Paul Kemp: Welcome to another episode of The App Guy Podcast. I am your host, it's Paul Kemp. This is a show that helps you out as an entrepreneur, startup founder, or even if you're just in a corporate job and you're interested in this world of entrepreneurs that are the most incredibly helpful founders, helping us in our journeys. We deconstruct success, we look at failures and we learn in our own journeys, so if you are any of those above, then this is going to be the episode for you, because I do like to go around the world... And today I have landed in Europe, because there's a lot of stuff going on in the tech world in Europe.

I've got a wonderful co-founder, his name is Søren Nielsen, and he is the co-founder of ERNIT. We're going to learn about ERNIT and how it's helping change the world. Søren, welcome to The App Guy Podcast.

Søren Nielsen: Thank you very much.

Paul Kemp: Let's talk about ERNIT first, because I was really blown away by the mission that you have... Tell us about ERNIT.

Søren Nielsen: Well, ERNIT is empowering children with essential lifelong skills; we do that with a physical piggy bank that's connected to an app, which is connected to a real-time bank account. Our big mission is to empower children with essential lifelong skills by making digital money tangible.

Paul Kemp: I'll tell you what, that's a fantastic elevator pitch. First of all, how did you come up with this idea of empowering children? Was it a light bulb moment, or has it been a long, slow burn?

Søren Nielsen: The story behind ERNIT is, of course, like so many other startup stories, that the three founders behind ERNIT - Thomas, Mads and myself, we were sitting around a  New Year's Eve table a few years ago, talking about how to give a kid some good money habits. Thomas has two kids, Mads has three and I have one, and we all had piggy banks when we were kids, so putting coins into those piggy banks, and pouring it out and counting it - that was like our first interaction with money... And we couldn't really see our own kids doing the same thing, mainly because we were using our credit cards to pay with, our phones to pay with.

I think what really hit it home for me was when my own daughter called my credit card [unintelligible 00:02:29.18] magic card, because she thought this card had an endless amount of money. We decided then and there that we were going to do something about it; we were going to go out and research the area and create a product. Along came ERNIT, a physical piggy bank connected to an app.

Paul Kemp: What is actually really interesting - first of all, you were sitting around a table, and it's New Year's Eve, and all we can think about is starting a business. [laughs] I'm surprised you remember the conversation.

Søren Nielsen: Yes, of course it's a long time ago now, but it's also one of those defining moments where you're sitting together with some friends and you're talking about life, and you're talking about what's the next year going to be like... I'd just heard the term "wine entrepreneur" a few weeks before that New Year's Eve. A wine entrepreneur is one of those guys that can just talk about all the good ideas when he gets a glass of wine, and then never does anything about it. I just decided then and there that I didn't want to be that guy, so we became champagne entrepreneurs instead, I guess.

Paul Kemp: [laughs] Now, the idea of this show is to inspire the listeners, the appster tribe, and what's really interesting is you're starting a business with friends... Tell us about the circumstances you were all in, because it's a big jump to go from having that light bulb moment to then actually running your own startup with the three of you. What was your personal circumstance at the time?

Søren Nielsen: Well, at the time I was an editor-in-chief at one of Denmark's biggest financial media. I'm a journalist by background, and I also have some business degrees, as well. I was sitting in a really well-paid job, and the same goes for Thomas and Mads. They were within the digital industry, making apps and working with ad agencies and stuff like that. We were all having some good jobs, having wives, having children, mortgages, everything... But this was just too big of an opportunity to say no to.

We decided first of all that we were going to play it safe in the beginning, because we were going to have our normal jobs, and then at night and during the weekends we would work on ERNIT in the beginning. We did that for one and a half years, and I remember the big changing moment. That was when we got the first investors (business angels) on board. We got some business angels saying "Yes, we want to put money into ERNIT", and I remember going back to my wife the same evening, telling her "Well, we've got these two business angels that want to put money into ERNIT." She just looked at me and said, "Well, then you have to quit your job." There was no question of us taking that jump and doing this, because again, this was a once in a lifetime opportunity and I wanted to be more than just that wine entrepreneur, I guess.

