First of all I’m really really sorry to say that my Newspaper project did not survive – not sorry for me (I take all responsibilities) – I just hate myself for bringing other people (employees and partners) and service providers into trouble – it feels unfair and coward-like… The recession and my stupid communications over summer (we delivered the yearly report 2 months too late) killed us. The simple explanation is that sales did not meet budgets and therefore since Thursday I have been talking to the people backing me and to myself (I have personally put DKK 105 million into this project – money that I have been borrowing – VERY BAD CHOICE) – and over that weekend I had to make a hard decision.

DKK 75 million was suddenly not enough – since the price to break- even suddenly doubled – and after working 9 months 24/7 (having learned more then the previous 10 years) with an increasingly dried up (dead) financial market – I simply could not see a way to continue…..

5 REASONS for my Sunday decision

1) Budgets tilted
– and all the cash I injected after summer was sucked up by the Tax Gyus – and August salary became a problem) – the August sales came in at only 60% of budget (we were canceled off media plans due to the negative press we received in July and our job market initiative lost traction) and pre-booked sales suggested that September sales would miss budget by a similar percentage or more (and this is despite that fact that we were still selling more advertising millimeters than any other newspaper in Denmark).

2) Overall Danish (Global) recession

– it’s coming with an ugly speed – and the first thing that retailers and big advertisers will cut = advertising. Today Media Market in Borsen even talks about no difference without Nyhedsavisen in the market.

3) I’m too inexperienced
– I’m too soft, too optimistic and romantic – I did not have enough pessimistic fantasy to imagine that budgets could break so fast – and that the recession is reality – it is all very strange. My management skills are beaten by any kindergarden manager (I respect them a lot by the way)..

4) Competition
– all papers in Denmark starts every morning by carrying money to work – and we have been working for the advertisers – and with pre-booked sales for September suggesting that we may actually sell less than in May, I suddenly started to doubt whether we could make money even in a JV with another player*. Prices never go up as fast as they go down – and competition will not stop with one competitor less.

5) My EGO
– suddenly I was afraid whether I was doing this to prove myself and because of the love of changing industries. I saw all my own cash being GONE – and personal bankruptcy as an option (I’m fighting it THESE DAYS since my funds dont give any cash – my investments have no value in a stressed sale – but dont feel sorry for me -> that’s how entrepreneurs work) – and suddenly I got a wakeup call.
Conclusion: Since I invest with passion and with a naive trust in management – I should only do smaller deals.


THE RATIONALE:
Even in a partnership with Metro or Berlingske – we would not be able to make money within 12 months!
*When Svenn Dam told me that on our trip to Stockholm after visiting Metro – I started sweating in that cold way – you know what I mean?

THE PARTNERSHIPS:

Metro
We asked Metro for a sales price for the Danish operation and as an alternative suggested a JV – but they obviously have way to much self confidence with Kinnevik (a VERY STRONG holding) backing them. And despite their trouble in the stock market – I felt that they would not give up – and join our wild operation. But I really had the hope – and our talks with their chairman were very open.

Berlingske (Mecom’s Danish operation)
I have had 15-20 conversations (calls and breakfast) with David Montgomery since June – Berlingske wanted to help us to close down (but I never wanted to do so – I have really believed in this with my heart). This Irishman with 35 years in the industry has been playing me like a piano – always suggesting collaboration – potentially buying – but always just cool and impossible to get a firm agreement with. Even when we 3 weeks ago sent an offer to take over Berlingske (see my previous post on how much under pressure they are) – David has been cool and just saying: “Morten – there are no magic bullets – I’ve been in many newspaper wars and it takes a long time and costs a lot of money – but it never really changes anything…”. On behalf of Baugur and Me – I proposed a deal where we would have closed down Nyhedsavisen solvently and then I should work for Mecom out of London- as a consultant (and this is subject to a lot of speculation – since some people think that I was not allowed to negotiate about this). The fact is that Mecom probably didn’t have the interest (nor the money) – and I could not find money to shut down solvently. It actually hurts me that rumours say I have been paid to close down – I would never EVER take money to do that without then closing the paper paying everyone what they were owed. And yes we had negotiations – but hey FUCK – isn’t that pretty normal when you have lost DKK 100 million? So FUCK you idiots – using your self pity to put this out.

JP/Politiken
I have had a couple of talk with them – but they have their Metro interest – amd they ALSO smelled that I was starting to doubt – what other reason would I have to call… (Yes I’m not too smart).

