A big business, a small country

A big business, a small country

First published in Portfolio magazine.

No business prospers on its first day. Some go beyond prospering, and develop into urban movements. How do you go from zero followers, money or sales to having it all - fans’ and bloggers’ love, queues and huge profits? We wondered too, in fact we asked around. Below is a story about a big business based in a small country. There’s so much to learn.

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The beginning

Kex hostel, Reykjavík’s most successful social establishment, has grown into a huge business branching out and opening new restaurants, pizzerias and travel companies all throughout a small nordic island half covered in ice. “Nobody really knew what they were doing, in fact, none of the founders ever stayed at a hostel”, Guðmundur Magnússon (or Gummi), manager of Kex, Iceland’s urban culture epicentre, told us over a cup of hot cocoa and original Kex cookies. The hostel is based in an old biscuit factory and so its industrial spirit became a great foundation to build something a lot different to a traditional hostel - no cheap beer, no greasy surfaces and no plastic menus. In other words, a place the founders could invite friends to and “hang out themselves”.

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The theft and creativity inspired by the financial crisis

Unconventional ways were used to first visit the ghost building. The founders originally intended to use the biscuit factory as a movie set, but after falling in love with its extensive use of space, they ended up stealing the whole building from Oskar Thor Axelsson, the film director. They also took his movie mood boards along with Halfdan Pedersen, the set designer, who then became the creator of Kex’ eclectic interior.

Even at the point when they already owned the building, Kex’ founders didn’t know what the factory would come to be: “something that would combine great beer, great music, great food, bearded men, a gastro pub and Bob Dylan.” At heart, they were good friends and wanted to do something together. The concept of a hostel came later. “Thank god for the recession”, the bank would have never given away such a building. In fact, the collapse of the Icelandic banks and economy in late 2008 was a blessing in disguise, at least for the Kex project. There were plans to demolish the building that has been there since 1930. Yet, not only the bank manager happily signed the documents, he also suggested exploring its pipe system - quite easily this could be a lot more than a nightclub, and so Kex was salvaged from losing its soul.

Michigan, Detroit, Ohio - the interior designer and his wife, a co-creator of Kex’ interior, drove around God forgotten American suburbs looking for lost treasures. As they were driving around the States, massive shipping containers got filled up with furniture, books, maps, toys, Amish church benches, Bauhaus lamps, cabinets from tobacco stores; things that came from WWII Nazi bunkers, and things they picked up in flea markets, all of it was shipped to Reykjavík’s port, minutes away from the transitioning building.

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Like differences between cultures, the differences often lie in the details

A lot of Kex’ success is preserved in its design details. A humble sign greets you at the entrance and an even more humble staircase leads you to the second floor. A scene from the movie, legacy of Pedersen’s original set design, sits still by the entrance, with is essence representing a piece of art rather than a piece of furniture.  

Kex’ success was engineered from the very beginning - fonts carefully chosen, every bit of old building recycled or borrowed - hardwood floor came from from an old and famous sports centre in Reykjavík. Hard work breeds hard success: Kex staff only takes orders with pencils - they want to think of the guest’s experience all the way to the smallest detail, even the ones they’ll never see.

The ‘why’

Before formulating Kex’ design, its philosophy was formed. Below find a mission statement conceived by its founders in the early beginnings. It’s a great example of the thought process and thinking behind a brand:

“Kex is a social place where locals and travellers get together. It’s the opposite of a boring and impersonal 5 star hotel and yet not a crummy and icky hostel. It’s both cheap and expensive. Guests would not want to stay there because of the size of their wallet, but because it spoke to them. Whether you wanted to stay in a room with 15 other people, you might or might not know, or you wanted a single/double hotel room with a personal bathroom and shower you would find that at KEX. It also sets to bring life and culture into an old industrial part of Reykjavík’s city center, a part of town that had been known for too long as the ‘Shadow neighbourhood’ of Reykjavík.”

Later on, Ólafur Ágústsson, head chef of Sæmundur í Sparifötunum, a modern Icelandic bistro based at Kex, tells us that the respect guest and staff feel for the establishment comes from it being humble and honest. The two qualities many businesses tend to lack rather than demonstrate.


While traveling I do trades - accommodation, a car or something as simple as a meal to photograph, write about and feature in the magazine. I only approach brands I love and whose products or services I’d use anyway. In Iceland my travel partner and I traded with Kex, that’s how we got this incredible interview and also a pop up office in Reykjavík. Next on my road map - Bali, Thailand and Vietnam. Reach out if you’d like to trade or want to collaborate on a project.

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