Paul Kemp: What I love about doing this podcast is we learn so much about the right way to pursue a dream. Just two episodes ago we learned that you know when the right time is to quit your corporate job, your well-paid salary, and again it's come up in this episode, where you just knew after a year and a half of hard work on weekends, you knew when to quit. Was it the same for your co-founders? Did they follow the same path as you?

Søren Nielsen: Yes, definitely. There was no question of us wanting to try this out, and we also had the huge support from our families. It's impossible to do something like this if you don't have the support from your family, and also during the hard grind which we're in right now... Because you can always talk about what it is like to start something up, but then going through the first couple of months, going through the first year and then the second year, you get into this grind where, of course, there's a lot of hard work. I think that's one of the things that people don't hear as much about - the grind, the middle part. You hear about the beginning, you heard about the end, but less about the middle of it all.

Paul Kemp: Yes, and that's what we like to explore, because what we try and do is unravel the real story behind people like yourself. What I'm really impressed with is the fact that, you know, a year and a half is not an impulse decision; you obviously know that's what you want to do, and the idea is solid by then, because you've invested so much time.

So you made the transition... Any tips or any strategy for going from the three of you earning a good salary and being able to pay your mortgage, to then basically relying on your startup to fund your own life?

Søren Nielsen: One of the things that I think is important is of course the family; you need to have the support of your family to be able to do this, or else it's not going to work.

The second part is that you have to have a time path going forward, saying "We'll give it whatever time it needs", but you have to be able to say -- for us, for instance, we said "Okay, we'll give it 12 months; we'll work without a salary for 12 months, and after 12 months there needs to be a salary." It doesn't have to be big, and believe me, it's not big right now, but there's a salary, and that was the plan that we set: "We'll work a year for free, and then something needs to happen."

I think it's really important to have a time schedule going forward, because if you're not doing that, then you're just working into oblivion, and you can do that as a startup.

Paul Kemp: That's a massive lesson, and I don't think we've learned that in all these 530 episodes, which is to set a target and have the target be earning a salary, because I guarantee there's people listening to this that are probably realizing they made a mistake, because they've worked so many years for next to nothing, just trying to survive, and you get used to it... So I love that.

Let's move the journey on then - what were the big challenges as you progressed in building what I assume is a prototype and showing it around? Talk us through the early start of the journey.

Søren Nielsen: Of course, being a hardware startup - also with an app, of course - the prototype is much more expensive to make than making the software part; of course, it depends on what kind of app you're doing... But in general, let's just say that hardware - yeah, it is hard. It takes time and money to get to a point where you think that the product is also worth showing to somebody else.

In our case, the prototype that we were working on after we quit our jobs was the prototype for the Kickstarter campaign. We did a crowdfunding campaign in the fall of 2015. The money that we got from the business angels - that was spent on building that campaign, making a prototype, making marketing materials, making the website, doing PR, all of those things. That was the first big step.

Dwelling a little bit about the MVP or the prototype, I think that this is one of the big lessons as well for me -okay, what is a prototype that is good enough? What is an MVP that is good enough? Because going into it, I think all of us founders had different definitions of what that MVP, what that prototype should look like. I think that's something that you have to discuss really early on in regards to what is the company's MVP.

Paul Kemp: That's also reminding me - we've had quite a few past episodes talking about successful Kickstarter campaigns, and what I've learned from you is the fact that many people assume that it's free money; you just put up a page and then it's going to take off, but you invested your funding in all the things that are required on the Kickstarter campaign. I guess that not only gave you additional funding, but already made a customer base.

Søren Nielsen: Yes, it did, but I have to say that at least in our case, the Kickstarter campaign was way more validating the product than it was getting funding, getting financials. We raised $80,000, and that was not nearly enough to start the production, making the development for the real product, but it was enough to make that product validation and also show investors "See? There's a market for this" and also getting insights into what kind of product the end users would want. That's, in my opinion, the biggest lesson you can get from a Kickstarter campaign - it's learning about your customers, putting a product out there and putting people's money where their mouths are, so to speak... You force people to buy your product, not just say "Oh, that's nice." No, you have to buy it.

Paul Kemp: Actually, I was thinking about the target customers... How many parents are on the planet that have kids that use technology? It must be huge.

