Nail it before you scale it

August 9, 2020


Lars Tvede talks about people and ideas entrepreneurs, navigating business cycles, how to inspire people and have fun while remote working, and what it takes to be a lucky person.


Entrepreneur and investor Lars Tvede holds a Master’s degree in Engineering and a Bachelor’s degree in International Commerce, and he is a certified derivatives trader from National Futures Association in Chicago. Lars Tvedes’ books have been published in 11 languages and more than 50 editions.

Lars spent 11 years in portfolio management and investment banking before moving to the high-tech and telecommunications industries in the mid 1990s, where he has been co-founder of several award-winning companies within the satellite, Internet and mobile space.

He is also founder of Beluga, a successful financial trading company. Lars was listed in The Guru Guide to Marketing as one of the Worlds 62 leading thinkers of marketing strategy.

Lars Tvede has appeared as guest host on CNBC and as TEDTalks speaker and is frequently covered in media.

He lives in Zug, Switzerland with his family. His hobbies include skiing, sailing and collecting Italian sports cars and wine.

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(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: Hey Lars, it’s great to have you on the show! How are you doing today?

Lars: I’m doing very fine. I am in Croatia. I’ve been here now for the last seven weeks. Living on a boat where I have my business meetings. People fly up to be on the boat and we discuss business. And then I trade financially and I have just almost finished a new book. I’m enjoying life a lot and have just made the decision that for the rest of my life, I think I want to be on a boat the entire summer and work that way because it’s really efficient for me. How are you doing?

Petri: I’m doing pretty well as well, thank you. It’s been a colourful summer by all means. Just getting back the floating office, how does that actually work? First of all, how can I have a meeting with you? How can I get to the boat? Do I need to charter a helicopter or how does it work?

 Lars: The Mediterranean is a very civilised area. There are great airports. Some of them have lots of direct connections. And Split, for instance, in Croatia is really super well connected to everything, Palma in Mallorca also. Later I’m going to Corfu which also has pretty good connections. So far, I think there’ve been around 60 different people on the boat on and off. And none of them had to do indirect flights. So it’s been quite easy for everyone.

Petri: That’s nice. Is this your first summer doing this or is this already like a habit?

Lars: I have been sailing a lot in the summers since 2006. But it’s the first time that it occurred to me that instead of I go to the boat and sail for a while and go back that I want to have the boat as my house. I want to think of it as my house. I work a lot, but I’ve found out that in the way I work this is efficient because sometimes in business we have a complicated issue.

Not necessarily a problem can also be a creative challenge. And if I take the group of people working on it, offsite and offshore as it is for 3-14 days where we work on the task, but we also swim, we water ski, we do other things. Then we achieve something that we would never achieve if we worked in a more traditional way of having meetings in an office and so on. It reminds me of something called the Hemingway bridge. The Hemingway bridge is one of the many creative processes that exist. Hemingway, he would write a chapter on a book.

And then when he was finished with that chapter and tired and wanted his whiskey, which he drank a lot of, he would just before he opened the bottle, he would just start on the next chapter because he was still in the writing mode and write half a page or two pages of the next chapter. And then he would stop. That is called the Hemingway bridge. It Is a bridge to the next task.

And then when he started on the next chapter the next day, because he already started it, he did not get a writer’s block ever. What happens when we are working on something is that we sit and discuss. How can we do this? Can we do that? We move forward somewhat and then it stops.

And then we swim. We have dinner. We sleep and the next morning somebody just has the solution. The day before we had written the first pages of the solution, but we couldn’t get any further. We were tired, but then we pick it up the next day. So it’s intensive creative work, but it does need the time.

I think creativity is largely not something that goes on in a brain, but between brains. And I just I’ve done this for many years, but it’s become more clear for me how efficient it is. I want to really make a virtue out of this. Of course, it’s enjoyable. So, that’s a part of it.

Petri: Is the sea always calm when you’re having visitors there and you want to work or is there something when you’re like, okay, I really miss my office?

Lars: When you’re on the Med, you can get within two weeks you may get three or four days where you have a passing depression and wind but then we just go to the port and then it’s fine. So it doesn’t really disturb anything.

Petri: You started the seafaring quite early. You were nine years old going to Greenland.

Lars: The first boat I was on was a freight ship sailing to Greenland. At that time, I don’t know if they still do that, but at that time they were making extra money on having three or four cabins for guests. My family and I, we were there and I was nine.

Yeah. It was eight days sailing to Christianshåb in Greenland, in Disko Bay. And out on the fourth day, we had a hurricane. My sister was so seasick. For some reason, I didn’t get seasick, but we were really throwing it all up. Even though, it was quite a hard trip I liked it so much.

I can’t explain why I feel so happy on a boat, but I think it’s got something to do with freedom. The feeling that you know that you can go anywhere and you can see towards the horizon and all directions. That makes me feel so relaxed. And I sleep incredibly well on a boat. And I hear many people, they say the same.

