This serial entrepreneur failed with 51 startups and succeeded with 52.th. attempt - with sex toys. According to him, a good idea is only a small part of success.
Alan, you founded Amorana in 2014 with Lukas Speiser and sold it in 2022. The early days, I read on the company's website, were «awkward».
Alan Frei: «Clumsy» is even a little too positive. Lukas, who was working in a bank at the time, and I had no idea what a business was, in the true sense of the word. We had no website, no stock, nothing.
How did it start?
We cobbled together a homepage in a day and sent it anonymously to 4,000 e-mail addresses of acquaintances. To our surprise, three people then bought something. We bought the material at «MagicX», on Zurich's Limmatquai: massage oils that were 50% cheaper because they had expired. This earned us our first complaints.
Many people see this theme - vibrators, lingerie, lubricating gel - as shocking. What has been the reaction to this?
When we started out, nobody thought it was a good idea. Nobody wanted to invest. My parents, both Catholics, weren't very enthusiastic. Neither were Lukas's grandparents. Our assumption was that these toys were good for a romantic relationship. After all, it's best to communicate openly about sexuality. Our ambition was to take this from a niche model to the mass market. Our good fortune was the success of Fifty Shades of Grey, which suddenly made the subject accessible to the general public.
How did success come about? If you were perfect amateurs, it couldn't have been enough.
We always wonder how success came about. (Laughter) We were the first to have the courage to expose ourselves in this segment. We went out and said: «Hey, we're selling sex toys now», with all the negative consequences and stupid remarks we must have heard. At the same time, the technology for this type of equipment developed. We met early on with the inventor of the world's best-selling sex toy, «The Womanizer», and introduced this product to Switzerland; it was a quantum leap in technology. And then there was our «Amorana» Advent calendar, with which we succeeded in getting people to approach the subject in a playful way.
You've persevered until you've succeeded: 51 projects you've launched have met with little success. This is 52th. which then took off. What kind of projects have you failed with?
For example, I'm the inventor of mango eau-de-vie; unfortunately, mango is the stupidest fruit to make eau-de-vie from, as it has a relatively large stone compared to its flesh. In fact, that's why people make brandy from apples or pears instead. Toilet paper without cardboard rolls, online divorces, a tutoring platform, a Facebook dating platform or a platform to reduce information asymmetry in the cab industry didn't work either. Another well-known company then did just that, with far greater success than we did...
How did you finance all this? Did you have a job on the side?
I soon realized that, at that time, the new economy could be built on the Internet. Whereas thirty years ago, you had to have offices, warehouses, machines and lots of employees, I became an entrepreneur when the Internet exploded and large companies were created. The costs of setting up a company were massively reduced, and suddenly you could create a website for 1,000 francs. Today, access is even easier.
But we're not paying rent on it yet.
When it comes to money, there are two components: expenses and revenues. If income is low, expenses must be low. As a result, for 14 years I lived in a very cheap, but also very noisy, apartment on Zurich's Rosengartenstrasse. I only had 70 items, including a fork, a knife and a spoon. I lived extremely minimalistically because I knew I could experiment for longer if the fixed costs were low. From time to time, I also went back to work. There were also projects in which investors took part, but which didn't work out afterwards.
Today, you have money and no longer need to live a minimalist lifestyle. Do you still do it?
After selling Amorana, I lived in a hotel for three years, fulfilling a great dream. Today, I have plates, forks and knives again, and live in a more or less normal household. But I still don't have much: two pairs of pants, seven shirts, seven pairs of underpants, seven pairs of socks, two sweaters, two pairs of sports pants, five T-shirts.
Many people find it hard to deal with a sudden abundance of money, and many lottery winners quickly become miserable to death. What was it like for you?
