În 2016 i-am luat un interviu lui Jesper Søgaard, CEO la compania Better Collective, unde am lucrat ca student și apoi full-time pentru un total de 5 ani și jumătate. Siteul unde l-am publicat inițial nu mai este activ, fapt pentru care îl republic aici. La momentul respectiv Better Collective deja era printre companiile cu cele mai mari creșteri an de an din Danemarca. Între timp, a ajuns de la 72 angajați la câteva sute, s-a listat la bursă și are o evaluare de 1 miliard de dolari.
Hi Jesper! First of all, thank you for giving us the opportunity of having this interview with you. Before analyzing the main topic – having a job vs. starting your own business while studying – could you please give us more details about how you started Better Collective and how it expanded over time?
The story behind Better Collective is pretty funny and it is marked with many events that brought us here today. I’ve done entrepreneurial things since forever. I remember starting a small kiosk at my student dorm in high school, or selling things when I was 12 years old.
Better Collective, for example, was started by coincidence. The co-founder, Christian, and myself were living in Viborg and we were in high school when we found out about the possibility of making money from online casinos by using the bonus you get when you make your first deposit. We also knew that it was possible to create a website where to explain the entire process, send traffic to online casinos and get paid for it. This happened in 2001.
In 2002, we were both done with high-school and I planned to move to Berlin to take a year off. Then, we decided to create a german website to explain this trick. It slowly grew by word-of-mouth and we started to win money by sending traffic to online casinos.
In 2003, we both moved to Copenhagen and started college, but we continued to work on our website in the free time we had available. We founded the company in 2004 and we kept working as students until 2006 when we got the Bachelor degree. This is when we agreed to give the business a chance and focus solely on the website. We also had enough money to buy bettingexpert, our biggest product. So that’s when things started to kick off and we treated this as a proper business and a full-time living.
From 2006 to 2008, we focused entirely on the company while working from our apartments. Then we decided to rent an office and start employing people in order to scale the business. It was January 2009 when we really started investing because we saw lots of opportunities in this industry.
Why did you decide to do start a company instead of continuing to make money as affiliates?
We have always been focusing on long term opportunities. The growth and the desire to achieve things is constantly motivating us. As a result, we have never reached the point where we felt that what we have is good enough. It has been like this from the very beginning.
Why do you think starting your own business as a student is the best time to do it?
I think that starting a business requires quite a lot of risk appetite. The problem is that the older you get, the more settled you get, and it is more difficult to cope with losing everything you achieved. When you have a family and a fixed income, it is a risk to start a company. Whereas, as a student, you have barely nothing to lose.
I would also add that you have a lot of time to work on your business. If you are organized and you prioritize your tasks, you can easily find 20 to 30 hours a week just to focus on your business. If you start somewhere around the second year of your bachelor degree, you have 3-4 years to decide if you should focus solely on your company or get a full-time job.
You need time to experience the growth. Let’s say we founded Better Collective as a full-time thing. If we did that, we would have soon realized that we didn’t have enough money to pay our bills. In the first couple of years we made enough to pay ourselves with student salaries. Our company wouldn’t have succeeded with bigger costs.
Building up your own business in the early twenties gives you the ability to take more risks without sacrificing family or career. However, you have no experience regarding how a company and the departments within it work. If you fail, and most startups do, you might not be able to get a proper job. What do you think about this?
It depends on your career choice. If you are very much into the corporate world, then it is probably not the fastest way to grow. If you spend all your time working on startups, you do not really learn the mentality of the big corporate companies.
So you need to have some sort of interest or motivation related to the startup world. That is pretty crucial. I would not recommend somebody who wants to have a big career in Novo Nordisk or Maersk to focus only on startups.
The media often portrays successful stories of entrepreneurs who became overnight celebrities, although they are actually an anomaly. Researches show that most startups get traction after 5-10 years (if they haven’t yet failed, as 80% do), they do not use classic marketing strategies, their founders are in their 30s / 40s and they do not need to get large seed investments or to reach millions of users in order to become successful.
Why is the reality of most startups and their founders so different from popular media profiles of celebrity startup CEOs?
I think there’s a challenge for young people because they don’t have the patience and the willingness of ongoing effort – you need to put a lot of work and time before you get any results. At a young age, it is easy to get distracted. You need to expect slow growth and it is tough.
The media picture is not helping the young founders at all. They need to understand that most businesses need a couple of years to achieve successful results. I am actually involved in a startup that was founded in 2011. They spent quite a lot of money, but they didn’t manage to find the right business model. After 4 years, we started to see improvement. However, there were 4 frustrating years until we got to the point where we can grow the business though it is a completely different model.
