Five takes from the Kavedon Family on building a solid business during uncertain times — Part 3
Carol Tarr — Portfolio Manager
In these interviews, taken between May and June 2022, four Kavedon Kapital partners and a portfolio manager share their experiences and learnings from previous crises with visions for thriving in current conditions. With multiple crashes weathered between them, they have a broad overview of the effect of cycles on the startup ecosystem, the opportunities they provide and how to leverage all types of conditions for growth, profitability and, most importantly, during these critical periods: survival and renewal.
This crisis will offer an opportunity to leap the gap to renewable energy, if not circularity
- Jasper Ettema, Portfolio Manager at Kavedon
Passing on Crisis
My first experience with the crisis was during the dot.com bubble burst between 95–00. I was studying economics (not business!) and was surrounded by old professors that would ignore the topic since the new economy, digital business, and the internet were still phantoms to them. The possibilities exceeded their imagination. Marketing would focus on FMCG, and Entrepreneurship would teach how to become a decent SME owner. One course taught e-Commerce for two credits. Imaginably, the bubble’s burst passed on our conservative economy bubble.
I felt we were missing something; after 20 years of dealing with innovation, I would now regard this to be the first downward phase of our Gartner Hype Cycle. A necessary market clean-up focuses on sustainable innovations and solutions to solving real problems. Something I would run into several times later.
In 2008, when the financial crisis broke loose, the company I worked for was struck by international banking connections directly. Our bank sent us into bankruptcy to use the gains from selling our property to cover their mistakes in asset management. I felt that was unfair since our company was doing good business, with just a lousy capital ratio. Some minor changes would have fixed that, and I was hired to design and implement those measures. We had loyal, hard-working employees with families, houses and mortgages, but the bank didn’t care. The bankruptcy offered good re-organisation opportunities, and our books were full of contracts.
As I was the only one seeing this opportunity, I started to discuss this with entrepreneurs in my network. They encouraged me to try to make management buy out of the situation, which was the start of my entrepreneurial career. Discovering and designing business opportunities was something I found pretty good at, although I failed to make the buy-out. Forced to face the situation, I found new abilities. Facing problems head-on but open-minded would be my new “Mojo”. This 2-month period changed my life and the way I look at business.
Several entrepreneurial endeavours later, the corona crisis cut down a project I’d had my heart on. I’d designed and operated an accelerator and managed the portfolio of investments resulting from these activities. Since tied to a retail organisation, cost reductions struck us hard. Closing this project made me think about where to put my efforts — starting something new again? What would that then be? Months of self-reflection made me conclude with an insight similar to soccer. Did you ever notice that the most famous soccer players never become just as good at coaching? And did you see that most utterly successful coaches were never outstanding players? I concluded to be a better coach than a player, meaning I would focus on helping other entrepreneurs rather than stepping into the founder role. Luckily Corona Crisis and its move to online allowed me to validate this quite quickly and leverage all my learnings from the past into support for founders and managers of founder support programs like accelerators and incubators.
Now, on the verge of another crisis, I have a more senior aggregate view on what’s coming up. Every crisis has as much destruction as it offers opportunity. To a certain extent, it could even be seen as a self-healing mechanism of our economy or society. Global logistic dependency shows us the limitations of globalisation preached over the last decade. And the dependence on Fossil fuels now shows even the laggards that fossil products’ life cycle is on its downward path. This crisis will offer us the opportunity to leap out of the unhealthy extent of global dependencies.
This crisis will offer a chance to leap the gap to renewable energy, if not circularity, if only we can stop consumerism. So let’s design an economic system that allows prosperity and well-being without the pressure of consumption and economic growth. Kavedon Kapital’s new Circular model for Venture Capital as an asset class offers precisely this to me.
Thank you for joining us on our 3 part series!
If you are an Investor realising the importance of switching to a Venture Capital model built on Circular Economic principles, get in touch with us to learn more about how Kavedon Kapital can help.
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