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Bain Capital is a product of the Great Deformation. It has garnered fabulous winnings through leveraged speculation in financial markets that have been perverted and deformed by decades of money printing and Wall Street coddling by the Fed. So Bain’s billions of profits were not rewards for capitalist creation; they were mainly windfalls collected from gambling in markets that were rigged to rise. Nevertheless, Mitt Romney claims that his essential qualification to be president is grounded in his 15 years as head of Bain Capital, from 1984 through early 1999. According to the campaign’s narrative, it was then that he became immersed in the toils of business enterprise, learning along the way the true secrets of how to grow the economy and create jobs. The fact that Bain’s returns reputedly averaged more than 50 percent annually during this period is purportedly proof of the case—real-world validation that Romney not only was a striking business success but also has been uniquely trained and seasoned for the task of restarting the nation’s sputtering engines of capitalism. Except Mitt Romney was not a businessman; he was a master financial speculator who bought, sold, flipped, and stripped businesses. He did not build enterprises the old-fashioned way—out of inspiration, perspiration, and a long slog in the free market fostering a new product, service, or process of production. Instead, he spent his 15 years raising debt in prodigious amounts on Wall Street so that Bain could purchase the pots and pans and castoffs of corporate America, leverage them to the hilt, gussy them up as reborn “roll-ups,” and then deliver them back to Wall Street for resale—the faster the better. Keep up with this story and more by subscribing now That is the modus operandi of the leveraged-buyout business, and in an honest free-market economy, there wouldn’t be much scope for it because it creates little of economic value. But we have a rigged system—a regime of crony capitalism—where the tax code heavily favors debt and capital gains, and the central bank purposefully enables rampant speculation by propping up the price of financial assets and battering down the cost of leveraged finance. So the vast outpouring of LBOs in recent decades has been the consequence of bad policy, not the product of capitalist enterprise. I know this from 17 years of experience doing leveraged buyouts at one of the pioneering private-equity houses, Blackstone, and then my own firm. I know the pitfalls of private equity. The whole business was about maximizing debt, extracting cash, cutting head counts, skimping on capital spending, outsourcing production, and dressing up the deal for the earliest, highest-profit exit possible. Occasionally, we did invest in genuine growth companies, but without cheap debt and deep tax subsidies, most deals would not make economic sense. ‘The Great Deformation: How Crony Capitalism Corrupts Free Markets and Democracy’ by David A. Stockman. 400 pp. PublicAffairs. $29.99. In truth, LBOs are capitalism’s natural undertakers—vulture investors who feed on failing businesses. Due to bad policy, however, they have now become monsters of the financial midway that strip-mine cash from healthy businesses and recycle it mostly to the top 1 percent. The waxing and waning of the artificially swollen LBO business has been perfectly correlated with the bubbles and busts emanating from the Fed—so timing is the heart of the business. In that respect, Romney’s tenure says it all: it was almost exactly coterminous with the first great Greenspan bubble, which crested at the turn of the century and ended in the thundering stock-market crash of 2000-02. The credentials that Romney proffers as evidence of his business acumen, in fact, mainly show that he hung around the basket during the greatest bull market in recorded history. Needless to say, having a trader’s facility for knowing when to hold ’em and when to fold ’em has virtually nothing to do with rectifying the massive fiscal hemorrhage and debt-burdened private economy that are the real issues before the American electorate. Indeed, the next president’s overriding task is restoring national solvency—an undertaking that will involve immense societywide pain, sacrifice, and denial and that will therefore require “fairness” as a defining principle. And that’s why heralding Romney’s record at Bain is so completely perverse. The record is actually all about the utter unfairness of windfall riches obtained under our anti-free market regime of bubble finance. RIP VAN ROMNEY When Romney opened the doors to Bain Capital in 1984, the S&P 500 stood at 160. By the time he answered the call to duty in Salt Lake City in early 1999, it had gone parabolic and reached 1270. This meant that had a modern Rip Van Winkle bought the S&P 500 index and held it through the 15 years in question, the annual return (with dividends) would have been a spectacular 17 percent. Bain did considerably better, of course, but the reason wasn’t business acumen. The secret was leverage, luck, inside baseball, and the peculiar asymmetrical dynamics of the leveraged gambling carried on by private-equity shops. LBO funds are invested as equity at the bottom of a company’s capital structure, which