How Ingvar Gudmundsson ignored his Mum – and kept fighting during the wilderness years – to build a dotcom powerhouse
If Ingvar Gudmundsson had an Icelandic króna for every time his mother asked him despairingly, “son, why don’t you just get a job?” he’d have an office full of coins. He doesn’t blame her. The path to building a fast-growth global dotcom company has been more treacherous than an Icelandic F-road. The bumpy journey began in 2000 when Ingvar rode the rocket of internet success only for his fledgling company to crash to earth. He returned home to Iceland, shut himself away in his parents’ basement, and built up a new online business. Years of struggle followed, plus the massive Icelandic financial crash of 2008. After evolving to survive, things slowly turned around, leading to modest success, before a simple change to the business suddenly resulted in spectacular growth and seven-figure revenues. Ingvar, however, remembers the tough times well, so he doesn’t blame his Mum for her constant suggestions that salaried employment might be beneficial. He knows better than most that behind almost every successful entrepreneur lurks the wilderness years – for Ingvar this was a time when nothing was certain…except for the regular stream of his Mum’s concerned questions.
Before we look at Ingvar’s story more closely, it’s interesting to hear the advice he gives to the millions of entrepreneurs out there struggling to succeed. With the benefit of his experience, he says: “Persistence is incredibly important; you have to believe in your product. But you also need evidence that your product has the potential to succeed. You should not fight forever without evidence, but if you have it, then fight as hard as possible and don’t give up. Then you must try to find the best employees. For me, that has been incredibly important: I found a brilliant small team – fabulous people who are the backbone of the company. I’d never have been able to get here on my own.”
So how did he get there? It was while working as a general manager for an Icelandic food-manufacturing company in France that the engineering graduate first jumped aboard the entrepreneurial rollercoaster. In 1999 Ingvar came up with a concept for a website where users could sign up to get paid to see ads. Ingvar explains: “The idea was to allow advertisers to target certain people. For example, if a fashion brand wanted to target women aged 16-18, only young women would receive an invitation to see its ad. Users would then be given a small proportion of ad revenue, or they could donate it to charity.”
The idea seemed to have legs – Usain Bolt-shaped ones – so Ingvar quit his job and went to work. Soon after launch, 10 new users were signing up to his website – BePaid.com – every second, and it became the 207th most-visited site in the world. Lots of Ingvar’s Icelandic contacts jumped aboard a rocket that seemed to be destined for dreamland, and the new company quickly secured $3m of funding. Ingvar and his team established a New York HQ, opened a subsidiary in London, and started to plan for the next stage of funding. Before long, 50 employees were on the payroll and BePaid.com had two million registered users. But then the rocket unexpectedly ran out of fuel. By the middle of 2000, it became clear that the next round of funding was not happening. The petrol gauge quickly slipped into the red. “Maybe the company was never supposed to be; possibly perhaps it was not viable,” says Ingvar. “I do not see any company like it today so possibly it was just not a good idea. We’ll never know. Just before we went bankrupt, however, we sent out one ad and got back $45k in revenues, so in a way things did look good right until the end.”
The team battled on, with many staff working unpaid for three months, but by the end of 2000 the project was dead in the water. Ingvar returned to Iceland with many of his old team. “It was quite a difficult time,” he recalls. “Lots of Icelandic people had invested in this company – family and people I knew well. Everyone thought it was going to be a huge success, including me, so coming back home was tough because it felt like I had failed. Iceland is small so when I went to the gym, to the restaurant, to the shops, I imagined that everyone was judging me. Today I realise most of this was built up in my own head. Many investors who had lost money came to me and said: ‘Don’t think about it, everything is fine, no worries.’ The same was true with the employees, but I still felt bad.”
Chastened, in 2001 Ingvar hunkered down and began to work from his parents’ basement, experimenting with a few “internet solutions” and continuing to think big. His most promising idea was a web-based accountancy software package, which he programmed himself. “This time I did not even consider finding backers or employees,” he says. “It was just me and zero budget because I didn’t want to take the risk. I chose to be cautious and mostly did everything myself, programming from morning till night every day.”