The problem is that the lottery winners didn't have to earn that money. Personally, I had nothing for a long time, and I was one of those people who had to call the tax office and ask: «Can we split the tax payment over six months»? Once I had some money, I asked myself what was important to me in life, and I concluded that it was freedom. I didn't want to lose this freedom by buying material goods like cars, a house, a boat. The freedom to do whatever I want to realize my ideas is simply much, much more important to me than owning a villa in Küsnacht, for example.
I've read your entrepreneur's guide, Alan's Start-up Guide. You write: «All you need is a clearly defined basic idea, a logo and a credit card». Why only that?
With a logo, a credit card and a clearly defined idea, you can test an idea very, very quickly. You set up a website for 100 francs and slip in advertisements for 50 francs. You can quickly see if there's a demand or not.
Your recipe is «try, try, try». Many young entrepreneurs are afraid of having a great idea and someone stealing it. So they always talk about their projects in secret. Isn't this nonsense in most cases?
My experience is that the idea is only a small percentage of success. Of course, you have to have a good idea, but that's not enough to succeed in business. In the early days, I was like that too, asking people if they could sign NDAs, or confidentiality agreements. Over the years, I've learned that the more I talk about my idea, the better I can articulate it, the clearer my vision becomes. You could say it's a bit like cutting a diamond in the rough in your head. There's also that beautiful phrase: «You haven't understood anything until you can explain it yourself.» It's the same with entrepreneurship. If you hide all the time and do everything in your head, you won't make it in the market. You have to get out there and listen to people's reactions to your idea. The question is: do people want it or not?
What else should a young entrepreneur be aware of?
We have a limited amount of time on this earth. You can use that limited time by filling in Excel spreadsheets as an employee. Or you can implement your own ideas. I advocate implementing your ideas, trying them out.
Few people do.
It's not always easy. You have obligations, a family, a house. Once you've decided to achieve something, the second step is not to be afraid of failure or of being branded. That's why I also live and promote the culture of mistakes.
Do you see this culture in Switzerland?
Switzerland is a country of entrepreneurs. The problem is that Swiss companies have become too successful! That's why more and more people have joined these big companies over the last hundred years. If we want to maintain prosperity in Switzerland, we need to give young people the chance to realize their own ideas and businesses. If you fail and then join a big company, it's not seen as a negative thing. Big companies are also looking for people with an entrepreneurial spirit and who have had entrepreneurial experiences.
What are the main strengths of the Swiss economy?
Thanks to universities and apprenticeships, the groundwork for setting up your own business is very good in Switzerland. As opportunity costs are very high, most people who start a business here feel very committed to their idea. In Berlin, for example, many have a start-up on the side. But they don't really move forward because they have low costs and are only half-committed to their work somewhere in a café. It's also for this reason that decisions in Switzerland are generally taken on a serious basis. We say to ourselves: «I'm going to go all the way, otherwise I'll be eaten up by costs».
What are the problems in Switzerland?
The market is relatively small and the investment culture is not as well developed as elsewhere. In the beginning, it's relatively easy to raise money. But then, many companies find themselves in the «valley of death»: lacking a venture capital culture, it's difficult to grow a business. Those who have passed through this valley of death generally succeed in the long term. The Googles and Nvidias of the world also come to Switzerland.
Why?
Because life in Switzerland is wonderful. The country is safe. Taxes are understandable. These advantages make it easier for large employers to attract workers.
You've shown an entrepreneurial spirit. Is it innate? Can it be cultivated?
I don't think the entrepreneurial spirit is innate. Because I see a lot of extremely successful entrepreneurs who say, «I never wanted to be an entrepreneur. I just had this idea, and it had to come out of me.»
How did it work out for you?
What struck me was that in 2003/04, at the age of 20 or 21, I went to China and studied Sinology. Today it's different, but when I was there, there was an incredible atmosphere of renewal. People didn't business plan, they went for it! I found that euphoria and the understanding that you can do something fascinating. I came back and said to myself, «I want to do the same thing.»
Ronnie Grob is editor-in-chief of Schweizer Monat.
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