Ep336: Marko Höynälä – Trust Is the Backbone of Any Business

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Guest profile

BIO: Marko Höynälä is the Founder and CEO of Kipuwex Ltd and has invented three game-changing IoT products. Kipuwex is a medical device that wirelessly and continuously measures a person’s biomarkers which can then be accessed by health care professionals from anywhere in the world.

STORY: Marko jumped blindly into an opportunity to partner with a Pakistani company to distribute his medical device. The company ordered a considerable amount of devices but never paid for them.

LEARNING: Do not trust people or businesses blindly. Building trust is an essential part of a business, and when it is broken, the business breaks down too. Be confident to go out of your comfort zone.


“Do your homework on how foreign markets operate. Do not just go there blindly.”

Marko Höynälä


Worst investment ever

Marko had been actively seeking investors and customers of Kipuwex outside of Finland, his home country. Coincidentally, Marko was contacted by a company from Pakistan that was very eager to have this kind of device because it can do more than most of the other devices and is more affordable.

He decided to go to Pakistan and find out what the market had in store for his company, despite the security risk that the country is. Marko spent some time with a company that wanted to do sales and distribution of Kipuwex.

Getting into a foreign partnership

Marko spent a week with the Pakistani company. The company introduced Marko to about five hospitals, and he got to demonstrate Kipuwex to them. The hospitals were eager to buy the device.

Marko and the distribution company got all the agreements and paperwork ready, and they agreed to partner and distribute Kipuwex in Pakistan. The company even ordered some devices. Then Marko returned to Finland and sent the devices to Pakistan.

The company did not pay upfront for the devices; they promised to do so the next day. Marko is yet to receive the money to date. The company gave a shoddy excuse claiming that the problem was with Marko’s bank account. Marko lost a considerable sum of money in the deal.

Lessons learned

Do not trust people blindly

Do not trust people or businesses blindly. Find out as much as you can about them before partnering with them.

Cultures are different around the world

People are not necessarily similar in other countries. Just because people do business in a certain way in your home country does not mean it will be done the same elsewhere.

Be confident to go out of your comfort zone

If you want to be a successful entrepreneur, you must be bold enough to get out of your comfort zone and try new things.

Andrew’s takeaways

Building trust is an essential part of a business

Trust is the glue that keeps a business together. If that trust breaks, the business breaks down too.

There is no shortcut to building trust

Trust is built over time. You get to see how a person or a relationship performs over time and get to know whether they are worth trusting.

Actionable advice

To be successful as an entrepreneur, you must go out of your comfort zone. But, first, do thorough research and seek guidance from those who have been in your area of business before.

No. 1 goal for the next 12 months

Marko’s number one goal for the next 12 months is to focus on the next round of investment that his business needs to deliver products to customers around the world.

Parting words


“Do not replicate my mistakes.”

Marko Höynälä


Read full transcript

Andrew Stotz 00:01
Hello fellow risk takers and welcome to my worst investment ever stories of loss to keep you winning in our community. We know that to winning investing, you must take risk, but to win big, you've got to reduce it. And I bet you're exposed to investment risks right now. To reduce it, go to my worst investment ever.com and download the risk reduction checklist I made specifically for you based on the lessons learned from all my guests, fellow risk takers, this is your worst podcast host Andrew Stotz, and I'm here with featured guests. Marco Perla Nala. narco, are you ready to rock?

Marko Höynälä 00:42
Yes, I am. Yeah, and thank you for the invitation. Your case in the so

Andrew Stotz 00:48
I'm very happy to have you with us. And I'm going to introduce you to the audience. So Marco is founder and CEO of Kip who are who work. And it is a device medical device that provides an innovative solution to tackle global health problems. It's recognized among top medical innovations in the world. Now Marco is a well known innovator from Finland, thanks to his invention of three game changing IoT products. This most valuable product right now is an easy to use lightweight IoT device which wirelessly and continuously measures a person's biomarkers, which can then be accessed by healthcare professionals from anywhere in the world. I imagine that's very important these days. So Marco is also a person who drives initiatives and projects to completion. Always Marco, take a moment. And tell us a little bit about your life.

