Posts tagged ‘Iceland’

July 14, 2014

How to release the Currency Controls in Iceland

The logo of the Central Bank of Iceland

The logo of the Central Bank of Iceland (Photo credit: Wikipedia)

For those of us living in Iceland, the notion of living in a currency control regime that was instituted in Iceland after the financial collapse in 2008 is draconian. I understand why the currency controls are needed, to prevent capital flight to stabilize the fluctuations of the Icelandic Krona (ISK) and to ensure price stability within the country. The Central Bank of Iceland is caught between a rock and a hard place, on the one hand they want to release the currency controls and on the other hand they don’t feel that they have the tools to stop the flood gate if there is a capital flight, the risk is the overhang of ISK denominated Glacier Bonds that were issued by the Icelandic banks before the collapse. The hypothesis IMHO is that if the currency controls are released then the Glacier bonds will be dumped and whatever foreign currency reserves that the Central Bank of Iceland is holding will be utilized just to pay for that redemption pushing the Country back to the same state as it was in 2008. Iceland was not bankrupt it just ran out of foreign currency to pay for all the goods and services that Iceland imports. Yes, this is a legitimate concern and it could potentially happen. The problem with policies that are put in place like it was done in 2008, is that it is a one size fits all. We know that one size does not fit all issues.

That was a long preamble, but coming back to how to remove the currency controls. Lets think about what needs to be in place to release currency controls? In order for a free flow of currency there needs to be a balance of ISK to other currencies and we know for a fact that is not the case. When there is a mis-match with Demand and Supply of any underlying currency to ISK, the price of ISK will have to adjust to make the transaction happen. The Central Bank of Iceland has the power today to refuse to participate in a market transaction because of the currency control, in a regime that does not have the currency control the Central Bank cannot refuse to participate and has to allow the transaction to happen. Given the above premise, I have argued since the Currency Control policy was put in place that Iceland will have not leave this regime for the foreseeable future. I even wrote a paper about it and it was published in the University of Iceland annual journal.

So how are we going to release the currency controls in Iceland? I have a simple solution. Just inform all those institutions that hold on to the Glacier Bonds that they can redeem their bonds in Bitcoins, yes, I said it, in Bitcoins. How can the Central Bank of Iceland get Bitcoins you ask? well, we have the cheapest energy in Iceland, real estate is also relatively cheap, there are a number of Data Centers being developed. The Central Bank of Iceland and the Government of Iceland can mine Bitcoins and pay the owners of Glacier Bonds in Bitcoins. If my estimates are right we can do this with less than a $10m investment in gear and teams that could mine Bitcoins in Iceland. This will take the pressure off the ISK, allow the common citizen of Iceland to actually buy a book in Amazon and pay for it and get it delivered. It will be unprecedented and simple to execute. I think it is a relatively small investment to get Iceland back on even ground. What do you think?

June 25, 2014

Permission less Innovation

prime-air_high-resolution02It is painful to watch the obvious play out in the US. I don’t know if you have been seeing what is happening with legislation and regulations around all the innovations that Entrepreneurs and Startups have been doing and how the incumbents have been coming up with resistance through lobbying and permission raj. The latest is the FAA ban on drone technology to deliver packages. No-one knows if this thing is going to work but before that we need to go and get permission to experiment? Makes no sense to me… There a numerous accounts of this happening in the Hospitality sector vs Airbnb, Taxi services vs Uber, Privacy concerns, Net Neutrality and so on and so forth. I think as these debates play themselves out what is an entrepreneur to do? wait for the legislation to give them permission to innovate? I really do believe the machines have taken over, we just need to figure out a way to make this as easy as possible. I believe tremendous value can be created if one can innovate in a place where there is no need to get permission to innovate, say a place like Iceland, of course we have a legal system and regulatory bodies but I think value creating legal things can be built here and tested without causing any challenges to the livelihood of people or displacing a large population as it could do in some of the larger industries in the larger markets. Actually, innovation is needed in a small place like Iceland because there are not a lot of people here. Icelanders have innovated on many fronts, namely Energy, Education, Fishing and Home heating and Broadband (did I mention I get lightning fast broadband in my home through Fiber Optic Cables, and that is standard).

The biggest value is going to be in the field of Software that creates value on top of Networks. I think that makes a lot of sense in Iceland and I have enough case studies to prove that this works. I am not stopping with my arguments, I am putting my money where my mouth is. I am investing in all of these things in Iceland. So if you are scared about the legal ramifications of starting a business in Iceland with innovation as your core, just talk to me. We need to embrace change as change is coming… there is nothing we can do about it other than get ready and prepare and be well equipped to manage ourselves in the change.

