Henrik Werdelin enjoys turning nothing into something and working with good people.
He’s Co.founder of BarkBox and angel/advisor in other startups via venture development firm Prehype where he's Managing Partner.
Prior to these adventures, Henrik was the Entrepreneur in Residence with Index Ventures. Before Index, he was running product development for MTV International. Henrik spearheaded the development of MTV’s award winning innovative digital products. Including tv formats, broadband channels, and mobile games.
He is Danish and lives in the US. Fast Company recently named him amongst “The Top 100 most Creative”.
Transcript
Yulia: I start out my podcast with the same question to everyone. "What was your dream as a kid?"
Henrik: I think it went through a few iterations. I don't know why, but when I was super young I had this idea wanting to go into genetics — gene manipulation, and stuff like that. But for some reason that kind of quickly changed.
For the longer time when I was a kid, I wanted to be a journalist. So I had this dream of being a CNN correspondent. The first part of my career I kind of pursued that. I started school magazines, wrote the school play, and started radio channels, and CD-ROMs. And ended up being first a radio producer at the BBC, and then I went on to become a producer at MTV. Then I got dragged into the digital side.
Yulia: So what was the first piece of tech that you built? Even as a kid.
Henrik: Well I was always really intrigued... It's sort of a funny story. So I grew up with my mom. She is a historian and an incredible woman in many ways. She is very entrepreneurial in her spirit — like everything is always possible. And at the time, when I was pretty young age (probably seven or eight) she used to work for the Danish National Library.
She had this very incredible boss which told her that basically whatever you do, make sure your son gets into computers. So she spent all her money on a Commodore PC one — which was kind of like the first computer. I basically had to play with it because she spent all her money on it. When everybody else got to go and play soccer ball, I kind of had to get stuck playing with the computers. So, I as many other kids kind of tore all of the stuff apart and try to build back together.
The first kind of tech I think I built was a CD-ROM. This was back in the mid-90s. We came up with this idea of basically making a broadband TV channel, like an interactive TV channel. Of course at that time the Internet wasn't really developed. So we would burn it down to CD and then we would sell it in magazines stores. You'd pay 10 bucks to get basically get all of these stories. I did that with a friend of mine. That was probably my first real tech product.
Yulia: I read something about your mom. That you helped her publish a book. I did a little bit of background reading on you Henrik. I know this.
Henrik: My mom being part wonderful, part crazy is always kind of thinking about new kinds of projects to throw herself at. Since she's written so many books, we were talking a little bit of what could be a fun book maybe to write together. So we came up with this idea of writing "Internet for Mommies." I guess it is really a book about are you stalk to your children. But it became more of a book of like "if you are a little bit of in your age and you think technology is scary" —what are some of the things you can use it for. She's very active on Twitter, Facebook, and Instagram and what have you. She wrote this book and we were lucky enough to become a bestseller in Denmark. So she's been touring around and educating people who are a little bit older about how to use technology.
Yulia: I love it. She's a Digital Prophet!
Henrik: She's definitely a Digital Prophet. She basically has no fear. I remember that once I came home and she lived in a very little village a few hours away from Copenhagen, Denmark. I came there one day and she was like "Oh yeah the CD-ROM on my computer is broken, but I found an old one amongst your computer equipment so I just replaced it." So she literally took the computer apart. The other time she had kind of had this idea, she wanted to set up a Wi-Fi network across the whole village. Because that would be really smart and everybody could piggyback on her network. She had all these antennas and things like that. I think one thing that makes her pretty incredible when it comes technology — is she's completely fearless with computers. She basically throws herself into anything.
Yulia: That's incredible. I say that a lot, because I think that things are so incredible.
What lead you to Index Ventures? Where you launching a startup at the time?
Henrik: I had done a startup after MTV, in the video space and Index Ventures and Sequoia made our seed investment. When we exit that business (as many entrepreneurs) we didn't really know what to do next. I think as an entrepreneur, you kind of have these "in between gigs" kind of periods. Where you're not kind of ready to go to a corporate. You don't necessarily want to go back in the coffee shop and just start from scratch again, because you need to lick your wounds a little bit.