Marko Höynälä 01:46
Hey, thank you. Yeah, it's been very colorful life. But I just have focus on people websites, that is our main product at the moment. However, I'm a senior in the printer. So I started my career already 1995. I work in very big mega companies for about 15 years, almost 20. And then 2015, I started as an entrepreneur, and I wanted to do something which is innovative, and has a good business opportunity. But I wanted to help people around the world. And therefore I was very eager to find a big problem that I can tackle. And then 2015, I didn't have a proper connection to hospital settings. So I always been very interested to something in healthcare. Then 2017 Finally, I got a chance to do something in medical field, there was an innovation competition, organized by a University Hospital, which is one of the largest hospital in Finland. And they listed the four or five major problems they actually see in their daily life in the hospital. And one of them was the pain management of the tide. And that actually raised my interest that, okay, there is no solution available on the market, it can actually detect and determine the pain of the child. And I've been slowly starting to think whether I can do something about it, would it be possible to make a device, it can automatically detect the pain of the child. And then I participated in this competition with the idea of people works. And then basically, it was a surprise that I won that competition, that this was basically a starting point for people. And it was a basic summer 2017 When that happened, and then since that, I have been focusing on people like Syria, which hopefully will give a good at toolset toolbox. For those who are suffering from the chronic pain. And in addition to those people who don't have access to appropriate health care, especially people in developing countries, so they are something like 3.7 billion people still who do not have access to sufficient health care services. So this is what we want to tackle with people.

Andrew Stotz 04:33
I'm curious, what is it? I mean, when we think about pain, you know, we think I can feel pain, I know I have pain, but what are the markers that that your pain that you have a higher level of pain? Is it something related to blood pressure? Is it something related to a series of factors are?

Marko Höynälä 04:52
Very, very good question. Obviously, there's many indicators of pain itself is very different. are difficult to quantify. But of course, like adults, they can actually give a score from zero to 10. But I have a pain, six or seven. But what about babies, for instance, having they are not able to express themselves. So how to really find out whether babies are in pain. And I think most of the people, audience and those that that maybe will start crying and possibly having pain, but it's not the only reason why babies crying, they can actually cry several different reasons. But then they say, it's a combination of physiological behavior of factors, as well as behavioral factors that need to be taken into account. So what they do in the hospital hospital, they actually look at, for instance, blood pressure, they look at, they look, temperature, and then they actually observe the crying part of how baby's crying, or the movement of the baby. And all these different parameters, they have valued, sort of, let's say that it's 789 parameters, they calculate that some of the parameters equals to 17 points, and 17 points equal to seven in paid. So it's really time taking process, you need to actually observe so many measurements from so many different devices or monitoring devices. And in addition that, you need to monitor the behavior of factors from the baby. So it's really time taking an expensive procedure. And it's also very subjective. So we wanted to actually, obviously take as many parameters into account as possible, and also analyze the behavior of factors automatically and continuously. So then it was quite challenging to first identify what parameters or biomarkers we want to indicate in the device. So in total, we have 11. And with the help of these 11, biomarkers or measurements, we can convert these measurements into real reliable and pain data with the help of AI.

Andrew Stotz 07:13
And when you say good, how we do it. It's amazing when you say I'm very fascinated when you say reliable, pain data. How reliable is it? Yeah,

Marko Höynälä 07:26
so at the moment, let beside that abuse, it's very challenging to make a very tiny device where we actually integrate all these biomarkers. So that was a solid itself that can be actually integrate all these biomarkers into tiny device. And, okay, now, we have been running the company three and a half years, and we have many stacks that indicate all these biomarkers in title device. And then we are now in the process of running through the clinical trials, where we can see how reliably we actually can measure the pain. But based on the initial calculations and development, and clinical trial work, we are confident that we can do it that much more accurate than any of the existing methods.

Andrew Stotz 08:16
And I'm looking at your website, and I look at the device and it kind of, to me, it looks like something between the size of a mouse, maybe half the size of a mouse and the size of a watch, you know of a big watch. How would you describe the size of this device?

Marko Höynälä 08:35
It is a small. Let's say it's a smaller than a matte box? Maybe half of it?

Okay. Well,

Marko Höynälä 08:50
yes, and it's very lightweight. So you don't basically feel it pretty much at all, when you wear it on the chest. normally see it has been designed such a way that it's usable. Also for babies. It's not only for adults.

Andrew Stotz 09:05
You know, one last thing about it that's kind of interesting is you know, I I suffered from addiction when I was young, and got addicted to drugs. And I managed to get off that and you know, I've been clean for a long time. But when I look back at America, and what's happened with oxy cotton and all of the drugs that are out there, ultimately those drugs are for pain. But you do have a lot of people that are getting those drugs, and in fact may not be in pain, they just may be in emotional pain, but they may not actually be in physical pain. And though your device is geared towards you know young people or kids and maybe people that can't vocalize it. It's also kind of interesting to be able to I imagine a good doctor who has ethics may really not want to give this kind of really heavy dangerous drugs to someone who's truly not experience Seeing a level of pain that they're expressing, they may be saying, I've got an extremely high level of pain, but it actually it may be much more mild than they think about it. That's just what came into my mind. And what do you think about that?