means that the lenders who provide 80 to 90 percent of the capital have no recourse to the private-equity sponsor if deals go bust. Accordingly, LBO funds can lose 1X (one times) their money on failed deals, but make 10X or even 50X on the occasional “home run.” During a period of rising markets, expanding valuation multiples, and abundant credit, the opportunity to “average up” the home runs with the 1X losses is considerable; it can generate a spectacular portfolio outcome. In a nutshell, that’s the story of Bain Capital during Mitt Romney’s tenure. The Wall Street Journal examined 77 significant deals completed during that period based on fundraising documents from Bain, and the results are a perfect illustration of bull-market asymmetry. Overall, Bain generated an impressive $2.5 billion in investor gains on $1.1 billion in investments. But 10 of Bain’s deals accounted for 75 percent of the investor profits. Accordingly, Bain’s returns on the overwhelming bulk of the deals—67 out of 77—were actually lower than what a passive S&P 500 indexer would have earned even without the risk of leverage or paying all the private-equity fees. Investor profits amounted to a prosaic 0.7X the original investment on these deals and, based on its average five-year holding period, the annual return would have computed to about 12 percent—well below the 17 percent average return on the S&P in this period. By contrast, the 10 home runs generated profits of $1.8 billion on investments of only $250 million, yielding a spectacular return of 7X investment. Yet it is this handful of home runs that both make the Romney investment legend and also seal the indictment: they show that Bain Capital was a vehicle for leveraged speculation that was gifted immeasurably by the Greenspan bubble. It was a fortunate place where leverage got lucky, not a higher form of capitalist endeavor or training school for presidential aspirants. So in October 1995, Bain again rolled the dice on a “transformative” acquisition. It spent $300 million acquiring Williamhouse, assuming all its heavy debt. The purchase price at 18X operating free cash flow was on the far edge of risky, but once again the putative “synergies” proved compelling to Bain’s bankers at the Bankers Trust Company. They refinanced all of the huge Williamhouse debts and provided an additional loan of $245 million. As it happened, Bain only needed $150 million to buy Williamhouse’s stock and pay the deal fees. So it sent its bankers a case of champagne and helped itself to a $60 million dividend in compensation for prospective “synergies” from a day-old merger. By year-end 1995, Ampad had added envelopes and accordion files to its yellow-pad portfolio, but in the process of its frenetic acquisitions, Bain had trashed the company’s balance sheet. Compared to $45 million of debt at year-end 1994, Ampad by June 2006 had 10X as much debt to service—$460 million! This $57 million result included a lot of chickens that had not yet hatched. For example, $8.5 million of higher operating income was to be from the Niagara Envelope acquisition that had not actually finalized as of the IPO prospectus. Likewise, a savings of $4.5 million was cited from closing Williamhouse’s New York City headquarters, even though rent and severance costs several times greater were buried in purchase accounting and would be paid for years to come. Yet by July 1996, the Greenspan stock-market bubble had a good head of steam. This meant that Ampad had no trouble selling nearly $250 million of stock based on a prospectus riddled with pro forma adjustments to the point of incomprehensibility, and a growth story that strained credulity. Bain Capital was able to sell to credulous IPO punters another $50 million of its stock, bringing its return to over $100 million and the fabled 20-bagger. Meanwhile, the hedge-fund speculators pumped the company’s stock to a peak of $26 per share by late summer of 1996, making all the more evident that the Ampad deal was really about speculative mania on Wall Street, not a revival of “Old Yeller” from the bits and pieces of a dying industry. The company’s combined debt and equity was then being valued at $1.1 billion—or a fantastic 35X the $30 million of operating free cash flow (EBITDA less capital expenditure) that Ampad actually posted during 1997. However, within weeks of the IPO and a profits warning, the fast money smelled the rat and followed Bain in scampering off the listing ship. Margins were being squeezed by the superstores faster than the promised synergies could be realized. By early 1999, the stock was delisted and when the company was finally liquidated in bankruptcy shortly thereafter, secured lenders recovered about $100 million and other creditors got zero—that is, the company was worth about 10 percent of its peak valuation. Once again, the moral of the story is about the ill effects of bad public policy, not just that smarter speculators like Bain bagged the slower-witted. To be sure, private-equity sponsors usually don’t make huge profits on busted deals. I lost a bundle when my auto-supplier investment went bankrupt, and was prosecuted for fraud to boot. But the government eventually dropped the charges entirely because in the end it was a case of way too much leverage and bad timing in the