In mid-February, 26-year-old Ola Lauritzson flew to Stockholm from London. Only two years ago, Lauritzson founded his Internet finance company, EPO.com, in Sweden, with hopes that it would become the European leader. But he ran out of funding and sold his company in December to a deep-pocketed British competitor, EO. In February, BusinessWeek's Stephen Baker caught up with him in Stockholm, where he was ironing out the remaining details of the buyout. Lauritzson wore a suit but navigated the slushy streets in a pair of black running shoes.
Q: You formed this company when you were 24. What kind of experience did you have to prepare you for it?
A: I was a financial journalist for a while. I worked as a consultant at A.T. Kearney. I was an assistant brand manager at Procter & Gamble, doing Head & Shoulders for them. I worked for a while at Goldman Sachs.
Q: All by the time you were 24?
A: I kept busy. Actually, I started in business very young. When I was 9, I organized my friends in the neighborhood to collect cans. I sold shares in the can company to their parents and teachers at school for 5 kroner [$0.50 at the current exchange rate] apiece. We had a shareholders meeting around our kitchen table. I remember the room was very crowded.
Q: And in high school, you imported rain ponchos from China?
A: Yes, I did that for two years. I worked through an agent in Hong Kong. My big mistake was that I never traveled to China. At one point, I lost a shipment in Shanghai and had trouble figuring out what had happened. They told me there was a fire, but I don't know.
Q: How did you get the idea for EPO.com?
A: In 1995, I read about the Spring Street Brewing Co. Andy Klein, a securities lawyer in New York, had raised money over the Internet. I think he spent $2 million in lawyers fees and raised $1.6 million in capital. It got massive media attention. He turned it into Wit Capital. I began right away working on a master's thesis on the role of the Internet in capital markets.
Q: Did you do most of your research through the Internet?
A: Some. But I also traveled to the U.S. and interviewed all kinds of people in the industry.
Q: In April, you negotiated a merger with your biggest German rival, VEM. They were to contribute 58% of the stock of the combined company. Yet somehow, you were going to remain CEO. How did that happen?
A: I think we negotiated too well.
Q: But that alone doesn't explain it.
A: At the point when we were in talks with them, in March of last year, what we had was at the height of its value. We had operations throughout Europe. VEM was big, but they were only in Germany. Our operation may have been smaller, but we were the ones with a European strategy. I guess that's why I was going to stay in control. Unfortunately, as the markets changed, their shareholders began to have real questions about the merger. [The merger fell apart in November.]
Q: You've had quite an eventful year. Any lessons you picked up along the way?
A: First, I'd say, be careful where you start. Sweden's a very small market, and the Internet is a volume market. And also, don't overbuild the technology. It's better to build something small and scalable. We started out with a system that was bigger and more expensive than we needed.
Q: How much did it cost?
A: $2.5 million. I think it's the best system in the industry.
Q: That's a quarter of the capital you raised in January, 2000. Did you consider paying for the system with equity instead of cash?
A: In early 2000, cash wasn't a concern. It was low on the list. We received financing early in the year [$10 million], and we thought we'd be back late in the year for more. Even so, Andersen Consulting [now Accenture, the company that built the EPO system] offered to take payment in equity. Our board said no. We had a debate at the time. The board said you should not pay contractors with equity because you can't put as much pressure on them if they're shareholders. But now, of course, the lesson is: Save cash if you can.
Q: When did you notice that the dot-com bubble was bursting?
A: Around June. The market's priorities shifted. Early in the year, it was the land-grab phase. The most important element was time, followed by revenue and cost. By mid-summer, cost was No. 1, followed by revenue. Everything was backwards.
Q: Now you're an employee of EO. Do you have plans to start another company.
A: I'm excited about what we're doing at EO. We're growing the industry for online investing in Europe, and we will bring millions of new investors into the market. But yes, I do think of other ventures. I am an entrepreneur.
Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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