Marko Höynälä 10:14
Yeah, very good point that you raised. It's actually a fact that the US, there's a lot of, let's say, discussion about the opioid crisis. And these, as a matter of fact, more people are dying for opioids than in car crashes in us. So it's a big problem, what you actually described. And also, now, let's say, health society is looking for alternative ways to treat the pain that is not only kind of always giving the painkiller, but also alternative ways. And in addition to this a couple weeks device, we have also developed a separate application. For those people who are suffering from chronic pain. It's a self assessment tool, where you can actually record all the pain events, and share everything relevant to pain experiences with your doctors and nurses. So this is a separate application, which we have also developed, because of chronic pain is a global problem, half of the entire population is suffering from the chronic pain.

Andrew Stotz 11:22
And I'm sure many of our listeners are right now, because they're sitting in a chair, they're, you know, they're sitting in a desk, you know, all day long, and he definitely can cause back pain. I know that,

Marko Höynälä 11:32
yeah, I need to cost in the US only around 600 billion every year. It's a big cost associated the pain is still there regarding the babies, and, you know, being able to really understand the pain of the child. other aspect is also when baby is in pain, that you know, when giving the sum. In this case, I probably painkiller seeing that it really works. So with our devices, you can continuously measure that, does it really help when given a killer. And typically now, doctors and nurses are so damn busy. But the pain assessment is done only a couple of times per day. So it's not continuously monitoring whether painkillers are working.

Andrew Stotz 12:20
It also I guess, could hopefully mean minimum doses, rather than a doctor saying, Well, I don't know really what this pain is. So I'm going to pretty heavily medic, Medicaid, this, but there may be overmedicating just to be safe. Whereas with this type of accuracy, it just means that the baby may have to take less medicine to get the relief that they need.

Marko Höynälä 12:44
Yes, fasten on. And what I didn't mention yet is that, you know, it's extremely important to be able to treat the baby in timely manner when the baby is in pain, because the consequences are very fatal. It can cause lifelong trauma, disorder in development, meaning mental problems, or the pain may become chronic. So therefore, it's really important that the pain for the child is a 3d that timely manner.

Andrew Stotz 13:15
Well, I'd say that you've lived up to your goal of wanting to do something good for the world. So congratulations on that.

And now,

Andrew Stotz 13:26
speaking of pain, now it's time to share your worst investment ever. And since no one ever goes into their worst investment thinking it will be. Tell us a bit about the circumstances leading up to it. And then tell us your story.

