When hearing about The Hub, something instantly grabbed my interest. The Hub is a recently launched online platform designed to fit the needs of start-ups, as well as potential employees across industries, professions and geography – including everyone from students to staff members at more established companies who has had difficulties finding jobs on the start-up market.
There are three sections of The Hub; help with recruitment, funding and access to best practise tools. The Hub.dk traffics around 45.000 monthly visitors and over 80.000 monthly visitors counting the Nordic platforms together. It was released in Sweden and Norway in October, already piling up 171 start-up profiles and 75 investors listed in Sweden. The platform is based on strategic partnership between Rainmaking, SUP46 and Danske Bank. Rainmaking is one of the leading players in entrepreneurship around Europé and supports tech start-ups by providing inspiring work environment at affordable price. The idea behind the building ”Rainmaking Loft’’, is that it will help develop start-up innovations faster, because of the accessibility to co-working space and usable tools. The Lofts are not only to be found in Copenhagen, but in Berlin and London as well.
I left Lund to be drenched by the rain, jumping on a train to Copenhagen to meet with Klavs Hjort from Business Innovation at Danske Bank and Kasper Vardrup, co-founder of Rainmaking Loft and partner of Rainmaking. Leaving Københavs Hovedbanegård I sauntered through the idyllic streets of Copenhagen until I reached an old building from the late1800s at Danneskiold-Samsøes Allé 41 – Rainmaking Loft. Later that day, I learned that this facility used to be where the Royal Danish Navy made their soldiers ready for battle. A fitting environment for hard-working entrepreneurs, don’t you think? I arrived an hour early to breathe in the atmosphere and to get a feel for how it is to work there. Sipping on a cappuccino in the Loft’s lounge, I observed the surroundings and everything that was going on. There was a book facing me on a near table with the title ‘‘Start-up Guide Copenhagen’’. The interior was designed creatively; trees in the lounge areas with bird houses hanging from the branches, glass walls showing that the residents under Rainmaking Loft are each other’s resource, furniture with innovative and interesting designs, open and bright spaces for a pleasant working atmosphere. In other words, a well thought through concept. When strolling through the building later on, one could almost touch the feeling of innovation and the urge for development. As the clock turned twelve, Klavs and Kasper brought me to a conference room with glass walls. I quickly got used to the openness of the environment and frankly, it made me lose my nervousness and got me going.
Klavs, what is The Hub to Danske Bank and for start-ups? As I have understood it is a partnership between Danske Bank, Rainmaking and SUP46.
Klavs: Yes, it certainly is! It is within our efforts as a bank to start engaging with start-ups in new ways. Previously, the only conversation we had with start-ups was about lending. The outcome of that discussion would very often be negative, ending with a no, because banks usually do not provide loans to start-ups. Start-ups should not ask for loans, but for risk money. We decided to redesign our offerings towards start-ups. To be able to do that with relevancy we needed to talk to someone who knew the ecosystem very well and that is why we engaged with Rainmaking.
Kasper, can you tell me about Rainmaking?
Kasper: Rainmaking is a diverse company. We started in 2007 with the ambition of creating a start-up factory – a platform where we create our own start-ups based on our ideas and then continue to evolve that process. Since then, we have started 30 companies, some successful, others not. We have made a lot of mistakes, but also improved the process and our way of thinking. Today we do different things, but everything is anchored in the start-up ecosystem here in Denmark, across the Nordics, the UK and Germany.
What do you need as a start-up and an entrepreneur to be a part of the Hub? What does it take to be a part of the space here at Rainmaking Loft?
Kasper: That question encapsules a lot of things. Speaking of this house (Rainmaking Loft), we try to attract ambitious tech-start-ups. All our start-ups have a tech-component but they span various industries and products. We look for ambitious start-ups with founders and teams we like. That is the main criteria.
Klavs: I think we can copy the definition for The Hub. It is free of charge. You do not have to be a customer of Danske Bank. The nominator is that the company should have a tech-component and an eagerness to match. Most of these companies are dealing with a great deal of uncertainty. They are trying to design new business-models or aim for succes at an underserved market. They are trying to solve needs in new ways. A lot of them will die. If you look at the statistics, 30% will disappear after one year. This takes us back to the rule of funding – it is not loans they should have, but risk money.
What do you think one should think about and place importance on when founding a company? Kasper, you have good insight here, having founded so many successful companies.
Kasper: I can talk about that for a long time! It is important to start with an actual problem, not just a good idea. The focus should lie on solving a problem. That is one of my key learnings. After that, I would say that the team and the market are equally important. Even the best team will fail if the market is not there. So, my top advice is to focus on solving a problem, seeking support by a strong team and entering a market that benefits you.
Klavs, what are you, as a Bank and financier, looking for in a start-up/entrepreneur, when recruiting for The Hub?
