The impossible equation

November 23, 2022


Ahti Heinla talks about building companies that impact a massive amount of people, how even successful founders struggle and fail at times but also what’s the right approach to build a business case. He also reveals how his company managed to pull off something that a tier-one VC told to be impossible.


Ahti Heinla is the co-founder and CTO of Starship Technologies which is the world’s leading company creating local delivery robots. In 2002, he was part of the founding team of Skype and was the company’s Chief Technical Architect for the first five years. In 2008, Ahti helped to mobilise 3% of the population to clean Estonia’s forests in a day.

LinkedIn | Startship | Bluemoon 

YouTube player

Episode notes

  • when your robotics competition drive kicks in Robotex
  • an expensive hobby becomes a serious venture
  • committing to your startup
  • Skype was one of the biggest European success stories
  • aiming higher than Skype that had 700m users around 2010
  • trying out a lot of startups that have failed
  • the illusion of over-night successes
  • India, and almost moving there to build a startup
  • the other side of the entrepreneurship
  • a working business vs. a story
  • last-mile delivery economics
  • VCs are paying for most of the deliveries now
  • unit economics and back-of-the-envelope calculations
  • universal technologist
  • will this work commercially?
  • last-mile food deliveries
  • bootstrapped (self-funded)
  • why not drones?
  • millions of deliveries done already
  • R&D and commercial operations
  • predictability in engineering and business
  • Starship culture
  • planning for the future but delivering now
  • team interdependencies and stress
  • company values
  • key metrics
  • around the world daily by distance
  • driving without human supervision
  • a bleak moment
  • 250x improvement needed to survive
  • weekly reports on improvement
  • 4m deliveries is just a start
  • robotic deliveries will win
  • founders didn’t want to be the CEO
  • hired six CEOs but few have worked out
  • how to find a good fit CEO
  • resourcefulness
  • leadership qualities
  • career paths not always towards leadership positions
  • COO vs. CEO or a founder CEO
  • fundraising requires a performing company
  • a keyhole perspective
  • it matters how you tell your story in fundraising
  • the value of investor feedback
  • investor expectations with each investment round
  • coding with pen and paper
  • building the first computer game published outside of Estonia
  • Estonia after the Soviet collapse
  • complex needs boring to get somewhere
  • learning and experimentations are hidden from the public
  • ten years over-night success
  • big companies react to revenue threats (exponential growth surprises them)
  • the founding of Skype
  • learning PHP over a weekend
  • Estonian startup scene
  • starting from technology is a terrible idea for a business case
  • 1000x more expensive to call by using a regular call vs. Skype
  • Skype was organised around its internal chats
  • ten first Skype employees failed with their startups after Skype
  • Web3
  • cleaning the world

Episode links

Janus Friis
NASA’s centennial challenges
Allan Martinson
Wolt episode
OnlinePizza episode
Amazon Prime Air
Continuous integration
What a CEO does
Peter principle
Skype by Acquired podcast
Mixergy podcast episode
Jaan Tallinn
Disco Elysium
Niklas Zennström
Ambient Sound Investments
Skype mafia
Martin Villig
Taavet Hinrikus
Let’s Do It
World Cleanup Day
Estonian Fund of Nature
Sun Microsystems

Episode picture credit.

From Twitter to Farcaster and Mastodon

November 13, 2022

I was a late bird to Twitter but still have managed to make some 24k tweets over the years.

If you have been following what happens in the Twitter space it’s not boring.

A lot of people are moving away from Twitter at this point. You can use this as a chance to restart elsewhere or just expand your network to new territories. Fragmentation is evident and you cannot prevent it from happening. You can only adjust your behaviour.

Further ahead, we should not be needing to re-establish our presence over again but have our social graph and content follow us seamlessly. But we are not there yet.

Farcaster and Bluesky

Farcaster is an up-and-coming alternative to Twitter. It’s a web3 solution that tries to combine the best of blockchain and off-chain worlds. It’s a sufficiently decentralised network.

A social network achieves sufficient decentralization if two users can find each other and communicate, even if the rest of the network wants to prevent it. This implies that users can always reach their audience, which can only be true if developers can build many clients on the network. If only one client existed, it could stop users from communicating. Achieving this only requires three decentralized features: the ability to claim a unique username, post messages under that name, and read messages from any valid name.

Varun Srnivasan

Preston Byrne goes into detail about why this matters and what we should expect from a social network in the future. DeSo is a newcomer to the space but it does not have an off-chain element that may lead to difficulties in the future.

Farcaster is still at the beta stage and you need to send a direct message to Dan Romero to get in.

Twitter’s ex-CEO and co-founder Jack initiated a similar initiative, Bluesky, that has a waitlist status at the moment.


Mastodon‘s founder, Eugen Gargron, started the project in 2016 and he has the vision to decentralise social media.

Mastodon vs. Twitter engagement comparison

I signed up for the first time on April 2017 for a Mastodon instance but I learned a lesson about federated instances. You’re a guest on someone else’s server and they can delete your account at any time. This happened to my first account (the whole instance has disappeared) but lucky it does not matter. There’s no single entity that can keep you away from an interconnected network of servers. You can join another installation of the open-source software or even self-host one yourself.

Mastodon is based on ActivityPub protocol that is similar to how email systems talk to each other or even regular national postal networks have agreements to share information with each other to deliver international mail. Federation is a technical term for something that we have used forever in human history.

Mastodon does not have any advertising or nudging in its feed. You get what you subscribe to and decide to see. It’s a strange experience after getting a lot of clutter on other social networks.

It has also a town hall feeling where people engage and talk to each other. This is a very similar experience to other new social networks but expect it to change over time when more people join.

If you want to think migrating away from Twitter doing your content backup might be a good idea. There are also Mastodon tools (Debirdify; Fedifinder) that can scan your current Twitter profile followers, following, lists etc. and save them in a file that you can import to Mastodon. You can also cross-post between Twitter and Mastodon( Crossposter; Moa Bridge). Just keep in mind that each instance has their own rules and some forbid cross-posting.

You can find me and even this website (@Petri) on Mastodon.