And then being an investor was not necessarily something I wanted to do. So Index and was kind enough to offer me this odd job. Which is kind of a weird role, because you're basically just trying to figure out what to do next. So you spend some time (at least Index) you spend some time trying to come up with a new thing. You help portfolio companies a little bit, and you get introduced to basically how investing works.
It's an incredible job. The guys at Index were very kind to host me for a year's time, while I kind of came up with what my next thing would be.
Yulia: And the next thing was?
Henrik: Well, the next thing for me was to move to New York. I always had a love affair with the city. I still get goosebumps when I see Manhattan materialize when I drive in from the airport. I always had this giggly feeling in New York. I was very passionate about moving over here. I had two things happening at the same time. I had this idea about Prehype — which was basically that entrepreneurs had these period of time where they don't know necessarily what to do. They're looking to hang with like minded people, they're looking to basically finance their lifestyle a little bit by doing a few projects, but they really don't have their next idea yet. So I wanted to create a community, or space where entrepreneurs in between gigs could kind of hang out. So I moved over here to set that up.
These two things happened. One, where it dawned on me that the core of a good company is to come up with a problem. Find a very well defined problem, and then wrap technology, or a business model around that. Often an entrepreneur doesn't want to be in the space that they used to be in. I didn't want to do anything new in the video space, which I'd been in for a long time.
Then I kept meeting all these people from big companies who had these amazing problems to solve. But they also had patents, licenses, distribution power, and all these incredible things. But they just didn't have access to the entrepreneurial talent. They didn't have the methodology for doing something out of nothing. So that was kind of the focus.
Meanwhile I was lucky enough to meet a small team here in New York called "Hot Potato" lead by a guy called Justin. They were kind of looking for somebody to help them out with advice and product counseling. So I landed kind of like a half job there. I was kind of doing those two things at the same time. Then we were fortunate enough that Hot Potato got sold to Facebook, which gave me a little bit of money to basically finance the build out of Prehype. Where we now do two things. We basically built Startups from scratch. We do that with the corporate partners that we have, that offer us insights and assets. And then we do it with our own money where we build startups. When we see problems of the world that we think that we can solve.
Yulia: It's pretty awesome, Prehype is really fun. What advice do you have for startups that are looking to raise capital for the first time?
Henrik: I think for a founder (or a team) that's looking to raise capital, my first question... I think specifically these days would be "Do you want to raise capital at all. There's a lot of companies out there that I think can be incredible businesses, but they probably shouldn't raise capital. The issue with raising capital is it's often nice when you get going. Because you can hire more people and you can finance your lifestyle and stuff like that. But you kind of get on a treadmill and there's no way out of that. Your investors would want their money back at one point. They are often much more focused on selling the company than necessarily running a profitable company — where you get dividends and stuff like that.
Increasingly I think a lot of entrepreneurs are looking at non-tech solutions. I think you can run pretty successful businesses today without necessarily getting traditional capital. I think after that, I would look a little bit if I feel I have done enough signal testing in the market; to figure out if this business is a good or bad idea. Not necessarily because they should be overly worried of losing the Venture Capital's money — which obviously they should. But the Venture Capital invested a lot of different things, they have a portfolio. I think the true downside for an entrepreneur (of throwing themselves too quickly and raising capital) is that they spend a lot of time building a business that basically the world doesn't want.
I think the real currency that we have as entrepreneurs, is really our time and theirs. If you raise capital, it's very difficult for you to sit down and basically accept when your customers don't want your product. And then returns some of the capital and start from scratch. So most people they basically keep on this track that's going nowhere. Thirdly I would say find a set of investors that you really like, and that really buy into the core mission of your business. Craft a really good narrative around that venture. It's all about investing you and the prospects of the problems that you're trying to solve. So if you can craft a narrative of where that's going, then I find that to be much easier.
Yulia: Storytelling is a big part of it. Isn't it?
Henrik: I think so. I think that when we do new startups, we are basically laying out what could be the most positive version of the future. A lot of the time we're going into spaces where a lot of people have done it already. So we're a little bit contrarian, we're seeing something there that a lot of people don't see of that time. You have to have good storytelling, not just to get investment but you have to hire talent people (who are probably leaving well-paying jobs). You have to convince yourself that you are not too stupid. You have to convince your partners and your peer group that this is smart. You have to be able to explain a compelling narrative to PR and things like that. If you don't have like a very good way of articulating your your vision, I think that makes it very difficult to get off the ground.