June 20, 2014

Where is the value in Bitcoins?

ice8bSo I am getting obsessed with Bitcoins now! I met with an Entrepreneur in Iceland, well he is a Computer Science Student and is more obsessed with Bitcoins than I am. I think there is a small community that is developing in Iceland that is building things around Bitcoins. The first step in all of this is to create an exchange for Bitcoins to Icelandic Krona, which is the first thing that he wants to build. I think it makes sense. As I wrote yesterday about how intermediation could really solve the Bitcoin adoption problem and also makes one focus on the value that is created by the Bitcoin or Crypto Currency exchange mechanisms. There are many resources that outlines the benefits of using Bitcoins. Here is a video from site

ice8fBringing the context back to Iceland, I would like to fund a startup that does the exchange of Bitcoins to Icelandic Krona. The next obvious question is how does this exchange make money? The business model is similar to that of any payment service say a credit card company or Square or any other mechanism. Iceland is a small enough place that this payment service could solicit many businesses to accept Bitcoins as payment and the exchange can act as the intermediary. I am not the only one to think this works. There are a number of companies that have already set up Bitcoin mining facilities in Iceland. I think Bitcoin mining works in Iceland, as it converts the abundant renewable energy available in Iceland into a transaction currency.

I don’t believe in the doomsday scenarios played out by some of the folks as it relates to currencies and countries and sovereignties. I just think payment or transaction mechanisms that innovate on the two most important value in a transaction will win. What are those 2 things?

  1. Speed
  2. Transaction Cost

Of course there needs to be a mechanism to convert the transaction to the underlying currency of the country in the case of Iceland it is Icelandic Krona or ISK. Iceland already enjoys T+0 transaction speed i.e when I transfer money from my bank account to someone in Iceland it is instantaneous, please tell me any other country that already has that? In addition, there is no transaction cost. This is another reason I believe Icelanders will not see a challenge in adopting something like Bitcoins as this community is already used to it.

The traditional credit card companies in Iceland should jump on this but they are stuck in the Innovator’s Dilemma and they will never innovate faster than a startup can. I think investing enough to get a small percentage of the local commerce into Bitcoins will create enough value in a Startup that it justifies investing in it.

Oh, Chris you still think no one will invest in Bitcoins in Iceland?

I love it when people think they know more than anyone else… yours truly included, no-one knows the future but those who can work on writing the future usually win. I like the tinkering aspect of Entrepreneurship, I will write why I believe in this cohort in another blog post soon.

June 18, 2014

Bitcoins and Iceland

Bitcoin Wallpaper (2560x1600)

Bitcoin Wallpaper (2560×1600) (Photo credit: PerfectHue)

I had a Twitter debate and discussion with Chris Dixon about Bitcoins in Iceland. I have to say I was rather disappointed by the lack of vision on the part of a Venture Capitalist and Investor who is much respected by the community. Here is what boiled my noodles:

Here is a list of tweets that I posted to counter that:


Coming back to my argument, I think Bitcoins work in Iceland. We need to accommodate the policy around that. There is Auroracoin which has been mined and distributed to all Icelanders, it could be the basis for conversion. We just need startups that interface with Auroracoin and Bitcoin thereby facilitate a transaction mechanism that could enable a Cryptocurrency and Digital currency in Iceland. I don’t predict the future, but one can see the value and cost associated with Bitcoins. I am pretty sure that Bitcoins will become one of the transaction mechanism on the internet.

Here is an open challenge to Chris Dixon, to counter his statement that no-one will invest in Iceland until a policy change is made about Bitcoins. I will invest in Iceland in any Startup that is focusing on Bitcoins and Iceland. I think he is wrong, Iceland is the best place for things like this. I remember in 2009, when I heard people saying the same things, Iceland will never recover and Iceland will have no investors after this financial collapse well what happened in the last 5 years? Iceland is the only country in the OECD nations to actually start growing again faster than any other country. Who invested in Iceland? Icelanders did and I pretty sure if a compelling case is made for Cryptocurrency I believe Icelanders will invest in it as well.

What do you think?

June 13, 2014

Why the publishing industry is broken – John Biggs – Startup Iceland 2014

John is funny and says it as he sees it. Here is a story of John working on a book with a publisher and then working on another book by himself. The talk highlights whats wrong with the publishing business. I think it outlines the challenges most established businesses have with the advent of the new networked model of connected consumers, businesses and value drivers. I think we are on the verge of a break out in rethinking business models and the ways we do things.