Decoded and Selling in a Crisis

November 13, 2022

Common sense does not apply to marketing. People are not rational and how we make decisions is also a black box that results in over 80 % of new products failing.

If you think you’re a seasoned professional and you have a good grasp of what happens in the market think again. Your perception is minuscule and biased to your frame of reference. Something may have worked in the past but you don’t really know why. We cannot test causalities with human action.

All is not lost. There’s a lot of research from neurosciences to economics and behavioural sciences that help to understand our perception and decision-making. Decoded gives tools with case studies that help to make better marketing decisions and build products that speak to their customers.

Selling in a Crisis is a good reminder of the basics. There have always been difficult times and people have survived them. It takes a different mindset, resilience and focus to close sales when everything around you is falling apart and nobody is in the buying mood. Jeb Blount has put together a seller’s guide where you can pick a mantra of the day or just get some pep talk that gets you through the day.

IKEA—Ingvar Kamprad’s startup from 1943

October 25, 2022

Hannu Ryopponen – TALKS WITH PETRI

Hannu Ryopponen talks about working with Ingvar Kamprad, how he was as an entrepreneur and what made IKEA successful. He also reveals what happened when he travelled with Kamprad and met dignitaries.


Hannu Ryöppönen is a private investor and board professional who, since the 1970s, has served as CFO of many international companies in London, New York, Copenhagen, Luxembourg and Stockholm. He worked for over 10 years in Ingvar Kamprad’s inner circle as a group CFO for IKEA.

Ryöppönen has held top executive positions in companies like Royal Ahold, Industri Kapital, Stora Enso, and he has been in non-executive positions on boards of Amer Sports, Samworth Brothers, ICA, Novo Nordisk, Billerud Korsnas and Neste, among others. Apart from his extensive experience in finance and strategy, he has spent well over half of his career in different sectors of the retail industry.


YouTube player

Episode notes

  • working with Ingvar Kamprad
  • trust but verify
  • co-workers
  • extreme memory and observant
  • details and big picture
  • personality
  • decision-making
  • store opening visits
  • frugality
  • IKEA culture
  • informal organisation
  • delegated decision-making
  • non-confrontational feedback
  • success factors
  • Poland as a part of the success
  • “If we can’t afford it then we don’t build it”
  • dependency to lenders
  • cost consciousness
  • bureaucrazy
  • “if we talk about it now we should be able to do it tomorrow”
  • hot dog concept and an instant gratification
  • customer experience insights
  • Kamprad training excursions
  • “retail school”
  • Design and meet the customer expectations
  • customer focus
  • open your wallet early
  • Stockholm store (“Kungens Kurva”)
  • Walmart and Sam Walton
  • common sense way of conducting business
  • what business would Kamprad have started now?

Episode links

The story of IKEA
The testament of a furniture dealer
Democratic Design
Kungens Kurva

Age of Invisible Machines

October 9, 2022

What happens when you allow anyone in your organisation to start automating processes without a need to have coding skills?

Even more magic will appear when you set the bar higher than just making the machines do the manual routine work but to create user experiences and workflows that exceed human capabilities.

Gartner coined the term hyperautomation in 2019, and it’s one of their top strategic trends for this year.

Robb Wilson’s latest book, Age of the Invisible Machines, talks about using conversational AI as the interface tool for anything and everything in the automation ecosystem. It’s the concierge layer that hides all the complexity and intelligence beneath it.

Machines should accommodate to the context and user preferences and should be agnostic to different channel media. If you prefer to use voice that should be as natural way to interact as typing and chatting, as the other means to communicate.

Hyperautomation aims to become self-learning with the help of humans and even make the entire organisation redundant and replaceable by DAOs and other decentralised service layers.

Anyone who has used Siri, Alexa or numerous corporate chatbots is familiar with the task ahead. Predetermined selection trees and FAQ pages converted to chat prompts are not exactly a pleasant or delightful user experience.

Wilson says that deep learning, blockchain and code-free development tools will disrupt all businesses very soon. He compares the amount of change to the invention of the printing press and the industrial revolution.

Some of the incumbents are starting to restructure their companies around user interaction: Salesforce builds its entire company around its acquisition, Slack. Microsoft centres Teams as the core product that the rest will interface with and serve.

Ant Group from China is an operational example of hyperautomation. It has 450 million active users that get their loans approved, credits scored and funds distributed without human intervention. When you structure your company around the better-than-human user experience (Wilson’s term) and have the capabilities to create new micro-services and tasks with flexibility and dynamically it sets your company in a different innovation clock speed. The goal is to test, learn and adapt.

Decentralised micro-services and skills are familiar from the DeFi world where composability with money legos have enabled rapid innovation, creation and ecosystems of services that were not even dreamt of a few years earlier.

Wilson has been kickstarting the user experience driven hyperautomation with his company for years. How open and flexible ecosystem they are able to build remains still to be seen but the trend towards decentralisation and away from proprietary and closed ecosystems is here to stay.

You can fight gravity but cannot beat it

September 25, 2022

Micke Paqvalén – TALKS WITH PETRI

Micke Paqvalén talks about building award winning companies, rough times, and almost dying while working too hard. He also reveals his first startup at early age, and founding of a flying boat company.


Lars-Michaël (Micke) Paqvalén, M.Sc. (Econ.), is a company builder who has lived and worked internationally for over 25 years and exited four major software companies. He is the founder & chairman of TRÄ Group and Buildbite, co-founder of Brandbassador, Learning Intelligence Group (Claned & GraphoGame), Kiosked, Telepo, HansaWorld and an active early-stage investor in many disruptive companies, such as Proof Analytics among others. He is also on the Advisory Board of Nordic Innovation and Nordic Scalers, a pan-Nordic initiative to find and accelerate next-generation unicorns in the Nordics. During his tenure as an entrepreneur, he has been awarded the European ICT Grand Prize, the award for Best Enterprise Software solution at the Mobile World Congress, the growth entrepreneur of the year in both Finland and Sweden, the American and European Business Awards etc. Micke is a proud father of four children.


