Gunnar Holmsteinn talks
Icelanders Guide to San Franciscans Guide to Iceland!

Throughout the last few years I’ve had countless conversations with San Franciscans about Iceland and vice versa. I’ve done my best to describe the similarities and differences. Today I had four such conversations so I wanted to write a quick post that could help my friends a bit.


Enter the Icelanders Guide to San Franciscans Guide to Iceland! A brief guide about the different neighborhoods of San Francisco for Icelanders familiar with the Icelandic nightlife and/or a brief guide to all the different bars in Iceland for all the San Franciscians out there planning a good trip to Iceland.

Sounds complex? It’s not; I picked a neighborhood in SF and Bar in Iceland that share some similarities.

SF Neighborhood <=> Icelandic Bar.


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Guest Lecture in Business Administration

Just got back from a talk at the University of Iceland. Met some great young business people during their initial course in Management Science.

We focused on the management toolbox we use at CLARA but I also introduced my favorite concept in psychology; Flow by Mihaly Csikszentmihalyi.

More (in Icelandic):

Going to Startup Iceland for free?

The Startup Iceland conference is around the corner - just about five weeks until it begins. As a big fan of excellent networking events I’m really looking forward to the conference and hoping to meet some great people there. Rick Vidrio from CLARA and I will be coming from San Francisco to Iceland specifically for the conference - we’ll be in town between May 27. until June 4th.

This is a full-blown all-inclusive conference at the brand new Harpa Conference Center, tickets to the Conference itself are 25k ISK ($200 bucks) and tix to Alexander Osterwalder Workshop on the Business Model Canvas are 136k ISK ($1100 bucks). As you can see the price is a bit steep for most bootstrapped entrepreneurs (believe me, I’ve been there).

I would like make a small contribution to the entrepreneurial ecosystem. I’m inviting a smart entrepreneur to both the conference as well as the Business Model Workshop the following day.

If you’re bootstrapped, but interested in attending, read on!

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A step-by-step guide on building a Constitution - Iceland Style (#iceOS)

A nation’s constitution can be described in many different ways. I am personally fond of thinking about it as “The Nation’s Operating System”.  This is because a constitution is the basis for everything else, the basis of all other law; it contains the fundamental principles outlining how the government should work.

Constitutions are not written that often. It’s also not every day that you get the chance to participate in writing one. My lovely home country, Iceland, is currently allowing me to do just that;

I’ve had the privilege of participating in this process, largely on the technical side of things but also in the build-up and planning.

If you are wondering how to follow in Iceland’s footsteps, look no further.  Here is a simple step-by-step guide on how to build a new constitution from scratch.

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TEDx Silicon Valley

On Saturday May 14 2011 TEDx Silicon Valley will gathered some of the world’s leading thinkers and doers at Stanford to discuss social innovation and explore the emerging concept of Living by Numbers.

I predicted ”Watch out for Volcanos”.

On Saterday 21 May 2011 at 19:25 UTC, an eruption began, it was the strongest in Grímsvötn in the last 100 years. It disrupted 900 flights in Greenland, Norway, Svalbard, Denmark, Northern Ireland, England and Northern Germany. 

I’m categorizing this post as #Nostradamus.

Creativity at Work

Creativity at Work conference was held at Reykjavik University 15th of October 02010. I was asked to talk about the hottest start-up on earth.

We had some great talks over there. I loved the enthusiasm in the both the speakers and the crowed. My number one takeaway was that you should rather stay home when you are sad, then when you are sick, because creativity really fosters in happiness.

Here are my slides as well as a few points about what I talked. I could talk forever about our environment, spirit and culture, but here are just a few points. I tried to focus on the office, or to be exact, the bar - we at CLARA are doing whatever we can to to make the place where we spend most of our time, look less like an office and more like an bar. Being a high-tech start-up, that’s basic! The things that we think are needed to run a successful bar/start-up are the following;

  • A Keg. Grabbing a beer after work should be as easy as possible.
  • Openness. We try to be as open as possible. We have a blog that’s open to all the team members, advisers, board and investors. There we share detailed information on our key performance indicators; progress, money, products and so forth.
  • Methods. Living and breathing in an extremely fast environment calls for disciplined methods. We stick to agile project management and love it.
  • Team. When everything is put right together, getting awesome talent to join your team is a bit easier. It’s still extremely hard, but a bit easier.
  • Organic. We’re not just talking about building an garden in the middle of the office. Also the spirit and the culture must be genuine and organic.

I’m looking forward to learning even more stuff about running a fun start-up / bar - so if you guys have any ideas, don’t hesitate to let me know!

    The English Pub: Spin The Wheel.

