On 11 September 2019, Futurebox besøg af Karina Bergstrøm Larsen visited Futurebox and presented the gripping story about her startup journey with Satcom1 in front of the 75 attendees. A journey that started as a business plan quickly jotted down on a napkin over brunch in Copenhagen, and ended 13 years later with an impressive exit when the well-run company with unique products and 37 employees was sold to Honeywell for DKK 700 million.
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.
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.
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.
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.
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.