This as-told-to essay is based on a conversation with Hans Hasselby-Andersen, 56, CEO of Danish semiconductor startup Lotus Microsystems and cofounder of Merus Audio, which was acquired by Infineon in 2018. The following has been edited for length and clarity.
When I quit my job at Texas Instruments in September 2008 to start a semiconductor company, I had four children between the ages of 5 and 14.
It was almost the height of the financial crisis. You had Lehman Brothers going down in flames in the US, and the whole credit market was just freezing up.
So to jump out at that point and go into fundraising was a big, big step. My manager was looking at me like I was crazy, basically.
Thinking back, probably I should have waited a year or so and just cooled off a little bit. But the thing is, once you have an idea and you’re really motivated, you can’t really wait. You have to go do something about it.
I’m an electrical engineer by training. Earlier in my career, I joined a small startup that was acquired by Texas Instruments about five or six months after I arrived.
The whole concept of a company being acquired, an exit and all that, was all new to me.
It planted a seed in my head that, if the circumstances were right, this was also a path I could take, and not just build my career in a large company.
I stayed at Texas Instruments and worked in the audio semiconductor business.
I was picking up things from my interactions in the market where I thought there was actually a need for a much more energy-efficient way to drive speakers in products like portable speakers and soundbars.
I saw a market need, but I didn’t have the technical solution, so my first task was to go out and find a cofounder who could come up with a technical solution for that market.
I think that’s actually quite unusual for tech startups. Normally, somebody comes up with some technology, and then they go out and try to see where it can be applied. This was the opposite approach.
Four kids, one big decision
Just before I resigned, I called my bank and asked if I could get a basic bank overdraft facility just to give me some extra headroom to live on.
Honestly, I think if I had waited two weeks, I wouldn’t have gotten it. It was just when the financial crisis started to really kick in, and I seriously doubt I would’ve gotten that line of credit.
Getting the first funding took the better part of a year.
I probably spoke to between 50 and 100 different investors.
It’s really a dating game. You try to look appealing and interesting from a company point of view, but you mostly get rejections because the investor doesn’t invest in your domain, you’re too early, you’re too late, or you don’t fit their profile.
I paid out of my own pocket to travel to Japan, South Korea, and Singapore to meet potential customers. I wanted to pressure-test my idea, understand what they were struggling with, what their requirements were, and help mature my business case.
Eventually, I raised the equivalent of about $150,000 to $200,000. It was a very small amount, and we spent it in about six months. The minute we got the funding, we knew we had to continue fundraising immediately.
My wife, who was a school teacher at the time, has been very, very supportive. She never told me, “This is a stupid idea, go back and find a job.”
With four kids, you can’t just make that decision on your own. When we finally got the company off the ground, my wife and I made some adjustments to minimize the risk for my family.
We sold our apartment while we could still make a little money from it and rented instead, so we wouldn’t risk having to sell at a loss if the company failed. We also sold our car and leased one instead.
I slaughtered my pension and took out the money. I thought, “I need it now. I’m not about to be retired anyway.”
Throughout the life of a startup company, you’re more or less in fundraising mode all the time. You always have to keep your eye on how long you have cash and where you’re going to get your next funding. The worst thing that can happen is that you run out of cash.
If there’s one recommendation I would give first-time founders, it’s to prepare for things to take longer than they expect because they always do.
If you think you can do something in two years or three years, multiply that by two, at least.
If you plan financially for your cash to fund your plan as you lay it out, then you’re going to be in a difficult situation because you’re going to run out of cash before you’ve achieved the milestones you set out to achieve.
Engineers have to sell, too
Starting a company around 40 made me a different kind of founder. There were definitely things I had learned that I wouldn’t have been without.
I had learned how to communicate with customers, how to find out what the market needed, and how to explain what I was doing and why it was a good idea.
Many engineers are obviously good at what they do technically, but they can have a big challenge explaining that to others.
When you’re standing in front of investors, you have three minutes to explain what you’re doing. You have to train to do that elevator pitch.
Nine years later, the company I cofounded, Merus Audio, was acquired by Infineon.
I stayed on to help with the integration, but I was really not looking to go back into the corporate world. I had already had that experience and I had really come to like the startup life.
Today, I’m CEO and an investor at Lotus Microsystems, another semiconductor startup.
I’m not a founder this time, but I feel ownership. I feel invested in the company.
Would I take that same risk again today as I did with Merus?
I think the answer is yes.
If you have that mentality of wanting to try something on your own, to build something, that is a major driver inside you. It gives you an enormous amount of energy and motivation.
When you do that, you can actually achieve a lot.
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