What I've learned, by Skype's Niklas Zennstrom
By David Rowan |02 November 2010
I write The Digital Life, a monthly tech column in our sister Conde Nast magazine, GQ. This is my column from last month's issue (dated November). To subscribe to GQ, click here.
Think of all the giant technology companies that have changed your life, and the chances are that they're American. Facebook, Google, Twitter, Apple, Microsoft -- there's something about the US digital economy (not least piles of Silicon Valley cash) that churns out tech billionaires faster than Europe can generate teetering banks.
That's why Niklas Zennstrom is such a role model to entrepreneurs this side of the Atlantic. Not only did he co-found and run Skype, the London-based internet-phone start-up which eBay bought in 2005 for $3.1 billion. He also, with business partner Janus Friis, created the game-changing peer-to-peer software Kazaa, launched the online video-sharing service Joost, and now runs a Mayfair-based investment firm called Atomico which recently raised $165 million. Not bad for a 44-year-old Swedish-born Londoner listed in the latest Sunday Times Rich List as worth a mere £320 million.
What, then, can the rest of us learn from Zennstrom? I recently spent an afternoon with him in search of lessons he's picked up on the way.
- "It's hard work. When a business becomes successful seemingly overnight, no one knows about all the months and years you've invested, all the projects you've tried before that didn't work."
-"You shouldn't be afraid of failure -- when something fails, you think, what did I learn from that experience, I can do better next time. Then kill that project and move on to the next. Don't get disappointed."
-"Often you’re the only one who believes in what you're doing. Everyone around you will say, 'Why not give up? Don't you see it won't work?' You then have to find out, are they right or am I right? It took a year to raise money for Skype: we went to 26 different venture capitalists, asking for 1.5 million euros and prepared to give away a third of the company. But no one wanted to invest."
-"Surround yourself with smart, dedicated people -- to build something isn't a one-man show. It's more important to have smart people who really believe in what you're doing than really experienced people who may not share your dream."
-"Try to prove there are people actually interested in your product before you spend money building a business. Test it on your mother, sister, friends -- I tried Skype on them very early on. Though you never know with the 'mum test' if they’re saying good things because they just want to be nice."
-"Think globally. If you don't think big, it's unlikely you'll become big. We made sure from day one that Skype was an international business -- we were incorporated in Luxembourg, we had software developers in Estonia, we moved to London. The internet has no country boundaries."
-"If you want to be an entrepreneur, it's not a job, it's a lifestyle. It defines you. Forget about vacations, about going home at 6pm -- last thing at night you'll send emails, first thing in the morning you'll read emails, and you'll wake up in the middle of the night. But it's hugely rewarding as you're fulfilling something for yourself."
-"If you're married, your spouse needs to be into it. My wife's salary could support us while we were founding both Kazaa and Skype. With children it becomes harder."
-"Money, for me, was one motivation -- but so was the drive to change something, to make something happen. And to prove to the world you can do something real. If you're only driven by making money, you’re not going to be as likely to make it."
-"None of my family were entrepreneurs -- my parents were teachers. But I thought early on, in school in Sweden, that one day I wanted my own company as that was the way to make real money. I wanted to prove to others and myself that I could make it big."
-"Don't give up if you meet some resistance. I didn't need to raise this fund -- but we continued right through the [financial] storm and raised $165 million. So don't run for cover."
-"Once you're successful, people listen to you more. You get much taken more seriously. And people expect that the next thing you do will be instantaneously successful -- which makes everything much more difficult. Just because you had one success, doesn’t mean you'll have another."
-"I'm doing a lot of philanthropy. I don't feel any obligation to do so, but I'm passionate about the environment and climate change. It's very rewarding."
-"With success you have the ability to inspire people. I feel a public figure to some extent, that comes with the job. I'm comfortable with that."
-"The UK is best country in Europe when it comes to setting up companies. But it's no no longer as attractive for entrepreneurs to move here, and David Cameron should reset the conditions to those I found when I moved here: tax shouldn't be as high for stock options, and there should be taper relief so that if you invest all your savings to build something, you don't get taxed away."
-"Of course there's envy, but you have to manage it. I don't see that as a big problem."