YouTube player

Episode notes

  • desert walk
  • corporate governance
  • culture and sound values
  • Hotsip
  • Telepo
  • When VCs join your cash-flow positive company
  • losing 50% of your revenues for years to come
  • what happens when you remove the founder CEO
  • how you get diluted and losing the voting power
  • risks with highly scaling up
  • cost-control and efficiency
  • founders look after money differently than VCs
  • The founding of AaltoES
  • Yousician, Wolt
  • Kiosked
  • Contextual tagging, one-click ecommerce
  • Google and Facebook taking over the online advertising marketing
  • debt instruments as a means of startup funding (e.g. EIB)
  • the fastest growing company in Finland
  • take care of your health
  • near-death by working and stress
  • Candela
  • dealership rights for Apple in Finland
  • Hansaworld
  • Wallenbergs and Investor
  • leaving the secure corporate job
  • peer pressure in the startup boom times
  • you can fight gravity but cannot beat it (make your calls quick)
  • it’s really easy to make easy things complicated and really hard to make complex things simple
  • KPIs to focus
  • the cheapest way of financing, and the most expensive
  • old wooden buildings
  • Buildbite
  • Finnish archipelago

Episode links

AI disrupting creative and content industries

September 18, 2022

Who needs stock photos when you can create your own content with a few keywords when needed?

This is the level of disruption we’re experiencing now with DALL-E, Stable Diffusion and other machine learning models. Unlike OpenAI’s DALL-E, has released Stable Diffusion as an open source and it runs on regular computers without the need for heavy GPU units. You can test both with free online accounts.

What happens to artists when everybody has the tools to create new visual content based on extensive machine learning models?

We are already starting to see a flood of visual content since it’s so easy to generate it automatically or by manual iteration. This has created new job titles and demand for specialised skills such as prompt specialists & curators, digital art miners & historians among others.

It did not take long to figure out that you can generate tons of NFTs and jpeg monkeys with these models. But who’s going to buy all that freshly minted visual content? Check yourself to get an idea of what’s out there already.

It’s not just visual content. The same disruption is coming to audio and video content as well.

YouTube player
Audio and video generated by deep learning models

Who should be worried – creatives, artists, everybody or nobody?

There have always been new tools coming to market when the technology has improved. This is not a new phenomenon. Photographs replaced commissioned portraits when cameras and their processes became more affordable. The old ways were not entirely going away but became more specialised and required more creative input to stay relevant.

Digital cameras unlocked the picture taking that was held back by the cost of developing films and the time delay involved but the massive scale-up happened only when mobile phones started to have good enough cameras.

Is the machine learning generated content creative or artistic?

This debate is ongoing and it’s fascinating to follow different points of view. Humans have always imitated, copied, modified, altered, improved and iterated anything and everything they have managed to get their hands on. Hip-Hop Evolution is a good case in point of how sampling became the core of the entire genre of music. Nobody creates anything in a vacuum. We stand on the shoulders of giants as the saying goes.

Machine learning models are giant toolboxes that help in this imitation and variation process. Are most of the outputs bad, tasteless and bulk? Absolutely. The same applies to your social media feed or any other content you’re consuming. We are given more choices. The content generation becomes cheaper in more formats than was available previously. Next in line will be video, audio, AR and VR.

Can machines replace artistic expression? No. Tools are just tools. AI does not understand the context. It can be deceivingly good at presenting different appearances of meaning but they are just hollow facades based on their models. Machines are good at specialised tasks. They cannot do something they are not built to do, unlike humans who can explain and solve novel situations and circumstances.

Art has never been about the tools or media used but the meaning and the context (artists have their own and the audience make their own). That’s the sole territory of humans. We are universal explainers and capable of creativity that no machine can achieve.

New tools enable new artistic expression. This can happen in the coding and machine learning phase or by using the tools. These methods allow more people to become artists where previously you needed countless hours of practice to hone your skills in creating images, music or other media. Now, you can focus more on the context and meaning if you choose to do so (with many others).

Does this change mean disruption for many current jobs? If you have been making stock photos or other content that can be generated with ML models it may be time to shift to new areas where your skills are more valuable such as AR and VR, or you need to step up your game to stick out of the crowd and become artisan creator with higher perceived value.

I have been experimenting with DALLE-E 2 and Stable Diffusion for a while. It’s an area that will provide insights into the next decades and how our world will change rapidly with visible differences.

Here are some examples from this explorative journey for your inspiration and encouragement to start yours.

Business Edge

September 6, 2022

What do the leading companies have that others are missing?

What makes them successful and keeps them at the top?
What sets the market leader apart from the rest of the companies?

Business edge is the winning formula that many are seeking but only a few find.

The lucky ones stumble upon it but for the rest, it takes effort, dedication, experimentation, persistence, patience, and willingness to go an extra mile.

The business edge is not a single item but a combination of factors that together make the model resilient, growth generating and hard to copy.

The business edge is hard to define but easy to tell when you see it because it’s company, industry and context-specific. You can identify parts of it and you can analyse its components. Yet, replicating them will not yield the desired results. You cannot take it out of its context without losing it.

What are the characteristics of a business edge:

  • high customer loyalty
  • customer-friendly, -praised and -endorsed
  • coherent brand experience, purpose, values, and actions
  • high perceived customer value
  • strong organic growth
  • scalable business and revenue models
  • dedicated and committed founders

What is not a business edge in itself:

  • product-market fit
  • go-to-market
  • business strategy
  • competitive advantage
  • organic growth
  • cash flow positive high growth strategy
  • high customer retention
  • brand loyalty
  • purpose-driven culture
  • strong financial position

It has that extra magic others are lacking and it’s often invisible from the prying eyes. Some of it can also be kept secret on purpose and may involve processes and things that are catalysts only to the overall model.

What are examples of companies with a business edge?

  • Apple
  • TSMC
  • Tesla
  • Netflix

What is it that the early-stage investors are looking for (but often not able to put in words)? The business edge. Early-stage companies are diamonds in the rough and they are unfinished, unpolished and work in progress. Most of the components are not in place but the prospecting gems can be identified if you know what you’re seeking.