Over the next few years, his cloud-based accountancy package – Notando.is – attracted several Icelandic customers. Building such a complex product and taking it to market singlehandedly represented a huge personal achievement but commercial success was limited and today Ingvar recognises his good fortune in having a wife whose salary could support them both. In 2006, however, the business turned a corner when an Icelandic bank considered buying into Notando.is. Shortly after this vote of confidence, an Icelandic investor bought 50% of Ingvar’s business.
A cash injection followed and in late 2006 Ingvar headed to Ukraine to hire a team of developers who could improve his software. “By that point, many hundreds of companies were using the software,” recalls Ingvar. “Things had got exciting again!” His new team of nine redesigned Notando.is and relaunched it at the end of 2007. Everything was going swimmingly…
Enter 2008. Iceland’s economic system did not just suffer during the global financial crisis; it fell to pieces. All three of the country’s privately owned major commercial banks defaulted and Icelanders like Ingvar experienced the mother of all financial crashes. “Pretty much all small companies went bankrupt,” he says. “Many people lost everything. Strangely, though, I felt more positive than when BePaid.com went under. Pretty much everything was collapsing around me, but I was hopeful things would work out, mainly because I had a very, very good team, and we had a strong product. We lost half our revenues in a blink, and my joint investor went bankrupt so I bought him out, but I was quick in trimming the team and I was ready to take no salary myself .”
Ingvar’s business model protected him from being taken out by Iceland’s giant financial meltdown. Overheads were minimal and the company did not have any significant debt, so Notando.is survived. If Ingvar had taken a less cautious approach when building the business, things might have been different.
As it was, 2008 in fact turned out to be the catalyst needed to fire Ingvar’s company to major success. Why? Because – ironically – the crash decimated the Icelandic market, which meant a new business model became essential. “In Iceland at the time there was no hope,” recalls Ingvar. “People thought we would just become a very poor country, so the only option for us was to look abroad.”
Ingvar’s accounting software was built for the Icelandic market, so the only way to survive was to launch a new product. The answer already existed: an online appointment-booking system the team had built for a large Icelandic tyre company. “We quickly turned it into a new online solution and launched it globally. We had faith in it because it had worked brilliantly for the tyre company.”
Ingvar launched it under the name of DoReserve.com. “We didn’t have any capital to spend on advertising so we had to rely on people finding us,” explains Ingvar. “Fortunately, some did and by the end of 2009 around 20 companies were signing up each month. This showed us that the demand existed and it gave us confidence, even though money was very tight. I was not getting any salary and the employees’ salaries were being delayed.”
By 2011, Ingvar was still taking a paltry salary; surviving but not thriving. But then he made two simple changes and revolutionised the business. First, he changed the name of DoReserve.com to SimplyBook.Me. Second, he simplified the online user sign-up process. That’s it. But those two things were like tipping rocket fuel into the tank. “The new name got us noted by lots of technical bloggers; more people linked to our site and Google noticed us more. Instead of signing up 20 businesses a month, we started signing up several hundred. And today we sign up more than 5,000 business across the world each month.”
SimplyBook.Me has been profitable for five years, boasts seven-figure revenues (GBP) and is growing by 50-70% year on year. What’s more, it has no debt or external investors. “Now everyday at work is brilliant fun,” says Ingvar. “My wife has become CFO and we both love it and look forward to work everyday.”
Ingvar’s story shows what you can achieve as an entrepreneur if you roll with the punches, change your business model to suit your circumstances and keep on tweaking your recipe in the quest for perfection. His tale also lends credence to the theory that the entrepreneurial golden rule is keep on going, even when everything seems to be crumbling around you – the caveat being you need some evidence that you’re on the right track. Another lesson to take home is that genuine success rarely comes quickly; long periods in the wilderness are par for the course. Last, but not least, Ingvar’s narrative suggests that being the mother of an entrepreneur can be somewhat stressful. So, if you decide to follow the dream of building your own business, perhaps it’s best to tell Mum you’re very happy in your job as a civil servant, and the pension scheme is extremely generous. It could save her a lot of worry!