Some people don’t like it. Some people are uncomfortable with it being floating where maybe a kilometre of water below you but to me, it’s fantastic. If you have ever thought that, whew, I’m like made for this! Shooting with bow and arrow once I thought that this is strange because I feel like I’m made for this and I have the same feeling being on a boat.

Petri: Could you do that year-round?

Lars: I think it would become too much. Summer on a boat and in the winter I live in Switzerland, so that’s a lot about skiing and that’s a different thing.

Petri: So in the summer you do the creative work with the team then you are just executing it in the wintertime?

Lars: Not exactly because I do the same things that we do on a boat. I have a place in Verbier, which is a ski resort. And then I invite people up there and we do the same things. It is work, but it feels like pleasure. And I’m more happy sailing or skiing with a team of people where we’re doing a project then without that team of people doing a project. Because I enjoy mental work, but I really enjoy it in combination with the lifestyle things we do.

Petri: How many projects are you working at the same time?

Lars: I was counting a couple of months to go that I had 16 different projects going big and small. Right now, I have co-founded a venture capital fund. I have Supertrends, which is a company that is crowdsourcing a timeline for the future, a very big project. And I have Supertrends Institute, which is a think tank.

And then I have two book projects. The one that I’m finalising right now, which is about investing and then another one that I’m working on with a McKinsey partner, which is about how to organise companies for a more dynamic future. Then I have my trading activities. I’m also on the hunt for a new boat and so many different projects.

And on each of the projects, I have the liberty that most of what I have to do does not have any tight deadlines. My life is not at all like a typical big corporate C-suit person who has an agenda every day from nine to nine-thirty, you have to do this, and so on.

It’s more like the Hemingway bridge that I work on a project and I stumble or I get tired of that. And then I switched to another one and then I moved that forward a bit. And then I switched to the third one. And sometimes of course, when you have so many projects, you can think nothing ever gets finished because I’m pushing a little bit on too many things, but things do get finished.

I do get the pleasure of closing a deal or trade or a project frequently enough that I feel really the joy of getting stuff done.

Petri: Do you have key people you always rely on your projects or do you work with different people in different projects?

Lars: If I have some specific people that I like anchor?

Petri: Indeed. You have so many things going on. You get to know some people and these are good guys. And we do things together. And then we find new projects. So it’s like you have new projects and new people?

Lars: I have something like five people that I very often turn to discuss anything. But I also definitely have my wife who in many ways is more clever than I am. And then I have two really sharp children who have one advantage over me. And that is that they see things with young eyes and can tell me that what I’m doing is old fashioned and they should do it in a different way.

Petri: You’ve been founding more or less 10 companies at least. How did that all start? Was it clear from the beginning that you want to do your own things? What was the first time you realised that I want to build something by myself?

Lars: It’s difficult to describe how you started things. When you asked me that question, it’s difficult for me to pinpoint any specific point where I started becoming an entrepreneur. I can tell you this though, that when I was a student, there were two people who came to me with two different ideas that became two different companies. And in each of those cases, they came to me. One was a friend who had the idea to import cookies from Greece to Denmark.

Petri: Those things you eat and not the data cookies?

Lars: The wafers, the cookies. The idea sounded insane because Denmark is a huge exporter of cookies, and Greece’s absolutely not known for making that. But at that time Greece had their own currency and it was really cheap. We could just sell these cookies cheaper than anybody else.

We imported them by containers and sold them to supermarkets. And we had something like a 3% profit margin, but a very big volume. We made for a student decent money on that. And then I had another friend who was working in computer supplies and he said that people get irritated eyes from sitting a lot with the screens.

And the reason is that there’s a static field around a computer screen. And if you break the static field, dust will not get attracted to your eye. And then he had a solution to that, and we started doing that and it was so easy to sell. We sold it with a private label to a lot of companies and we made the big mistake of not considering that one bottle, it was a tiny bottle, was really enough for a lifetime supply.

It was super successful, but then we saturated the Danish market within half a year. And then everybody who wanted it had it. It was a strange feeling for me and we were not set up to scale it internationally. Although we had dreams of doing that. The two first startups, they were fine, but they did not scale much.

However, having done the process of registering the company, setting up an accounting system and just figuring out these basics of all of that, was quite useful and motivating for what had to be done later in life.

 Petri: Did you immediately set up a third company or something else happened between because you also have been writing many books?

You were 27 when you started to do marketing books and teaching marketing as well. So you’re in parallel doing a lot of things at the same time.

Lars: No, I did not immediately set up a third company. I went out to get a job. At that time, my thought was that I would for a while have a normal career and learn about how business is done in big and small companies. What happened though was that I got employed in a company with an entrepreneur.

And then I saw the big difference between how you do business in established companies and how you do it in entrepreneurial startups. I felt that I had to work as an entrepreneur after that and I’ve done that ever since.

Petri: How long did you last in corporate life?

Lars: I was eight years employed in two different places. First two years in the Danish Agricultural Marketing Board and then six years in a part of what is now called Arla Group. I was first doing marketing and then later I got a job in the finance department where I became the chief corporate dealer.