    Here’s a quick post about a wheel in downtown Reykjavik and information about when you should spin it, rather then ordering a beer.

    On Austurstræti (a street below the main street Laugavegur) in Iceland is a nice little place called The English Pub. I like the atmosphere there and it’s currently my number one place during the workweek when you really need to have a good time. I can highly recommend it for a great Wednesday night out (Wednesdays are the new Thursdays).

    The English Pub

    They have live shows every night, but their main attraction is the lucky wheel, for 1.500 ISK you can spin the wheel and drink away the prize! 

    But how lucky is it?(1)

    Here we can see that there are 16 different fields.

    1. 2 Shots
    2. Spin Again
    3. 1 Meter Beer (10 Small Beers)
    4. Sorry
    5. 3 Large Beers
    6. Spin Again
    7. 1 Large Beer
    8. Sorry
    9. 2 Large Beers
    10. Sorry
    11. 8 Large Beers
    12. Sorry
    13. 1 Large Beer
    14. Spin Again
    15. 4 Large Beers
    16. Sorry

    If you hit “Spin Again” you spin the wheel again so we don’t need to take that into account when calculating the expected outcome, that leaves 13 fields that matter.

    We know how much each of the items costs at The English Pub charges;

    • Shots are 700.- ISK each.
    • Small Beers are 600.- ISK each.
    • Large beers are 800.- ISK each.
    • A Sorry is free of charge.

    From this information we can derive the value of each outcome;

    1. 2 Shots = 1.400.- ISK
    2. 1 Meter Beer (10 Small Beers) = 6.000.- ISK
    3. Sorry = 0.- ISK
    4. 3 Large Beers = 2.400.- ISK
    5. 1 Large Beer = 800.- ISK
    6. Sorry = 0.- ISK
    7. 2 Large Beers = 1.600.- ISK
    8. Sorry = 0.- ISK
    9. 8 Large Beers = 6.400.- ISK
    10. Sorry = 0.- ISK
    11. 1 Large Beer = 800.- ISK
    12. 4 Large Beers = 3.200.- ISK
    13. Sorry = 0.- ISK

    With very simple calculations we find that the expected value of a fair spin(2) is 1.738.- ISK. That is higher then 1.500.- ISK, the cost of spinning the wheel.

    So to conclude;

    Spin the Wheel!

    (1) I’m not going to take into account the fun side of getting 8 large beer with a couple of your friends and how that effects the fun’nes of the evening.

    (2) I’m assuming that the wheel is not rigged and each field

    Update 1

    Below is a simulation done my friend Agnar Darri. He graphs expected total value as a function of total number of spins.

    Update 2

    Update suggested by Björgvin Ragnarsson.

    When you feel like ordering a meter of beer you probably won’t ask for 10 small beers. The small beer at English is about 330 ml. If you use the liter price for large beers the cost is 5.280.- instead of 6.000.- so this changes the Expected Value to 1.683.- ISK

    We still Spin The Wheel!

    Update 3

    It turns out that the beer is way cheaper on weekdays before 11 o’clock now in October or only 500 ISK. So now we calculate for both Update 2 (Using the liter price of large beers for the meeter) and spinning on a week day. That makes the expected value 1.092.- which is lower then the cost of spinning the wheel! 

    Also, we calculate that when the price of beer is less then 707.- ISK, you shouldn’t Spin the Wheel.

    Don’t Spin the Wheel!

    (…on weekdays before 23:00 in October)

    Ice Cream at CLARA today! We just signed an agreement with CCP. We are delivering the awesome CLARA system to them 1. of Oct

    Ice Cream at CLARA today! We just signed an agreement with CCP. We are delivering the awesome CLARA system to them 1. of Oct

    Skyrr Fall Conference

    Skýrr, the biggest the biggest IT company in Iceland is doing their annual “Haustráðstefna Skýrr" right now. About 700 people attended to see the likes of James Gosling - the father of Java, Hjalmar Gislason in DataMarket, Andres Jonsson the social PR guru of Iceland, Helga Waage from Mobilitus and two Alli’s from CCP. Also a ton of other great speakers talked alot about a bunch of different stuff.

    I was asked to speak about the state of Icelandic companies engaged in New Media.

    The main points where about

    1. A quick introduction about CLARA and the things we have been working on.
    2. A story about Brimborg, an Icelandic car dealership, that has been very engaged in social media in Iceland.
    3. The difference in the discussion in traditional media and new media. I took a political example from Reykjavik and our comedian / mayor.
    4. Another story about how a big bank in Iceland listened to the discussion about a charity they where running alongside the Reykjavik Marathon - they found out that they needed to push it way harder for people to contribute.