midst of an auto-industry collapse that took down GM, Chrysler, and nearly every major supplier too. The lesson is that LBOs are just another legal (and risky) way for speculators to make money, but they are dangerous because when they fail, they leave needless economic disruption and job losses in their wake. That’s why LBOs would be rare in an honest free market—it’s only cheap debt, interest deductions, and ludicrously low capital-gains taxes that artifically fuel them. The larger point is that Romney’s personal experience in the nation’s financial casinos is no mark against his character or competence. I’ve made money and lost it and know what it is like to be judged. But that experience doesn’t translate into answers on the great public issues before the nation, either. The Romney campaign’s feckless narrative that private equity generates real economic efficiency and societal wealth is dead wrong. A $165 MILLION SCORE ON EXPERIAN In September 1996, Bain Capital and some partners bought Experian, the consumer-credit-reporting division of TRW Inc., for $1.1 billion. But Bain ponied up only $88 million in equity along with a similar amount from partners; all the rest of the funding came from junk bonds and bank loans. Seven weeks later, they sold it to a British conglomerate for $1.7 billion, producing a $600 million profit for all the investors on their slim layer of equity capital and after not even enduring the inconvenience of unpacking their briefcases. Quite obviously Bain generated zero value before it flipped the property. So the fact that it scalped a sudden and spectacular $165 million windfall has nothing to do with investment skill or even trading prowess. Instead, the Experian Corp.’s $600 million valuation gain in just 50 days was an inside job. That explains how a division put on the auction block by one of the nation’s most prominent dealmakers, CEO Joseph Gorman, could have been so badly mispriced in the initial sale to Bain Capital and its partners—that is, how they got it for just 65 percent of what the property fetched only months later. In fact, the original auction had been run by Bear Stearns—and it became evident in March 2008 that Bear Stearns had never been in the client-service business; it had been in the brass-knuckled trading business, where it used its balance sheet to underwrite and trade immensely profitable “risk assets.” Not surprisingly, the private-equity houses were the premier source of profits for its trading and capital-markets desks—so its “investment bankers” needed little encouragement about where to steer corporate-divestiture deals. In that endeavor, they got plenty of help from the inside management of spun-off divisions, which were usually marketed as a “key asset” of the business and eager to participate in the prospective LBO. Thus, Experian’s CEO, D. Van Skilling, and his lieutenants reaped millions from this Wall Street-orchestrated windfall before they had even been issued new business cards. Oblivious to the irony, however, Skilling defended Bain’s instant $165 million profit by insisting to Business Insider “there was never a hint of financial chicanery at all.” He had that upside down. The deal was pure chicanery, but not because the private-equity investors were underhanded. It was because they were artificially enabled by the central banking and taxing branches of the state—the true source of this kind of rent-a-company speculation. w Crony Capitalism Corrupts Free Markets and Democracy by David Stockman. Copyright © 2012 by David Stockman. Adapted by permission of Publicaffairs, a member of the Perseus Books Group. Stockman’s book will be published in March 2013. Tags:IoT gateway, LTE Cat 1 router, Embedded LTE Cat 1 router, Industrial LTE Cat 1 router |
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The signs are not good for Volkswagen (VW). The world's largest automaker is at the centre of one of the biggest crises in the history of the automotive industry. Some 11 million vehicles are implicated in the defeat device scandal, whereby VW cheated energy testers with a clever piece of kit engineered to provide cleaner emissions during testing. The VW group's CEO, Martin Winterkorn has resigned in a bid to draw a line under the crisis and allow the group to have a "fresh start." However, there is a massive question mark over whether the company has the firepower to withstand the financial and legal challenges coming its way. The U.S. Environmental Protection Agency (EPA) has already said that VW could face penalties of up to $18 billion for deceiving regulators and violating the Clean Air Act. VW, which made a net profit of 10.85 billion euros ($12.3 billion) in 2014, has set aside 6.5 billion euros ($7.3 billion) to deal with the scandal's fallout. Keep up with this story and more by subscribing now However, EPA fines are likely to just be the beginning of the company's financial challenges. U.K. lawyers are being inundated with calls from concerned drivers, The Guardian reported. Jacqueline Young, the head of group litigation at multinational law firm Slater and Gordon, said though the scale of the scandal's impact on U.K. cars is not yet clear, a class-action lawsuit against VW "has the potential to be one of the largest group action lawsuits this country has