And that experience was absolutely amazing for me because first of all, I found out that I have a talent for investing and trading, which has been useful. I’ll put it this way. That has been useful because I’ve been investing well in my life, but it’s also been useful because with startups and commercial activities. I have had a very keen eye on the risk from the business cycles. And I’ve been quite successful in avoiding getting caught up in recessions with big exposures. I actually wrote a book quite early in my career, which in English is called Business cycles. In Danish it’s called Crisis, Crashes and Caviar if translated. It is a deep dive into how business cycles work and how you can predict them and how asset markets behave during business downturns that has been so useful for me.

I’ve written 17 books now, but this is one of the two books where I spent most work. I think there’s a man-year of work in that book about business cycles.

Petri: You mentioned that you did it pretty early in your career. Has anything changed and is it still completely valid or do you think that you have to refine the model? And where are we actually now in the business cycle?

Lars: I don’t think anything material has changed in how business cycles work. For as long as we can trackback through history they have been pretty much the same, except that they are not as violent now as they used to be because the central banks have learned a lot.

The last time that modern Western economies and Japan made big structural mistakes in handling business cycles was in the crisis of the 1930s. This is 90 years ago. And since then they’ve had a pretty good take on it. They did make another big mistake in the 1970s was something called the Fisher curve where they thought there was a trade-off between unemployment and inflation where they were wrong.

 We got an inflation problem. But now they really understand it very well. I’m quite sceptical of a lot of things governments and states do, but I do love the central banks. I think they’re fantastic. If I should give you a short summary of what everybody needs to know about business cycles I guess then it is that there are three kinds of business cycles.

One is not serious. It’s driven by inventory. And the average situation is like four and a half years. The second one is about capital investments. This is investments in software and buildings and offices and machinery. And that has a cycle duration of nine to ten years.

And then there’s a third one, which is in real estate and that has a duration of 18 to 20 years. And statistically, those situations are solid. They have been found in many different countries. They have been valid for many years but the statistical averages are not a forecast. You cannot say that definitely the next real estate crisis comes 18 to 20 years after the previous one. But you should expect that it’s quite likely that it comes around within something like that interval. And between these three different business cycles that have different duration does have a very strong phenomenon called mode-locking.

They log into each other in harmony. Every 10 years you’ll have a serious crisis. Every second of those serious crises is a real estate crisis. And that real estate crisis leads to a banking crisis, which leads to a very severe depression and/or recession. And that is what we had in 2008, where the clean-up lasted all the way to 2013 and where the whole financial system was brought to the brink.

I don’t expect an international real estate crisis until say 2030, around there. But if you look at it, I said every ten years we have a serious recession, so now is 2020. We have one. We had one from 2008 to 2011 at least. We had one in 2000 where Nasdaq crashed and so on.

We had one from 1990 to 1991. We had one around 1980 and then we had a bonus recession in 1974 to 1975 because of the oil crisis. That was not a natural recession. That was created by a political event. In the absence of any specific political or natural events, you would expect every 10 years to get a crisis.

That’s quite important both in planning commercial business and in investing. To the question of where are we now? We were not supposed to get a recession in 2020 because the normal leading indicators that suggest that now a recession is coming we’re not really sounding alarm.

We’ve got COVID instead. COVID triggered this recession. Otherwise, I think it would have come maybe two years later. But I think that getting out of this recession there’s a pretty good chance that we have an upswing that lasts 10 years. People have been wondering so much about how come the stock markets have been doing so well when the current data is so bad, but the stock market is forward-looking.

And so the stock market looks at what’s going to happen with the economy. The next many years. And when the interest rates are low, you are discounting future earnings with a very low discount rate. I can compare it to… imagine that you want for Christmas, you have this Christmas calendar where every day for 24 days in December there’s an apple for you every day.

And you know that around 10% of the apples, one out of 10 apples is bad. You don’t know which, but it’s always been like that. One out of 10 is bad. Now as you’re looking at the tray, you realise that the first apple you have to eat is a bad apple. You think I don’t want to pay the full price for this tray of 24 apples because the first one is bad.

That’s the only thing I know is the first one is bad. I also know on average 10% are bad. I would pay a little bit less because there’s a bad apple right there. How much less would you pay? I’ll pay maybe 5% less, 10% less because there’s a bad apple I can see right there. But you would not pay 30% less or 36% less. The reason I say 36% less is Standard and Poor’s 500 dropped 36% because of the COVID crisis.

That’s completely excessive because we know now that 2020 is a bad apple. But we can be reasonably sure the next nine apples are good. Then probably get one or two bad apples around 2030, and then we get good apples again. That does not mean that the entire package, the value of the stock market, is 36% less worth. On average a bad stock market since World War II has dropped 34% in recessions. This one dropped 36%. The mistake people make is that they have the short term view. They look at the news in the newspaper. Financial traders have a saying that says, if it’s in the press, it’s in the price.