Norway
The top 3 Norwegian papers are all gongho – on trying to take over Edda – the Norweigen part of Mecom. They had designed a hostile takeover of Mecom’s loans trying to buy GBP 600 million of loan for less than face value – and that way get the control of Mecom the day they could not meet their debt governance ratios on the loans. But this was too far fetched with my wallet size.

SPECIAL THANX

– All employees
I have had +50 sms/emails from employees who lost their jobs and feel sorry for me – strange – that’s so amazing. And during “bankruptcy aftermath drinking” – no one blamed me – all positive. Thats probobly first time in history)

– Baugur and Thordis from Stodir who gave me this chance – and the most fair deal EVER and NEVER jumped out of any commitment (and I would do this again if I could guaranty a solvent closing).
…
– Morten Nissen Nielsen – this gyus works like no one else – a bit young in his management style and optimistic – but DEEP RESPECT.
– Simon Andersen (this guy will be BIG)
– Michael Elmhoff from distribution – who handled the closedown in Aarhus and all the violent threats from the newspaper delivery employees
– My Family and Friends – who haven’t been able to talk to me for 9 months

SPECIAL NOTE

Call me stupid – not trustworthy – whatever –  it’s OK – I fucked up. I take all responsibility. It was MY MONEY (and all I had and had access too) – and it will be 18-24 months in hell from here – but I will start and invest with my knowledge and build companies for life – and I’m scared but not stopping – Im just back to ventures without money. Sorry.

THE (SEMI) BITTER AFTERMATH – from an optimistic id(ea)iot

Nyhedsavisen have done something historic (let’s call it a DKK 1 billion gift to The Danish Democracy) – and its unfair that Berlingske and JP/Politiken gets DKK 300 million in government subsidies – while Metro and Nyhedsavisen gets nothing – cal me bitter :)

If just the financial markets would have picked up in MAY – ohhh – we could have done it. FUCK FUCK FUCK I hate to loose – and I will see my psychiatrist to get over this – and not get bitter… There are so many things that we could have done if.. if… if… :) But the fact that USA (land of the free) handed over their credit institutions Freddie & Fannie to the state sunday and Lehmann Brothers down 50% yesterday – these events can tilt the world economy :( – and all my startups are hurting from it. No money in the market.

I never in my life had a lawsuit and hope it will stay this way – but given my personal guarantees it might be hard to avoid this time – fingers crossed.

I said that I would not give up until my arms and legs where cut of – and basicly thats NOW. I followed my instinct – and failed – and I will do it again – probably not this big a deal – but lots of smaller. I’ll be back

I have been trough hell this summer with Nyhedsavisen – because media is writing about media with a passion that very much surpases the size of the company. And today something significant happened – and NO PAPER TOOK IT UP – no one chose to write about it.

Berlingske Media lost DKK 78 million in first half of 2008 and has launched into a down-ward death spiral!!

Im NOT HAPPY ABOUT OTHERS PROBLEMS – but someone needs to publish it – Borsen, Berlingske and JP did not..

After months of nothing but EVIL spin about Nyhedsavisen, it seems very strange (but of course predictable) that NO-ONE is writing about how serious the situation is for Berlingske Media as they are loosing money BIG TIME and fighting for its life with its parent group up to its neck with debt.

Here are the numbers for Berlingske that were announced today:

For new readers beware that ”exceptional items” is accounting language for BULLSHIT. Reducing staff and restructuring the organization are REAL cost of running a business in a down-turn and next year there will just be new “exceptional items”.

If you want to see how AMAZINGLY small a font “exceptional items” can be written in, see their presentation and accountson www.mecom.co.uk/investors (do they think small fonts make the problem go away?)

On top of this they will BULLSHIT even more with long talks about online growth when in fact only 5% of total revenue comes from online (90m versus 1.7 billion of newspaper revenue) – FUCK ALL and does not in ANYWAY compensate for the 13% loss in advertising revenue they had just in first half of 2008.

Furthermore, the loss of DKK 78 million is before interest so the parent Mecom has to crack the whip in other countries in order to service their DKK 6 BILLION DEBT! Bankers are knocking on the board room door as we speak as the terms state that the loan cannot exceed 3.5 times the group earnings (EBITDA). And this is not your standard bank overdraft – if you breach the terms you are TOAST!

