Summary

Håkan Andersson, a noteworthy Swedish entrepreneur, embarks on a compelling narrative that delineates his evolution from spearheading the initiative to ban smoking on airplanes to revitalizing his logistics consulting firm from the precipice of insolvency. His innovative methodologies, which starkly contrast conventional consulting paradigms, emphasize transparency over mystique, thus empowering clients to seek his services rather than the opposite. Throughout our discourse, Håkan shares invaluable insights gleaned from navigating the tumultuous waters of the business landscape, including the existential challenges posed by the COVID-19 pandemic and the pivotal strategies employed to ensure sustainability and growth. We delve into his experiences of re-establishing a once-thriving enterprise, shedding light on the practical wisdom that underpins his approach to building a resilient business model. Join us as we explore a conversation imbued with sagacity, resilience, and a profound understanding of the intricate dynamics of entrepreneurship.

Story

The dialogue unfolds with the illustrious Håkan Andersson, whose entrepreneurial odyssey is distinguished by notable achievements and the resilience requisite for triumph in the competitive landscape of business. Håkan's journey commences with his pioneering efforts to eradicate smoking on airplanes, a groundbreaking initiative that transformed the aviation industry. This audacious endeavor not only enhanced passenger comfort but also set a precedent for health standards in air travel. As he narrates his experiences, Håkan reflects on the formidable challenges he faced when he was thrust into New York City, armed with nothing but his determination and the support of his wife. Faced with a failing logistics consulting firm, he embarked on a mission to revive its fortunes, adopting an innovative strategy that prioritized transparency over the obfuscation often found in consulting practices. By elucidating his processes and offering clear insights into his services, Håkan successfully attracted clients who appreciated the clarity he provided amidst a sea of complexity.

The conversation delves deeper into Håkan's strategic methodologies that underpin his consulting firm, Establish. With a focus on radical transparency, he elucidates how this principle not only differentiates his services from those of his competitors but also fosters trust and credibility with clients. Rather than shrouding his offerings in mystery, Håkan opted for an approach that demystifies the consulting process, thus allowing potential clients to engage with him in a more meaningful manner. This strategy proved particularly advantageous during tumultuous times, such as the COVID-19 pandemic, when the sudden cessation of business activities posed a significant threat to many companies. Håkan's foresight in maintaining a robust cash reserve and minimizing overhead costs enabled his firm to weather the storm, illustrating the critical importance of financial prudence in sustaining a business through crises.

As the dialogue progresses, Håkan shares poignant anecdotes that reveal the personal dimensions of his entrepreneurial journey. He recounts the legacy of his family's farm, a narrative punctuated by a legendary party that resulted in its destruction—a testament to resilience and recovery. This story serves as a metaphor for Håkan's own experiences in business; just as his grandfather rebuilt after the calamity, Håkan exemplifies that success often requires the fortitude to rise after setbacks. The discussion culminates with reflections on future aspirations, emphasizing the importance of mentorship and the cultivation of senior talent within his consulting firm. Håkan's journey is not merely about individual accomplishments; it embodies a commitment to fostering a culture of growth and resilience, demonstrating that the path to success is often paved with challenges that demand unwavering perseverance.

Takeaways

• Håkan Andersson's journey showcases the power of radical transparency in consulting firms, emphasizing how revealing methodologies can attract clients.
• Maintaining a substantial cash buffer is critical for business survival, as demonstrated by Håkan during the COVID-19 pandemic, where many projects were abruptly canceled.
• Focusing on a limited range of services rather than trying to offer everything allows consulting firms to position themselves clearly and create more value.
• Håkan's unique approach to consulting involves aligning marketing and sales strategies to ensure consistent messaging, enhancing client engagement and understanding.
• The experience of reviving a failing logistics firm illustrates the importance of resilience and adaptability in navigating business challenges effectively.
• Håkan's story about his grandfather's farm serves as a compelling metaphor for grit and perseverance, highlighting the importance of overcoming setbacks in personal and professional life.

Links

LinkedIn https://www.linkedin.com/in/hakanbandersson/

Establish Inc. https://www.establishinc.com/

Leave us a review: https://podchaser.com/DesigningSuccessfulStartups

Jothy’s book: https://www.amazon.com/Tech-Startup-Toolkit-launch-strong/dp/1633438422/

Site with podcasts: https://jothyrosenberg.com/podcast

YouTube channel: https://www.youtube.com/@DesigningSuccessfulStartups

Jothy’s non-profit: https://whosaysicant.org

Jothy’s TEDx talk: https://www.youtube.com/watch?v=PNtOawXAx5A

Foreign.