Some of the leading indicators:

  • the founders are clearly building their business edge (either implicitly or explicitly)
  • strong positive signals from the market, customers and traction
  • focus on the customer experience and perceived value
  • high clock-speed execution, experimentation and product development
  • strong team, sense of culture and mission
  • alignment and coherence in strategy, planning, implementation and results (i.e. say what you do and do what you say)

How can you identify a company without a business edge:

  • Unclear strategy, mission and purpose
  • vaguely defined value proposition, target market and implementation plan
  • complex and confusing product and brand image
  • muddy positioning
  • focus on means instead of value drivers (i.e. input utilisation vs. results)
  • vanity metrics
  • weak or delayed traction
  • product and development focus instead of customer experience and demand
  • a mix of different business and revenue models in the same product or solution
  • lack of long-term goals (i.e. opportunistic approach with impulsive moves and experimentation)
  • weak financial, cash flow and operational plans
  • lack of cohesion in the culture and the team

In short, if you don’t know clearly what you’re doing, why, what’s the purpose and the value you’re building the rest will follow accordingly: confusion in, mixed messages out yielding mediocre results at best.

Clear goals and communication with thought-out planning, experimentation and execution lead to exquisite results given enough persistence and iteration with a spark of luck together with the drive to find your business edge.

Ukrainian startup ecosystem

September 1, 2022

Andrew Zinchuk – TALKS WITH PETRI

Ukrainian investor and entrepreneur Andrew Zinchuk talks about what’s happening in the Ukrainian startup ecosystem, how things have evolved over the years and what’s expected to happen next. He also shares his insights into living and working in Ukraine during the war and where to find the best cocktails in town.


Andrew Zinchuk is a VC & an entrepreneur with extensive experience in all stages of a startup ecosystem. He’s the founder and general partner at ZAS Ventures. Previously, he was the managing director at a pre-team pre-idea startup incubator, and he has advised 100+ startups by acting as an advisor & mentor at Antler, Seedstars & Ukrainian Startup Fund.


YouTube player

Episode notes

  • daily life in Ukraine
  • new vibrant ecosystem in the making
  • startups during the war
  • early-stage funding sources in Ukraine
  • startup war stories and traction in 2022
  • startup scene before ‘22
  • co-working spaces, communities, meetups
  • angel investors, pre-seed, and seed VCs
  • private equity and family offices
  • new startup funding initiatives
  • Ukrainian unicorns
  • crypto and blockchain scene
  • drone and other startups coming out of the war situation
  • Starlink
  • key startup locations
  • how Ukraine has changed in the last decades
  • IT employment market
  • Eastern European tiger
  • eGov and e-Residency in Ukraine
  • corruption and the current situation
  • civil society
  • judicial and tax reform
  • Ukrainian startups’ legal structure
  • safety, quality of life, price level, English language
  • Ukraine in five years

Episode links
Mariupol Unlost Hope (more info; use Google Translate for both)

Summer readings

August 16, 2022

The Psychology of Money by Morgan Housel

Your worldview is based on your personal experiences. This is so narrow and limited window that it’s even scary what comes out of it. Many of the things are out of your control such as when and where you were born, and partly your uprising. Yet, these define together with your learnings and education how you think the world works. All this is reflected in your relationship to money, investing, risk-taking and time perspectives. Housel gives concise examples and insights in an easy-to-read format but simplicity does not mean the lessons are simple or shallow: it is a very sobering read and it’s nice to get reminded of the fundamentals once in a while.

The Pricing model revolution by Danilo Zatta

Pricing is an ever-important part of your business and revenue models. It’s part of your competitive advantage, branding, differentiation and profit margin. Zatta reminds us of the basic concepts such as cost plus, competitor and value pricing but also more novel approaches that he calls the pricing model revolution. For startups, many of the concepts are familiar such as subscription, pay-per-use, freemium, dynamic, AI-based and participative pricing. If you are looking for new ideas and inspiration for your business the book can provide insights and support in your strategy work.

The Private Equity Toolkit by Tamara Sakovska

The private equity world has been rather opaque with its methods, ways of working and processes. Sakovska sheds light on the inner workings of a PE professional from deal sourcing, case analysis, and valuation to deal structuring and execution as well as exiting the deals. The approach in the book is very pragmatic and practical. You can get ideas, compare your methods and gain knowledge from Sakavoska’s experiences and know-how.

User Experience Research by MartyCage and Spencer Murrell

The subtitle of the book cuts to the chase: discover what customers want. It focuses on the first step of the Design Thinking Process: empathising. There’s no point going further if you’re not understanding what drives customers and what they truly value. The rest of the steps are: define, ideate, prototype and test. The book is based on six key principles (relevant, aspirational, holistic, rigorous, actionable and visual) and it also makes it easy to read and be used as a reference guide while you’re doing your user experience research. It is visually pleasing and approachable UX is a testimonial to the message it’s conveying.

Quantum physics

For the last few years, I have been intensively studying physics again as a layman and here’re a few of the books that I have found to be inspirational:

– David Deutsch: The Fabric of Reality and The Beginning of Infinity
– Chiara Marletto: The Science of Can and Can’t
– Douglas Hofstadter: I am a strange loop and Gödel, Escher, Bach: an Eternal Golden Braid
– Max Tegmark: Our Mathematical Universe: My Quest for the Ultimate Nature of Reality
– Michael Lockwood: The Labyrinth of Time
– Carlo Rovelli: Reality is not what it seems, Seven Brief Lessons on Physics and Helgoland
– Peter Atkins: Four laws that drive the universe

Podcast appearances

August 11, 2022

I have been guesting a few podcasts recently. You may have seen them in my social feeds but as they are easy to miss here they are. The first two are in English and the rest in Finnish.

YouTube player

Both of my podcasts (Talks with Petri and Purpose ‘n Clarity) have +40 episodes out, and you can find most of them on Youtube as well.

How to reboot the society – The Network State way

August 7, 2022
The Network State

Established societies will slow down over time, and the ruling elites will try to prevent progress to happen for staying in power and enjoying the privileges.

Progress requires facing the unknown and uncontrollable, and holding back the urges to hinder this process. Most of the innovation and human progress has happened with new frontiers and by failures to curtail the progress (see Open: The Story of Human Progress for more).