But that’s an understatement. It’s if it’s in the press, it’s all discounted in the price. When the press is full of horrible things, you should buy. And when the price is full of great, great stuff you should sell. My view is that the good times are ahead. Obviously, we still have a COVID overhang until there’s hopefully a vaccine or efficient ways of helping people.

When they get it, it looks like we have a vaccine this year or next year, and then that’s out of the way. And then we have cheap money and we are ready for a quite extended upswing.

That was my answer to that question. I hope it was not too long, but pardon me. I’ve written a book almost 400 pages about the subject.

Petri: I guess that’s the perfect answer. it’s really short considered that there’s like a 400 pages of wisdom. You also wrote another book called Supertrends and it came out late last year?

Lars: Late last year.

Petri: It was before corona hit.

Has something already outdated? Would you change something there or even more fun question, did you predict or was it in the book that could be things like corona happening?

Lars: I did not predict corona happening. Bill Gates did actually. Interestingly I found out, so I have Netflix. I don’t know if you use Netflix?

Petri: Oh yeah, too much.

Lars: Yeah. Okay. There’s a documentary series on Netflix called Explained. There is one episode, which is called where will the next pandemic come from?

And that came out the summer of ’19. And there’s quite a long scene where they show a wet market in China. And then they said it might very well come from a wet market in China. And then they explained that the way that you have dead and living animals of different species, including pets and people at the same time at the same place, was a perfect breeding ground for a new pandemic virus or a new virus, which could create a pandemic.

Clearly, scientists saw the risk of that. And, when I say Bill Gates, Bill Gates and others have been warning for a long time that we should be a bit better prepared for this kind of disaster, but I did not predict it in Supertrends. The book is so recent that I have almost no time to be wrong yet.

It takes a longer time to be wrong on these things. I can just say that what we’ve been going through has accelerated the movement that was going on already and the movements to watch: remote working, e-commerce et cetera. And we can see that, for instance, in the massive increase in sales from Amazon.

These things would have happened anyway, but perhaps they were moved five years forward by this lockdown event. And a lot of people, they did their first e-commerce transactions ever. A lot of people realised for the first time how efficient perhaps it was for them to work from home.

I’ve seen the census of the population in different countries that can work from home. And in the more developed countries, like the more wealthy Western European nations, plus the US it’s about 50%, half the population can work from home. And of course, before this there were people working from home.

There were people who had a fixed agreement that they would work from home one day a week, for instance, or they will do it occasionally, but it was also perhaps frowned a bit about. Because are you really working when you’re at home or what you’re doing? Now they were forced to work. And then nobody could frown at each other.

We were all working at home and, and in some cases, people discovered that it was actually more efficient. And I’ve been doing this for 20 years. I’m very used to it and it does have disadvantages, but certainly also has advantages for me to put in as I do sometimes I put in 14 hours a day.

That’s not that hard if I work at home because I get up and I stop working straight away. I take a break. I do sports. After lunch, I take a nap. I take a power nap of about 20 minutes. if I’m mentally tired and something, I’d take a little walk, it’s quite efficient. If you need to put in a lot of hours on a project.

Some people have a lot of travelling time, which is very exhausting and unproductive, and they got rid of that. It moves some things forward to the benefit of everybody.

Petri: You explained how you work and the way you work. Is that something you learned over the years? Do you have some kind of advice for entrepreneurs maybe having their first startup and there’s always too much to do, there’s never enough hours and it’s a marathon and not a sprint?

Lars: Of course, that’s a very broad question and there are so many answers. I co-authored a whole book about all the things you need to do.

Petri: What’s the title of the book and is in Danish or English?

Lars: It’s out in English and it’s called Entrepreneur: building your company from start to success.

Petri: That’s a recent book two or three years old?

Lars: Two years old. If you want to start a company you should find out what is your purpose with starting a company. Is it because you have a great idea? You made an invention or saw this great opportunity or is it because you have a great desire to start a company and you’re looking for the great idea. Secondly, is it a growth company or a lifestyle company? In order to make the decision between those two, you have to figure out what kind of person you are. What personality you have.

Let me just define. A lifestyle company could be a law firm. It could be a restaurant, dentist, something where it’s your job, but you run the show yourself. A growth company typically, for instance, a software company, it’s something that can scale a lot and where you might attract external investors who come in because they think they can get their money 10, 30, 50 times back if you succeed.

One difference is, if you’re an idea person, you probably want to become a serial entrepreneur. Because you’ll get all these ideas for things that you can start. You want to start them up and then once they’re up and running, you want to find somebody else to run them and then start the next thing. Richard Branson has started apparently around 500 companies.

I’m not sure where he came up with old ideas. I think he closed down three hundred. He closed down more than half. All the time he gets ideas. For instance, I once read that he started a ski company called Virgin Snow, mainly because he just thought the name was so cool that he had to start that company.

