have slowly build out to some scale, but none has become really big.

JUST EAT has for quite a few years operated a RDS in Denmark. I used to argue, that this operation was not core to the JUST EAT Group strategy at the current time, but that it could be in the long run. The Danish example should learn the company all the tricks on how to run such an operation, what technologies could drive efficiencies, what management processes would support scaling, etc. The idea was, that the day a market place had received lots of scale in a country (like JUST EAT did already a few years ago in Denmark), then the time was to take the service to restaurants and consumers to the next level. Restaurants would love to get rid of the logistics challenge, and would get happier customers because a professional RDS would do better. The consumers would love to get a more consistent delivery. And on top of that, well-known technologies could be used to create much more transparency on the infamous question “where is my food”, since a technology based RDS would always know where what delivery vehicles were with what food to what customers, and this information would be available to all involved incl. the consumer. Most consumers are ok if there is some delay in delivering the food on a busy evening, but the lack of information on what level of delay is causing frustration. And adding lots of costs to the market place in terms of extra customer care calls, loss of customers, frustrated restaurant owners, etc.

So, my basic thinking is, that the combination of taking charge of logistics at scale + technology + integration with market place + professional management will create a much better experience for both restaurants, market place and consumers, and it would also drive more restaurants onto the market place, which again drives more scale, etc. Furthermore, this has to be taken into the perspective of companies like Über having insane valuations by disrupting local logistics with an innovative, crowd-sourced model. Imagine a company, that in the period from 16.00-21.00 had hundred of cars in a city like London busy deployed to deliver takeaway food in an efficient way, and then used the same cars as logistic assets for other stuff at other periods of the day – some cars could be owned by the company, other were crowd-sourced. It could be used as taxis (many taxi rides are single rides, so the classic delivery van would still be good for that), groceries (check out e.g. Hubbub), or maybe as part of the massive delivery infrastructure now being set up by the big e-commerce players like Amazon, Rakutan and eBay. Everybody in the now huge e-commerce space knows, that one of the key battle grounds in the future is physical distribution, and the online takeaway market places are very well positioned to build an infrastructure that has all kinds of synergies both with the existing core business as well as other even bigger industries thirsting to add logistics infrastructure. And if the online takeaway companies doesn’t build the infrastructure, then maybe Amazon is coming to their business from another angle – or maybe startups basing their RDS on technology, crowd-sourcing, professional management processes, etc., for example Index backed Deliveroo who are using some of these tools.

JUST EAT already has the skills and technology, so they already have a solid base if they pursue this vision. Apparently, Grubhub is testing how to build a delivery network in the USA, and there are rumours on other European players testing the waters as well. If the two big guys in the next couple of years decide to build out this part of their business to be part of their core, they have the scale, financial muscle and expertise to take the industry to the next level, and gain a competitive edge that will be much appreciated by restaurants and customers. My guess at least.

On top of this, I believe the longer term perspective (which is what really made people believe I was crazy back in 2009 – and probably also a bit in the years after) is that “delivery technologies” is changing. Google Cars to supplement delivery drivers and Amazon drones to deliver small packages is happening, and it is moving much faster than what most people realize. Yes, there are a few legal issues, etc., etc. (details, details!) but the technology is almost there today, and as (almost) always technology will prevail in the long run – and the forward looking and bold will reap the benefit.

Everything for those that are hungry and lazy!

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Year 1 and the journey ahead

It’s a bit more than one year ago I left JUST EAT, so it’s time to reflect on how things have panned out in the next phase of my startup life. I don’t want to share everything here (a bit of privacy, thanks), but a few relevant things are worth noting – a rundown in numbers:

These numbers are only some of the data points, and don’t paint the whole picture of my new journey, but it does say something about the route towards building great, tech based companies in another capacity than CEO. It’s still early days, and no one knows how much of this that will work (other than for sure some of it will not), but I’m confident there is lots of substance in these companies. Lots of great personalities for sure -;)

It is very different being a chairman/partner than a CEO, e.g. it is no doubt much tougher being the CEO than being in my current shoes. But it’s not all fun and creative thinking to fulfill the role I have now, it also has it’s share of frustration, doubt and risk. But the point is, that without proper involvement it gets too fluffy, and not at all satisfactory for me personally. If you want the fun and joy, you need to take a bit of pain as well.