Marko Höynälä 13:40
Oh my god. Yes. Yeah, as I mentioned that I'm a serial entrepreneur, and what is a really proper money startup, especially when you live in North, almost the middle of nowhere. The key thing is that funding having money to run your business and finding investors, investors and customers in Finland is not easy. And if you find the investors, Melville explicitly when we talk about medical devices, the development of medical devices very expensive. So you need to be able to find a let's say, investors that are willing to give a little bit more than pocket money. So then you can really do medical device What do you suppose to do? So, therefore, the only thing how you can really survive and do something is that you need to go abroad, you need to meet people find investors find customers, the customers and investors are not coming to you. So I've been very active and seeking investors and customers outside of Finland, I am not focusing not at all And so, when we studied the development projects, you know, first talking that it will be a pain assessment device, but then along The way we realize that, okay, now we have integrated these 11 biomarkers into it, that, okay, maybe it's not any longer a pain assessment device, it's actually a patient monitoring device. Because the current have basically two more measurements than most of the patient monitoring devices, these big boxes with wire, and it's really expensive. So then, accidentally, we were contacted from Pakistan, that they are very eager to have this kind of device, simply because we do more than most of the devices on our servers only affordable. And obviously, this is a minimum viable product that we can go quicker into the market that we don't necessarily need to include the yet the pain path that we can launch the product, first without the pain test, including the biomarkers. So I obviously was very eager to know more about the market in Pakistan. And then I decided that I will go there myself and experience that is there really a market and meeting people and possible investors and customers. And we did a lot of preparation work, you know, getting prepared that the able to demonstrate everything for the hospitals. And then there was a one organization who wanted to become our partner doing saves and distributers distribution on our behalf in Pakistan. So wanted to spend some time with that company. And when I had, you know, coming to Pakistan, you've always, because is that? What about safety? Is it the to risk to go there. But I'm really a person who is willing to take risk. I'm not hesitant to do that. So I made the decision that let's go and experience how to market in Pakistan. And we flew to Pakistan. And then immediately on the aisle at the airport, I started to realize that well, people are watching, and started to see people with the guns almost everywhere. And I was like, Whoa, why was this a really wise decision to come here. So putting my risk in danger by going in there. Hopefully, this returns something good that risking my life and doing all the preparation. And then meeting that first a possible partner, we spent many days going through our, our product, and going through our cremains and chasing agreements and getting everything prepared. And they introduced us four or five different hospitals, where we visited. And we demonstrated that people were chosen, and they were very eager that they would like to purchase immediately. And I was yes, this was really great to come here. And they actually placed kind of conditional orders that as soon as we have finalized the product, they will take an order. I was Alright, this is awesome. There's a good business opportunity in Pakistan. But then when we spent more time almost one week with the possible partner, we got all the paperwork done everything ready. And they said they want to purchase some amount of devices or good amount of devices, which we agreed to sell them and we deal with them. And they said they will do the payment immediately. And you know, when you have spent one week with that company there, we build a relationship and we start trusting each other. And even though we got the warning that you always should actually try to get the upfront payment in those kind of places. But the money you have spent one week with them you have a really nice to have a relationship. So I trust it we actually kind of left become out of devices there. And what of other stuff kind of accessories etc. And they promised to do the payment the next day. And I haven't got the payment still today. So we was big amount of money almost entire, let's say stock of our devices hoping that Okay, now we can demonstrate we have a first customer we have a study to get the tax and for the company. We have studied get the revenue, but we never could get the money. We never got the money. So that was and what did they say? Basically they said that it's not it's a problem. Getting our back that we should click on our bank. And of course we contact our bank that wire money has not arrived. And they said no, no, they have nothing to do. It's actually the property in the Pakistan. And then from Pakistan, they try to send some documents that they have done the transfer, but it never happened. Actually. So in a way, you were cheated. And betrayed.

Andrew Stotz 20:28
Hmm. And what do you think they did with the devices?

Marko Höynälä 20:33
Yeah, so there's two possibilities that they may have actually solved them themselves, or they have opened and started to look at what is inside and trying to copy. We have done either of these two. We never managed to get the money. When was that trip? Roughly? It was said before the COVID. And 19. It was a one year ago, one year, okay, in January 2020,

Andrew Stotz 21:04
back when we can travel? So let me ask you, Can you summarize the lessons that you learned from this experience?

Marko Höynälä 21:12
Yeah, so um, I think the two things we got to learn from this. One is that, obviously, you do need to be confident to go out of your comfort zone, explicitly, not, we took a big risk, putting our own life in danger, according to Pakistan. You know, it's not very safe country, to be honest. So this was something that they wanted to experience and really got indication that there is a market, there is a need, by meeting those five hospitals are two of them already placed orders that the market is there. But then we trusted the kind of local partner there that we can actually start delivering through that partner, and building the relationship. And that was a basic, the weak part of this equation that the partner betrayed us. So now, probably, I'm not going to do the same that trusting a local partner, such as talking to, let's say, one week with them. So I rather would like to use more reliable partner, well known partners, global distributors.

Andrew Stotz 22:24
So maybe I'll share a couple of things that I take away from the story. After listening to many stories of loss, I've reduced the mistakes down to six common mistakes. And Mistake number four is called misplaced trust. And it's a very common one. And I think that one of the things that I always tell young people, for instance, in business is that when we go to business school, we learn about law, we learn about management, we learn about accounting, we learn about marketing, but we don't really learn about trust. And trust is really the glue that keeps business together. And you don't think about it, but you know, you've got accounts receivable, you've got accounts payable, you've got employees that are working, and they're trusting that you're going to pay them at the end of this month. And trust is everywhere in business. And if that trust breaks down, business breaks down. And so I think it's a great, you know, the big takeaway from me of your story is to remind us all that building trust is an important part of business. And it's not to say that we don't trust people, it's just that in the beginning, it may be that we deal in cash until we build a trusting relationship. You know, and that type of thing, you know, and we have a much tougher requirement until there's some history. And I think the second thing I would say about trust is that there's no shortcut to trust, that it must come over time, because you've got to see how that person performs over time or that relationship performance over time. Those are the things that I take away anything you would add to that.