Petri: So he bought a domain name and it was like…

Lars: But other people are people people. And the people people they love to build a team around them and they bond for that team. They feel that this is a family and they don’t like the idea of ever selling that because like selling your family. And so these people will typically build one company. If they’re successful, they’ll make that company into a giant company and maybe they’ll sell it when they’re 60 or 50, or they’ll sell some of it to get some money out, but keep the control as long as it possibly can. Perhaps until their last day on earth.

Always, for everything, I recommend young people to take personality tests and there are lots of them on the net.

It’s something that anybody can do and then reflect on what kind of person am I. What kind of role should I play in a startup? Am I a startup person at all? Am I a people person or am I an idea person? Am I a person who likes to work with practical things instead?

Then the second thing is that statistics show that you have a much higher chance of success if you are more than one founder. Many of the most successful companies start with two or three founders, and then eventually only one runs the show and the other ones drop out. The two big exceptions are Elon Musk and Jeff Bezos from Amazon. Jeff Bezos was a single founder and that went pretty well. On average, it’s better to be several founders.

And then you have to have this discussion between the founders about what do they expect from this? Do they see it as a lifestyle project or as a growth project?

Do they expect to work 80 hours a week or 20 hours a week? Are they complementary? Do they have shared values? I think you have to have different competencies, different networks, but shared values. If you don’t have shared values that will become an issue at some point.

Ideally, you have somebody who has great technical skills, somebody who has great sales and marketing skills and somebody who’s great operational skills.

By operational skills, I mean somebody who makes sure that everything is executed upon. These are the most important early considerations when you want to do a startup.

 Petri: You are a VC, venture capitalist. How do you evaluate opportunities and what are the most important things when you’re considering a new company to invest?

Lars: In our book, we have an appendix, where we have a list of the screening criteria, and these are based to a small degree on personal experience from investing in startups and building startups, but mainly on scientific research. There has been done a lot of scientific research on what works and what doesn’t work statistically in startups. For instance, this about having several founders is one of them, one of the many criteria. But I look very much for some kind of boundaries against competition and the most common boundary in growth companies these days is a network effect.

Very often when I look at a business case, I look at does it have a network effect. But also could it have a network thing or could it have more elements of network effects than it is currently enjoying? Because if you have a network effect, you’ll have that ability to make substantial profits.

And, if you don’t, then even if the market grows a lot, if you don’t have any barriers against the competition, you might also grow a lot, but you’re never gonna earn a lot. And this is very important to me and there I said it: if the market grows a lot, of course, you really prefer that it is a growth market and that it is very big and that it can scale globally.

I look a lot on the team. The dream team is somebody who has worked before in another startup. It doesn’t matter much whether that startup failed or succeeded, but I’ve tried many times, I’ve seen it, I’ve tried it, I’ve hired people that come as a team. What happens is you’ll have a group of people that work together.

Maybe you have a startup with 50 people…let’s say you have a high-pressure startup with 50 people and let’s say it goes down. Well, the most common exit for startups is bankruptcy.

Let’s say it goes down and then after it goes down, five of the people they really liked to work together. I can be pretty sure that that’s a good team because they have been working together in a very high-pressure situation and they want to do it again. Such a team might start a company, but they might also join a startup company as a team.

That’s an ideal situation. And the opposite, is something that very often goes wrong and I’ve also tried and burned my fingers with it, is that you hire somebody who comes from the established corporate life with a great CV and you’ll get super flattered that this person was a great CV from a well-established brand company wants to work in your competence level.

That’s like an endorsement that is telling you that this person thinks that your company will become such a well-established big brand company. But these people used to be working in a completely different environment. It’s an environment where the work is laid out in the description of your job.

In many cases, if they are senior, they have a fixed agenda. They have somebody who just tells them: now you have to go to this meeting, that meeting, and now there’s a budget. Everything is planned for them. You come into a startup, nothing is planned for you. You have to make up as you go is like driving a train, but you have to put down your rails while you’re driving the train.

 I’ve experienced four times the frustration of this going wrong. They start writing a lot of reports, but to whom? Nobody reads long reports in a startup. When the copy machine or the printer doesn’t work, they can’t figure out why nobody comes and fixes it.

Instead of that, there is in the startup environment a lot of gunslingers as guns for hire that do nothing their entire career than go from startup to startup. They work for quite low salaries, but they get stock options and some of the startups they work in, it works out. And they get the savings and their wealth from that.

But they can only work in a startup environment because that is how they are. Some of these people have the same saying that I have, which is when a company hires the human resources manager I leave because then the magic is gone. The magic is when everything is like a family it’s informal, and everybody is taking full ownership and everybody improvises, somebody is asked to go and build up distribution in America.

Okay, I’ll go to America and I’ll build up distribution. I have no idea how to do it, but I know how to buy the flight ticket. I also know how to book and check-in to a hotel. I know how to find somebody who can hire people. I take people who not only can work without a fixed plan but who enjoy it.

I realised that I prefer that kind of environment when I was 17 years old and my parents were divorced. My father lived in Chile in South America and he wrote to me. That was the time when it was too expensive with phone calls. He wrote to me whether I would like to come and live with him and see him for a year.

