Times are tough, and companies are bleeding. Not only is funding far less than last year, but many companies are having to cut spending and employees to stay afloat as profitability becomes king. However, it is not all bad news. Economic downturns prove difficult for every business, but they can be positive environments for startups.
According to Martin Hegelund, economic downturns mean companies are forced to do the right things because of the lack of funding. He also points out that there is less competition for customers and talent during tough times. The following questions answered by Martin Hegelund, Co-Founder and Chief Marketing Officer at Ageras Group, address his entrepreneurial journey, startups during economic downturns, and what he thinks the future will hold for the industry.
Grit Daily: Tell us about your entrepreneurial journey. How did you get your start as a founder?
Martin Hegelund: My journey as an entrepreneur started when I launched a network of websites back in 2005 at age 13. It started out just for fun with just one site, but I got hooked on everything you can do with the internet. I believe the internet is the most significant invention since electricity as it enables so many new services and amplifies knowledge at a speed we have never seen before.
With this thesis in mind, a small team of freelancers and I kept launching new websites and digital services, such as ad-based websites, directories, and online stores. I used the internet as my sandbox to keep learning from my many mistakes and worked hard to become exceptionally good at building digital services, getting them to market, and making money through transactions or subscriptions.
Grit Daily: When did you come up with the idea for Ageras, and how was the company started?
Martin Hegelund: I launched my first projects while I was still in school. After doing that as a side hustle for five years, I met Rico Andersen, with whom I founded a household services marketplace. After working on that project for two years we had spent all our savings and even taken out a loan to fund our investments. But our pure C2C business model turned out to be unsustainable and we had to close down.
However, now poor on money but rich on new learnings, we found out that we were a great match working together, we had become excellent in building marketplaces (but wanted to do this B2B instead) and last we reflected on that we as non-financially savvy entrepreneurs had nowhere to get an overview of our finances.
So we started by building Ageras, a marketplace of accountants and business advisors, and scaled that to most of Europe and the US. Later we added accounting software with the aim of having a solution where you could always be on top of your business – whether you work with an accountant or not.
Today we are in a very different stage, now that we have a more comprehensive offering including business banking in some markets – and have also served a million businesses globally.
Grit Daily: You’ve been employing an aggressive M&A strategy this last year. How does that work in tandem with your executive mindset?
Martin Hegelund: We want our software to be the center of the everyday life of a business owner. So while you can use our light accounting product, Zervant, all over the world, in order to create real value for our customers, we need to have a very strong local focus.
It would take years to build software that has all the specific customizations for each market and therefore we have selected a few core markets where we have acquired a very strong accounting platform which we then use as our main product in that market. In addition, we want to acquire more niche features that we embed in our software across the globe.
We are of course building features and products ourselves, but to have true global scale, we need to do acquisitions to expand our service offering at the pace we want.
Grit Daily: What are your top predictions for the fintech field over the next 6-12 months? What “trends” do you see falling by the wayside?
Martin Hegelund: Downturns really cut fat from the bone and in a high-growth area like fintech, I think this will be even more evident. We will see customers cutting back on spending and investors doing that even more so, meaning that only the most value-creating products will survive.
When money is no longer “free” we will see highly speculative projects where they are either inherently not creating value, very risky to execute or the potential upside is too far out in the future falling to the ground.
The winners will be those that actually help their users – and I think fintech, in general, is poised to come strengthened out on the other side of this downturn. Businesses and consumers alike all over the globe will look into how they can optimize their spending, money management, and income and there are amazing fintech inventions that will now see a surge in demand – and more to come – to facilitate that.
Grit Daily: Where do you see the biggest opportunities within fintech moving forward, from both a founder and technological POV?
Martin Hegelund: I think we have only seen the tip of the iceberg in B2B fintech. There are already companies working on including traditionally “unbankable” segments in the digital financial infrastructure. The cost of payments is going towards zero. There are already countless financial planning and investment apps.
On the other hand, companies all over the globe rely on multiple systems, manual processes, etc. to facilitate procurement, invoicing, payments, accounting, and banking. That leads to wasted resources and a huge risk of making mistakes.
B2B might not be as ‘sexy’ as user count and brand recognition often is smaller than in the B2C space. But the monetary upside (both for customers and the innovators) is so much bigger.
That is why I think our space is so much more interesting to work in. We can see that we are saving work hours each week for small business owners. That makes a true difference and therefore they are extremely loyal customers.
Grit Daily: What would your top tips be for fellow fintech founders just finding their footing?
Martin Hegelund: Building a fintech company is tough. You need to launch fast, get feedback from early customers, experiment rapidly with your business model, and find your edge and product-market fit. Disruption within fintech is fast, while time to market can be slow, and if you don’t have a true edge and a business model that is closely aligned with the value you create, your company might just be “a feature” in some other product tomorrow.
Grit Daily: Do you think times of inflation/potential recession are positive for entrepreneurs to get their business going? Why or why not, and if so, what fintech tools can help set them up for success?
Martin Hegelund: Uber, Airbnb, Venmo, Square (Block), and Slack were all founded during the great financial crisis. While I don’t think a tough market downturn is a positive environment to build a business, some of the world’s greatest companies have been built in times of distress.
It was probably despite the macro-environment they became successful, but growing up as a company in a tough market with less access to investment makes you focus on doing the right things. Meanwhile, if there are fewer businesses starting up in your space, there is less competition for your potential customers and talent in the market.
About Martin Hegelund
Martin Hegelund is the Co-Founder and Chief Marketing Officer at Ageras Group. After founding his first Internet project at age 13, Martin became obsessed with building and scaling Internet businesses. He is an award-winning serial entrepreneur with 15 years of experience working with digital media, SaaS, and online marketplaces. Martin cofounded several successful technology companies – Ageras Group being one of them, which to date has raised $145M USD to fuel its rapid international growth. He gives back to the ecosystem by investing in early-stage startups.
Spencer Hulse is a news desk editor at Grit Daily News. He covers startups, affiliate, viral, and marketing news.