To give more data to support the notion that the publishing business is broken, read this post by Brad Feld on why he launched a brand new publishing company called FG Press

June 12, 2014

Why we don’t need a “Silicon” something in Iceland – Ben Kepes – Startup Iceland 2014

I really enjoyed the talk by Ben Kepes, who travels extensively and participates in various conferences as speaker, evangelist and technology blogger and investor. His advice for Iceland made the headlines in the local newspapers. I think he is right, there is only one Silicon Valley and we should not try to create a community with a name that has “Silicon” in it. I like Startup Iceland :) as a name for the Startup Community in Iceland.

It was interesting to read the Twitter Argument between Mark Suster and Kara Swisher about the story that was written by Nellie Bowles on Silicon Beach to describe the LA Tech Community.


Mark hates the name and it was interesting for me to read that and relate it back to what Ben was saying. I think every community should have the Silicon Valley mindset i.e Anything is possible, failure is another way to learn and people willing to take chances on each other to create value. When there is a lot of money involved a number of these things gets skewed. I don’t know enough about Silicon Valley to comment on it but Ben does. Listen to his talk, there are wise words there.

June 11, 2014

Intrapreneurship in Iceland – the story of Tempo

I believe startup thinking or entrepreneurial mindset is not limited to startups and entrepreneurs. I think anyone in any job can put on the hat of an entrepreneur and try to change their job, their career or even their big corporation. It is difficult but the challenges are no different than when one starts a new company or embarks on an entrepreneurial journey. Today we have a guest blog by Jessie VanderVeen, the Marketing Manager of TM Software a company that was born out of the financial crisis in 2008 within a large established IT company in Iceland. I think the story is inspiring and everyone who is part of a large organization can take note and innovate their customer service, product development or how you do your day to day activities. Here is the story of Intrapreneurship in Iceland:

By Jessica VanderVeen, Marketing Manager at Tempo

Tempo’s story is one of resourcefulness, resilience, and a bona fide need for adaptability and change during a time when Iceland’s economic environment demanded these very things. Our existence came to be out of a need to build agile solutions for real problems faced by real users — our own at TM Software.

TEMPO timelineBack in 2006, TM Software (a software development company headquartered in Reykjavík) implemented Atlassian’s popular project and issue-tracking platform, JIRA, throughout our organization. The developers on our custom web solutions teams loved JIRA, but were using an external platform to plan and track their time spent for client billing purposes, as well as for internal payroll. As a company that embraces Agile methodologies, this created a lot of hassle, headaches, wasted time, and even the possibility for inaccuracies. We needed an agile time tracking and planning solution that was so tightly integrated with JIRA, it felt like a part of the platform. We also wanted to measure how we used our time and whether we might improve our efficiency or better allocate our resources, and we needed reliable data to help us with those endeavors.

Initially, a handful of developers at TM Software was assigned to build the agile time tracking and resource planning plugin — now known as our Tempo Timesheets add-on — we so badly needed, and launched it for internal purposes. We ended up liking the solution we built so much, realized that there simply wasn’t a comparable solution available on the market, and launched it externally one year later with notable success.TEMPO facts

For several years, TM Software focused solely on building custom web solutions for customers, so the decision to launch into product development was a significant one — a leap that ended up benefitting us more than we initially anticipated.

We were able to accomplish this transition by bootstrapping: staying lean, making strategic decisions, and expanding only as our needs and resources evolved.

June 10, 2014

Liad Agmon on how to get lucky – Startup Iceland 2014

This was one of the funniest talks in the history of Startup Iceland. Liad has a flare for delivery and timing. I am pretty sure he would have been a great stand-up comedian. He used to write jokes for scripts while he was in school. Of course there is a fantastic lesson in the talk about how to get lucky… no, no I mean with being an Entrepreneur and how to get your business up and going. Hint, persistence and having an open mind is the key. Listen to the talk, you will see what I mean.

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June 4, 2014

Startup Iceland 2014 – Done!

Ben at Startup Iceland

coverage in Channel 2 News in Iceland

Wow! what a ride, it was so much fun to hear all the great talks, meet so many young, upcoming and established entrepreneurs in Iceland participate in Startup Iceland. Startup Iceland this year engaged the whole stack of the community, we had people from the Government, Financial Institutions, Universities, Students, Entrepreneurs, Service Providers and people who were just curious to see what this is about. The mentoring sessions was also very well attended, although I screwed up and did not do a good job of preparing for the mentoring session. Oh, well, we learn and try to do better next time. I was impressed by the participation, networking and discussions that was going on during the coffee and lunch breaks. I am happy to say we packed the house and I believe everyone learned something new, got a new connection and built a bridge to cross some of the chasms one faces in this entrepreneurial journey.