Our societies are good at adding new legislation, taxes and administrative burdens to citizens. We don’t have good methods for garbage collection to expire, delete and remove previous layers. The default destruction will happen first slowly and then suddenly if we do nothing (e.g. the rise of locality). Fiat currencies are just one example where inflation is a very visible manifestation of this downward death spiral now.

In the past, renewal happened mainly by physically locating to or discovering new areas. While we are waiting for the space age to reach out to the masses we have another new territory open for us: the digital one.

Commercial successes with the Internet domain space are evident. Web3 allows this development to reach another culmination point where the previous Leviathans, god and state, are yielding to the new one: Network.

The previous ones relied on physical coercion as their ultimate leverage. The new one gains its power from cryptography, transparency and decentralisation: you cannot fiat your way to unlock private keys no matter how mighty your army is. Individuals have the leverage over the top-down hierarchies.

Even in Matrix, the physical reality mattered. Who controls the atom space can reshape the rest. Yet, we are shifting from the atoms-first to the digital-first society: when the Internet is down, not much is working in the physical world either.

The challenge is how to reboot a society without violence? The conventional means (election, revolution, war, micronations, seasteading, space) have not resulted in a drastic increase of new states over the last hundred years without resorting to violence or a zero-sum power shift without fundamental civil rebooting. There are exceptions such as the Eastern European countries that had the opportunity to reboot their societies after the collapse of the Soviet Union (e.g. Estonia).

Elections, revolutions and democracy are not voluntary processes: the majority rules over the rest. The Network State sets the bar higher: how to create new states that are 100 % voluntarily built without physical violence?

Start from the digital-first, and the land is the last stage. This reverses the conventional approach where the land is the primary goal first, and then trying to build the momentum and recognition by other states happens later.

How do you gain leverage with the digital-first approach? The most condensed definition so far is this:

A network state is a highly aligned online community with a capacity for collective action that crowdfunds territory around the world and eventually gains diplomatic recognition from pre-existing states.

Prepare for the future where nation-states (or what’s left of them) are mere utility providers for the basics like electricity, water and heating are for us now, or you read about them only in the history books as an experimental (violent) phase in the human history.

But first, read the book and build some network states.

Founder burnout

July 20, 2022

Mikko Revonniemi – TALKS WITH PETRI

Mikko Revonniemi talks about the founding and the early years of Four Sigmatic, his burnout and the measures it took to overcome it. He also shares his insights from e-commerce marketing and how to get leads to your DTC startup.


Mikko Revonniemi is a purpose-driven entrepreneur passionate about creating solutions for people to optimize their health and well-being on physical, mental, and spiritual levels. He is a co-founder at Four Sigmatic, a company focusing on medicinal mushrooms, and Taimi, which aims to solve nutrition-related diseases with personalized nutrition and data. He is an ex-trail runner and over-achiever whose new interest, after a long burnout, is in meaning and balance in all aspects of life.


YouTube player

Episode notes

  • The struggle vs. the Tim Ferriss effect
  • Early days in Shanghai
  • Learning Chinese
  • Mushrooms
  • The food and beverage approach
  • Setting up the business in HongKong
  • Reputational issues in the early days
  • What can go wrong when you’re selling mushrooms online?
  • Influencer marketing
  • Funding issues and lack of working capital
  • Blender almost blunder
  • Go-to-market approach
  • Into the US via Finland and Canada
  • B2B (business-to-business) and DTC (direct-to-consumer)
  • Be persistent and follow up with your customers
  • Organised chaos and opportunism
  • Logistics and customs issues
  • Marketing differences between Europe and the US
  • The origin of the brand name
  • Founder burnout and symptoms
  • The realisation moment and what could have been done before
  • Remote team communication and picking up signals
  • Radical honesty
  • Ultrarunning
  • The nature of HongKong
  • The competitive nature kicks in running
  • When stepping down from Four Sigmatic was not enough to stop the burnout
  • Recovering from the burnout
  • Self-reflection
  • The origin story of
  • The US market launch issues in 2020
  • Payment gateways, Meta and Google as gatekeepers
  • Arguing against algorithms
  • The webinar approach
  • DTC marketing tips
  • Cost per lead in the US vs. Finland
  • Get your own leads: don’t trust the big platforms
  • Surprises in how people pay
  • Abandoned cart email sequence works
  • overachieving is not a thing

Entrepreneurs and inflation

June 19, 2022


Per Bylund talks about the root cause of inflation, how to deal with it and why founders have some inherent advantages. He also explains the fiat currency scam and explores the wonders of MMT.


Per Bylund is a Swede in Oklahoma, USA, where he works as associate professor of entrepreneurship and Johnny D. Pope Chair in the Spears School of Business at Oklahoma State University. He had careers in politics and as business consultant and systems developer before moving to the USA and starting a career in academia. He has also successfully failed as an entrepreneur no less than four times, experiences that he draws from when teaching students and writing columns for Entrepreneur magazine.

He is an author of two books, The Problem of Production: A Theory of the Firm (Routledge, 2016) and The Seen, the Unseen, and the Unrealized: How Regulations Affect Our Everyday Lives (Lexington, 2016), and has a third on the way (expected later in 2022). He is also actively discussing matters of the economy, entrepreneurship, and freedom on Twitter; follow him at @PerBylund.


