Candace Johnson: “It is essential to align anything you do with your core values and make sure that you bring positive change.”
Candace Johnson is the Co-Founder of SES, the world’s pre-eminent satellite group, and the architect of SES Global. She is EBAN President Emeritus and belongs to the EBAN Space committee as well. She is the founding President of Europe Online Investments S.A., the world’s first internet-based online service and satellite broadband network, and the Founder of Loral Cyberstar-Teleport Europe, the first independent private trans-border satellite communications network in Europe. She is also a founding investor and Member of the Board of Kacific, the high-throughput Satellite Internet System for the Pacific. She is also the founding President of the VATM, the Association of Private Telecom Operators in Germany, and of the Global Telecom Women’s Network (GTWN).
Candace Johnson is a serial space entrepreneur and angel investor. At the end of January, she did a masterclass for selected ESA BIC Estonia and S2B Launchpad incubatees from Tartu Science Park, one of our co-organizers. She has dedicated her life to bringing about positive change with everything she does. She told us what inspires her, what she looks for in a startup, and reveals her all-time favorite business book.
This interview was conducted by Kadri Arrak, the Marketing and Communications Manager of Tartu Science Park.
In my life, I have always been very big on personal responsibility. My goal has always been to bring about positive change. No matter what I do. If I'm starting a company, investing in one, if I have decided to be on the board of a company – I don't see this as a career, I see it as my life.
I'm the entrepreneur, the founder, and the mother of SES Astra. I have stayed with it for 37 years. When my husband was the ambassador for Luxembourg to the United States and we married in 1981, his country was having several severe economic crises. I came up with the idea for SES for his country to help them start a new pillar of economic activity. I did not feel it was appropriate to receive any money for this "investment”. I invested my money and time, but I never ever received any economic return. You might say my life is rather strange – I made many people and companies be millionaires and billionaires. I helped make the country wealthy, as SES is the world's largest satellite system and the largest taxpayer in Luxembourg.
Still, for me, SES is one of the most positive things I have ever done in my life. Investment does not have to be currency-related. BUT, it does have to bring about positive change – in the life of the company, in your life, or other people's lives. That's how I see investments.
A "happy day" only lasts one day, because as an entrepreneur, as an investor, you cannot rest on your laurels. The "happy day" is also fleeting. You can enjoy it only briefly. At the end of a New York Times article, Deborah Rhodes writes, and I quote – "Enduring satisfaction is most often a byproduct of participating in worthwhile activities that do not have happiness as their primary goal. Ultimate fulfillment comes from a sense of remaining true to core ideals and principles, and of using life for something of value that outlasts it." This is absolutely my life.
I invest, I do, I act and I take this personal responsibility on me. I understand that the “personal responsibility” is to the stakeholders, the shareholders, the team, the idea, and the planet. When I'm asked to do something different from what I believe in or that hasn't come from myself, I say, I have to examine my conscience. Now this drives people crazy. They say: "Oh my goodness, Candace has to examine her conscience again." But I do it because it's something foreign that is coming from outside. And I have to be sure that it aligns with my core values.
So I didn't leave to go to the university to learn about space because I had it in my living room, at the family dining table. Nor did I need to go to the university to learn about doing business because when we were five years old, we were taught how to run our lemonade stand. We had to buy the ingredients. We had to pick the best location. We had to do a marketing campaign, and we had to make money. At five years old, I was taught what is my overhead! And what is my profit going to be? I grew up with this, and quite frankly, many American children also grew up this way.
My father also became an entrepreneur when he was 57 and branched out on his own, starting several very successful companies. He was also a venture capitalist and an angel investor like me. I think most of us, entrepreneurs turned investors, think we are better entrepreneurs than investors.
When I was 29 and 30 years old, I started SES Astra. Before that, I had been the executive producer of the United States' largest classical music radio station. Having this musical and the telecoms and satellite background, I thought it was ridiculous that we were doing all of these amazing programs just for the Washington D.C. and New York area in the United States. I thought to myself, "We should go on satellite and spread it across the United States". And that is exactly what we did in 1976, way before Ted Turner's so-called superstation, “CNN”!
From the Radio Broadcast Station, I then went to a radio and television syndication company. At the time, they were sending the tapes in metal boxes via courier to all of the stations to then be broadcasted. I said this is also ridiculous. It would be best if you also put all of this onto a satellite, which the syndication company then did. I was the Director of Marketing, and they had never had any corporate sales. They only had syndication sales so that each station would pay them. Still, they didn't have anybody who was actually spending advertising money or being corporate sponsors. So, they said they would give me 10% of the commission. In my first year, I got seven corporate sponsors and advertisers for these nationwide syndicated programs. I then actually sold the company to U.S. News & World Report when I was 29 years old. That 10% commission was a lot! I sold the company for $3 million, so at age 29, I had $300,000.