Yulia: There's a lot to be said for mental strength. Do you have any tips? I hit the gym if I'm stressed out.
Henrik: I think we all have our ways of dealing with the demons when they come out. I think part of the job of the entrepreneur, is to take on that emotional responsibility for a lot of other people. Your VC don't necessarily want to know all the issues you are facing. You have to convince your staff, you have to convince your partner or yourself. There's definitely a lot of stress (as and there's a lot of things to do) but also an emotional anxiety that a lot of people expect you to take on your shoulders. I think there are a lot of life hacks out there on how to make that better. I think going to the gym makes a lot of sense. I walked to work many, many days because that's my little kind of free time. I started to dig into mindfulness, in installing some of these apps just to get a little bit more headspace. I think that there is not necessarily like one thing that you do. You find a lot of different kind of small tricks that basically make you not go crazy.
Henrik: There's a funny story to make your point. I heard one day that Richard Branson would ask "If you gave advice for an entrepreneur, what would you do?" And he says "Go to the gym."
You need to make sure that you don't eat too many bad things. That you don't let that your fitness go because you're so busy. You try to create a balance, because it's such a long game. The reality is that statistically, you're probably going to fail. So you might as well have a good time while you're doing it.
Yulia: It's so true. Richard windsurfs.
Yulia: What's your advice for building an influencer community and running campaigns across all social networks?
Henrik: We have a little bit of an easier time (I think) than most other people because we are in a space that naturally, emotionally, connects with people. I sometimes feel that we get a lot of credit (and definitely take it) but we also have a subject matter that lends itself very well to having a very large Instagram, Facebook, and e-mail list. I'm not sure that all things that we've done is something that you can just replicate into other things. I'll definitely say that you should get started (before you think); these things take a long time to develop. It's very difficult in the early days to really spot they ROI on content marketing and social campaigns. You kind of need to have that in your core DNA (of your organization) pretty early for you to start to see the impact on it.
We were lucky enough that we hired an incredible storyteller Stacey, that was one of our very early hires. She really gave it a voice of its own. I think what I might have done (which other founders could do) is to give her, or yourself the permission to have a point of view and not kind of become boring.
When we started to put dogs humping stuff on Wednesday because it was hump day, a lot of people kind of went "Hey what are you doing? This might alienate people." I think we are definitely always of the mindset that we'd "rather piss a few people off than be irrelevant."
Really taking (not a point of view) but just make sure that you express your personality. You see it as a way to engage with your customer, not as a way of just kind of shouting at them. We've always been pretty good of being humble to the audience we serve. Listen to them, and then trying to do our best to entertain them, and really share their excitement about their dogs.
Yulia: I love dogs. It's such a great brand. My life doesn't have time for a dog right now, but in two years I'm getting a dog.
Henrik: You can foster.
Yulia: I know. I'm never home. I need something where an animal can travel with me. LA is very dog friendly. Every agency in LA has a dog. You go everywhere and there are dogs.
Henrik: There are dogs everywhere in general. A lot of people don't realize how big the industry is. There's roughly 17 million dogs in the US. You're looking at 35 percent of households, 40 percent of households that have a dog. What's ironic about it, is that it's been an industry that's been so large and it's really changed the last few years. Where people consider their dogs more part of the family than necessarily pets. But there hasn't been a lot of development on the product side. What we're hoping to do BarkBox and with products we make and sell for Bark Shop is to really create a new way for people to have an exciting time with their dog.
Yulia: BarkBox has a vision of becoming Disney for dogs. What does that look like to Bark and Co? Can we expect a theme park?
Henrik: I'd love to do a theme park for dogs. I'd love to do more things that allow you to spend more quality time with your dog. I think what's unique about Bark is that we don't see ourself as a company that does one thing. We see us as a company that solves one problem. And that is how do you make dogs and their are people happier. How do you make sure that they have more quality time they spend together. Because we love dogs and dogs like to hang with us. What I think is unique about our approach is that instead of saying "We just do treats," or "We just do toys," we also are creating events, services, and content. All these different things that really amplify our business.
Yes, I think there is room for a Disney World for dogs. I think that I'm crazy enough do something to something like. The reality is that most of the time in the U.S. you can kind of hang out on your sofa, or you can go for a walk in the park, but there aren't that many things you can do together with your dog.