YouTube player

Episode notes

  • what should founders know about inflation at the moment?
  • what is inflation?
  • old vs. new definition of inflation
  • prices should be going down not rising over time
  • inflation measurements
  • redistribution from savers and fixed salaries to borrowers
  • inflation reduces your income
  • hidden taxation
  • how people dealt with inflation in the past
  • strategies for sales and purchase contracts & your cost structure
  • why you should not listen to the government
  • learning proper and sound economics
  • dilution of money vs. other issues (e.g. boom, trend, demand or supply issues)
  • stay out of long-term sales contracts
  • do not hold currency
  • understanding vs. predicting the economy
  • central bank money printing
  • where does the printed money go?
  • central banks are not stopping the money printing
  • impossible to predict people’s behaviour
  • mathematical models are not working
  • naïvety of modern economics
  • “pee in your pants” economics
  • crises are getting bigger
  • fiat currency scam
  • digital government currency vs. old fiat money
  • central bank digital coins (CBDC)
  • dangers of CBDC
  • possible outcomes
  • entrepreneurs are well positioned in the market
  • how to think about the economy?
  • Bylund’s new book coming up
  • you can understand economics with the right tools
  • stablecoins
  • market-based monies cause problems for politicians and governments
  • modern monetary theory (MMT) is not modern, monetary, nor theory
  • money is not about coins and bills: it’s the commonly used medium of exchange
  • governments did not create money
  • money arises from people’s actions
  • why founders have advantages that others don’t have
  • entrepreneurs are in the business of creating our tomorrow

Episode links

Speed and resilience in market downturns

May 22, 2022


Henry Nilert talks about building startups during market crises and how you survive the volatile times. He also shares his founder stories of building and exiting to large corporates as well as his take on the venture studio business model.


Henry Nilert is a Swedish entrepreneur with a background living and working in France, the US, the United Kingdom and Finland. He has extensive experience building successful startups, as co-founder of iobox, one of the largest early mobile entertainment portals in Europe, and co-founder of Credit24, a leading online lending platform in Finland, the Baltics, and beyond. As advisor and angel investor he has supported a large number of startups, with a focus on B2B SaaS and Fintech.


YouTube player

Episode notes

  • the story of iobox: €230m exit after 18 months from the first round of funding
  • high clock speed execution and compressed implementation timeline
  • technological infrastructure limits your capabilities
  • rapid geographical expansion and PR success
  • three rounds of funding within a year
  • what to do when the market starts to weaken down
  • IPO track disappears
  • options when selling your company
  • hiring an investment bank
  • getting the company ready for the trade sale and the due diligence (DD)
  • the deal details: different shareholders (options, employees, share classes etc), lock-ups, warranties
  • how to keep the deal momentum going
  • startups are fragile
  • how to keep the transaction costs under control and close the deal in a few weeks
  • leverage on negotiations: know what you want
  • what happened to Iobox after the acquisition
  • timing and technology as a part of the success
  • the story of Credit24
  • a regulatory change allowing new business opportunities
  • when the founders have no experience in their line of business
  • online lending business
  • rapid market expansion
  • listing the company and raising funds
  • small cap pubic company disadvantages in fundraising
  • when your share price does not reflect your real value
  • when out of industry players have advantages over incumbents
  • building a company during the credit crisis
  • switching to a crisis mode with your startup
  • when even your shareholders expect your company to fold
  • the thin line of having enough business to have a chance to survive
  • learning the business and becoming resilient via crisis
  • speed vs. resilience
  • challenges in an unregulated business environment
  • regulatory uncertainty
  • team confidence
  • clock speed as your de-risking method
  • acquisition by a traditional business
  • synergies for both parties
  • closing the sales with a hard deadline
  • Credit24 lending business after the acquisition
  • selling your company as a listed entity
  • coming up with the sales price
  • pros and cons of a venture studio business model
  • an angel perspective on deal flow
  • how to approach an angel investor
  • why your angel investor is not investing in your next round of funding
  • disciplined angel investing

Episode links

Wartime CEO

April 18, 2022


Ukrainian startup founder Alyona Mysko talks about how to prepare and manage during crisis, the role of individuals in society, and the reality of solopreneurship. She also reveals recruitment tips, and what to do in Moscow.


Alyona Mysko is thefounder and CEO of Fuelfinance. She has worked in finance for more than 10 years, being an expert in financial planning and risk management. During this period, she was a lecturer for more than 1500 students and participated as a mentor in CEE SeedStars, EO business Incubator, Tech2 Impact programs. Two years ago, she launched her personal startup Fuelfinance, and set the Fuelfinance mission as “Our goal is to save hundreds of thousands of SMBs from bankruptcies and unlock trillions of dollars in GDP growth”. She’s passionate about wakesurfing, Petrykivka painting and Ukrainian Art.

Company | LinkedIn | TwitterInstagram 

YouTube player

Episode notes

  • business crisis mode
  • prepare and plan for the worst
  • team crisis plan
  • leadership and priorities
  • normalising the operations
  • recruitment during the war
  • helping yourself, the company and the society
  • ways you can help in the wartime
  • volunteer initiatives
  • switching your business model overnight
  • Covid-19 prepared for what happened next
  • coping mentally and emotionally
  • Product Hunt campaign
  • promotional campaign in the US
  • entrepreneurs helping the government in PR
  • solo founder benefits and downsides
  • good partnership components
  • people’s behaviour during the crisis
  • recruitment criteria and tips
  • Fuelfinance company culture
  • making a marketing video
  • Euromaidan
  • business trip to Russia in 2014
  • “Bad but stable”

Episode links (We do your finance -video) (Alyona in Moscow)

Growth hacking with gamification

March 10, 2022


Niels Bosma talks about doing marketing with a technical background, automating your workflows and what happens when friends become co-founders in the same company.


Niels Bosma is a passionate growth hacker, product developer and angel investor. He builds growth engines.

His latest venture is Filestar that is revolutionising how people work with their files. He is also a co-founder of Offerta and Tessin, which is Scandinavia’s first and largest platform for real estate financing. Niels loves to do side projects such as SeoTools for Excel. He is also an avid mountain biker.

Company | LinkedIn | TwitterGithub 

YouTube player

Episode notes

  • leaving early as a startup founder
  • influence vs. titles
  • automation as a part of your workflow
  • growth hacking and SEO
  • long-tail landing pages
  • automated Youtube videos
  • long-tail traffic as a part of the business model
  • fully automated Adwords campaigns
  • fast development response to demand
  • marketing is very technical now
  • CTO and CMO
  • backtracking marketing expenditure
  • start early with SEO
  • quantity vs quality in content
  • reuse your content
  • open-source intelligence
  • lead engines and prospecting
  • sales gamification
  • culture building
  • transparency
  • recruitment with the team
  • student training program
  • developing own talents
  • friends as co-founders
  • take funding or not?