So, when I told the prime minister of Luxembourg that he should do a satellite system, he agreed but said he didn't have anybody to do it. I said I would do it for him. He did not have any money to fund the project, and I also did not think it would be correct for me to take any money from it because my husband was the Ambassador of Luxembourg – the country that would eventually give the frequencies to the company. So, I used my money from my first “exit” to fund the next three years of this system. That is kind of the story of my first investment.
Entrepreneurs must understand that the moment they take third-party money – other people's money – those people are investing in them to get a return. It is paramount to zero in on the fact: "Does the entrepreneur understand that you are investing in her or him because you are expecting a return on your investment?".
I try to ascertain in any investment I make – whether as a business angel, the chair of a venture capital fund, the president of a fund, etc. – does the entrepreneur understand that the money that we are investing is going to give a return? If they do not understand that, then we do not invest, and I do not invest.
Entrepreneurs know this, and they say ask me if I can put them in touch with this person or that person. I will not put the entrepreneur in touch with anybody, and I will not call and ask anybody to do anything until the entrepreneur has shown me that they have delivered. Very, very few entrepreneurs get to that point. That is why I also do masterclasses and mentoring because I try to help as many entrepreneurs as possible to get to that point.
The biggest mistake is that none of them come to me and say: "This is what I am going to do to create value. And I can do it with this product, service, technology. It's going to cost me this amount of money. And in this time, I will make this amount of money." You would be amazed at how many entrepreneurs do not say that. And yet, that has to be the first opening selling point. The second selling point for me and other third-party entrepreneurs, investors is that we don't have money and time to spend on little things. So I always tell all space entrepreneurs, ‘think big’. Thirdly do something right away, go out to the market.
Can you work with somebody? Can you get them to give you what I call a transformational deal? A transformational deal is what I call the unfair advantage. The unfair advantage is ten times better, smaller, quicker, faster, cheaper, whatever with a factor of 10. The reason being is that by the time you get to market, that factor of 10 might already be two, but at least you start and try to find the client or the government or whatever that needs you. When I began Astra, the Luxembourg government was looking for a new pillar. And I said you could do a satellite system, a private satellite system. Estonia is a small country, but they could do the same.
The pioneering client usually needs something, is missing something. So they're willing to take a risk. I always emphasize that you have to take out all of the risks when you go to a third-party investor. People tell me: "Oh, but Candace, you're in the satellite business, you take risks every day." Since I know that space is so risky, I must make sure that I have taken out all of the risks I can. Because once you're out there, it is risky. But if you have done everything you can to make it not risky, you may get lucky.
When we started Oceania Women's Network Satellite (OWNSAT), we launched our Kacific satellite and totally bootstrapped it. We started with a group of angels. A really funny story is that the International Telecommunication Union (ITU) asked me to come and present OWNSAT in Geneva. They shared with me that they were going to give three companies a contract each for four megahertz of broadband internet. So, I said: "Fine! We will apply to get one of these contracts." And you know what? We got it!
Inmarsat, Intelsat, OWNSAT – the three of us got a contract. Since we were bootstrapping everything, we got capacity off of another satellite. When all the SIDS (Small Island Developing States) came to Samoa I sent the CEO down there. OWNSAT was the only one there. Inmarsat and Intelsat couldn't have cared less. We had all of the presidents of all of the small islands in the Pacific around one table. And we just sat there with our order book, signing them up. With that, we then got more capacities than we could serve them. I love bootstrapping, I think it is the way to go.
I think that the two biggest trends are: a) sensors, meaning the Internet of Things, putting a sensor on everything, and b) the best way to gather that data is, of course, via satellites. After you have big data, you will be able to analyze it with AI. That creates real value, real information, real actionable items.
When I started SES Astra, I was called “the most dangerous woman in Europe” by a cartel, including Rupert Murdoch, Leo Kirch from Germany, and Silvio Berlusconi from Italy. They tried to take over the SES Astra satellite system, but I said no. I was the only one on the board who said no. I went to the Financial Times, and I told them a cartel was trying to take over the Astra satellite.