Talk us through the product then, because I'm still unclear exactly how the product works. Of course, many people are listening to this whilst driving or doing something, so let's try and describe visually the product and how it benefits the children.

Søren Nielsen: Yes. I want to start with just a normal use case... A normal use case would be that a family signs up for the product and they have both the app and the physical piggy bank as well. Then it's really important that it's the child that sets the goal; there's goals within the app.

The goal can be anything from an iPad, a bike or a gift for mom, and then the parents and grandparents and other grownups with those magic cards that I was talking about before - they can then transfer money directly into the piggy bank. Each time they do, this physical piggy bank lights up and plays a sound. Then the child has to go and physically interact with the piggy bank, pressing its mouth. When it does that, the money is claimed, and then in the app the child can then distribute the money between the different goals that it has set. That's the way that we're making digital money tangible.

Paul Kemp: That's incredible. Any family member then can use their physical account. Is it at the moment global?

Søren Nielsen: Yes, it is global, but the real money part is only doable in Denmark as it is; it's not doable yet in the rest of the world. That's because we have to start building relationships with the bank infrastructure in each country.

Again, starting this journey out with the Kickstarter campaign, we were really naive about the whole infrastructure of money. Even though I've worked within financial services, we were still really naive. We're at a point now where we have real money in the product, but only for the Danish customers, whereas the global product does not have real money in it yet.

Paul Kemp: Søren, it's quite interesting how this show works out... Just the previous guest - her name is Alicia Roisman Ismach - was talking about fintech, the challenges and regulation and all this sort of stuff... But are you able to take cryptocurrency and change that into local currency yet? Or is that another step on your feature list?

Søren Nielsen: That's another step... It's funny that you mentioned it, because it's actually a step that we've already made, but we've gone away from again. The reason for that is that the users were not ready for it yet.

The first currency that we combined with our solution was a blockchain; on the blockchain there's this blockchain bank that we were working with. They actually have 50 different currencies that you could put into the product. We had the whole backend linked up to it and it was ready to go, but again, going back to the insights that you get from your customers doing a Kickstarter campaign, the customers were just not ready for it. They were still unwary of putting children's money on blockchain; that was related to Bitcoin, that was related to some kind of bad behavior, at least at the point when we were doing this.
I guess the market is more mature today, but I would still say that when we have to do with real money, and especially children's money, the market is still not mature enough for blockchain, in my opinion.

Paul Kemp: What was really interesting is listening to you in terms of the idea, it's just wonderful; then listening to all the challenges that you have to go through... You have to have grit and stamina in this whole startup world to fulfill your dream; it must just drive you insane competing with all these challenges as you try to deliver what seems like just the most amazing idea.

Søren Nielsen: I think one of the main characteristics for a founder of a startup is to be a bit naive in the beginning, and then have a lot of perseverance. If you don't have those characteristics, it's going to be tough. Because you have to be a bit naive in the beginning, saying "Okay, I can do this. It's not a big problem", and then also just sticking to it afterwards and not taking a no for a no.

I've had so many sales meetings, so many investor meetings where I've heard a no, and I'm actually thinking inside my head that you're actually saying "maybe", or even "yes." You have to have that kind of worldview, that a no is not always a no.

Paul Kemp: Yes, and that's what we're learning from all the co-founders that come on here - if there were too many yeses, then maybe the idea is not so good. You need a  lot of pessimism, because that means there's opportunities to really crack a new market.

One of the chats I'm reminded of is when one of the co-founders of a drinking app actually sat next to someone using his app, and was just delighted to see the benefit it was bringing this user. Was has it been like to sit with the family and watch them play with your product? Was it a really enlightening moment?

Søren Nielsen: I think it was one of the most giving moments that I've ever had, just getting the response from the families and the children... When they see ERNIT - the physical part - for the first time and when they start using it, and getting these e-mails and getting people's responses on "Oh, this is just so much fun!" And even just a small thing like having a physical object that has to do with digital money is enough to start the conversation, and for me that's been like the most eye-opening thing of them all.

