Satcom1 has developed software that makes it possible for air passengers to make mobile phone calls and surf the Internet via satellite connections.
There were, of course, small and large bumps in the road to success, which Karina and her partners and employees had to overcome. One size fits all is no good when it comes to startups, but there are a number of crucial points that all entrepreneurs should consider; otherwise, it may become a costly affair or may even threaten the existence of the company. The three dilemmas which Karina Bergstrøm Larsen asked the participants to discuss reflect three crucial points and have been carefully selected to shed light on a range of somewhat overlooked issues in the startup environment.
Dilemma #1: The challenge of being several owners
What do you do if one of the owners no longer lives up to his or her role and responsibilities and the other owners want to get rid of him or her in respect of both operations and ownership?
Karina Bergstrøm Larsen recommends hiring good lawyers and/or accountants first thing to ensure that the worst possible scenarios have been taken into account, both legally and financially. This may entail a considerable expense for a startup in its early stage, but the risk and expenses of not doing so may turn out to be overwhelming. In addition to the legal and financial consequences, there are, of course, also personal consequences. “The three of us had expected to grow old together and sip champagne at the Riviera on the other side,” as Karina puts it with a twinkle in her eye.
Dilemma #2: The importance of daring to be honest
What do you do if you end up in a loyalty conflict between, for example, a customer and a business partner?
A situation in which the business partner ‘owns’ the customer with you as an anonymous subcontractor, and the business partner fails to live up to the agreement, both with you and with the customer. This is where honesty comes in. A situation became critical at a meeting in France with a customer who was extremely unhappy with a lack of deliveries. The business partner was responsible for the deliveries, but was generally not contactable and chose not to show up for the meeting. But Karina Bergstrøm Larsen did show up – via phone – as did two of her developers, who participated as representatives of the business partner, and whom the customer assumed were employed with the business partner. Karina Bergstrøm Larsen could not defend the reasonable criticism and introduced herself with the words “Hello, I’m Karina from Satcom1 in Denmark” and explained the situation to the appalled customer. A necessary breach of the contract and breach of loyalty towards the business partner. Together, Satcom1 and the customer came up with a solution that resulted in an additional project for Satcom1.
Dilemma #3: Attention to change of control clauses
What do you do if change of control clauses in contracts with key customers or suppliers pose a threat to the business?
This may be the case if you are on the way to selling your startup or if changes take place at your business partners or key customers which may affect you financially. If, for example, you have invested in developing something for a large customer in the form of software licences, you need to ensure that the customer undertakes to buy a minimum of X number of licences, also if they are acquired by another company, so that your earnings from key customers or partners are secured. Karina Bergstrøm Larsen’s advice is to completely avoid the uncertainty by carefully evaluating the possible consequences of all change of control clauses before signing the contract. And yes, it may be a huge task, but it is important to also read the small print and do your legwork as this is the best way to prepare for negotiations and for securing revenue for your company.
Four takes on what it takes for the individual entrepreneur to succeed
Karina Bergstrøm Larsen has been proclaimed ‘one of Denmark’s few truly successful female entrepreneurs’, and of course we took the opportunity to get her take on what qualities can speed up your startup journey:
Tenacious, i.e. having the desire and the drive to do precisely what you are doing, also when it is hard and the challenges seem overwhelming.
Appreciative towards employees, who must be involved and be told that they are world-class. The startup may well be your baby, but the baby needs more people than you to grow big and strong.
Conservative when it comes to the finances and operation of the startup. Keep the cost level in control as you grow, and see if you can avoid lending, because that pays off in the long run.
Be open about your priorities towards networks and friends. There will be less time for them, but if you explain it from the outset, it is easier to accept.
Karina’s CV
In 1996, as a newly qualified export engineer, Karina targeted her job search at the aviation and satellite communications sectors. This led to a career with Ericsson, Thrane & Thrane, and Satair, where she was employed when the idea for Satcom1 was born and while the first business plans were formulated. In 2006, she took the plunge and stood at the helm of Satcom1 until it was sold to Honeywell in 2015. Subsequently, Karina worked at management level with business development of Honeywell services within the defence sector until summer 2019. At the moment, Karina is spending a lot of time on something she finds incredibly important: bringing her many experiences into play among entrepreneurs in her role of mentor, adviser, and lecturer. Alongside her professional career, Karina has also become a mother.