For one year, we ran a standstill, a takeover attempt of the Astra satellite. I was sued, and finally, the chancellor of Germany, Kohl, called the prime minister of Luxembourg to ask about me. The Prime Minister said: "She has always defended Luxembourg and Astra. We stand behind her." That's why Astra was able to continue to be independent, that's why these core values are so important.
This interview was conducted by Kadri Arrak, the Marketing and Communications Manager of Tartu Science Park.
Which three characteristics a successful investor must possess?
First of all, I'm an entrepreneur. I have started companies, and I have built companies. I'm probably an a-typical investor as you are supposed to exit from the company. My slogan is – “Never accept ‘no’ for an answer, never give up and never go away even when others want you to”. I have stayed with all of the companies I have started. I've had partial exits, but I have always stayed with the companies, who feel kind of like your babies.In my life, I have always been very big on personal responsibility. My goal has always been to bring about positive change. No matter what I do. If I'm starting a company, investing in one, if I have decided to be on the board of a company – I don't see this as a career, I see it as my life.
The idea is to focus on bringing about a positive change to the world, and if you see an opportunity to bring it, you must do that.My entrepreneurial work and my investments are not so much about money as they are about having “happy days” and bringing about positive change. These “happy days”, when you basically have brought about a revolution, can happen multiple times in the life of a company. For SES Astra, the world's pre-eminent satellite group, it was when the Berlin Wall fell in 1990, and we were able to bring freedom of choice immediately to all of the eastern European countries. The second was when we became the first-ever satellite to be launched by a Russian launch vehicle. This was in 1995, and it created real international peace in space.
I'm the entrepreneur, the founder, and the mother of SES Astra. I have stayed with it for 37 years. When my husband was the ambassador for Luxembourg to the United States and we married in 1981, his country was having several severe economic crises. I came up with the idea for SES for his country to help them start a new pillar of economic activity. I did not feel it was appropriate to receive any money for this "investment”. I invested my money and time, but I never ever received any economic return. You might say my life is rather strange – I made many people and companies be millionaires and billionaires. I helped make the country wealthy, as SES is the world's largest satellite system and the largest taxpayer in Luxembourg.
Still, for me, SES is one of the most positive things I have ever done in my life. Investment does not have to be currency-related. BUT, it does have to bring about positive change – in the life of the company, in your life, or other people's lives. That's how I see investments.
What motivates you to invest your time and money?
A lot of people always ask me what drives me. What is my ambition? I say I actually don't have any ambitions, but I do have this sense of personal responsibility. My criteria to invest or to undertake anything is about bringing positive change for the user, for the planet, for the stakeholders, etc. When I, or the company that I have helped create or invested in, can do that, then that constitutes a happy day for me.A "happy day" only lasts one day, because as an entrepreneur, as an investor, you cannot rest on your laurels. The "happy day" is also fleeting. You can enjoy it only briefly. At the end of a New York Times article, Deborah Rhodes writes, and I quote – "Enduring satisfaction is most often a byproduct of participating in worthwhile activities that do not have happiness as their primary goal. Ultimate fulfillment comes from a sense of remaining true to core ideals and principles, and of using life for something of value that outlasts it." This is absolutely my life.
I invest, I do, I act and I take this personal responsibility on me. I understand that the “personal responsibility” is to the stakeholders, the shareholders, the team, the idea, and the planet. When I'm asked to do something different from what I believe in or that hasn't come from myself, I say, I have to examine my conscience. Now this drives people crazy. They say: "Oh my goodness, Candace has to examine her conscience again." But I do it because it's something foreign that is coming from outside. And I have to be sure that it aligns with my core values.
Whenever I decide to either do a new entrepreneurial project or to invest in a new company, I apply what I call the three-prong approach, which is – head, heart, and gut.If all three of those tell me that I should do it, then I must do it. If one of them is missing, I don't do it. It is essential to align anything you do with your core values and make sure that you bring positive change. Now, you could say, Candace, we're supposed to be talking about investing, but this how and why I invest.
How did you become an investor? Tell me about your first investment.
I grew up in a family where the father was one of the people who did the first satellites in the United States for the White House for President Kennedy and President Johnson. He then also did the first private domestic satellite for Westar, the Western Union. I grew up in this family where we had people like Wernher von Braun and Vinton Cerf visiting us. And my mother and father would always let the children come before dinner and sit on the steps. We heard these people talking about what they were doing – working on the Apollo mission, going to the moon, going into space, doing the first satellites, etc.So I didn't leave to go to the university to learn about space because I had it in my living room, at the family dining table. Nor did I need to go to the university to learn about doing business because when we were five years old, we were taught how to run our lemonade stand. We had to buy the ingredients. We had to pick the best location. We had to do a marketing campaign, and we had to make money. At five years old, I was taught what is my overhead! And what is my profit going to be? I grew up with this, and quite frankly, many American children also grew up this way.