I wrote back to him if I could bring three friends and he said yes to that. We came four and I had saved up by working different factories and the other ones had also been cleaning toilets in old people’s home and so on. We came and then we used his house as a base, and then we travelled around on buses in six countries.

And with a budget of $3 a day per person, there was no mobile phone. We had no credit card. So there was no possibility of getting help for all the situations we came in. I got knocked down at the Carnival in Rio and both of my eardrums blew in a train, and lots of stuff went wrong for us all the time.

We realised that you had to be 18 years to cross any border. And two of us were 17. In one border we sneaked into the border control and took the stamp and stamped our passports. We did everything we could and I realised that the fact that there was no help was a thrill to me. I loved it. I loved that.

We had to sort out everything ourselves. That kind of thing makes me happy and makes me very productive, but it makes other people unhappy and unproductive. This is something you can find out a lot about by taking a personality test. But you can find out even more by trying it.

If you want to be an entrepreneur, instead of starting your own company, you can get a job in somebody else’s startup company first. If you are a skilled person, maybe you’ll get offered stock options, and then you might even earn the money that enables you to start your own company afterwards. But you certainly find out if you like this and if you’re good at that, maybe you don’t like it, then no, I’m done. You’ve been there half a year, two years, whatever you find out that it wasn’t for you.

Fine. And then you can move on with your life. Of course, the ideal situation is you start the company while you are a student. And that is something my daughter did. For instance, she started a company three months after she joined university. So if that had gone bad, there would be no loss, no risk, no downside at all for her, but it went well. That’s perfect, but you’ll have to have an idea in order to start a company, but she ran into an idea.

Petri: How do you come up with all the ideas? How do you come up with the projects? What keeps you motivated in exploring new things? You probably have enough money that you don’t need to work, just for the sake of working though, but you clearly love what you’re doing,

Lars: About money, If you like yachting I think you can never get enough money.

Petri: When you have a little bit more then you’re happy.

Lars: Yeah, there’s always a little bit, and then you buy a bigger boat and then it is just not enough anymore.

The way you can navigate in life is with a laser or with a radar. The extreme version of working with a laser might be you’re inheriting your family’s farm, and you have to farm that farm and that’s what you have to do. And then you marry the neighbour’s daughter or son, or you can have a career plan.

And if you work with a radar, you don’t think that far ahead at all. You just do something you find interesting, and then you stumble into something else and stumble into something else. And interestingly, you probably know there’s been a lot of research into what makes people happy.

There’s been a little bit of scientific research into what makes people lucky. And there is a scientist called Weissman. He put adverts in the media where he asked people who thought that they were generally very unlucky people or generally very lucky people. He asked them to participate in an experiment.

One of the things he did was he created a newspaper. In that newspaper, you had to count how many pictures that were, and then you would get some money if you counted it right. The people who were unlucky, they would go through the entire newspaper and count all the pictures and get their reward.

The lucky people, they would notice that on page five, I think it was, there was a story that said you can stop counting now. There are 22 pictures.

He made a lot of different experiments that showed the lucky people they are not only looking at the task just ahead. They’re looking at anything. He set up a meeting in a bar with the subjects. And then he deliberately came 20 minutes late for the meeting but he set up candid cameras and filmed what they did while they waited. The lucky people started talking with other people around them. The unlucky people would just stare into the wall and be frustrated that he was late for the meeting.

In order to get ideas, you should not only look at the well-defined task ahead of you. You should have a general curiosity. And so you can execute on having a general curiosity by going to lots of places, being in many countries, reading a lot, talking with a lot of people. It will create for you a picture of the world. It’s like a big patchwork of the world. And then in that, you will just see things that can be combined because innovation is only combination.

Steve Jobs said quite famously that sometimes people would come up with a great innovation. They are even embarrassed by how simple it was because they just saw a combination. They did not make anything. They combined some things that already existed. Since then sometimes I’ve been thinking about whether I think of any innovation which is not a recombination of something that does not exist already.

The more you see the more likely it is that you see new combinations. And the funny thing is that your life is more fun if you live that way. That is how it happens. Then after you get the idea then as people also say it’s 1% inspiration, 99% perspiration. After they get the idea, you’ll have to work a lot on executing on it and refining it.

And then we come into the whole new discipline of how to run a startup company where you don’t use traditional business planning and business plans but you’ll have a much more fluid planning system. You’ll make minimal viable products and so on. As one thing I’ve learned, partly the hard way as an entrepreneur, is that I like to start slowly.

If I can, if there’s no immediate competitive pressure, I like to start slowly with a startup burning very little money. While you work with idea and continue to work with the idea while you are trying to figure out how to get it right. And this is called nail it before you scale it. So I prefer to nail it. Take my time nailing it.

And then once I believe that now it’s really good, then you scale it and then you scale it very aggressively. You don’t always have the privilege to give yourself self that time. But if you can, that’s what I prefer to do. Think about it for a long time. And when you think about it that also means talk with other people about it.