seen." The noxious fumes of the scandal are gradually spreading across the globe. Germany's transport minister Alexander Dobrindt said on Wednesday that VW has admitted to using defeat devices in Europe, raising the possibility of further legal actions across the continent. Several other European countries—including France, Italy and Switzerland—have said they will probe VW vehicles in their countries, while South Korea has also said it will test up to 5,000 VW diesel cars. Baback Yazdani, a former executive at Jaguar Land Rover and dean of Nottingham Business School, believes that the costs for VW will add up to "tens of billions, if not twenties." He compares the financial implications of the scandal for VW to BP's troubles following the Gulf of Mexico oil spill. In July, BP agreed to pay $18.7 billion to settle the remaining claims after years of lawsuits following the 2010 disaster, taking the total cost to the company to some $54 billion. He adds that the reputational damage to VW is difficult to calculate, but the scandal could end up losing them customers to competitors. "I don't have a calculator to add it all up but quite a bit of this is actually unknown and it will only be known after it happens," says Yazdani. "If you're ready to buy a car and you hesitate for one brand, there's another 10 waiting to sell their product to you." Besides all this, there is also the cost of rebuilding trust. VW delivered more than 10 million vehicles to customers in 2014, constituting a 12.9 percent share of the entire passenger car market. Many of these are likely to be outraged by the scale of the deception carried out by VW. According to a YouGov poll, VW is now the lowest-ranked car brand in the U.K. in terms of Buzz scores (whether people have heard anything positive or negative about the brand). The German automaker fell 31 places in a week, while also losing 10 points among U.S. customers. The history of one of VW's main competitors may provide some succor. In March 2014, Japanese automakers Toyota reached a record $1.32 billion settlement with the U.S. Justice Department after it concealed safety issues linked to at least five deaths. Yet by March this year, Toyota was predicted to generate a greater profit than Japan's other seven carmakers combined, according to Bloomberg. For Yazdani, who says he is sure the company will survive the crisis, the key for VW is to come clean and address the problem immediately. "In the short term it will have an impact—people will hesitate to buy, the secondhand value will be impacted...It's impossible for there not to be an impact," he says. "BP saw theirs out, there was a big case in Toyota a few years back and they saw it out...They have the means to see it out and obviously it depends on how fast they act." A statement from VW's headquarters in Wolfsburg said the company is "working at full speed to clarify irregularities" on the issue of defeat devices, but assured customers that new VW vehicles available in the European Union "comply with legal requirements and environmental standards." Tags: LTE router, 3g router , M2M router, wireless router, wireless m2m router, WiFi M2M Router |
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PHNOM PENH (Reuters) - Scores of garment workers have fallen sick this week at factories in Cambodia including two that produce clothing for sportswear giants Puma SE and Adidas, police and workers said on Thursday. A total of 118 employees passed out at work on Thursday at the Shen Zhou and Daqian Textile factories in Phnom Penh, police said, another blow for an industry fraught with disputes but critical to Cambodia's fledgling economy. Puma and Adidas said they were investigating the faintings at the two factories and would respond soon. Keep up with this story and more by subscribing now Garment manufacturing earns Cambodia more than $5 billion a year in revenue and employs some 600,000 people, many of them breadwinners for impoverished families in the countryside. "We don't know why but one worker was sick and others just saw them and began to collapse," district police chief Khem Saran told Reuters. He said 53 employees had fallen sick at another factory because of the strong smell of paint. Labour rights NGO Community Legal Education Center said more than 200 workers had fainted this week. Mass faintings are all too familiar in Cambodia, which has become an important manufacturing center for many high street fashion brands. Garment makers have often complained of poor ventilation, strong chemicals and use of potent glue for footwear, although official investigations in recent years have been largely inconclusive. There were more than 1,000 faintings reported in 2011 alone in factories that are mostly owned by Chinese, Taiwanese and South Koreans. Most workers earn less than $100 per month and many volunteer for overtime to boost their income. "It was hot and I began to vomit, I had diarrhea and others had the same problems," said Nguon Sarith, 30, who was hooked up to an intravenous drip at a hospital in the capital. She said she didn't know the cause. The problems do not stop at faintings. The industry has been plagued by unrest in recent months, with long-running disputes over pay mushrooming into nationwide strikes and anti-government protests that have been violently suppressed by security forces. Some 18 unions plan to hold a week-long strike on April 17 to demand a minimum wage rise to $160 monthly from $100. The last strike was put down hard by authorities, who on January 3 used live ammunition to disperse crowds, killing five workers. Tags:M2M router, wireless router, wireless m2m router, WiFi M2M Router, Industrial Wireless M2M Router, M2M IoT router |