My father also became an entrepreneur when he was 57 and branched out on his own, starting several very successful companies. He was also a venture capitalist and an angel investor like me. I think most of us, entrepreneurs turned investors, think we are better entrepreneurs than investors.
When I was 29 and 30 years old, I started SES Astra. Before that, I had been the executive producer of the United States' largest classical music radio station. Having this musical and the telecoms and satellite background, I thought it was ridiculous that we were doing all of these amazing programs just for the Washington D.C. and New York area in the United States. I thought to myself, "We should go on satellite and spread it across the United States". And that is exactly what we did in 1976, way before Ted Turner's so-called superstation, “CNN”!
From the Radio Broadcast Station, I then went to a radio and television syndication company. At the time, they were sending the tapes in metal boxes via courier to all of the stations to then be broadcasted. I said this is also ridiculous. It would be best if you also put all of this onto a satellite, which the syndication company then did. I was the Director of Marketing, and they had never had any corporate sales. They only had syndication sales so that each station would pay them. Still, they didn't have anybody who was actually spending advertising money or being corporate sponsors. So, they said they would give me 10% of the commission. In my first year, I got seven corporate sponsors and advertisers for these nationwide syndicated programs. I then actually sold the company to U.S. News & World Report when I was 29 years old. That 10% commission was a lot! I sold the company for $3 million, so at age 29, I had $300,000.
So, when I told the prime minister of Luxembourg that he should do a satellite system, he agreed but said he didn't have anybody to do it. I said I would do it for him. He did not have any money to fund the project, and I also did not think it would be correct for me to take any money from it because my husband was the Ambassador of Luxembourg – the country that would eventually give the frequencies to the company. So, I used my money from my first “exit” to fund the next three years of this system. That is kind of the story of my first investment.
How do you decide whether to invest in a company?
A successful investor tries to make the company successful. As a business angel, we say: "It's expertise, experience, network, and, oh, yes money!" As a venture capitalist, you are investing other people's money. So you have a responsibility to those people to make a return on their investment. And this is a huge difference between investing your money, time, experience, network versus investing other people's money. But it is the same thing for entrepreneurs.Entrepreneurs must understand that the moment they take third-party money – other people's money – those people are investing in them to get a return. It is paramount to zero in on the fact: "Does the entrepreneur understand that you are investing in her or him because you are expecting a return on your investment?".
I try to ascertain in any investment I make – whether as a business angel, the chair of a venture capital fund, the president of a fund, etc. – does the entrepreneur understand that the money that we are investing is going to give a return? If they do not understand that, then we do not invest, and I do not invest.
Where is your main focus as an investor at the moment (sectors, geographical, etc.)?
I invest all over the world because space is everywhere. My best investments have been in space. It is the sector that I know the best and that I can influence the best. If I believe in that company, in that entrepreneur, I can call anybody I know in the world and say: "Look, I think this is a great company. I think you should invest in them, or I think you should give them a contract!" As such, I invest in the Pacific, in Europe, in the United States, etc.Entrepreneurs know this, and they say ask me if I can put them in touch with this person or that person. I will not put the entrepreneur in touch with anybody, and I will not call and ask anybody to do anything until the entrepreneur has shown me that they have delivered. Very, very few entrepreneurs get to that point. That is why I also do masterclasses and mentoring because I try to help as many entrepreneurs as possible to get to that point.
In your opinion, what's the biggest mistake that early-stage startups/entrepreneurs do when they seek investment? How could they prevent that?
Space in Europe and many other parts of the world has been funded so long by grants, research, and development funds instead of focusing on making money. I spend a lot of time helping entrepreneurs understand that they must show me (and a future investor) how their product, service, and technology will make money if they are looking for third-party investment.The biggest mistake is that none of them come to me and say: "This is what I am going to do to create value. And I can do it with this product, service, technology. It's going to cost me this amount of money. And in this time, I will make this amount of money." You would be amazed at how many entrepreneurs do not say that. And yet, that has to be the first opening selling point. The second selling point for me and other third-party entrepreneurs, investors is that we don't have money and time to spend on little things. So I always tell all space entrepreneurs, ‘think big’. Thirdly do something right away, go out to the market.