Can I ask you a question? How do you learn best? Do you learn best by doing, by listening, by writing, by reading, by talking, what is your most efficient way of learning?

Petri: I’m pretty much like eyes open. I’m reading a lot. I’m listening. I’m observing. I’m questioning. I’m having a lot of time to do all these things because I think that’s what you said as well. Sometimes it’s not evident what’s in there. It’s like what’s between spaces, what’s between the words and to see that it’s not evident.

You have to get some kind of contrast. Sometimes it’s time. You’ll take a bit of time. One way I was explaining this the other day to someone is that usually when you have a team you’re coaching each other so you can get quick results.

But if you don’t have anyone. you can coach yourself with time.

If you do something and then you just to let it be on the table for a while let the dust settle and you come back to it after a week or two weeks, or maybe a holiday, if you have one month holiday, whatnot, and then you come and you look at through the fresh eyes or fresh ears, depending what you do.

And then you can see that, Oh, I’ve been actually evolving. This is not exactly what I want anymore. It doesn’t look good. It has this and these faults. And that’s one way to look at it. And I think that’s quite important.

You mentioned that you’ve been doing a lot of investing. Investments have so much to do with timing and with the same thing with ideas. You can have the perfect idea. But it’s too far ahead of the market. So it doesn’t work or there’s something else wrong. The business cycle is wrong or something happens with the timing and it doesn’t work. Have you been studying this part? Is there something you can do with that? Because you’re going to have the perfect team. You’re gonna have the perfect idea, but it’s just the unfortunate timing.

Lars: By the way, I like very much your impression that you can be your own coach with time. I’ve never heard it said that way, but I think that’s correct. I have an inventory of ideas and when I have an idea I talk with people. I explain it to people and I see what comes back. And, with some nobody seems to find it.

Interestingly nobody adds to it. Nobody says, Oh, should we do this together? Can I make a company with you where we do this? Would you hire me for this because that sounds really cool?

Petri: Maybe you’re in the wrong room. You’re not, the saying that’s, you know, if you’re the smartest person in the room, you’re in the wrong room.

Lars: Yeah, that can also be, but I try to do this with people that I think are clever at least in that respect. I co-founded Supertrends, the company, last year, but I got the idea 10 years ago when I wrote a similar book called Supertrends 10 years ago, but with a different angle. And when I wrote that book, I thought I could make a company that crowdsources a timeline for the future. And that time I did exactly what I said now. I spoke with different people about it, and nobody seemed to be interested in. I thought, right. I have lots of other things to do in my life.

So I didn’t do anything about it. I did buy the domain though, from a squatter. And then, I was working with venture capital and I thought, Hm, that’s very good. There’s a very good synergy between the supertrends project and doing venture capital. So maybe now’s a good time to start it.

And then I had some students who were applying to work in our venture fund for projects and there were no projects. And then I just said, okay, then you can work with me in defining the supertrend thing. And I took them sailing and I took them skiing and they had a great time and overall it was five teams and a number of sessions.

We figured out how to do this. And then I needed somebody accompanied to do the coding for the software. And then I had a friend who had a software company with 800 people, a very good company. So I sent him a short description of what we have in mind. And I said, would you be a candidate for implementing this?

And then I met him and then he said, I’ve looked at this and the idea you have I had myself 10 years ago and I have conferences all over the world about tech. And normally we put up a whiteboard and then some magnets and then we draw a timeline and then we ask people a question. And when they go for lunch, the question is about when something will happen, they have to put the magnets on the timeline.

Each individually to indicate when they think this will happen, when can quantum computing crack the standard banking encryption, for instance. We have been doing this and we have also being doing it on overhead projectors. And he had photos to prove it. And then he said, so I can do your software on the condition that I can be your 50/50 partner in this.

This is the kind of thing I’m looking for. Somebody who really likes the idea I have. I have lots of ideas that I think are potentially very good, but I can’t find anybody who agrees with me. Who is willing to take some risks on it in terms of time and/or money.

Petri: I think there’s wisdom there, a third one as well that is good to talk about ideas. Nobody’s stealing your idea because there’re so many things that you need to actually do. Like you explained in your example, the person already figured that out. He was also looking for a solution. He knew about what’s happening and what you were talking about.

 You already may be in the future. You see the future, you are in the future, you are living in the future, but you’re the only one there. And it’s so hard to convince other people. If other people are using horses and you like having a Tesla already, it doesn’t really work.

And that’s why it’s kind of safe to talk about your ideas…

Lars: Yeah, of course, it’s not entirely safe, but it’s pretty safe. And I read one book where the author says I would challenge you. If you have a great idea and you’re afraid of some big company stealing it I would challenge you to make them like your idea. It’s almost impossible, even if your idea’s great. If you’ll reverse the mindset, but it becomes easier if you think that you will only get… You have a fantastic idea. That’s the only fantastic idea you will ever get in your life. Then I can understand you’re afraid of somebody stealing it. I can understand that. There can be a point in that. But if you have a whole inventory of ideas all the time, then you are less concerned if somebody at some point steals one of your ideas, because the more important thing is to get your idea refined.

