Jon Olafsson has been a music executive, a media mogul, and a retiree. Today he is a beverage executive. He told Inc.com about Iceland's entrepreneurial ecosystem, and how he made it big there.
At age 14, Jon Olafsson started working his first gig as a band promoter in his native Iceland. Two years later, he was managing bands professionally. Soon he emerged as the country's most influential music executive, owning 85 percent music recorded in Iceland. Over time, Olafsson expanded business—and then in 1999 merged his companies into Northern Lights Communications, a multimedia conglomerate of film, radio, television, print, and mobile. His media-mogul image earned him the tongue-in-cheek title: "the Icelandic Richard Branson." But in 2003, Olafsson sold everything, in an attempt to retire. It wasn't long before he dipped his toe in an entirely different business: the beverage industry. This isn't an entertainment-industry branding play—he's not selling energy drinks or bottles of bubbly. Instead, Olafsson founded Icelandic Water Holdings with his son. He told John McDermott of Inc.com why he did it.
You had a successful media company—and then you let it go to get into the bottled water business, which is such a crowded space. Why?
The reality is, it all just sort of happened. I sold everything in 2003 and I had moved already to the U.K. As you know, Iceland is a very small country. Land-wise, it's the same size as New York. So, it's not a big playground, is it?
Right—so how does geography affect entrepreneurship in Iceland?
You have to be able to do a lot of things to survive. Most people have more than one job. My mother was born in a dirt house. Iceland has come a long since the second World War. We took a giant step into the future. For me personally, after selling Northern Lights Communications I wanted to retire, only to realize that I'm a work junkie. At the same time, my son was working on a product where a Saudi said, "I want to get into the water business. Can you help me find something in Iceland?" He looked around and found this company. He won the bid, but the Saudi never paid. So we were kind of stuck with it. That was not our intention.
And it just took off from there?
A few months later, we finally looked at it and realized that the world market was huge. Fifty percent of the total market value came from the States, but only about 20 percent of the water consumption was done in the States. It was a high margin market. We looked at what Fiji did. Its fame came from Hollywood. We said, "Let's open up in L.A. and see if we can make this work."
This was a business you were just kind of stuck with, though?
Yeah. Let's put it this way: If I had known then what I know today, I never would've done this.
Why do you say that?
We thought we could do this for between $8 and $12 million. We're about $120 million into it.
So what separates Icelandic Glacial from other bottled water products?
The first thing is the size of the source. The source is a huge underground river. It's snow and rainwater that goes through lava and takes between 400 and 600 years to reach the river. The amount that goes to the ocean everyday is twice the daily world consumption of bottled water. the pH level of the water is very unique. It's 8.4, which means it's alkaline water. We drink a lot things—coffee, alcohol—that are acidic and have a low pH level. Your body is always working to maintain a 7.23 level, and alkaline water will help that balance. It's very healthy for you. Also, we were the first bottled water to be certified carbon neutral.
But you're shipping internationally. How do you offset the logistics?
Our company calculates how much carbon we use and we invest that amount in renewable energy sources. Also, Iceland is an island. Everything that we consume is imported. A lot of ships are coming in from the States and Europe and going back empty. So we use what would be empty hauls to take our water.
I saw you described your water as the only water that tastes wet.
No, I didn't say that. A customer said that and it was printed as a headline. Anyway, we're currently working in cooperation with Christian Dior. Have you heard anything about that?
No. Please tell.
Dior analyzed every bottle of water they could get their hands on and they came to us and said ours was the best water in the world. They're producing a product line called Diorsnow exclusively with our water. They're spending about 6 million euros on advertisements that all say "with Icelandic Glacial water."
Icelandic Glacial was the first water on the ground in Haiti following the 2010 earthquake. Why was that so important to you?
We donated more than $1 million worth of water. And that's what I see myself doing in the future. When this company has been established in some way that I can put it in someone else's hands, I will then be on the charity side of it.
What kind of advice do you have for young, aspiring entrepreneurs?
I think the biggest disappointments young people have are when they go somewhere and somebody tells them "no." Never go in without knowing how you're going to get the "yes." Plan and prepare yourself. That's the most important thing. The other thing I always tell people is about opportunity. If you're an entrepreneur, you always see the opportunities. Let's say opportunity was like a ball coming this way. If you don't grab it and run with it, someone else will.
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