Nyhedsavisen is squeezing Berlingske on EVERY FRONT and anyone who has spent 5 MINUTES in the newspaper business knows that you CANNOT staff cut your way out of a seriously accelerating advertising loss.

All in all – Berlingske is going DOWN!!

Of course this should also be of interest to JP/Politiken as there business completely mirrors Berlingske’s challenges with only ONE exception: they haven’t really started firing people yet!! Luckily, employees on JP/Politiken have a BOOMING job section in Nyhedsavisen to look forward to!!

And while I’m at it, why is no-one writing about the Metro BULLSHIT about 16% double coverage of Metro and 24 Timer when it is in fact 44%!! How can anyone be in ANY DOUBT that their business concept is so obviously thrown together using the exact same calculators the management used to DESTROY TV2 with!!

LONG LIVE NYHEDSAVISEN !!

This video made me fall in love with a trustfund, blond, bimbo, pop, porn, fashion, celeberty – bullshitter. Paris Hilton is playing the role – better then any sitcom or soap could EVER do it. Bye Bye Mcain

Its not possible for me to describe wth words how proud I am of Tommy Ahlers – with whom I started Zyb. Its sold today for 31mio€ to Vodaphone – and besides a THE VERY BRAVE VC
(Henrik Albersen from Nordic.com ) only Tommy and the amasing team can take credit for this one…

And for me: Its incredible to do it time after time ;) – sorry – I had to say it. AND IT IS!

Interesting interview with Eric Google

Nils Normann send me this poster – and I love it.

I’ve been in NYC since Saturday evening – and had meetings with Goldman, Bessemer, Chris Dixon (wow smart due), was at a Wired 10 people dinner invited by Chris Anderson (The Long Tail mann) to talk about free – the topic of his new book. Found it very interesting – and they where all very interested in my NewsPaper story – and well its pretty much FREE.

Big thanx to Dan Roth for inviting

Try this and imagine what it can be used for www.20q.net
This is intellectual hacking to me.

Playing in the micro league of investments one cant keep the eyes off Warren Buffet – here is a super interesting piece on Buffet

And one more time – my favorite quote:

“When the tide goes out, we find out who’s been swimming without a bathing suit.”

-Warren Buffett, July ‘07

Im proud to be in the panel at this event in Dubai

– Here is some interesting info and Video on Dubai via Dan Roth (now Wired)

Faisal Belhoul, Founder & Managing Partner
Ithmar Capital

Ali Erfan, Senior Advisor
Ithmar Capital

Joe Lacob, Partner
Kleiner Perkins Caufield Byers

Khaldoun Haj Hasan, Co-Founder & Managing Partner
Ithmar Capital

Michael Queen, Managing Partner – Infrastructure
3i

Dr. Ahmad Khayyat, Chief Executive Officer
Emaar Industries & Investments (Pvt) JSC

Prof. Dr. Monzer Kahf, Consultant in Shari’ah Finance and Economics

Deborah Magid, Director – Software Strategy
IBM Venture Capital Group

Hany Shawky, Director
Global Capital Partners LP

Sanjay Sehgal, Managing Partner & Chief Executive Officer
East West Capital Partners

Abrar Mir, Chief Executive Officer
NBD Sana Capital

Sarath Naru, Managing Partner
VenturEast Funds

Patrick von Bargen, Chief Executive Officer
Centre for Venture Education

Nicholas Parker, Chairman & Co-Founder
Cleantech Group

Hossam Shobokshi, Director  Principal Finance – Middle East & North
Africa

G Bala Subramanyan, Chief Investment Officer
M’Sharie

Dr. Ahmad Al Ghazawi, President and Chief Executive
Officer
Trium Pharma

Arno Castanet, European Research Manager – Venture Capital and
Private Equity
Dow Jones

Khaldoon Tabaza, Chief Executive Officer
Riyada Ventures

Ahmed Al Manasreh, Founder & Chairman
Sanad Venture Capital

Ziad Tassabehji, Director – Innovation & Investment
Masdar

Sadeq Sayeed, Senior Advisor
Nomura

Henry Makansi, Principal – Energy
Warburg Pincus

Gina Domanig, Managing Partner
Emerald

Jeffrey Leonard, President & Founding Partner
Global Environment Fund (GEF)

Alwaleed Abdul Abdelrahman, Senior Vice President – Private
Equity
Abu Dhabi Investment Company (ADIC)

Paul Deninger, Vice Chairman
Jefferies & Company, Inc.