Episode links (John Hammond)

Improvise with a total bravery

January 20, 2022


Multitalented artist Younee talks about her journey of self-discovery and rebellion in building a successful international career with many levels of accomplishments and renewal after prodigious domestic stardom in Korea. She also reveals how to push your limits and be vulnerable in front of a live audience.


YOUNEE from South Korea is a virtuoso, prize-winning pianist and an impressively talented and awarded singer/songwriter who, from an early age, has a desire to break the boundaries.

Her tuition begins at the age of three, then involves studying classical piano for the next twenty years. She is one of a small group of highly trained classical musicians who are equally at home on Jazz, Pop and Rock stages.

In 2006, she releases her first and highly successful debut album ‚Love’ (EMI) as “Key’s Piano” in Korea, becomes a star in her native country and a permanent guest in TV-shows, festivals and contests. She is also highly active as a songwriter writing a string of pop songs for other Korean artists, such as the title song and No.1 hit of “Dan Hansaram” for the Korean TV drama “Famous Princesses” on KBS TV.

YOUNEE decides to move to England with the aim of writing and producing in collaboration with several icons of the British jazz scene and to release her English language crossover- album “True To You” in the UK. The album track ‘Home To You’ hits several radio charts in the US culminating in the No. 1 spot of the important AC-Chartbound listings, and YOUNEE, together with her co-writer, wins the category of ‘Best Songwriter’ at the Music Aid Awards.

Then she signed to a German record label, management and concert agency “Karsten Jahnke” in Hamburg and moved to Germany in 2013 where she has released two albums so far. She has performed at Jazzopen Stuttgart, Leverkusener Jazztage, Dresdener Jazztage, Woman in Jazz, Ingolstädter Jazztage, Beethoven Festival, Elbphilharmonie Hamburg, and many more in both classic and jazz stages.

Website | Instagram | TwitterYoutube | Spotify | Clubhouse

YouTube player

Episode notes

  • how it all started
  • perfect pitch & synesthesia (seeing sounds as colours)
  • self-reflection in training and private improvisation
  • first public performance
  • public improvisation by accident
  • Korean competitive environment
  • art vs. competitiveness
  • teenage years
  • Korean pop-star
  • jazz and rock influences
  • search for own musical style
  • first albums as Key’s Piano
  • the beginning of the international career
  • the first British album with an impressive lineup
  • the re-release of the British album this year
  • new improvisation album coming up soon
  • living in Germany
  • cultural influences
  • an unreleased pop album
  • German studio albums
  • perfecting the sound in Jugendstil
  • stories behind The Moment and Ansbach Blues
  • complete improvisations (becoming braver)
  • never played and first performed live: Take Five
  • art as in-moment experiences
  • a live concert performance with vocal improvisation including lyrics inspired by Clubhouse experimentation
  • Korean culture and influence

Episode links (Jungle) (Take Five)

Technical notes

Correction: 1:34 “see the sounds as colours”
There were some serious technical challenges while recording this video, and it has been improvised from lower quality audio and video backup sources.

Keep provoking happy accidents

December 21, 2021

Pierre Stanislas – TALKS WITH PETRI

Pierre Stanislas talks about finding opportunities in unexpected places, how to become insurtech leader and make waves with side projects. He also shares insights into the future of Clubdeck and web3 audio platforms.


Pierre Stanislas is the CEO & co-founder of Wilov, and a co-founder of Clubdeck. He has worked in finance for 15 years (London & Paris), advising institutional clients on their strategy. In parallel, and just for fun, Pierre has developed and launched mobile apps in various fields such as gaming, social media, culture or sport, some of which have been downloaded by several thousand users. Passionate about sailing, music and martial arts, he has also written two novels in his spare time. Pierre holds an MSc from Ecole Centrale Paris.

Website | LinkedIn | Twitter

YouTube player

Episode notes

  • happy accidents and serendipitous business life
  • the math genius trading exotic options
  • side projects while having a corporate career
  • trendsetting with Twitter
  • a side project makes waves and gets an acquisition offer
  • Clubhouse and its impact
  • content creation with audio and where it’s heading
  • low latency live audio on a global scale
  • building Clubdeck
  • traction without marketing
  • Tech News around the World by Tyler Crowley
  • new content and knowledge back catalogue in making
  • streaming on multiple live platforms
  • an indirect validation and community support for the product
  • Spotify Greenroom and Twitter Spaces
  • Greenroom’s launch failure but solid tech
  • Twitter Spaces’ technological limitations
  • Clubdeck’s future
  • decentralised web3 audio platform
  • insurtech and founding Wilow
  • an app-only product has advantages
  • design choices shape your business decisions and processes
  • early days bold business decisions
  • pay when you drive and ecological implications
  • aligning user incentives with your business model
  • turning legal requirements into revenue opportunities
  • monetary motivations can drive word of mouth
  • App store featuring as a significant marketing boost
  • corporate VCs as your investors
  • turning a boring business area into something appealing
  • choosing which opportunities to pursue when you have plenty
  • big in Japan for 15 minutes

Episode links

Metaplex is here

December 20, 2021

The holiday season is here. What would be better than gifting an NFT?

That was my initial thought. The basic idea is simple but it’s all in the implementation. What if you don’t want to use eth since the gas prices are way too high? What if you want to give them and not sell them? What if you want to mint them yourself instead of buying already minted NFTs?

Putting all these together led me to look into the direction of Solana. Its “gas” prices are reasonable. It’s the fastest-growing network, and they already released their “Wordpress” for NFTs: Metaplex. (Solsea is a good place to start with if you want to use a platform for minting, buying and selling your NFTs.)

The blog post from the summer sounds promising and it looks simple enough to implement.

It took me a while to wrap my head around the whole concept since it’s not exactly as simple as using WordPress nor as painless to install. Finally, with help of multiple online posts and docs, and helping friends I succeeded. The code is still in rapid development so things are changing and many things are not even mentioned. Trial and error is the way to go and read the code for explanations.

Overall, I was impressed by how much you can accomplish now. If you use the command line interface it’s up to your imagination and skills to pull things off. If you want to use the graphical interface tools you can still do a lot. Even airdropping NFTs with various claiming possibilities is already available.

