A Transplant Entrepreneur Tells All

A Transplant Entrepreneur Tells All

Interview by Katie Eggers, Photographs by Louisa Podlich

With eyes of steel, a heart of gold and a mind of his own, Icelandic transplant Björgvin Sævarsson is best known for cofounding Element 6 Media, the Twin Cities’ greenest advertising agency. He has since expanded into management consulting, designing sustainability programs for companies in the U.S. and abroad. A serial entrepreneur whose ventures have succeeded despite being at odds with traditional corporate culture, he has proven that telling the truth, keeping employees happy and putting a premium on sustainability does not make a business less profitable.

 

People in the Twin Cities know you as the co-founder of Element 6 Media, one of the more buzzed-about start-ups here in town in recent years. You and your Dutch business partner brought green advertisement to the next level by using natural materials to carry your message. Tell me about some of the cool things you have done.

For Fresh Energy, we did a snow stamping campaign, one of the few that we did here in the Twin Cities. We did snow imprints in the streets of Minneapolis, and by the end of the week, we had reached over ten million people. Online videos of it went viral twice. It was not the final ad that reached the most impressions, but the making-of. People were interacting with us when we were making snow murals or drawing something the size of a football field into the sand. That’s where people comment. They came with their smartphones, and they were making up songs about the brand.

You are a transplant from overseas—what was starting a business in Minnesota like? Was it a big struggle?

To be honest—yes. In our experience, the advertising industry is full of bad culture. Everybody is using each other, and you never knew whether you had people. They use you for information, for drafting ideas and campaigns, and as soon as you deliver, it goes into a black hole. You never hear back from them, and before you know it, you see your ideas used elsewhere. But as a small business, what are you going to do? In my experience, the industry doesn’t have a whole lot of professional courtesy. That makes it harder for a small company to start out. There were so many times where we were just guessing—that’s not very efficient.

So how did you make it through your first year?

Over half of the requests for proposals and the actual work came out of Europe even though we did no marketing there. They were just so much further ahead in the sustainability realm. I hate to say it, because it goes against a popular American belief, but people here are very risk-averse. They use the toolbox they know and that they are familiar with. They are very afraid of going out of that comfort zone. Corporate culture, and especially the advertising culture, doesn’t reward you for thinking differently, for taking a chance. It doesn’t reward risk, not even calculated risk. People are not allowed to be creative, and that’s why the industry is stagnant. It’s culture that keeps repeating itself—advertisement is so boring. When do you ever see advertisement that sticks out and that you really notice? They keep bombarding you with one single message: Buy, buy, buy. When you watch TV for some time, you see the same commercial repeated over and over again, just with a different brand. That’s why consumers are always on defense.

“I wasn’t going to run a business unless I could pay a human salary.”

I expected a tale about the difficulty of starting out in a foreign country, and here you are sharing your experience with an industry that the Twin Cities are usually pretty proud of. But it doesn’t seem like you are just talking about Minnesota.

Oh, no! I believe Americans are ready for a much bigger advertising toolbox. It is hard to find artistic, deeper-level advertising. In Europe, you see an entire commercial on television for a full minute, and you never see the brand. And it works! I believe it could work in America, too. But people are afraid to use it, and the few believers have a hard time selling it. Most advertisement is tiresome and exhausting, and quite frankly, I hate it. And I want to change it. But that’s not enough when the market isn’t ready for it. If you want to introduce something that is new—being a trailblazer, essentially—well, it sounds fancy, but it’s extremely hard work. There is nothing fancy about it.

You know, people are going to judge us pretty harshly. They hear that you are from Iceland, and they might know that I am from Germany, and they may wonder—why don’t they just go back home?

Because we have both made this country our home. And like all immigrants before, we want to be useful by making a positive change. But the fact of the matter remains: this is an American problem. The economy doesn’t help, and there is not enough staff. The average worker probably receives one hundred emails a day; of course they can’t all be answered. So the professional courtesy suffers. When you have the information you need, you run with it.

You must have also had some positive experiences.

Yes, of course. Plenty! One of the most memorable is when we worked with General Mills and their Green Giant brand. They are a giant corporation, and to be perfectly honest, I was not expecting much. But it was very friendly and extremely professional. They have a genuinely positive business culture. Of course, I have been able to work with great people once the business was established, but the road to getting there was cutthroat. My business partner almost lost his mind. But you know, it is what it is. When you allow yourself to become just like everybody else, that’s where you lose it all. People everywhere have great talents, but in order to fully develop them, they should be able to keep their integrity and do business the way they do business—and not suffer from extreme micro-management from the employer.

Could you expand on that?