Welcome to another episode of Designing Successful Startups.

I'm Joffy Weisenberg.

Today we're sitting down with Hokan Anderson, a Swedish entrepreneur with a remarkable story with spans from banning smoking on airplanes to reviving a consulting business from the brink of bankruptcy.

In this case, I was airdropped into New York City.

I knew no one besides my wife, which was wonderful, but I had a no network.

I had a firm that was failing, so I had to do something to get revenues.

It had a glorious past, so that was a good thing.

Hokan takes us through his journey with establish a logistics consulting firm he originally built, sold, and then bought back when it was failing.

His innovative approach turned conventional consulting wisdom on its head.

Instead of mystifying his services, he made everything transparent, allowing customers to find him rather than chasing them down.

From surviving Covid when his entire pipeline disappeared in 10 days, to expanding internationally, Hokan shares candid insights about building a sustainable business model while staying true to your core offerings.

And wait until you hear the story about his grandfather's legendary party that burned down a 500-year-old family farm he just inherited.

Join us for this conversation packed with practical wisdom, surprising pivots, and the kind of grit that comes from generations of Swedish resilience.

And hello Hkan.

Hello Jyoti.

How are you today?

I'm good today.

As always, I like to ask, and I'd love for you to tell us because you're not from the United States.

Tell us where you are from and where you live now.

I am from Malmo, Sweden, which is a country way up north where the summer days are very long and the summer, summer and the winter nights are very long too.

Right now I'm where every grown up person want to be.

New York City, 39 on Broadway.

I go to New York City sometimes because I'm from.

I'm in Boston.

I don't fly down.

I take the Acela because it takes the same amount of time and I don't know, just easier on the body.

But then if I'm in Manhattan, I can enjoy it for about two days and then it's just like too crazy.

Well, the beautiful thing is I live in Greenwich Village and it is like being in a village.

I know all the people like four blocks around where I live.

I know all the restaurants and they know me.

And then you can venture out and you're like a tourist in your own town.

It is a different thing living there.

I've heard about it several times that it's not so crazy if you live There.

But I'm not gonna, I'm not gonna do that experiment.

Hey, so before we start talking about your, your, your current company established, you did some big things in your career.

And one of the things that you did that I just.

Every time I'm on a plane, I am so thankful that you started.

You literally started the, the path to ban smoking on airplanes.

Tell us a bit about that.

I'm very proud of it because people my age have experience sitting on a plane in the non smoking section and when you get the tray with the food in, someone in front of you is lighting a cigarette and blowing out the smoke.

I was head of the product development at Scandinavian Airlines and this started to become an issue and we didn't have the resources to have the advanced ventilation systems.

So we did research and came up with the concept that we will cancel smoking altogether.

And it went as far as the Danish Queen, who is a chain smoker, she signed a letter and allowed her airline to be smoke free.

Within a year after we introduced this, all airline industry had adapted to.

They were just waiting for someone to take the risk and we did it.

I have a little side comment here and that is the country that we thought would be worse was Japan.

So the area manager asked me to go there.

I laid out all the reasons for why we would go smoke free.

And afterwards they were standing up and giving me a standing ovation.

So I said to the area manager, you see, they love it.

And he said, you're not understanding anything.

They love your courage to stand up and telling them such bullshit.

No, I keep learning new things about Japanese business culture.

So they didn't belong with it.

They had to.

And since all their competitors were going along with it as well, then it was a success.

And I haven't heard anyone complaining about not being able to smoke on the airplane since then.

I have only one more question for you about airlines.

Do you think that my hope that we are never going to allow cell phone conversations on planes?

Do you think that's going to last?

That we're going to keep that or somehow the airlines are going to give in and allow cell phone calls?

That will happen.

I hate it.

I wish that it won't happen, but it will.

And it has actually been there.

It was a big drive in the 90s where you could they have phones at the seatbacks.

It never took off.

But I think that cell phones are different.

So let's hope that you're right because I certainly appreciate the haven, the oasis of no cell phone.

Yeah.

The thing is that you're trapped, you're trapped right there.

It's just the same exact thing as smoking.

And you know, people will, there'll be five people around you simultaneously talking loudly and you know, you can't sleep, you can't concentrate, you might even have trouble watching a movie.

Let's talk about your firm, Establish.

Tell us what was the motivation for it?

What made you create Establish?

Well, the thing is we created Establish back in the 90s and we grew it all over the world.

We had seven countries and then we sold it off and we tried to do nothing for a while.

