Younoodle - a cloud based start-up

The second visit on the MMT 2013 study tour was to Younoodle and Torsten Kolind who kindly took a few hours out to explain about his company and some of the differences between the start-up atmosphere in his native country Denmark and Silicon Valley.

Torsten - centered next to the flat panel

Torsten got his experiences from own web based ventures and later from heading Venture Cup - a competition which encourages students and faculty at Danish universities to start their own businesses.

Younoodle was co-founded with Rebeca Hwang. In brief, what they do at Younoodle is providing a platform that enables structuring of uneven data sets and organising them for decision makers to have a clearer picture of - let's say an uneven mass of applicants or e.g. entrepreneurs.

Still a bit hard to understand?

Imagine you run a trust fund and despite the fact that you have a dedicated application form the input varies anyway which turns the selection process into a time consuming and cumbersome activity. Call Younoodle.

Or you are a government who runs an entreprenurial programme (like Start-Up Chile) and need to match applicants against various parameters. Call Younoodle.

From the Younoodle homepage it seems like they also match entrepreneurs with like minded. They rely on the Podio collaboration platform which is a part of Citrix.


Now on to the differences between Denmark and Silicon Valley...
In Silicon Valley it's a national sport to think business - most faculty members at Stanford have own start-ups on their curriculum. At business meetings with potential customers one should be extremely well prepared as it might as well turn out to be your next investor.

In Torstens opinion running a business in Silicon Valley is like playing in the premier league in ones first season. Business life is like in a jungle but the struggle for constant survival has the positive effect that start-ups eventually fail at an earlier stage and probably with less money spend. Entrepreneurs have gained experience and are thus more valuable.

In Denmark there are regional supportive systems for entrepreneurs - depending of the maturity  stage of your start-up a variety of possibilities exist: help for making a business plan, legal assistance, financing and loans for export, cheap office space for the new company etc. The massive support might keep unfeasible business ideas running for too long (but of course the intention is to support them long enough to live by themselves).

A major difference is probably also the excessive amount of venture capital available in Silicon Valley compared to Denmark. Further on there is tax relief on start-ups where as Denmark until December 2012 had a certain tax on people who owned less that 10 % of a company.

When it comes to intellectual property the venture capitalists in the valley know that building a sustainable business is 2 % idea and 98 % execution. In Denmark we tend to be more secret about the idea itself, keeping it tight longer and discuss it with a few people only... This i a learning we could take with us.

In SOMA (south of market) where Younoodle resides you can enter any café and pitch your idea to the nearest stranger and get som valuable feed back! 

The financing differs a bit as well according to Torsten. A recent initiative is so called accellerators who will back up your initial idea for 3 months, after that you will look for seed capital, then the A-round, the B-round ..... and finally IPO if necessary. After the A-round the entrepreneurs will most likely still own more than 50 % of the shares.
In Denmark, he said, investors typically demand a higher premium for their risk which probably leads to projects that never gets funded.
It is a discussion worth how delution will affect the entreprenurial mindset of the founders. Can they sustain workload, creativity etc. at an decreasing share of the company. Of course they must accept this but at what point does it have negative effects?

From what Torsten told it seems like the VC's in Silicon Valley prefer to have a minority stake in a company which is still run by the highly dedicated people who founded it. Rather a smaller portion of a nice meal than no meal at all?

Got a little hooked in new ventures? Jump over to Venturebeat and have a look...

The start-up must have: a shuffle board. This one is brand new!

Lean production - out of the textbook

Sea Recovery production facility in Carson, California

When visiting Sea Recovery in Carson, Los Angeles where Henrik Wendelboe is CEO I had the pleasure, besides visiting an old friend, of seeing how lean production has been implemented in real life.

This is in particular interesting as my MMT class spend a lot of time last semester studying different production techniques. If not familiar with lean yet you should know that it focuses on the reduction of waste in the value stream by reducing the need for human interaction, space, time, working stock etc.