Somebody who manages people and has decision-making power should be somebody with integrity, not someone lost in the title of his business card. As soon as you give away fancy titles, people tend to become something they are not. Let’s say there is this person. Let’s have it be a woman because women need to work harder to prove themselves. She is happy in her job and everybody loves her. She does well, and she is being rewarded with a promotion. But it may not be natural for her to manage other people, and all of a sudden, she is out of her comfort zone. So her colleagues start disliking her, and she might take on a mean attitude and come home at night unhappy. Most of the time she doesn’t really make that much more money, but her quality of life went down the drain. A natural leader, on the other hand, is approachable and naturally able to manage these kinds of responsibilities. I really believe that if you stay true to your nature, regardless of what it says on your business card, you will do well. Because before anything else, we are all human. But you often lose that in business. Everybody looks the same, so it comes down to the titles.

The standard assumptions of corporate business culture really don’t seem to be your thing.

How could it? Everything is so stakeholder-driven, and people pay too much respect to money and power instead of the human value. It’s a very tough culture. We punish ourselves very hard for failing if we don’t meet the corporation’s goals. The argument I usually make is that American corporations are busy making annual or quarterly reports look good for the stakeholders, while elsewhere in the world, they don’t have that pressure. I think that is at the source of why so many people are unhappy at work. It’s unnatural pressure on the employees. What we should really ask ourselves is this: We have an enormous wealth in our company—how do we build it long-term? Companies that value a return on an investment only in terms of money will fail. There is a new way of thinking and doing in smaller companies, and I believe they will eventually take over. It’s a generational change. The movement is strong enough to change business culture.

There seems to be a strong sense of mutual misapprehension between European and American businesspeople and their respective cultures. As a European in the U.S., it is hard not to scratch your head when you see that corporations have done a hell of a good job making their workers take pride in being the hardest-working people in the world while simultaneously cutting all the rewards that make working hard worthwhile in the first place. Many Americans see Europeans as a bunch of socialist slackers, but there is another side of the coin. Europeans wonder why Americans spend so much time chitchatting at the water cooler and sending pointless follow-up emails.

Well, I’ll just say that I never see my European friends on Facebook or Twitter during work hours.

I think in Germany, we still have a lot of jobs where your boss expects you to get your work done in an eight-hour day. When you chronically hang around the office longer, the boss will start to wonder if you have a problem with efficiently managing your time. And it’s easy to focus on the job when you are guaranteed vacation, sick days, and pay for overtime. When you don’t get any of these rewards but are expected to put in twelve-hour days nevertheless, you’ll stop caring about your job. Why shouldn’t you? Your employer obviously doesn’t care about you. So you allow yourself a little more Facebook time.

And culturally, I think, Europeans have an easier time using work as a social outlet. The hierarchies are much flatter. The bosses and the rest of the crew are having lunch together, talking, human to human. I know this happens here too, but in Europe, that’s a norm.

So when you have difficulties navigating corporate culture, the best solution is starting your own business?

People have to be careful with start-ups. The concept has been glorified. People love the word entrepreneur, but God, there is nothing fancy about being one. It’s hard work. It’s working in mud up to your eyeballs, most of the time.

Element 6 Media wasn’t the first business you started. What came before?

When I moved here in the late nineties, I was offered a job after an internship. But I have never once in my life gone the straight route. I turned it down because I knew I would just get comfortable with a paycheck. So I figured, let’s get used to not having a paycheck every month. And I started a business. I founded an import-export business of organic food product, which at the time was a great market to start out in. We imported organic, chemical-free food from Europe, Asia and South America. And we raised grass-fed beef here in Minnesota that we introduced to upscale stores, such as Lunds and Kowalski’s Markets. But you know what? We didn’t have to do a lot of advertising and marketing. Our business had a natural pull, and there were two reasons for that. First, we always remained honest with our clients, and secondly, our employees were happy. I paid them a minimum of thirty percent more than the market rate. I wasn’t going to run a business unless I could pay a human salary. Never did anyone leave without saying, “Could I do anything else before I leave?” I had to say, “Get out of here.” During the four years that I was with my company, not one employee ever called in sick. They would show up sick, and I had to drive them home. We produced with fifteen employees what my competitors did with thirty-five. That’s the kind of energy there was. It had a pull, and not a push. I didn’t have to sell; the customers came to us. I did that with every business I started since.

That sounds too good to be true.

Well, we really had to fight the U.S. food industry and the big distributors. They were out to kill me, business-wise.

Really?

I was processing in a plant in Owatonna, and part of the production line was owned by one of the largest distribution companies in the U.S. All of a sudden, I got a phone call from the processing plant. The guys were good friends, and we had always done great business. They said, “Björgvin, we can’t process your meats anymore unless we raise the price. The other distribution company will pull their machinery.” That got me out of that business for a while.

But you bounced back from that?

Yes—I never sugarcoated the truth when our clients asked how we were doing, but they kept coming back. But the next hit came in 2001. After 9/11, I lost everything. I should have been bankrupt. I had food products stuck at airports all over the country during the busiest time of the year.