Can you work with somebody? Can you get them to give you what I call a transformational deal? A transformational deal is what I call the unfair advantage. The unfair advantage is ten times better, smaller, quicker, faster, cheaper, whatever with a factor of 10. The reason being is that by the time you get to market, that factor of 10 might already be two, but at least you start and try to find the client or the government or whatever that needs you. When I began Astra, the Luxembourg government was looking for a new pillar. And I said you could do a satellite system, a private satellite system. Estonia is a small country, but they could do the same.
Is it always a good idea for a startup to take outside investment? Can you be really successful without, e.g. bootstrapping?
Actually, I tell a lot of entrepreneurs not to take third-party investment. Even venture capitalists tell entrepreneurs the best money that you can take is your sales. That's why I talk about transformational deals and pioneering clients, somebody who needs you. Somebody strong enough to say, "I don't care if the technology doesn't work now, of course, it better work damn well in the future, but I will be your pioneering client."The pioneering client usually needs something, is missing something. So they're willing to take a risk. I always emphasize that you have to take out all of the risks when you go to a third-party investor. People tell me: "Oh, but Candace, you're in the satellite business, you take risks every day." Since I know that space is so risky, I must make sure that I have taken out all of the risks I can. Because once you're out there, it is risky. But if you have done everything you can to make it not risky, you may get lucky.
When we started Oceania Women's Network Satellite (OWNSAT), we launched our Kacific satellite and totally bootstrapped it. We started with a group of angels. A really funny story is that the International Telecommunication Union (ITU) asked me to come and present OWNSAT in Geneva. They shared with me that they were going to give three companies a contract each for four megahertz of broadband internet. So, I said: "Fine! We will apply to get one of these contracts." And you know what? We got it!
Inmarsat, Intelsat, OWNSAT – the three of us got a contract. Since we were bootstrapping everything, we got capacity off of another satellite. When all the SIDS (Small Island Developing States) came to Samoa I sent the CEO down there. OWNSAT was the only one there. Inmarsat and Intelsat couldn't have cared less. We had all of the presidents of all of the small islands in the Pacific around one table. And we just sat there with our order book, signing them up. With that, we then got more capacities than we could serve them. I love bootstrapping, I think it is the way to go.
What is the thing the startups must remember when talking to an investor?
Think big! If you're going to do a business plan, do the business plan for yourself so that you can genuinely believe in it, not for the investors. That business plan must tell you who your clients are, how much money you're going to make, make sure you will make money. A lot of times startups forget to show that they're making money. Finally, you must know and believe that you can pull it off!What are some of the most exciting developments in the space sector on your radar at the moment?
I have worked in space for longer than 45 years. I started out using space to bring people universal access to satellite television, satellite telecommunications, satellite mobile, etc. For the last ten years, I have focused on using space to access the universe. So I have gone from universal access to accessing the universe. Whether it is space situational awareness, using the space for our environment, or helping bring people to the moon or Mars.I think that the two biggest trends are: a) sensors, meaning the Internet of Things, putting a sensor on everything, and b) the best way to gather that data is, of course, via satellites. After you have big data, you will be able to analyze it with AI. That creates real value, real information, real actionable items.
Are there any books you'd suggest to someone who wants to get better at investing or business in general?
The best book, which I absolutely love, is Peter Drucker's "The Effective Executive". I still have the copy that my father gave me, with all the important parts that he had marked. It is a classic, and I haven't really found anything better. I stay away from those new vision books because I have my own vision of how the future will be.And I do not like to be colored by other people's visions. I'm pretty sure that after 68 years, I have a pretty good idea of what is and is not.Maybe someday I will write a book, but I still have so much to do, and also quite frankly, some people have to die. If creating new structures, and you're what people would call "challenging the status quo" then you make enemies.
When I started SES Astra, I was called “the most dangerous woman in Europe” by a cartel, including Rupert Murdoch, Leo Kirch from Germany, and Silvio Berlusconi from Italy. They tried to take over the SES Astra satellite system, but I said no. I was the only one on the board who said no. I went to the Financial Times, and I told them a cartel was trying to take over the Astra satellite.
For one year, we ran a standstill, a takeover attempt of the Astra satellite. I was sued, and finally, the chancellor of Germany, Kohl, called the prime minister of Luxembourg to ask about me. The Prime Minister said: "She has always defended Luxembourg and Astra. We stand behind her." That's why Astra was able to continue to be independent, that's why these core values are so important.
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