What we learned is that every time we create an experience where you and your dog can have a great time together, people seem to really be excited about it.
Yulia: It's really hard when you have to go on vacation and you can't take your dog with you. it's really heart breaking.
Henrik: Exactly. My co-founder Matt always talks about Bark Jet because he has a Great Dane, so it doesn't really fit underneath the seat in front of him. A lot of us feel a little bit scared about putting our dogs down in the cargo bay. If we can become much better at helping both evangelize and maybe even create services that will allow you to bring your dog on your next weekend trip, we would love to do that.
Yulia: I heard that Mariah Carey has a private chauffeur for her dog.
Henrik: I think I makes sense.
Yulia: She chauffeurs the dog from Coast to Coast. Where ever the dog goes, the chauffeur just drives it. Which is brilliant.
Henrik: I think it is brilliant. I would love to bring my dogs on more of my trips. She's kind of a lab/chow/golden mix. She's a big dog. I just can't bring her when I travel anywhere. I think that's an issue.
Yulia: Back to balancing work and family life. Few people ask men that. How do you balance work, family, life, and everything else.
Henrik: I have a three year old son, so I definitely am cognitive about wanting to be a dad that's there. I think as with many things you obviously have to make it a priority. I'm not sure that I always subscribe to kind of like the Catholic approach of "If you beat yourself to death making your start up, then it will be successful." I think you need to have a light step when you walk into work every day. You need to make sure you take your weekends, and you need to make sure that you give yourself head space to really solve some of the problems. If you're just sitting over your computer, I don't think you can do that.
I think it's good for business to have a good work life balance. I think for me, I have been very fortunate that my wife is very similar to me in that she's very ambitious with her own line of work. But we really see that's kind of like a team. So she's done this incredible thing where she had an incredible career in the movie industry doing visual effects, and then when we had our son she changed her career completely. She's now studying biology and chemistry, wanting to go into ironically — genetics.
I think one of the ways we get that to work is that we have an incredible partnership at home — where we can help each other. So when she goes to exams, I can kind of step out a little bit. When I have very stressful times at work, she'll step up on it. Then I think it's just something you have to do as a founder. You never run out of things to do in the day.
What I tend to do in the morning, I have my kind of "To Do" system and I put things that I have to get done that day. Then I kind of feel a sense of gratification when I've completed that "To Do" list. So I don't end up just getting overwhelmed with all these things I have to do. In the morning when I'm a little bit clearer, I can say "Well these are the things that I should achieve today and if I achieve them I've had a good day." I think besides making your priority and besides making sure that you are in a good partnership, I think it's just about trying to make that balance.
Yulia: I think in the end, you just need a good Co-founder. It's like a startup.
Henrik: I would say that's another thing. You know Matt and Carly at BarkBox, I would have never been able to do that by myself. Partly because they have so many skills that I don't have. But also just because I've been able to share the workload. I think whatever I do, I will always have a Co-founder now because I think doing it by yourself is just too difficult.
Yulia: It is. I have two more questions still.
Henrik: No worries.
Yulia: Startups focus on solving problems for the upper classes usually. In the future, how will tech innovate life for middle and lower classes? Now that smartphones make tech accessible to the most rural parts of the world.
I was just backpacking through Vietnam and Cambodia last year. Everybody has a smart phone. Even in India. What kind of products do you think we can develop?
Henrik: Yeah I think you're right that there's definitely companies that started out by going for a more affluent kind of audience. But if you take companies like Uber, I think they've shown the way where they can have an exclusive product to start with. It was Uber Black Cars and then they can really use that to create a product that is for everyone. They seem to be excited about this idea of even taking over public transport in many places. What I hope is that it's less about building products for rich people, and it's more about using technology to give people who don't have as many means access to some of the services that the more wealthy people had before.
I think you're totally right that there will be some very big businesses being built to service new areas like emerging markets. Or even non-emerging markets, but like huge kind of territories like India, China, South America, and stuff like that. So technologies have definitely been democratized on the demand side. Everybody has a smartphone. I think you're increasingly are seeing startups that are kind of trying to jump into that space and creating products that is about scale. A few ones that spring to mind is Boxed, which is the mobile app — a little bit like Costco dot com. There's Hollar out of (I think) LA which is basically a dollar of dollar products products. So I think you see more and more of these things kind of coming in now. I think they'll be a lot of opportunity in that space.