The company is a consulting in logistics, logistics and warehousing.

And then me and my two business partners were starting a little bit smaller doing consulting and then we got the opportunity where the buyer of Establish had failed and the company was about to go bankrupt.

And they said, so do you guys want to give it a shot?

And said absolutely.

Because at the same time I had met my, my now wife and she lived in New York.

So perfect.

The problem was this, that I have at that time been in consulting industry for many years.

And the way you do consulting is that you build trust.

You build trust through networking.

They know you as a person and then they ask you can you help out here?

And a good consultant would listen, come up with a bespoke or at least a customized scope and maybe a solution and you, you go from there.

In this case, I was airdropped into New York City.

I knew no one besides my, my wife, which was wonderful.

But I had a no network.

I had a firm that was failing.

So I had to do something to get revenues.

It had a glorious past.

So that was a good thing.

The services had a Chinese menu that did everything for everyone.

Can I interject question, where were you.

When you started it?

Originally?

Originally this was in from Sweden.

And then we expanded, then we expanded into to the US and into.

Okay, because I was trying to figure out where were you being airdropped into New York City from?

And that was from Sweden, right?

That was from Sweden.

Okay, got it.

So, and we also, the leads we're getting through Google, we didn't get them because we were penalized because they had used some link forms to get backlinks and get higher.

And we also found out that all the services could be getting for free.

So if you did a network study, the transportation companies would do it for free for you.

If you buy equipment like racking equipment, you can get that for free from them.

So I then had to make a living and it's in New York.

So what we did was that we looked at what are the competitors here.

And this was very interesting because as with every consulting firm, the competitor would be the big auditing firms, CPA firms, the Accentures, you had a big strategy firms and then you have the logistics companies.

Like I said, some of them would do, some were services for free.

And then you had a lot of overweight middle aged white men with big egos and their name on the door.

What we were thinking then is that what they were all trying to do was to make what we did as complicated as possible and that they had the recipe for the secret sauce.

And then the idea we had was that why don't we, since we can't do that, we don't have the network or anything, why don't we turn this around and undress what we're doing?

So the idea was then to cut down on the services.

We went from like 60, 70 different services into four very clear.

And we said we're going to be extremely transparent.

So we're going to tell exactly what you get.

You're going to tell exactly how you get it.

The process, the secret sauce.

We would spell it out for you in detail.

We will get you all the steps from when you hang up this call to when you get there.

You will get case studies for free, which we would put that out there and we would give you references saying this is what we did in your business.

What happened was that people would, instead of going to link forms and stuff like that, they would search for how do you do this?

And we were the only ones that were giving this away for free.

How you do it.

They would contact us and what we did was, and this is basic in all selling, so it's nothing new.

We would always answer the same day as the request come in and we would set up a call, a teams call.

And what we would do on that call is that we would go through exactly what you would see on the website, which is how you would do this and how you get to the end with every step.

And the wonderful thing is that in nine cases out of 10, they would say at the end of that call, this is exactly what I'm looking for.

And then you wonder why would that be?

Well, they have searched for exactly what we are offering because we are very clear on what we're offering.

They then went to our website and they went through exactly how you do it and what they would get and with all the references.

And I would then, in a very attractive presentation, say exactly the Same thing.

So they first searched for it, they then confirmed it on the website and then they heard it, but with different graphics and with a mix of Swedish and English presenting it.

And they would say, yes, this is exactly what we want.

And the beauty of this is it's very hard to go to someone and say, Mr.

Rosenberg, wouldn't you like to get a new layout to your warehouse?

Chances are you would say, well, I don't have a warehouse or no, it's working pretty nicely.

But if somebody is looking for a new layout for a warehouse and like the way you will develop the layout for warehouse, chances are that they would really like what you see.

So this was a way to get in.

And the second thing, if you go to consulting companies, you will see a smiling CEO and you would see a list of all the brilliant brands.

We made a very conscious decision, no persons, they didn't want to know that at the time we were a three man band.

So by setting this up this way we could be for all they knew, 300.

And it's also that it's not connected to an individual, it's connected to a methodology.

And then since we had a lot of time, we didn't have a lot of revenues there.

We would then develop all the tools like here's our standard presentation, here's our mda, here's our data request, here's our analysis tools down to when you go out to a customer.

We had set up the tablets, the iPads, so that it was easy to take notes and write the or sketch out the processes, what we found there.

And this is crucial to anyone that wants to get into a consulting.

It doesn't matter how brilliant you are and how fantastic results you deliver, if the customer was expecting something else.