Marko Höynälä 24:06
I'm from Finland, and Finland is always seen as maybe one of the most trustful country. People. They are very open and honest. And this is how I've been basically growing up that I trust what people are saying. And maybe this was I also kind of mistake from our side that I was to, say, blue I person believing that. You know, I have a bigger relationship than trust after one week, as that would be the case in Finland. So in Finland in this area where I'm living actually verbal agreements, whereby our contracts are still applicable. So you don't need to even have a written agreement. If you have made a verb claiming that is still applicable in the court itself. So the lessons learned that, well, people are not necessarily necessarily similar in other countries.

Andrew Stotz 25:15
And I'm going to ask you the next question. But before I ask you that question, you know, I, I think that from my experience living in Asia, now 30 years, it's very common for, let's say, as a Westerner, to go to a country, and they take care of you very well. And they're very nice. And they introduce you to people. And it's really hard to be able to see through, if somebody is doing that in a sneaky way, or tricky way, or whether they're doing that with sincerity. So this is what makes the next question really hard, because I want to think about, let's just take a young man or woman from Finland or other countries where they have a pretty, you know, legal structure or legal relationships that are very clear, and they want to expand they need to expand to other countries. So I'm going to ask you this question based upon what you have learned from this story. And what you continue to learn what action would you recommend our listeners take to avoid suffering the same fate?


Marko Höynälä 26:22
obviously, it is. In order to be successful, as an entrepreneur, you need to tell us the current status view and go out of your comfort zone. But don't be, too, let's say, open minded, you need to actually follow some, some guidelines that has been which which you have caught probably from your advisors, and elsewhere for using the experience that how other people's have done that. So I should have probably done a little bit more homework that how other companies have managed to, let's say, enter the Pakistan market, and not just going there blindly. So probably consulting some other companies that didn't, what is the best possible way to tackle that market? And not just that believing my own instinct?

Andrew Stotz 27:24
That's good advice. You know, try to find someone that's gone before I think about one story, you know, in relation to my coffee business, where my best friend Dale runs that company for 25 years. And in the beginning, it was a bit of a mess, you know, accounting was a mess. And there was there's so many things that you couldn't just, you couldn't keep the business, working, operating super efficiently, because you were trying to grow. But we got a great accountant. And she's been really great. She's been with us for years. But I somebody, we were out at an event talking about starting up companies. And somebody said, you know, what advice would you give? And he said, the first thing I would do if I started a company today is I would hire an accountant to sit right next to me, and help me to manage all the flow of cash and all that, but also to have, I'm thinking about, like, in your case, to have the policy, so that when they say, Oh, yeah, yeah, we want to get this and that, oh, here's the policy from the accounting department. So it's not us saying something, you know, it's just that I have to follow the policy. And that's what Dale had said about the idea of, you know, really using the accountant for that type of purpose.

Marko Höynälä 28:33
Yeah. And what we did there basically, after that, obviously, what is very important also for startup companies that they have very strong advisor report. And since this experience, we have actually improved or enhanced the advisor report. So before that, the more kind of miracle advisors, not the necessary so much business advisors. And that is what we have now covered also that we have a real business advisors in our advisory board.

Andrew Stotz 29:07
Well, today, you are being a business advisor to all the listeners out there. So I appreciate that last question, what's your number one goal for the next 12 months.

Marko Höynälä 29:16
Now we are focusing our next round of investment that we need to stick her so that we can now go to market and delivering products to our customers around the world. So start making products and that is the way we need some money.

Andrew Stotz 29:32
Exciting. Well, for the listeners out there. You want to contribute some cash to this very novel, opportunity. Just go to the show notes and click on the link and you can get straight to Marco alright listeners that you haven't another story of loss to keep you winning reduce your risk in your life by going to my worst investment ever.com and download the risk reduction checklist as we conclude Marco I want to thank you again for coming on the show. And on behalf of a Stotz Academy, I hereby award you alumni status for turning your worst investment ever into your best teaching moment. Do you have any parting words for the audience?

Marko Höynälä 30:16
I very grateful for this opportunity. So hopefully audience got some hints and tips from this. So don't replicate my mistakes.

Andrew Stotz 30:27
Let's replicate your success. Fantastic. Well, that's a wrap on another great story to help us create, grow and protect our well fellow risk takers. This is your worst podcast host Andrew Stotz saying I'll see you on the upside.


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About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

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