Founder stories: Personalised AI for self-sovereign digital lives
Co-founded by Kasper Juul, Simon Westh Henriksen and Yngvi Reynberg Karlson, Hyphen is on a mission to build personalised AI for self-sovereign, digital lives. We spoke to CGO Yngvi Reynberg Karlson about the startup’s journey so far - and the ups and downs of founder life.
What inspired you to start Hyphen? What is the mission you are working towards?
At Hyphen, we imagine a future where every individual fully owns their digital presence - and where AI serves as a trusted and personalised advisor in people’s lives. Self-sovereignty, individual freedom and privacy are three incredibly important factors here. I have always been interested in philosophy and my own philosophy is based on the individual. In my opinion, everyone should be self-sovereign. Everyone should own their data. At the moment, we try solving this through regulations but that is not enough.
This is what we are trying to achieve with our personal AI “Kin”: It’s the digital brain that anticipates your needs and provides personalised recommendations to make your life easier and more efficient - whilst keeping your data fully private. You don’t have to trust a privacy policy, you can trust the technology.
Was being a founder something you always wanted to do?
It has never been an active decision. It’s just who I am. I can not NOT build things. I enjoy it but it can be frustrating as well because it’s hard to relax due to the risk involved.
Looking back, I can say that over time you stop being “delusional” when it comes to what it means to be a founder. It’s a good thing because it means you are learning - but it’s also useful to be a bit delusional especially when you want to start building something new.
As a founder, what are some of the biggest challenges you have been facing in the last couple of months at Hyphen?
There is one rule if you want to start a business: You start with the problem - and build a product to solve this as the next step. We actually broke that rule by starting with a vision and the tech. It made things a lot more difficult for us.
Back In January, I thought we would have to close the business: The privacy issue was proving to be more difficult than we had expected and we were struggling to find a business model that worked. This also made fundraising for us an incredibly difficult task.
You eventually did secure the funding you needed for Hyphen. Congratulations! What were some of the obstacles you were facing and what helped you overcome these?
We tried raising money based on our technology - but we didn’t have a product ready for the market or enough reliable data to back it up. This made it really difficult for us to raise funding because investors don’t like that level of risk. We actually went into fundraising twice before we were finally able to close our round with $1.1m.
Finally being able to secure the funding we needed was driven by two key aspects. Firstly, we managed to get our product and our business model ready. Secondly, we were now able to bring our vision to life - with a great product and with data and financial metrics. This is where Scaleup Finance has been a really valuable partner as well. You need the financials to back up your company’s vision and Scaleup’s platform, as well as the CFO support, has been really helpful in guiding us through all of this.
Not only are you a serial entrepreneur, but you also support other startups as an investor. How has this mix of experience impacted how you are running Hyphen now?
It’s extremely valuable. As an investor, I have seen a lot of ideas and pitches. I know what works and what doesn’t. I know what to look out for when hiring people. On top of that, my good network with the VC community has obviously also come in handy for us at Hyphen.
Despite all of these learnings and benefits - I still make mistakes and continue to learn every day. The fact that we started with a vision and the tech at Hyphen is the perfect example here.
What has been one of the biggest learnings on your founder journey so far?
It’s EXTREMELY difficult. I think being a founder tends to be positioned as this cool, almost glamorised lifestyle but that’s not the reality. If you are thinking of starting your own business, there is one thing you should ask yourself: Why do I actually want to be a founder? Yes, it can be fun. It can be rewarding. But it can also be frustrating a lot of the time - with long working hours. I have worked with a lot of founders over the years and I don’t know anyone who is talented enough to not put in those long hours. That’s why you should really think about your motivation to be a founder. If that is not genuine, then going through those rough aspects of founder life will be difficult. Being a founder is not for everyone.
Reflecting back on your founder journey, what piece of advice would you want to give others thinking of starting their own business?
Don't start your own business when you have young kids. If you're thinking about starting a family, then you should make your family a priority. As a founder, you're going to get busy very quickly. Working hours are naturally long, and that will impact the amount of time you can spend with your children.
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
How should a startup business prepare its budget?
To prepare a budget for your startup, begin by listing all potential expenses you anticipate in starting and operating your business. Next, organise these expenses into categories. After that, estimate your monthly revenue and calculate the total costs required to start and run your business.
What are the key steps to creating an effective budget?
Step 1: Determine and track your income sources.
Step 2: Make a list of your cost. Include both fixed and variable costs.
Step 3: Set achievable financial goals.
Step 4: Develop a plan to meet those goals.
Step 5: Put everything together to build your budget.
Step 6: Regularly review and revise your forecast to ensure it remains effective.
What does capital budgeting entail for a startup?
Capital budgeting for a startup involves allocating a set amount of funds for specific purposes, such as purchasing new equipment or expanding business operations. This process is crucial as it supports making strategic investments that are expected to yield long-term benefits for the startup.
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
How can a startup forecast its cash flow?
To forecast cash flow for a startup, follow these steps:
Step 1: Create a sales forecast by estimating the revenue your products or services will generate over the forecast period.
Step 2: Develop a profit and loss forecast to understand your expected expenses and income.
Step 3: Prepare your cash flow forecast, which involves calculating expected cash inflows and outflows. This can often be done for longer-term by using assumptions around payment terms to forecast a Balance Sheet, and using the movements in Balance Sheet and Net Profit/Loss to calculate the cashflow.
Step 4: Consider ways of improving cash flow by improving your invoicing methods, considering short-term borrowing, and negotiate better payment terms to manage cash flow effectively.
What is the most accurate method to forecast cash flow?
The most accurate method for forecasting cash flow in the short-term is the direct method, which utilises actual cash flow data. In contrast, the indirect method is better suited for longer term forecasting using projected balance sheet movements and income statements to estimate future cash flows.
How is cash flow calculated?
Cash flow is calculated by deducting cash outflows from cash inflows over a specific period. This calculation alongside forecasts of future cash flow helps determine if there is sufficient money available to sustain business.
How do you project cash flow over three years?
To project cash flow over a three-year period, undertake the following steps:
Step 1: Collect historical financial data.
Step 2: Identify all expected cash inflows, which could include revenue, investment, grant income, etc.
Step 3: Estimate all anticipated cash outflows including expenses, suppliers that need to be paid, investments into assets, debt repayments, etc.
Step 4: Calculate the net cash flow by subtracting outflows from inflows.
Step 5: Consider your cash reserves and explore financing options if needed.
Step 6: Regularly review and adjust your projections to ensure accuracy and relevance.
FAQs
All the answers you need for all the questions you’ve got.
(But also TL;DR)
When should a startup consider hiring a CFO?
A startup should think about hiring a Chief Financial Officer (CFO) when it begins to experience rapid growth, finds it challenging to manage finances, or needs to navigate complex investment scenarios. A seasoned financial professional can provide the necessary expertise to handle these challenges effectively.
What are the indicators that my business might need CFO support?
You might need to hire a CFO or consider outsourcing this role if you notice any of the following signs: a decrease in gross profit margins despite increasing revenue, uncontrolled business growth, lack of cash reserves despite having a financially successful year, or a halt in business growth.
Does my startup really need a full-time CFO?
Recruiting a full-time CFO is an expensive hire. Given budget constraints and the need to prove the viability of your business idea, founders will often need to prioritise investing into building and commercialising their product. That's where CFO services for startups are a cost-effective solution for founders looking to take their financial management to the next level.
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