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Curriculum Vitae An American with German grandparents who moved to France at 21, Julie Meyer went on to be named one of the top 50 alumni of the European business school INSEAD. Her entrepreneurial instincts and early interest in the web led her to instrumental roles in the nascent stages of businesses like Skype and lastminute.com. In 2000, she set up Ariadne Capital and, in 2011, was honoured with an MBE for Services to Entrepreneurship. She lives in London and is a practising Christian in the Lutheran tradition. Friday evening Keep up with this story and more by subscribing now During the week, my life is one big whoosh, so by the time I get to Friday evening, I'm craving time on my own. I'll treat myself to a quiet salad, a glass of wine, and read a magazine at one of my favorite restaurants, like Maroush, in Earl's Court – my neighbourhood. Or I might sort out the house and make lists with some music in the background; maybe the Italian singer Paolo Conte – it's the happiest music in the world – or anything from Fleetwood Mac to Elton John. I'm really showing my age now. Saturday morning I naturally wake up between seven and eight on the weekends. I go down to this gorgeous little café called the Kensington Quarter. I'm a regular there, and I'll sit at the bar and have an omelette, or Eggs Benedict, and drink too much coffee. It's sort of become my kitchen. I get a facial and a manicure every Saturday morning. It might sound excessive, but it makes me feel good. I also do all the normal chores. Saturday afternoon I like to eat well on the weekend. I see it as the two days I can control what I eat, because during the week it's a cocktail here, a big lunch there, and so forth. So I'll have two days of just eating salad, fresh shrimp and good vegetables. I'm from California – so I've made every kind of salad you can imagine. My personal trainer also comes around to my flat, and I'll do an hour on both Saturday and Sunday. I know I sound like Gwyneth Paltrow, but the weekend is my time, and I try to be good to my body. I'm not 22 any more. Sometimes if I've had to travel somewhere on Friday for work I'll just stay there for the weekend. I lived in Paris during my twenties, so I feel I grew up there, and I also love Milan and Rome. I found myself in Athens one Friday night, and I thought, you know what? I'm flying to Santorini. It was lovely. Sunday morning I go to church at Holy Trinity Brompton every Sunday morning, because it puts me in a good mood. Then I usually start thinking about the week ahead. I get a huge kick out of my work. I wouldn't say I live to work, but the core concept of my work is designing your life, and designing society, and everything I do is about being an actor in the world, and not just accepting what the world gives you. To me, it's not work, it's just fun. Sunday evening I always joke that I start to feel like a human being again by Sunday evening, because on every level – physical, spiritual, organisational – I've got myself regulated back to Julie. But everyone in my firm knows they can reach me on a Sunday evening. Inevitably, people call. Tags: Industrial router,LTE router, 3g router , M2M router, wireless router, wireless m2m router |
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February in northern Finland: everything has been frozen for months. Standing chest deep in the Baltic Sea, in a hole carved out of the ice, I take a deep breath and face the audience. I’m in Oulu, a city in the Nordic nation that is home to air guitar championships, nuclear metal music and former mobile phone giant Nokia. Just over 100 miles from the Arctic Circle, I had come to the self-proclaimed capital of northern Scandinavia to visit the headquarters of the once mighty phone maker, but I’d had the fortune—or perhaps misfortune—to sit next to a cheery faced woman at dinner the night before called Mia Kemppaala. Mia, whose business card describes her as a “weaver of opportunities”, told me she was the founder of something called Polar Bear Pitching; a competition where startups from around the world get the opportunity to pitch their ideas to a panel of investors for a chance of winning 10,000 euro ($10,573) and a trip to Silicon Valley. The only catch is they have to do it from an ice hole. Tech & Science Emails and Alerts - Get the best of Newsweek Tech & Science delivered to your inbox Ice covering the Baltic Sea in Oulu in February is more than one foot thick. Henri Luoma Photography The idea for Polar Bear Pitching came in 2013, after several technology startups emerged from the wreckage of Nokia. The Finnish firm’s failure to keep up with the pace of mobile internet developments and the subsequent sale of its mobile division to Microsoft left Oulu with thousands of highly trained, highly educated residents without a job, but with plenty of ideas to