Klavs: For The Hub, we welcome all types of companies who want to be a part of it. We have a screening too, of course. There are also industries that we do not welcome for pure ethical reasons, regardless of weather they are bankable or not. In other words, it really is an open platform. The dilemma, which I talked about in the beginning, occurs if they ask for a loan. We have a credit policy and would look at their business module. If we see the risk as being too high, we decline. Now however, we have the possibility to guide them towards The Hub. Through The Hub they could get the help they need.
How can an entrepreneur use The Hub and Rainmaking? In other words, how will being part of The Hub or Rainmaking help you and why should you be a part of it?
Kasper: The purpose of The Hub and our (Rainmaking) involvement with The Hub is to create a platform that can solve some of the problems that most start-ups face. We have focused on problem solving. We began by interviewing hundreds of start-up-companies and identified a number of problems that most of them face. Those are the areas that Klavs mentioned before: access to employees and co-founders, access to tools, access to and knowledge about funding options. A lot of start-ups spend time reinventing their ideas, writing the same contracts and looking for the same template. Putting solutions to all of this in the same place creates great value.
You both mentioned access to “tools”. Could you give an example?
Kasper: Some of the things we have been focusing on are basic contracts, like employment and shareholder contracts. We have investigted how to run board meetings in an efficient and structured manner. We have also looked at how to present a business in order to appeal to investors when wanting to raise funds. Therefore, we help with pitch-learning. We have tried to put all of this in an easy, understandable guidebook. When talking about pitch-learning for example, how do you really carry it out?
What is the best way to perfect your pitch?
Kasper: You can create your storyline and present your business as well as possible, but the real learnings comes from having meetings with investors. Historically, when I pitched to investors, the pitch itself changed quite a bit during the period of the meetings. There is always the problem of you understanding your idea, but presenting it to the investors it becomes unclear what the business idea is. Go out and try it on as many as possible! Another way is to look at other good pitches. There are a lot of pitches available online from successful companies.
You are both part of something which many young business and economics students strive to be a part of. Is there anything I haven’t asked you which you want to add to the picture of The Hub and Rainmaking?
Klavs: A great lesson for us, which I think should be a great lesson for all start-ups, is that it is really, really important to realize you need to start with the problem. Once you have got and solved that, it all comes down to getting your idea out there as quickly as possible to show what you can offer and recieve feedback. We often spend a lot of time building a solution we think is good, but then after six months, when receiving feedback, we realize that it is already done or not worth further development. It is important to realize when you have a bad idea. It is very common for companies to keep investing in an idea which is not going to work, rather than throwing it away and starting over. This goes for start-ups as well. I’m not saying you should not believe in your idea, but have self-perception. You need need a problem, a solution and quick feedback.
Kasper: Founders who sit on their ideas and protect them will not make it. It never works. Instead of spending time writing a very detailed business plan, you should identify the critical points of your great idea and test it on as many potential customers as possible. And contunioe testing it throughout the process. Never stop doing that!
This information and these tips you have been given me is something you need from an “insider”. Being a student or starting ut as an entrepreneur as an “outsider”, it is hard to get by this kind of valuable information.
Klavs: Yes, and I think this goes both ways! It applies to us as a big institution as well. That is why it is great that Rainmaking also wanted to work with big cooperates. There are also a lot of students, like you just explained, that would like to become a part of it but do not know how to. There could also be people like me, sitting in a big corporate, wanting to be a part of a new adventure but not knowing weather to take the risks. One of the greatest things about The Hub is that it becomes transparent and easy for outsiders of the ecosystem to take part in.
You recently launched The Hub, which is a great first step, but have you thought about how to further closen- the information gap between insiders and outsiders? It is common for students to feel that they have what it takes to enter the market but that they are in need of the right information to showcase the proper qualities.
Klavs: With the risk of sounding a bit rude, I think we see the same tendency with some of the companies that are arriving. Instead of just waiting for someone to come with a solution, you could come to this place (Rainmaking Loft) even without an invitation. Perhaps you would have talked to someone here, or you could have joined one of the start-up-events in Malmö. Of course we could help the outsiders get some kind of introduction, but I think we would be doing it wrong if we tried to give them a rigid “How to be a start-up” manual. If you do not have the guts or the willingness to act upon your thought, then you should stick to being a student or an employee in a big corporate. It is lot about the mentality, I would say. If you want to be part of an ecosystem, you need to be there!
Yes, one would of course take away a part of the innovation when giving too much. But, it is interesting, because you just closed a part of the information gap unintentionally. Your comment about the will and mentality shows that one needs the commitment, the energy and the right team to get to the point one wants to reach. This illustrates that it is not only about having an idea, it is about showing that you (and your team) have what it takes to go all the way!
Klavs: Yes, that is right!
This has been very interesting and profitable. Thank you!
I am not sure whether it was the Loft’s atmosphere or the interesting talk with Klavs Hjort and Kasper Vardrup, but these hours left me with a strong sense of trust to venture into an unexplored market. Before leaving Rainmaking Loft, I saw a young woman with her nose deep down the Start-up Guide Copenhagen, intensively scribbling down notes, probably preparing for her next battle as an entrepreneur.