And what have I learned – a lot of interesting details of how very specific industries and products work, but most importantly I have seen again-and-again that talent & energy is what makes all the difference when building companies.

Thanks to all those, that helped make the last 12 months exciting!

(nice picture from Norway to encourage an entrepreneurial spirit)

GenieBelt – the Genie to help Construction, now with funding

We, the construction genies from GenieBelt, just raised an angel round of $½ Million, yehaa! That’s not a lot of money compared to some bigger funding rounds I have done in the past, but it’s exactly what we need and the feeling is as good as when I did £40 Million rounds. And what will the money be spend on?

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Together with a few other guys I founded a new company about half a year ago. A company which has high ambitions of helping the small- and medium sized businesses in the construction industry to improve the way they handle construction projects. Digital tools has been used in many years in construction, and also among the SME’s, but what we are building will be different than anything else the industry has seen. Here’s a bit of background.

Back in February I met up with my old mate, Peter Bang. Peter and I studied economics together many (many-many, too many-many) years ago and also had a stint abroad as well, where we broadened our horizon in business, British ale beer, and snooker. Peter left Uni and has stayed loyal to the same company ever since, which is a very rare thing these days, but that is probably also because it’s a very successful company, Velux. They make building materials and is especially renowned as a world leader in roof windows, i.e. Peter knows a bit about the construction industry.

We ended up talking about how his recent experience from refurbishing his house had been less than good, and since I was planning to refurbish my farm, we came to the conclusion that someone should build a work-flow management system that could help construction managers to better run small and medium sized projects. Mobile, cloud, super slick UI and all that – done deal, easy peasy, next!

I started doing research in the area, which – despite my fascination with big construction machines and power tools – is not that familiar to me, but then (the usual story) I started meeting a couple of people that had a much more personal angle on the Construction industry, and also supported the idea, i.e. Nikolaj/CTO and Joachim/everything-commercial.But the big event that took this forward was meeting Gari who just happens to have a construction engineering background and was putting together the pieces of his own start-up with two other guys (Francisco & Kacper). Their project was as a starting point more narrow than what I was considering (they still won Venture Cup twice though), but Gari and his team did have a longer term plan. And so it began …

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It’s been half a year now, and our 10-12 man team is now running full speed ahead. We just recently partnered up with a guy who knows more about our space than most: Bob, who is the co-founder and CEO of a company that some years ago tried to do partly what we are doing now, but the technology was not quite ready, and he never had the kind of resources we are deploying now. Bob has taken our UX capabilities to new highs, stellar person.

Some of our team members are in London and Poland, but the main part is sitting in Copenhagen, where I’m spending a couple of days a week at our office, and it’s nice again to be involved at the very early stages of company building. That is always a very humbling experience.

“So again; what exactly is the product”? you might think – we will get back on that. Right now the entire team is chasing our product vision, by doing use case research, UX’ing and developing so we are moving quickly ahead. Some time in by summer 2014 we can show version 1, and we plan to amaze you. Building companies based on new stuff is not easy, but the team, the idea and the market is there.

NB: thanks to the angels which have supported us so far, e.g. Ditlev, Claus, Troels, Mat & Giorgio – we will do our utmost to make you look good!

Part of Sekoia – work flow management for assisted living

Everyone knows the demograpic facts: the human population is not only growing, but in the developed part of the world (and increasingly so in other major regions, e.g. China), the proportion of elderly people is growing even faster. And the old are also getting older! That poses a big challenge, since it is a core responsibility of any society to take care of the elderly, those that worked hard so those following would inherit a better world (preferably!), and with a bigger and bigger portion of the population being older it gets costly for the working population to sustain a good level of elderly care.