What happened?

Well, I lost almost $300,000, which was a really big pain for a small business. I was only in my second year, and I didn’t have insurance. Nobody wanted to insure a guy with a thick accent who was not a citizen. It was tough: I had literally lost it all. For the next two years, I worked my butt off. I paid my suppliers whatever I could, and I was always honest about my situation. And even though I owed them money, they kept shipping products! I think it was because they knew I was honest. They took the risk with me, and that’s very rare, especially in international business. My clients, including Lunds and Byerly’s, saw this. They saw how the competition went about business the way they knew, which was full of white lies. Whereas I would just say, “I don’t have fresh product right now because I couldn’t get it into the country.” Then they realized: This guy is actually telling the truth. He is not taking stuff out of his freezer, selling it as fresh. While I paid the short-term price, I won out long-term. Lunds and Byerly’s came to me, and they offered me an exclusive seafood contract. I didn’t even have to ask them for it. That was a gigantic contract, and then others followed suit. Many of the top hotels in the country came to us.

And you think all of this was due to your business culture?

Yes, but not because I am particularly smart or special—I don’t have an agenda, and I am not a tree hugger. Just by doing something that is very logical and that is the right thing. A lot of people have unlearned this: to be green, for real. You naturally develop an attraction. In my businesses, nothing was made more complicated than it was. My employees didn’t have titles. And we didn’t need salespeople, because the drivers and delivery guys did all the work. My food business grew almost a million dollars a month in my last year. But it’s hard to sell this idea to the classic spreadsheet viewer. At the time, I didn’t know how to sell it to investors, and I went through a lot of struggle. They took the business, and I went elsewhere.

Your investors took it? So you lost it all, again?

Yes. Early on, I was very naïve, and they certainly took advantage of me. I took on investors while I was paying my employees thirty percent over market rate. Once they came on board, they cut salaries, fired people, and I left. Having grown up in Iceland, I wasn’t a natural in a cutthroat world. When I go back home, nobody ever asks what I do for a living. Nobody cares. You do marketing, or you run a business, whatever. But they care about everything else. Are you happy? Are you having a good time at work? This culture stayed with me throughout my entrepreneurial life, and although I had a very profitable business, the investors didn’t see it that way. Investors often look through a different lens than the founder. Their values are completely different, at least until they reach a certain age. There are two types of investors. There are the younger ones, those under sixty, usually, and the younger they are, the more they need to prove themselves. What’s the best way to do this? It’s to say, “I screwed these people and made money for us.” Then the rest of them will say, “Oh, he cares about money, that’s good. We’ll keep this guy and he will go up very quickly.” After I lost my first company to investors, I got into the business myself, and I got deep into mergers and acquisitions. There, you see how some investment bankers and equity companies go about making their money. But I have always known—and I have been able to prove it several times with my own businesses—that there is a way to make even more money while keeping employees happy.

What about the other types of investors—you said there are two types?

The older ones? They have already proven themselves, and they see that there is another way. They are comfortable; they have a big house and a second house somewhere else. They made a living for themselves. Now it’s time for them to show generosity and help someone else. And you know what? Nobody wants to help the bad guy. People want to help the good guy. So for me, in the long run, those people are fun to work with. That’s where a lot of opportunities are.

“The goodwill of a company has it’s own attraction.”

Today’s business culture is changing with the arrival of Millennials in the workforce. If you look twenty years ahead, do you think they will have brought a more informal and collaborative spirit to investment culture?

Honestly, I don’t know. I don’t think that things are actually going to change that much. Money will keep getting into fewer and fewer hands. We know that’s been happening and that income inequality will only increase, with many more people in poverty. At that point, it almost won’t even matter who is in power. Money goes where money is. It’s very hard to fight that power. Besides, I don’t think our culture is mature enough to want to change.

You don’t sound very optimistic.

No; we are missing the big picture. I have had the privilege to be able to design sustainability programs for countries from different parts of the globe, and wherever you are, even in the U.S., there are two resources that are important to healthy communities. It’s water and electricity. When you don’t have these resources, you won’t only have more poverty, but you will have big problems in foreign policy down the road. But as a culture, we reward short-term thinking. For example, some of my recent projects had to do with biofuels in the U.S. Do you know how much water it takes to grow biofuels? Not only are we using valuable water, but we are also putting chemical fertilizers into the ground to grow these fuels, and it all goes directly into the water. We’ll keep doing this until one day we can’t take a shower or have a glass of water. Then we’ll spend half a trillion dollars to fix the problem.

In Part 2 of our interview, Björgvin explains why telling the truth at all times can make a business more profitable, why parochial competition is holding the Midwest back from reaching its full potential and why Lutefisk has nothing on the Icelandic delicacy of rotten shark.

Read Part 2 of this interview in Thirty Two’s Fall Issue

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