And that brings me back to my question to you about how you learn. I’m a reader. I learn a lot from reading, and I learned even more from writing. But I’ve also found that if I had to do a speech about something or a presentation of something that when I’m talking about my thing and I’ve prepared it from home, I made PowerPoint slides or whatever. So, I know what I want to say. And then when I’m standing there and saying it. I get an idea that changes my idea while I’m explaining it. It becomes actually quite awkward because you’re in the middle of explaining something and halfway through you change your mind in front of these people…

Petri: I can imagine. What is Lars doing? Why he’s asking for a piece of paper in the middle of the speech? Well, I have this idea, I have to just write it down now. Can you wait for a second?

Lars: I once read a description of Boris Johnson. Whether people like him or not, he’s very, very intelligent. When he was at Oxford in this discussion club, and then you had to take the podium and defend your point of view. And then he takes the podium and then in his speech he has an argument with himself in his entire speech. He disagrees with himself all the time and flips forth and back. And it’s hilariously funny.

Petri: You also have a technique. Once you had a bit of wrong shoes. If something funny happens while you’re performing, and a lot of eyeballs are watching you what should you do?

Lars: The thing with the shoes is I’m famously distracted so much so that my wife asked…I was married for 30 years. I got divorced three years ago, and then I got married last year. My new wife at one point she asked, I can’t understand how you’re paying for your life as it were.

Why can’t you understand that? Because you’re completely disorganised. Everything is a big mess where you are. How can you get anything to work? But I have people helping me get organised. An example of how disorganised I am, once I got up at 4.30 in the morning to get to the early morning plane from Zurich to City airport.

In order not to wake anybody up I took my shoes on the dock and only in the airport did I realise that one show was a Church, another one was a Moresco and they look quite different. I thought, how do I get through all these high-powered business meetings in London with two different shoes on.

I had no chance of buying shoes at the airport because it was a seven o’clock flight, no shops were open. So when I came into the reception I would put my briefcase just in front of my shoes. So that was fine. And then somebody came to pick me up and then I would walk fairly close to them and have a very intense conversation and look them straight into the eyes.

Petri: Almost intimidating guy, you know?

Lars: Now I wonder that these people who stand too close to you, maybe they have some problem with their shoes. Then I come into a meeting room and I rush to my chair and sit down while staring into their eyes and talking, engaging them in talk while I was hiding my shoes.

And as far as I know, I got through something like seven business meetings and the entire trip with not a single person noticing that I had two very different shoes on.

Also even worse, once we were selling satellite communication systems and the night before I had to go to a sales meeting. I had put all the descriptions, which are diagrams technical descriptions, in my briefcase. And then, I got to the meeting. I opened my briefcase while I’m talking. So I put my briefcase on the table and open it while I’m talking. And then it’s my daughter’s toys inside. So I kept talking while I closed the briefcase.

I think I said something, I’ll just show you the diagrams. And then I just put the briefcase down and said instead of showing you the diagrams, I think it’s easier if I draw it to you with a pencil. Do you have a pencil and a paper? I was drawing for them. She had just emptied my briefcase and made it into a dolls house. So it was full of dolls. These kinds of things happened to me quite a lot.

Petri: What is your favourite word?

Lars: My favourite word is freedom.

Petri: What is your least favourite word?

Lars: Tyranny.

Petri: What turns you on creatively, spiritually or emotionally?

Lars: Music

Petri: What turns you off?

Lars: That will be tyranny,

Petri: What is your favourite curse word?

Lars: Fuck. I think I’ve been working in the financial business, dealers, they say fuck a lot.

Petri: What sound or noise do you love?

Lars: I love the sound of water, running water. No, even more, to be at the bow of a boat, which is gliding through water. And you can barely hear the sound of this water around the boat. That’s fantastic.

Petri: What sound or noise do you hate?

Lars: Somebody putting their nails to a blackboard or a dentist’s thrill if I can choose two.

Petri: What profession other than your own would you like to attempt?

Lars: I would like to be a drummer.

Petri: What profession would you not like to do?

Lars: Auditing

Petri: If you could be a co-founder of any startup in any era, which one would you choose?

Lars: I think Amazon, but I’m also very fascinated by the Wright brothers, the airplane.

Petri: Any final words for the audience?

Lars: Yeah, that could be about the Wright brothers because they assembled their plane in nine days and then it flew. But the true story is in Matt Ridley’s new book about innovation, which I just read, and he writes that they worked a lot on it. They found a French expert in aerodynamics and they wrote almost 200 letters to him asking him questions.

They’ve built dragons that had the shapes of smaller airplanes and tested them and different ones. They tested flying wings. They tested sitting on flying wings.

My final word is that don’t forget that innovation is 1% inspiration and 99% perspiration.

Petri: Thank you Lars. This was so much fun!

Lars: It was a pleasure. Thank you.