Yulia: You talk about AI from time to time. I was thinking about how developing empathy in Artificial Intelligence is a challenge. I wonder if there's a way we can help actual people in real life develop empathy first. If we can figure out a way to teach empathy to people, then maybe take that knowledge and that format and start transferring it to AI we might have a break through. What are you thoughts on empathy and AI?
Henrik: I think you're right. I've been pretty vocal about that. I think that a lot of bots right now are very utilitarian and they don't give people the experience that they expect or deserve. At Bark we have something we call the "Happy Team" which is our customer service team. It's more than that. They do everything from retention, to selling, to answering people on social — stuff like that. We've really managed to create I think a top notch team in Columbus, Ohio that (I think maybe because the are Midwestern) understands empathy very intuitively and made that the core of their DNA.
I think we hopefully are showing now is that having empathy and celebrating that could also be good business. It's a little bit like companies that do For-Profit, For Good. You take a component and you can show that it doesn't have to be two sides of the scale. Where you either need to have empathy or you need to have profits, but you can have both.
That's definitely something that we're passionate about pushing out. Like being a company where our brands in general are brands that people have an emotional relationship to. Because they have a true relationship with us, not because we make cool TV ads, or because we have a cheaper product. But because that we are somebody that they emotionally connect with. That requires a high sense of empathy, so that's something that we're pushing pushing a lot.
Getting the permission and showing that it can be profitable. Then as we become better and better at understanding what it is that we're doing, you can start to have technology help you free up resources to allow you to do more empathy. We would probably use bots for things like "Change my password" or "Where's my BarkBox." Which you don't really need to have a conversation about. We hope that will free up people's time (and the happy team) to get excited about that your dog chewed something, or that whatever it is that you're excited about your dog.
Yulia: My last question is. What is your dream as an adult?
Henrik: I think when when we talk about dreams and New Year's resolutions we're kind of just generating. I looked at a lot of happiness research. It looks like your happiness level is pretty constant. No matter if you win the lotto, or you have an accident, you tend up hitting the same happiness level about a year after those events. It make me think a little bit about micro-dosing for happiness. Instead of thinking about these big events, selling companies, or fundraising, or whatever could be that most people often identify as their dream. I think about what things that I'm already doing. What are the bright spots that will make me just a little bit happier, and how can I do more of that. Going to the gym, or having a great time with my family, or walking to work.
I think what my dream is to be a holistic successful person. Not just with my businesses, but as a father, and as a husband, and as a friend, and as somebody who gives back to society. My dream is less big things, and it's more of a collection of micro-doses of happiness.
Yulia: I think we remember the micro-doses of happiness at the end of everything.
Henrik: You know, I was listening to a podcast - one of Tim Ferriss the other day. He has a trick where he goes through his calendar for the year and basically writes things that made him happy and things that he thought were a waste of time. Then you start to try to see patterns around that. Being a little bit thoughtful about these small bright spots, is where I think we can easily achieve more happiness. Rather than chasing these kind of big fluffy events which at the end of the day often when you reach them doesn't really change your happiness levels very much.
Yulia: I started looking at happiness last year too. It got to the point where I was working a lot and I was just not happy. I was doing my startup and freelancing at ad agencies. I knew that something had to change. Then I realized that happiness is self-generated. You can self-generate it when ever you want and it takes meditation. You can sit down, take a few seconds and re-program your brain.
Henrik: I think you can fake it, then to make it — right? I think there's research around that. If you force yourself to smile, it's going to release these hormones in your body that will make you happy. I think now when our companies are becoming bigger in size, I think it's your responsibility to throw out that good energy. Sometimes if I had like a little bit of a shitty day, and I'm about to enter work, I mend myself together. I say "Hey you know there are going to be a lot of people effected if I come in and look like I'm doom and gloom." Then I take on the happy face and obviously that energy gets pushed back at you. Therefore you very often become in a good mood. After a little bit.
Yulia: Henrik, I want to let you get back to spreading the happy at BarkBox and Prehype. I really appreciate it. I think you rock.
Henrik: Of course. Thank you.
Yulia: Thank you.