Lean was defined in the late 80s when the American car manufacturing industry got really worried over the Japanese competition - expressed as cheaper cars, faster development of new models and (much) shorter production time per unit. The research began at MIT and was lead by Jim Womack, Ph.D.

Sea Recovery are water makers - they manufacture freshwater plants from mid-size boats to larger vessels (35-80+ feet / 9-24+ meters). The technique is the well-known reverse osmosis principle - saline water in and fresh water out - the devices are powered by electricity from the boat.

Henrik showing the Aqua Matic water maker

Henrik explained how they transformed the production into a faster and leaner operation.
I was shown then and now pictures of the production and also drawings showing the necessary distance to walk in order to complete one aggregate. And things has become much simpler. I haven't asked for permission to disclose details from what I saw but I am rather sure that you will find similar examples in many text books on lean and your nearest lean consultant might do the same for your production or service.

After some six years of ownership by Danish industrial group Danfoss it was sold off to industrial conglomerate Parker Hannifin in October 2012. Read press release here.

During our conversation Henrik recommended an interesting book "Crossing The Chasm" by Geoffrey A. Moore which I picked up the day after in the Stanford book store. I expect to understand a bit more of moving all way through the "early adopters" segment to "early majority" on the technology life cycle curve. And reading just a few lines indicates that here might be some food for thought useful in my own industry - telecommunications...


 Order it from Amazon without even leaving the house and read it together with me.

Study trip to California

During the upcoming week I will be visiting companies in California together with 15 students from MMT at Aalborg University.
First I will visit Sea Recovery in Los Angeles who does water purification and then jump on to San Francisco the same day, meet with the team and pay Younoodle a visit. They have a networking platform for start ups.

At Stanford University we will visit Center for Design Research and dSchool. Each department is trendsetting among universities.

SAP has a development center in California and after that we also take a jump over to Google.

Frog design Inc. is one of the most famous design companies in the world. They started their business in Germany but then moved on to California and began designing Macintosh computers.

Business model generation is everybodys responsibility

Back in November 2011, I participated in a seminar held by Innovation X which is a university funded regional initiative in the Aalborg area to serve entrepreneurs in growth industries and demonstrate various kind of assistance these entrepreneurs can obtain.

My personal objective for participating (since I am not an entrepreneur in a growth industry?) is that these seminars quite often lead to new insights which I later can implement in my daily work.

One of the lectures was given by Yariv Taran, Ph.D. from Center for Research Excellence in Business Models on the subject “Business model innovation” and showed to be highly interesting and practically applicable.

“Business model” is one of those terms (strategy and roadmap are others) that everybody uses in their own personal way. And gets away with it.

He claimed that many businesses (and their consultants) often utilize the same old handful of management tools: balanced scorecard, Porters five forces, SWOT analysis etc. and that today’s businesses are in the need for new management tools.

He defined the difference between incremental (do what we do better) and radical (do something different) innovation and took us further on to the Osterwalder model for business models.

The Business Model Canvas is highly applicable in today’s business environment as it encompasses not only the traditional parameters (product, price, place, customers etc.) but also business collaboration and partnerships which are important today.

The aim for the model was to develop a new managerial toolbox for executives and staff that describe a business model, the purpose of it and how it can be visualized (or communicated).

Since I am not an entrepreneur with my own business how can I then use the knowledge just described?

Obviously, many of us collaborate on ideas or even parts of ideas that fit into a broader context and that eventually will turn into a new business area for your business. On the other hand, all of us collaborate every day on changing the existing business models, making them more efficient, leaner, smarter, customer centric or something else.

Business models are a part of everybody’s daily work.

By means of this tool you can communicate efficient and straight forward and your managers and peers will enjoy the simplicity, the less amount of text and the overview.

Study the Business Model Canvas and study a bit more on the website where you will enjoy a 2 minute descriptive video clip.

If you got really interested in this then jump over to slideshare and read the book Business Model Generation (72 pages) for free. Dagfinn Myhre of Telenor is portrayed on page 8.

One last question: why didn’t this happen earlier?

Answer: it’s the usual lack of urgency (and why fix something which isn't broke….)

Yet.