    The talk was in Icelandic so the slides where that as well, here they are:

    Haustráðstefna Skýrr on Prezi

    6 reasons for bootstrapping before accepting VC money

    Today we at CLARA closed a 1 million dollar round of funding that will provide the working capital we need to scale up and get us ready for world dominance. Until now we have been making every penny count in bootstrap mode. I’m writing this to explain my thoughts about bootstrapping, what it has done for us and why others should do the same.

    When I first heard that we should “Bootstrap" it left a huge question mark on my face. I immediately thought about my statistics courses in the university; why in the world would my start up need to to derive estimates of confidence intervals for estimators of parameters of some statistical distributions. I actually thought about some of the R programs I wrote and started thinking how that could be applied. I eventually said that there was no need for that anytime soon, maybe a few years down the road. That left an even bigger question mark on the face of the guy I was chatting with. 

    It turns out that Bootstrapping is also a phrase in business finance. It’s about keeping a tight fist on all your expenses and knowing that Cash Flow is more important than your mother. Something we’ve always been keen on doing but never had the correct lingo for it. In the past two years, we’ve put a huge emphasis on doing stuff that people, especially the people that pay us, like. The team has been very focused on organic growth and building our company the way we want.

    In my mind, starting with little to no cash and working your way up is a very healthy start for a young company having to figure out how to make a great product.

    Here are my Top 6 reasons why I think it’s important to start by bootstrapping:

    #1: Vision

    We managed to justify a greater evaluation of our company simply by waiting. The founding members will still hold a majority stake in the company for years to come. This is not all done with out help so we will of course continue to learn from the best around and surround ourselves with big thinking leaders.

    When we started CLARA we knew exactly what we wanted to achieve. We didn’t write the typical mission statement because we found that was too forced. Instead we had two mantras that we still look at today when we are thinking about our next moves. 

    First: we want to help companies understand their customers. 

    Second: we want to make the environment for market research better by developing the technology needed. 

    This is our vision. Staying true to it is more important to us than anything else. These mantras are embraced by every member of our team which help with every decision they have to make throughout our development.

    #2: Building

    By bootstrapping we’ve had the freedom to build the company our way, not just copying some culture from outside ‘owners’. We have a simple rule banning cords on the floor because that interferes with all the skateboarding and just recently we cracked open a wall to fit in our new bar. Those things, and hundreds more like them, form the companies culture; our culture.

    #3: Proof

    When you show results, asking for money gets a lot easier. There are loads of people out there with great business plans who say that all they need is X amount of millions so they can build the most awesome products you’ll ever see. That’s not gonna happen, unless they’ve already made someone very rich. By building cash flow and getting solid reoccurring revenues, you are not only getting the money, you are also getting the best proof there is that you have something worth investing in.

    #4: Options

    Once you don’t need money, you’re in a great position to talk to investors. There’s nothing more frustrating to them than someone not needing their money, and that’s a good thing. We got to pick the very best investor that suited our “super awesome growth strategy”©. Our new boardmember brings in a vast amount of knowledge in the high-tech start up scene and a great international network since their venture fund invests in the US, Europe and Asia.

    #5: Team

    When bootstrapping, you’re making sure that your team members don’t become too spoiled and careless. The team understands that their paycheck totally depends on their efforts and it really makes them sprint to perfection!

    I’m truly honored to work with such a great team. I love you guys! 

    No homo.

    #6: Debt-Free

    By bootstrapping, we’ve never had to owe anything to anyone. At one point we had the option to borrow money from the banks, but chose not to because we knew we could pull through. When you are running a company in an economy where a greater majority of companies are legally bankrupt, the young debt-free start-up is the prettiest girl at the ball.

    Being dept free is awsome when negotioting, whether it’s lowering the rent at your new office or talking to some VC’s. Put yourself in the shoes of a VC investor, would you invest in an tail of old dept? Or would you look at the young energetic start-up that only needs money to grow, expand and scale their proven technology

    How to bootstrap?

    I sincerely recommend focusing on organic growth and building up your start-up the Bootstrapping style, here are a few tips from what we’ve done over the past 2 years.

    To save money, we’ve …
    … applied to every grant there is, and received all of them, minus one
    … borrowed desks and chairs from a great friend!
    … bought used computers
    … bought used sub-par servers, and thats actully helped us write even better and faster code!
    … borrowed (read: stole) internet from a neighbor… eaten noodles!… never paid rent, by jumping between incubators
    … stolen pens and a stabler at client meetings
    … used cheap post-it notes and scotch tape
    … Ikea!!
    … attended all lectures and cocktail parties known to man that have free food and drinks
    … only hired people we desperately need, and brought them in as shareholders as well
    … drunk beer with very smart people, instead of paying for expensive consultants

    … and loads of other stuff!