create their own companies. Polar Bear Pitching, Mia thought, would provide a platform for them. Read more: Is Nokia planning a comeback? “It’s all about sisu ,” she tells me. Sisu is a Finnish word with no direct translation in English; it describes a uniquely Finnish characteristic and I have a hard time properly understanding its meaning. According to a report in the New York Times from 1940, sisu is a “compound of bravado and bravery, of ferocity and tenacity, of the ability to keep fighting after most people would have quit, and to fight with the will to win.” The Urban Dictionary describes it as a “word used to typify the Finnish spirit.” Mia tells me it is this trait that helped Oulu through this difficult time: “To understand sisu is to understand Finland. It is to understand what happened to Oulu after Nokia, and it is to understand the spirit of Polar Bear Pitching.” I’m still not quite sure I understand. “Speaking of which,” she segues neatly, “one of the startups has had to pull out because they’re too sick to go in the ice hole tomorrow. Such a shame. We’re trying to find someone who can fill in for them. How do you fancy a lesson in sisu ?” There is no time limit for startups at the Polar Bear Pitching competition, but most last less than two minutes in the icy water. Henri Luoma Photography The next evening, I am in a changing room, preparing to pitch for a company I had only learned about a few hours before. As I strip from my winter clothes into a pair of sport shorts, I ask someone who has just returned from the ice hole how it was. He’s a large man, with tattoos on each arm, a shaved head, and a belly as firm and round as a medicine ball. Standing there in just a pair of wet boxers, his body glowing red, he looks me up and down. “It’s nothing,” he says in a flat Finnish tone. “It is a cat’s piss.” Peering out from behind a toilet stall, another man asks: “You pissed in the hole?” Eventually the man who had misheard revealed that he had tried to urinate while in the water in an effort to keep warm and increase the time he had to pitch. He’d planned to relieve himself of the two beers he had quickly sunk beforehand as he delivered his pitch from the ice hole. “But I couldn’t do it man, not when I saw all those people watching me.” It was not the only tactic I learned of that contestants contrived to stave off the cold. The head of one startup, who asked not to be named after he learned I was also a journalist, had brought with him a swimming cap filled with petroleum jelly, which he used to smear on his most sensitive areas. “When I did a test in cold water the other day, it just hurt so much,” he told me. As my turn approaches, my main fear is forgetting the name of the startup I’m representing. I etch it firmly onto the back of my hand with a biro, and keep my written pitch in my hand in case my mind goes completely blank. The average temperature in Oulu in Finland is -10C and I start to feel the cold while waiting outside for my turn in just shorts, socks and a dressing gown. When it’s finally time to step down into the ice hole, the first sensation is shock. The feeling of cold doesn’t begin to really sink beneath the skin until I’m several sentences into the pitch. “So what is it?” I ask rhetorically. My mind freezes for a second and I go off script. “A social media ads platform,” I say. This isn’t quite true but this isn’t the time to be wasting time correcting myself. Anthony Cuthbertson was a last minute replacement for a startup that was too sick to pitch at the Polar Bear Pitching competition in Oulu, Finland, on February 15, 2017. Henri Luoma Photography I make it to just over a minute and a half, running out of things to say before the cold becomes unbearable. Braver contenders lasted close to four minutes but many of the startups tell me the record since Polar Bear Pitching is over 7 minutes. I don’t start shivering until after I leave the water and am walking to the hot tub a short distance from the ice hole. Lowering my legs into the hot water is the first time the experience becomes painful and for the first 30 seconds my lower limbs prickle with pins and needles, while my upper body shudders. I’m the last of 18 startups to pitch and I learn the results while sat in the hot tub. This year’s winning team, an electric vehicle charging startup from Finland called Virta, went into the ice hole as a pair in order to use each other’s backs as makeshift PowerPoint slides. Judged as much by their performance as their idea, the duo were doing their best to deliver a pitch that would rival last year’s champion, who backflipped into the ice hole. (Backflips were banned for 2017 for health and safety reasons, as well as putting your head underwater.) Those Arctic acrobatics earned FlowMotion, a Norwegian smartphone stabilizer startup, the €10,000 prize but most importantly exposure. The company went on to raise $1.3m in a Kickstarter campaign in late 2016. For Virta, the concerns of emulating FlowMotion’s success once out of the ice hole are still to come. But for now, the pair are too busy enjoying the after party, wondering how to cash the over-sized cheque they received. As I’m leaving, back to the warmth of my hotel, I pass the perma-cheery Mia. “You see now, what is sisu?” “I think so,” I lie. “Thank you.” |