Eric Chen, Partner
WI Harper

Max von Bismarck, Head of Investors
World Economic Forum

Morten Lund, Co-Founder & Managing Partner
LundXY, Global Ventures

Steve Smith, Partner
JS Private Equity

Dr. Adnan Al Sultan, Chairman
National Technology Enterprises Company (NTEC)

Andrew Tarbuck, Partner
Norton Rose

Christophe de Mahieu, Managing Director & Co-Head
Investcorp

Navin Valrani, Executive Director
Oasis Investment Company,

Al Shirawi Group of Companies (Engineering Services Group)
Pekka Maki, Managing Partner
3TS

Walid Bakr, Director
Riyada Ventures

Saad Bargach, Managing Director
Lime Rock Partners

Ayman Al Bannaw, ICT Business Development Manager
Noor Financial Investment

Chris Bongars, Chief Executive Officer
Cleantech Asia

Munther Hilal, Chief Executive Officer
Capital Industries & Investments

Karthik Ranganathan, Partner
Baring Private Equity

I’ve been VERY VERY squished  in a couple of deals – and was a little scared wheather i could solve things. But I must say that everything I was ever told about how bad and cruel business and capitalism is suposed to be is WRONG. I have been heped out by my parters, my investments, my advisors, friends and my team – in a fantastic way.

Its all about LUCK ?

Seems that the Flickr community have a problem with Video

I made a deal with Laura that she has to jump 200 times a day to get the new toy ;)

CNBC just published this fine piece of selfpromotion on me ;)

Here is a respond from a FANTASTIC US Based business angel – that shows all the right points in how to think about a startup. I never saw such a spot on approach. I have covered up the company name – but its all makes sence to nearly all companies. Read and enjoy:

I love the XXX concept. I think the idea is fantastic. However, in my opinion, the User Interface is way too complex. There’s too much effort for someone to get benefits, too many complex charts and too much work to do. Even the investor charts were hard to follow. I highly doubt with such a complex interface and so many screens with so much going on, you will be able to capture a meaningful portion of the market for obese people.

I also feel there are too many scientists involved, but not enough tech people or UI designers.

Here’s my challenge to you:

If you can manage to reduce what XXX does differently and its main use scenario down to one sentence, it would be compelling. I still like the idea a lot but in its current state, I think it needs work.

I also don’t like the idea that breakeven is expected in almost 3 years. Why not launch in a major market instead of just Denmark ?

The distribution channel seems too complicated – too many companies/partnerships to keep track of – likely to result in too many hires, salespeople, bus dev people increasing costs (whereas most of the traction could come virally through word of mouth). I do agree getting XXX PARTNERS would help, but also limit your target market to people that actually visit those (for which I have no stats in Europe).

When you look at successful web apps, they’re all SIMPLE. Twitter, Google, Facebook, Flickr, Youtube – when you have take so much to explain what the site does and how it will build sales, in my book you lost half the battle.

I think the major innovation missing here is automating …. Not sure what the right formula is, but highly doubt this is it.

Im NOT on the fear Google team – I LOVE GOOGLE!! And as long as everyone (criminals, pedofiels and dopedealers) wears a trackable phone that can be opened remotely from the authorities :) – lets not complain…

I was fully aware that taking majority in a top newspaper would mean a LOT of interest and speculation. But I did not foresee so much negative and wrong bullshit. I cant go into specifics – BUT WE ARE NOT AT ALL LOOSING FAITH OR POWER AND GIVE UP IS NOT A PART OF OUR VOCABULARY!! I will let this graph say everything. Dear highly respected Professors, Experts, Bankers, Friends and Enemy’s – only George Bush is loosing track faster – and he is not even on a subscription model like many of our highly valued and very good competitors…

Im getting a new blog design and some functionalty – and I really look forward. Its gonna be very cool – but Thomas – the amasing desinger and creator of the news thing has been a little slow. And now – dear Valued Readers – we will see him naked at Burger King on Wednesday.

I have some trouble these days – and think a A LOT. and I have to say the size of the Matrix is starting to be a little big – what ever I think of there is a new dimension… Am I wacked – probobly yes….

Google search: mathematical multidimensional matrix

I feel like Judas – but I had to move to a Mac and try it out – and I must say that I like it – REALY LIKE IT. Wow. MacBook Pro 15″ – Im very impressed – but its too big.