So it's very hard to compensate wrong direction with higher speed.

So what this then told us is that by being extremely careful about this is exactly what you should expect and then having the tools to make sure that we will deliver exactly what we promised.

So.

So you've explained really well a different model for where you figured out how to get customers to come to you.

Are there downsides to having the customers come to you or risk downsides?

I know that date very well.

So within 10 days all our pipeline, all our projects were canceled.

And if you don't have any active selling, it's very hard to do whatever you're doing to get them come to you more because you have to rely on them coming to you.

So that was a very, very hard experience that somehow you need to build because all our services were built on package.

This is what you get.

And we realized we need to get some sort of stickiness.

We need to get some sort of.

How do we build this into repetitive?

And there you got to work the old fashioned way.

And if you have a happy client, how do you keep them happy?

How do you build the next service that would be logical to buy after the first?

And that was a very rough awakening.

But we survived.

Hi.

The podcast you are listening to is a companion to my recent book, Tech Startup Toolkit, how to Launch Strong and Exit Big.

This is the book I wish I'd had as I was founding and running eight startups over 35 years.

I tell the unvarnished truth about what went right and especially about what went wrong.

You could get it from all the usual booksellers.

I hope you like it.

It's a true labor of love.

Now back to the show.

I'm impressed that you, your kind of business is, is, is, is tough when the, when the spigot shuts down.

The spigot of money shuts down.

What, what we, we had done two things that helped us through.

One was that cash is king.

We know that most companies that fail do it because of being out of cash.

So we had a buffer much more than we really needed that was in the bank.

And number two was that we didn't have any overhead.

We could move out of our office in two months.

I took over the accounting.

We didn't have any other cost but the, but the salary.

How much of the company was still in, in Sweden.

But at this point, this, this, that was about half.

But I'm talking about the US Parts here at.

But I mean, it was about half.

Yeah, well, but the, the pandemic was.

I mean.

Oh yeah, it was over there just as, as much.

I assume they, they had a shutdown too.

There was a little bit of a difference there because they were lucky enough to have big projects going on in public transportation like subway and rail that survived.

So that was a little bit easier.

They shut down.

They were much lower in revenue, but they still had some foundation to work.

We're on a little bit of the details for me.

They called you, the owners that, that bought it from you, called you up and said, we're about to go bankrupt.

Do you want to take it over?

Did they sell it back to you?

What did they do?

How did, what happened there?

Did they sell it back to you for a dollar?

What?

Well, we bought it back for I think was a hundred thousand.

So you sold it to them for a reasonable amount.

You bought it back for pennies on rep and that you sold it for.

So and then how long did it take you to get to the point where you could put money away in the bank as a buffer against a difficult time?

Well, we turn break even like kind of immediately because you just look at the balance sheet and say this is what we have, this is what we can pay.

And then before it was up and running and being really profitable it was like four years.

It takes time.

What I'm describing sounds easy but it takes time and you have to fail.

And we failed many times on the way here.

I think the biggest thing for us was to stay clear on not adding services because it's very easy during those three or four years to say we do whatever you want, we would clean your toilets, we will serve you burgers or whatever you want.

But we managed actually to stay true to Here are the services we're offering and focus on doing that really well.

And I think that helped us a lot.

What's the long term goal now?

Do you want to say that again or is it kind of something you're going to keep going with?

There are two steps.

There's one we've changed a little bit the concept here.

One is that we used to have senior junior consultants because we could train them in weeks and do this stuff but to get this stickiness we're now recruiting more senior consultants that can build the trust and all that.

So that is something that we're growing also we learned that even if we could do everything for unhurt and 9th and Broadway there is a high value of being local.

So now we're offering an office in Chicago to be in the Midwest.

I have a side gig that is in the company but unintentional.

We have an office in Cuenca, Ecuador that wasn't planned, it was just a good consultant moving there and they are doing software implementation and they're super profitable.

It's just exploding in Latin America.

I don't speak Spanish so I have to trust it.

But it's fantastic.

So that is something we want to do but we also want to sell because from my point I want to give to the more senior consultants the chance to spread their wings in a bigger organization.

And we think that our concept would work if you got the geographical coverage.

We are in the lucky situation where we have a number of suitors.

Really this sounds so much cliche but we're Looking at what do we think would be the most fun.

My sons are bankers and they said being a logistics consultant that must be the worst pickup line ever because it's so non sexy and everything.

I happen to think this is really fun.

I think this is really, really cool what we're doing.

It changes things.

If we can find someone that is buying us, I would get the money.

That's nice.

