There probably aren't many people that can claim that the collapse of their company saved their life, but Ingvar Gudmundsson, CEO of online appointment scheduling system SimplyBook.me, probably can.
In early 2001, the Icelander was trying to secure a second round of funding for his first online video advertising business BePaid.com. Having secured an initial round of $3m dollars, the startup had grown rapidly.
In the space of a few months it was attracting customers in the millions, was close to breaking into the world’s top 200 most viewed websites, and had 60 staff in based in offices in London and on the 82nd floor of the World Trade Centre in New York.
Gudmundsson admits that the expansion was ‘perhaps a little bit too quick’, but nonetheless the company was ‘on schedule’ and was in negotiations to secure potential $20m investment to grow further.
Then the dot com bubble burst and the funds quickly dried up. ‘It was absolutely impossible for us to get any further funding,’ says Gudmundsson. ‘We met with a lot of investors and investment banks but the door had already closed.’
The company struggled on for a few months, but was unable to maintain its commitments and eventually went bankrupt. It was painful at the time, but in hindsight Ingvar says it was extremely good fortune.
‘If we'd have gotten the funding I'm pretty sure that we would have continued to have our offices in the World Trade Centre,’ says Gudmundsson. ‘Ten months later the first plane crashed into our building just a few floors above ours. So in that perspective it was definitely our luck.’
From collapse to crisis
After the collapse of BePaid.com, Gudmundsson retreated back to Iceland to look for a new opportunity. After a couple of ventures, including an online handyman search service, he was asked by a family member to help develop an online accounting solution for their business.
After realising the potential of the product, he decided to launch it commercially in 2003.
‘I was probably one of the first doing that type of solution, but it was probably too early and the wrong country so I did not get much success outside of Iceland,’ says Gudmundsson.
Regardless of the limited international uptake, LogiLedger was able to attract over 1,000 Icelandic clients - which Gudmundsson says ‘isn’t that bad for Iceland’ - and was in the conversation with an Icelandic bank that wanted to take the solution in house.
Then in 2008, following years of relentless expansion - and triggered partly by the global financial crisis - Iceland’s banking system collapsed, sending the nation into an economic and political crisis.
Gudmundsson lost the majority of his customer base, revenues fell and he was forced to cut the entire payroll bar three key members. But the company was able to survive.
Are you talking to me?
He spent the next two years trying to rebuild. After working for a private company to develop an appointment scheduling system, he decided to launch it as a new product, initially under the name of DoReserve.com.
However, with next to no marketing budget and with DoReserve.com failing to attract audiences, Gudmundsson started looking for an alternative solution.
‘There was this belief that you needed to have a dot com domain if you wanted to have a global website and have people trust you. Anything else would just be looked at as some trash,’ says Gudmundsson.
‘But if you wanted a good dot com name, most of the best ones were taken and you couldn't get one unless you were going to pay huge sums for it and we just didn’t have the money.’
The answer came in 2010 after reading an article about a Dutch startup called Tinypay.me, which operated using the Montenegrin web domain dot me - which was much cheaper than a dot com address.
‘Having seen that this could actually work, we came up with the name Simplybook.me and switched the site to that domain. That was definitely what changed everything for us as a company'.
So why dot me?
‘The name needs to work, you cannot just have any name and then dot me. But it works perfectly in our situation,’ says Gudmundsson explaining how, as well as being dramatically cheaper, he was able to choose a name that reflected the brand and had a much more 'searchable' IP address for people wanting a 'simple booking service'.
Because of this SimplyBook.me, started to rise organically through the Google search engine ratings. As more customers started visiting and - fundamentally - staying on the site, it was able to attract more customers.
Still largely based out of Reykjavik, it now attracts tens of thousands of users globally - the largest market being English speaking - has 22 permanent staff and is in the process of expanding offices in Taiwan and Brazil.
Despite the fate of his previous ventures, Gudmundsson is confident that SimplyBook.me will work out very differently. ‘The company has been profitable for a few years now. We have a good buffer in terms of cash, we have good revenues (in the millions) and we are present in a lot of countries - so risk wise we are in a good position.’
Of course only time will tell, but either way, he’s got plenty of experience of bouncing back.
Image credit: SimplyBook.me