Making of MYO: Part 2 "No one can know everything"

03/05/2022

It is the beginning of May and the ski season is officially over here in Åre.

Last week, the weather suddenly turned beautiful, and when that happens, there is only one thing to do: ENJOY! So we went on a long trip around the Jämtland Triangle, of course with some yarn in the backpack so we could take some pictures along the way. It is incredibly nice to sit in the spring sun and let the fingers create something.

"Overall, last month felt long and a bit unclear. Many things, especially the overarching plan for where we are headed with MYO, have become clearer, but at the same time, we have been struggling with technical issues on one of the marketing platforms we use (which has so far been the most important for us), which has of course affected our sales. It can be incredibly frustrating when things do not progress as planned, especially when the company is still in the startup phase and every penny counts."

"I am still incredibly grateful that we have found a person who chose to invest and has supported us financially and believes in our future as much as we do. We ran into each other here in Åre, totally by chance - and after getting to know each other for a while, it felt right for us to continue creating MYO together. But how did it go the first time we were out looking for an investment? It actually needs to be told here in the blog - because in the spring of 2021, I was part of this year's season of SVT's program 'Dragons' Den.'"

How do you present your company to investors?

"It's quite interesting how people react differently in situations when thrown into the unknown. The recording of Draknästet was in February 2021, and about three weeks before that, I received a call from the production team; they had received a tip about MYO and asked if I wanted to participate and pitch in the program. I had never even considered the thought of presenting a half-finished business concept to investors in front of the entire Swedish TV audience, but when the question came, it felt like I really had no choice. Missing such an opportunity felt completely unthinkable. I immediately happened to say yes and submitted a short video presentation, to then travel to Stockholm a couple of weeks later - and in between, create a case for MYO that would be interesting for the investors sitting in the jury." 

I had previously been in contact with the local incubator (a business development program) here in Åre, and although MYO was not yet officially accepted into their program, I received help from the incubator's consultants to put together my pitch. I had two weeks to prepare everything, a.k.a. come up with a reasonable future plan and budget, but only four products that were actually ready to sell. The emotions that came and went during this period were a mix of hope, anxiety, faith, despair, and everything in between. I tried to remind myself that even if this didn't turn into anything, I had still taken the chance. And I would never regret that, even if none of the "dragons" would invest in us at this point. 

"I remember it like it was yesterday when Sofie, now our mentor at the incubator, stopped by my old office and asked questions that contained terms I had never heard of, and brought up things that I simply hadn’t understood one should have thought about already at the startup. Regardless of whether you bring in investors or not, you need to have a business plan and a clear vision of your goals, and even though it existed, I needed a lot, A LOT more substance before the MYO case would be ready to be presented."

Some of the questions that came up were; 

1. What is your coverage contribution for the products? 
2. What is specific / unique about MYO compared to the competitors that already exist on the market? 
3. 'CAC (Customer Acquisition Cost), LTV (Lifetime Value) and RCR (Returning Customer Rate), what do these look like?' 
4. What do you think you will generate in revenue in 5 years? Which countries will you sell in? How many employees will you have? 

"How did it feel not to know the answers? Tough, of course. I was about to faint. Even with all the help I got, it felt like I was falling behind on everything I should have been thinking about, which felt quite embarrassing. These things were, of course, important to be able to predict and calculate in order to paint a realistic picture of the company's value and future potential." 

"When the initial shock had worn off, I realized that there was a lot of good in this process. Finally getting a better grip on my business was absolutely necessary for the future, as was being able to calculate these figures. So I just had to get to work on it." 

Dare to dream big - and back it up with numbers 

"Even though I have gone through this process, I do not have a detailed plan to provide regarding the pitch itself or how exactly to present your case, but if you Google the topic, you will find a lot of good tips. Generally, it is important to clearly describe the problem that the product/business idea is supposed to solve, the solution itself, show your passion, and then be able to demonstrate with numbers that the business model can be scaled up." 

"But based on that, I can perhaps still mention a few fundamental things that one should keep in mind from the beginning when considering bringing in external capital;" 

1. In what way is your idea or product unique?
2. Who is the customer - and in what way do you meet their needs? 
3. What strengths and weaknesses do you have in your business model (Important to identify both)
4. What factors can negatively affect growth and what can be done to prevent these? 
5. What steps are important to take "sooner rather than later", i.e. how do you show the potential investor that you have actually taken certain steps to enable the growth and scalability of the company?
6. Can your potential investor help you with something more than just capital? 

"For me, the hardest part was daring to talk about numbers. The budgeted revenue and return, for example, in 5 or 10 years, should be reasonable but at the same time ambitious, and I, who had never run a business or worked with such forecasts, had no idea what the expected growth could look like. The last thing I wanted was to accidentally say something I couldn't stand by or explain."

"Better too high than too low," I thought anyway, because these numbers would also serve as the basis for the company's valuation and how much I was ready to sell off, at a very early stage. Selling part of the company is always a trade-off, and just as important as bringing in capital is actually bringing in the right person as an investor. So I decided to keep a cool head and stand by the valuation and plan I decided to present.

"You have jumped into the deep end of the pool - and learned to swim" 

"The Dragon's Nest didn't go quite as I had hoped and I didn't get any investment. However, what is important is not what happened in the studio; what is important was what happened in the process along the way, and shortly thereafter." 

In just a few weeks, I learned what it means to pitch and what questions one should have answers to, something that one normally might spend a bit more time learning. In the meantime, thanks to the help from the incubator, I also got in touch with a couple of different agencies that helped with the planning and from which I learned a lot. Feeling their support and commitment, and also their belief in our business idea, meant everything - even though I didn't succeed in my first attempt to get investment for MYO. 

"And when I was completely exhausted after the recording and a bit sad that the pitch hadn't gone better, Sofie said something important; 'But think about the fact that you have now jumped into the deep end of the pool and learned to swim. All other pitches will be easy compared to this one!' She was of course right - you usually learn the most when you face a sufficiently big challenge." 

"There was one more person who showed her worth during this process, and that is Salli. We hadn't even started talking about actually owning MYO together, but when the recording was over, I realized how much I wanted her with me on this journey. Besides being my good friend and an incredibly lovely person, I saw how we would complement each other in running a business together." 

'How did we come together, and what are the thoughts now regarding MYO's growth and the team that will build this up? I plan to write about that in the next blog, so stay tuned!' 

Dream big! <3 

// Oona, grundaren av MYO Make Your Own