Did the founders you mention expect this?
No, they raised the capital based on very aggressive valuation and growth and it just didn’t happen. The problem with having aggressive figures to chase is the stress they generate. You have investors who rely on you and when you are unable to perform, it is frustrating and demotivating. What’s strange is that this company has experienced growth every year, just not that aggressive as they were expecting.
While Better Collective has become a successful company with more than 70 employees without raising any capital, you have chosen to invest money in other startups which have a different business model. How should a young entrepreneur think about his startup in terms of raising funds vs. bootstrapping?
I would recommend to bootstrap as much as possible. I think the best type of funding that you can get is the one that helps you scale the business. You can put more emphasis on the sales and marketing initiatives. It is very dangerous to get money for product development. You do not know what to expect and deadlines will always be missed.
The problem with attracting funds before you have the product right is that it is going to be much more expensive. As you miss milestones, you end up running out of money. It is not easy to build a product if you do not have money, but it is easier to get help from others when you don’t have anything to give in exchange. My advice would be try to get the product built before focusing on funding.
You should care about setting the right team who can build the product in the spare time. You need to create the vision. As a non-technical founder and CEO, I depend on technical people. My job is to formulate the vision, get people on board, and encourage them to do the best in order to deliver the technical projects we need.
If I am bootstrapping, as a non-technical founder and CEO, my job is to get out there and get the person who can be the CTO of the company or at least the one who can build the product and motivate him if we get traction to the product.
In your journey as a co-founder and CEO, you’ve probably gained experience on how not to handle certain things. What advice can you pass on to someone who wants to follow a similar path? It would be interesting to talk about some challenges that you had to overcome.
I am frank about problems. I recently read an article that I found enlightening in terms of how to be a good leader and how to handle conflicts. It pointed out that you have to be direct and empathetic. If you are able to get these two things right, you will come a long way. The worse thing you can do is not to let other people know that there is a problem. I think it is a very big weakness not being frank when somebody else is doing a bad job.
If you are able to give direct and negative feedback in a friendly way with a lot of respect, it is going to be effective. You need to integrate this way of handling conflicts in the company’s culture and you are going to have fewer problems. You can deal with them right from the start, before they become big issues.
Secondly, I would wait as long as possible before getting funded. There are going to be strings attached and an investment will affect the way you work. If you are able to bootstrap, it is better to get as far as you can get without investments. Of course, this is not a general rule, but before you take action you need to reflect if it really is the right thing for your business.
Thirdly, always treat everybody with respect and be professional, serious and reliable. It is very important, because everyone around you (your customers, your employees, your investors) is more permissive when they know they can rely on you. Avoid shortcuts that might hurt your personal brand or image. I think this is a crucial advice because in the business world everybody talks to each other.
What is the core skill that you bring to Better Collective as CEO?
In my case, what I bring to this company is a talent for finding good people and creating the right environment where they prosper and deliver. Then, creating a vision and letting people understand what we are trying to achieve. This goes on several levels: one is for the company (the overall vision); the other one is at a personal level (you need to create a vision for the employee).
When Better Collective was a small company with few employees, I had to make sure that everybody understood and believed in the vision. If you are not able to sell a vision, you can not get the talented people you need. When the company was really small, I still managed to attract skilled people, because I explained what will happen in five years time in this company based on what aspirations we have.
The majority of our readers actually have (or would like to have) a student job relevant to their studies. What do you think it is important for a student to learn in a company and how does those things apply to Better Collective and its relationship with student employees?
If you want to build a company and you want to start it with few costs and be able to run it as a student, then there’s almost only one place to look: the internet. You need some relevant skills such as online marketing, a bit of understanding of coding / servers; basically, the fundamentals of an internet business. Then, you need to figure out what kind of internet business you want.
However, no matter if you want to start a company or you end up working for somebody else, you need to have the ability to get traffic on a website. In the end, the most difficult part is to get the audience for your product or website. Basically, that is what we work with at Better Collective: doing online marketing the best way possible and bring lots of visitors to our websites.
In regards to the relationship Better Collective has with students, I know from my personal experience the high quality of student workers. You get motivated people so you can give them responsibility and expect them to deliver. When we started employing people, we relied on our students. Many of them became full-time employees. If we educate them the right way, they will be able to perform. I am actually a big fan of student employees and it is an integrated part of the company. We definitely treat them as regular employees, because many of them will start working full-time if they are good enough.