As in so many other situations, part of the answer to that challenge lies in technology. Biotechnology and innovation in health care in general is of course part of this. An important part of the many elements that needs to get in place, is how to make existing assisted living/elderly care more effective. In Scandinavia there are thousands of homes for elderly people, that no longer can live by them selves, and need daily support – and you can add tens of thousands more in countries like Germany, UK, Japan, USA, etc. If you visit these homes, you will see how the nurses and assistants are running very fast to cope with all their daily routines and the constantly appearing emergency situations. They are also acutely aware, that they will not get a lot of extra resources to cope, maybe on the contrary – so how can the work be organised more effectively so they can maintain a good service level with sufficient “warm hands” to take care of the elderly?

Half a year ago, I was contacted by some of the founders of Sekoia (not the VC of more-or-less the same name) who had worked on a solution for exactly that: work-flow management for the elderly care homes. At first, it might sound like a simple issue, but I am working/has worked with several teams doing work-flow management for specific industries, and the devil is always in the detail. You can use some generic solution, but the big productivity gains always come from customizing to the specifics of the industry. And the Sekoia guys had spend nearly three years fine tuning the concept before they recently went into sales mode, i.e. they knew very well what the needs are of this sector. And with their open platform concept, I believe this is a winner.

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The team ticked the boxes for me (chemistry, potential, progress, I can help, etc.), so we quickly decided to team up, and I became investor and active chairman some months ago. I have spend some time working with parts of the team, and last week we had a couple of days off-site (in a cabin used by kindergartens that needs a bit of nature – proper!) where I got to know the whole team. That only gave me more confidence in that we have something really good brewing. Lately, the team has turned up the volume and sharpened the philosophy behind the solution and seen even better customer feedback. The team has also started to get more into sales mode, and talked to the relevant institutions (p.t. only Denmark, but we have big plans …) about the philosophy behind the solution, and there is great reception, it really is a way for the sector to both drive effectiveness as well as quality. Even without significant sales activities, Sekoia now has dozens of solutions sold. That might not sound like a lot, but in Scandinavia, where we have a relatively sophisticated set-up for assisted living, no other player has more than one pilot in action. And in the rest of Europe, we haven’t seen anything like our approach – this might end up as a good example of Scandinavian welfare technology being exported for the greater good.

The number of 85+ year olds will grow by more than 150% between 2005 and 2030, and the population which is 100+ years old will quadruple, so wish Sekoia good luck in succeeding with the mission of making assisted living better and more cost efficient. As a minimum, the solution needs to everywhere when I need a warm, helping hand some time around 2070!

OldPeople

Wahanda – why I get involved in “hair and beauty”

Those that know me would not say the “hair & beauty” segment is a natural fit for me. My wife would even say I’m the anti-thesis to hair & beauty (she married me because of wit, charm and money …) so how did I end up as chairman of Wahanda?

Earlier this spring I got a ping from Lopo Champalimaud. Lopo is co-founder and CEO of Wahanda, Europe’s biggest destination for salon – and spa bookings. Initially I was a bit baffled, because why would people in the beauty space talk to me, they obviously had never met me or seen pictures of me, but when I then started chatting to Lopo, I quickly realised the logic for why I should talk to Wahanda. A while ago, Lopo had decided to go all in on the booking part of his business concept, i.e. if you need to get you hair done or want a beauty treatment, then go to Wahanda, check out the local salons in your area, and book directly into the system. Obviously, that is quite similar to the underlying model of JUST EAT – however, there are also some critical differences which team Wahanda has spotted and are getting the most out of.

Lopo’s Wahanda journey has so far been 5 years long, and lots have been achieved, but I am particularly excited about the focus on building up the best and biggest network of local merchants that can offer great supply of hair and beauty services through out the UK, and internationally as well. Lopo and his team (incl. the latest add-on of Simon and Chris) has more experience than anyone else in this space, and the size of the business is also well ahead of the many smaller players in the industry. Building internationally leading companies in emerging industries is one of the greatest professional experiences I know of, and I think Wahanda has a great opportunity to do exactly that.

A chairman role is very different from the many years where I was running companies, but I hope that background is a strength. I need to help & support those that leads the organisation & strategy, not be the big leader or strategizer my self. This transition is massively helped by the fact that Lopo and I get along very well, and through a very open discussion atmosphere we get everything on the table and leverage our different backgrounds and perspectives. I’m looking very much forward to the Wahanda journey, this will be both very fun and very big. And I might even learn a few beauty tips along the way.