You actually don't need that much to start a conversation about this, but you need something more than just an app. That's been really, in our perspective, a great thing, because that was why we started out... We were saying "Okay, how can we make this money tangible for kids the age of four and up?", because they're not used to having a phone with an app on it, and as long as we are bound to these bodies, we have some senses that need to be nurtured; this is what all experts are agreeing on, so if we can view money and you can touch it, there's more learning in it than if you can just, for instance, touch it.

From that perspective, having those children and those families responding to the physical piggy bank, and the interaction with the app, that's just tremendously giving.

Paul Kemp: Yes, and actually there's two things that come to mind... One is that it must eventually bring a lot of families around the world together, because I could imagine sitting with your child and saying "Hey look, auntie Gertrude from Australia has given you some pocket money towards that bike!" It must bring a lot of families together. Did you see that goal?

Søren Nielsen: That is definitely something -- I think we started out looking at it as purely like money, like "Okay, how can we make this money tangible?", but then it also grew bigger and bigger, to "Okay, you can actually use money to teach children about perseverance, you can teach children about patience, you can teach them how to make delayed gratification, and you can also connect people." My mom and dad - they're living on the West coast of Denmark, I'm living on the East coast in Copenhagen, so we don't see them that much, but they can then send money through ERNIT to my daughter's piggy bank, and that's a connection right there.

I think that's a really great thing within this as well, that we're connecting families, connecting people in general.

Paul Kemp: The second thing that I was reminded of is the fact that by teaching children how to save -- there's a book I've just read by Tony Robbins called "Unshakeable", and in there he talks about if you start at a very young age (18), investing in the stock market or just saving a very small percentage of your salary, you are going to ultimately end up having assets well over a million, just because of compound interest and the fact that it compounds over the years.

We're a nation of debtors, aren't we? We've got this credit card debt problem all around the West, and you're obviously challenged with that...

Søren Nielsen: That's of course something that we meet almost everywhere that we go, especially in a country like the U.S., where we've spent a lot of time as well. There people are really afraid that their children will go into huge debt, not only because of college, but also just because you don't have the same sense of value as you had before for the money... We can get everything instantly, and I think that's one of the dangers of where we are with this convenience - from the convenience of your home you can buy everything in the world practically, and you can get it shipped right to your door.

You don't feel the same kind of pain of letting go of something like you did before when you had physical cash. That is something that we're looking into and we're trying to solve. We get all these experts from around the world contacting us because it's not something that's been done before; we're actually touching into something scientific here as well, and that's what makes it exciting, as well... It's not defined yet how this is supposed to work and how we're going teach children about money when there's no physical cash anymore, but with ERNIT we're trying to solve that.

Paul Kemp: Sadly, Søren, we have to wrap this up soon, but what I was wondering is like, for all those parents who are listening who are eager to get involved, how best can they -- I'm guessing the Danish listeners are pretty alright... But anyone globally can at least sign up to follow your journey and then eventually sign up?

Søren Nielsen: Yes, definitely. You can go to and you can sign up to our newsletter. You can also at the same point be a part of the pre-orders. You can go in and sign up for that, and we'll let you know once we're ready to ship out to the people after the Kickstarter campaign, because we're still shipping to the Kickstarter campaign people as is right now... But we're taking pre-orders in and we're ready to make the next batch, as well. So the journey goes on.

Paul Kemp: It does. And how best can people reach out to yourself, Søren? What's the best way of getting in touch?

Søren Nielsen: I'm pretty active on LinkedIn. Unfortunately, I have a pretty common name in Denmark, so I guess I'm not that easy to find... But if you write Søren Nielsen and you write ERNIT as well, then you should find me. I guess that's one of the easiest ways of getting in touch with me.

Paul Kemp: Yes, I wish I had a unique name... I'm also sharing my name with a guy who writes Star Wars books. I'll put a link in the show notes, so you can just go to and search for episode 530. For all of you who are too busy to write this down, just remember - go to, episode 530, and you'll be able to connect with Søren on LinkedIn.

It's been a wonderful, pleasant journey. I love talking about how to change the world, and certainly starting with children is probably the best way. All the best, Søren, and thanks for coming on the show.

Søren Nielsen: Thank you!