But there could be some years where we're doing this on a grander scale and that would be fun.

So consulting businesses typically save for about one time revenues.

Yeah.

So you, you know it's very different.

I mean your margins are, are quite a bit lower.

You know, I ran a consulting business.

For a little while.

We were feeling good when we got 35% margins and then.

35% is good.

Yeah, I think that is good.

Yeah.

Yeah.

And then.

But it's still a serve for runtime revenue.

You know you sound like you have a very efficient business.

Expenses are, are low.

I mean I think your, your expenses have to be completely dominated by just salaries.

There's nothing.

Oh yes, oh yes.

Oh yes.

And so you, you could, you could have a good sale and it would.

Be interesting to see the way we look at it.

Is that probably not fun to do it with the ey's and accentures of the world.

Yeah.

If, if you're listening I, I'm open but.

But the ones that we're discussing with now are some CPA firms that don't have this hands on service.

We're discussing with more engineering based firms that are international which would be interesting.

What I think for us is the key is that there is an a way if we're doing as good as we think that we're willing to have a lower upfront to have a high reward.

So if we can get 1.52 points revenue but a high upside if we, if we knock it out of the park, we would be more interested in that than trying to drive up the first one.

As much as we can say she's a.

Gives you like, like everyone I ever talked to who's started something from scratch.

Especially someone who's started something from scratch, sold it, somebody almost killed it and you've given it a rebirth.

Anyone who's done any of those things has a lot of grit.

And I would love to know is there a story about that you could tell us about where you feel your grit comes from?

I think there are two answers to it.

My background is very blue collar so my grandmother were for a while cleaning toilets to support the family.

And me and my siblings were the first to.

To make it through senior high, much less through the university.

And you learn a thing or two that even if I'm not the smartest person in the room, and I'm very rarely the smartest person, I can hang in longer than they can.

So that is one thing.

The other part, the other side of the family were farmers.

And my grandfather inherited the farm.

It's a small farm, but it had been for 600 years in the family, 500 at that time.

He was 19 when he inherited it.

He had a big party and burned down the whole farm, Everything, totally.

That was one hell of a party.

The story goes that he made his booze himself.

So his younger brother told you can't taste it, but you serve, serve the alcohol.

And of course he tasted it and he fell over it and that's how the fire started.

So then they tried to get the fire department there, but the firefighters, they were there and they were passed out drunk.

Even the priest, the local priest was there and he was too drunk to do anything.

So that must have been a hell of a party.

What was it?

Was it vodka?

What were they distilling themselves?

Yeah, vodka.

And this is from the part of Sweden where Absolut vodka come from.

Absolute vodka.

And there was an absolute party.

Okay, so his farm was burned to the ground.

Now what?

Well, so he then had to work his way to get.

Get money to build it up again.

And that as far as I can tell, seen pictures, he then had to do it manually with horses.

And so because he burned down the tractors and whatever, you had to help that.

And then now it's thriving with my.

My uncle is running it.

Sir.

Is a sir in the family?

It's still in the family.

That's an amazing.

That wasn't scary about it.

Is there a burned out tractor somewhere?

This is something that the family isn't very proud of.

I think it's a fun story.

But they don't have books out there.

Describing that happened or anything.

No.

Well, this is Orman Marina.

And my father was actually digging out from the local newspaper.

So he's got the.

So we have those where they're reporting about the farm burning down.

Wow.

Everyone's got a unique grootster.

That's one right there.

Hokan.

Thank you.

I think we've done a nice little episode here.

Especially people interested in consulting and partying.

And partying.

And the earnings of Absolut vodka.

All right, my friend, thank you.

Thank you so much.

Appreciate it.

Thank you and your founder's toolkit is one.

Radical transparency could be your edge when competitors try to make their services seem mysterious, consider being completely transparent about your methodology.

Publish exactly how you work.

2.

Cash is king Maintain a substantial cash buffer beyond what you think you need.

As hokan demonstrated during COVID this can be the difference between survival and bankruptcy.

3.

Resist Service Spa it's tempting to say we'll do anything when building a business, but staying focused on doing a few things extremely well creates more value and clearer positioning.

4.

Create a seamless sales funnel.

Align your marketing, website content and sales presentations to tell the same story in different formats.

That way, when potential clients hear consistent messaging three times, the conversation becomes natural.

Plan for stickiness.

Build recurring revenue into your business model.

1.

Off projects are vulnerable to market disruptions, while ongoing relationships provide stability.

The show notes contain useful resources and links.

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This is Joffre Rosenberg saying TTFN Tata for now.