John Biggs interviewing Jenny and Bre about MakerBot

John Biggs interviewing Jenny and Bre about MakerBot

I am so thankful for all the Speakers, Mentors, Sponsors, Harpa Concert Hall and Conference Center facilities and project team there, Reykjavik University leadership team and project managers there and all the volunteers who put their heart and mind into making this event come alive. I am truly blessed to get a chance to work with you all. I know my wife is going to kill me, I cannot wait to organize Startup Iceland again next year. I committed 10 years to building a sustainable startup ecosystem in Iceland and we are 4 years in and 6 more to go. I know with the momentum that we have gathered in the last years, we will continue full speed ahead… As Bre and Jenny from MakerBot continually reinforced to us with their MakerBot Way during the event.

I have to admit that this event is great personal learning experience for me and I learn so much from all these awesome speakers, leaders and influencers who come here and share freely their wisdom. What a way to learn. I am incredibly motivated to start working on a roster of speakers for next year. We will continue to get all the video content ready and start sharing the same through, I will definitely blog about it so watch this blog post, or do me a favor and just subscribe to it that way you can get it in your promotions tab of gmail.

Lots of exciting ideas and suggestions came up during the event. I will be blogging about that as well so watch this space.


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May 29, 2014

Startup Iceland – Offer to Startup participants and Startup Energy Reykjavik Investor Day

DeluxeBannersStartup Iceland is coming monday June 2nd. We will have over 250 people who will participate in the Conference. I want to make an offer to all the startups who are participating (and if you are not you should we still have some tickets left, contact me), if you have a pull out banner and want to display it in the coffee meetup area, email me your request. We want all startups in Iceland to take the opportunity to showcase what you are doing. It is impromptu offer, just like your elevator pitch, you never know who you are going to meet but having the pitch ready is valuable. You never know where it leads.

I attended Startup Energy Reykjavik Investor Day yesterday, I was about an hour late as in the hurry burry of organizing everything with Startup Iceland I had totally forgotten about the Investor day. Thank you Einar Gunnar for reminding me. Anyways, I participated, I had met most of the teams as I was a volunteer mentor in the program. I am going to do what we have been lacking in Iceland. I am going to work with one of the teams and invest in the team. We have been deliberating and analyzing every team that comes out of these accelerators, I think that is the wrong way to look at this effort. I think we need to start investing in these teams and take bets and make them win. There is no other way. So, I am putting my money where my mouth is.

Einar Gunnar who has been leading the effort in Iceland as it relates to Accelerators and building a startup community, gave a very good talk and showed the video Brad Feld had made about his book Startup Communities – Building Sustainable Startup Communities in your city. I think it was a great way to close the investor day. We are in such an early stage in Iceland that it is difficult to pick winners. I think Iceland as a Startup location works. I have seen it work and I have CLARA, GreenQloud, Meniga, DataMarket, Mobilitus, Plain Vanilla Games, Guide To Iceland, Modio, and many other startups that I meet everyday to validate that great ideas and companies can be created and developed right here in Iceland. What we need to do is Do More Faster, tinker and learn for the process.

What was also very interesting to me was the data on the number of applications that Startup Reykjavik and Startup Energy Reykjavik received. It continues to grow every year.

These are the teams that presented in Startup Energy Reykjavik:

  • he HTPM Gerosion CenterHTPM GEROSION Center will provide consultation, material testing & specialized R&D work for entities in the geothermal/petroleum industries.
  • BMJ EnergyWe offer total solutions for hydro with focus on micro scale. Designed and built from scratch by BMJ both generator sets and controll units.
  • Sodium Chorate Plant
    Small scale Sodium Chlorate production for export and more efficient use of energy.
  • Landsvarmi
    Organization that finances, sets up and operates heat pumps for central heating of houses.
  • BigEddie
    A novel approach to wind resource assessment using a combination of observations, Large Eddie Simulations (LES) and CFD modeling techniques.
  • PEA Aluminum
    Portable Element Analyzer for real-time data in potrooms.
  • GeoDrone
    GeoDrone is providing services for the geothermal industry. We combine modern technology in UAV with advanced remote sensing (e.g. LIDAR).


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