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My weekend testing resulted in a live online default installation. You can get your gift NFT from there by participating in the open auction with unlimited winners. Every bidder wins and the minimum amount to participate is (0.0001 sol) instead of plain zero due to platform limitations (it does not accept zero). You need to pay the network costs but altogether a dollar or two worth of sol gets you a brand new NFT at the end of the auction (I hope – it’s still running). Feel free to test yourself at your own risk (see the video for how easy it is).

The experiment was partly successful. I did not manage to mint an NFT that could be given out immediately and with zero price (excluding network fees) that is from an unlimited or large enough supply without putting them on sale separately. Most likely this is just the limitation of the Metaplex platform at the moment and can be easily accomplished with the command tool.

If you really want to send NFTS to your friends or employees and you’re willing to send them manually from your wallet that’s possible. You just mint the desired amount and send them separately. No command-line tool is needed.

YouTube player

It seems the UX allows you to do things that are not actually possible with the actual contracts resulting in errors in code execution and you burning sol for experimentation (you could use the test network for not burning actual sol but it’s cheap enough to do it live, too). I encountered multiple errors and failed attempts but all together they may have been mostly due to my ignorance of the coding logic than actual bugs or errors.

For a smooth user experience, you would need some coding, tweaking and customisation. Caching the network requests, creating a claiming UX, a limited edition with a single mint, and overall nicer front end UX that serves your purpose takes a bit of time and skills but nothing a few good days of coding cannot accomplish.

If you want to learn about smart contracts and the web3 this is a really good way to learn. You can even nudge your friends to open a waller, swap some fiat and get their first web3 experience.

Ohh – and I still have the very first 1/1 mint I did. I might sell it later…

See the previous related posts Web3 is here and The art of NFTs.


November 26, 2021

The original Internet has started to arrive now. It took a bit of detour to centralised services in the last two decades.

In the HTTP protocol there’s still a place for payments, and it’s called 402. 404 is all too familiar to everyone who has ever browsed on the web. In the below section, Mikko Hyppönen talks about the payment opportunities over 20 years ago (see below the timestamped section).

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Now that the Internet has its original form of money that is relative commonly distributed and has become accessible to all it unlocks enormous opportunities fast.

The speed of development is accelerating at a very rapid pace. You will be mistaken if you look back and think that it will take a long time since it has been slow development so far.

Ethereum as the harbinger of distributed computing has enabled a lot of different services even though it’s expensive to operate with ETH due to high gas fees at the moment.

For example, if you would like to bid for a traditional auction but lack the funds yourself you could set up a crowdfunding campaign and participate within a week’s notice with +40m USD as a result. Governance with DAOs is the new feature that enables a lot of services.

Or you could write, rally some people around you, mint some NFTs, do auctions yourself or raise funds for your next project. All this with where you’re the owner of your data and keys.

Similary, if music is your jam you could upload your songs to Audius streaming service and get paid for your playtime without middlemen. Audius is the new Spotify.

Or if you like to watch videos you could head to Odysee that is the Youtube of the web3 era.

There are a lot of developments and it’s already now impossible to keep track of all the major new initiatives – and that’s a good sign! For example, Sia has been ramping up their infrastructure heavily and it’s starting to bear fruit. You can create your own Google/Facebook type of single sign-on with MySky. Then it’s time to make your own homescreen, install some apps and even build your own de-centralised web pages or just store data.

Let’s not forget the Internet connection. Helium is rapidly becoming a decentralised last-mile Internet provider without centralised capital costs. You could provide a hotspot and start earning in your location (if you can get hold of any hardware due to shortages).

What enables the rapid development and deployment of new services is the very nature of web3. Everyone can contribute and you can use the existing parts to build yours on top of them. There’s no need to start from scratch and start to buy your servers or code everything in-house like in the early days of the Internet.

Composability is the fancy word for idea and code legos of web3.

The best way to start experiencing the new world is to do something. Just hodling your cryptocurrencies is a bit boring and not really much of an effort either. Just point your browser to Coinbase, Bitstamp or Binance and get started.

Before you get too far it’s good to secure your keys and keep the wallet with tokens to yourself. A hardware wallet like Ledger can help when using browser extensions such as Metamask and Phantom. For accepting Bitcoin tips from Twitter and other online services you could try the mobile app, Muun.

Now that we have sorted out the necessary basics how about something more adventurous like registering your .eth or .sol domain? I would start with .sol since it’s cheaper with transaction fees and therefore more forgiving with mistakes.

Just keep in mind that even though .sol domains are paid only once and yours to keep it’s not entirely sure that this is the case forever (even for .eth domains since its Ethiopia’s country domain).

You may be wondering what is Solana. I suggest you read this and listen to this and the recent Clubhouse event. Solana is the new kid on the block but raising fast. If you already have some cryptos try Raydium to swap between coins.

Most of the regular web services will have web3 equivalents. Don’t wait too long to get yourself familiar with the future since incumbents become obsolete faster. If you’re starting to build your startup now it’s even more important that you’re not betting on old technology.

There’s also some additional motivation. Some of the old fiat low tech is self-destructing – first slowly and then suddenly.

Efforts create the achievements

November 25, 2021


Amir Nashat talks about working with stellar people, how curiosity leads you to amazing results, and what is exciting in the biotech field. He also reveals how he met his childhood hero.


Amir Nashat is a managing partner in Polaris’ Boston office. He joined Polaris in 2002 and focuses on investments in healthcare.

Additionally, Amir has served as a director of Adnexus Therapeutics (Bristol Myers Squibb), Athenix Corporation (Bayer), Avila Therapeutics (Celgene), Fate Therapeutics (NASDAQ: FATE), Freenome, Living Proof (Unilever), Promedior Pharmaceuticals (Roche), Receptos (Celgene), Selecta Biosciences (NASDAQ: SELB), Sun Catalytix (Lockheed Martin), and TARIS Biomedical (J&J).

In addition to his investment role, Amir has served as the CEO of Dewpoint, Jnana, Living Proof, Olivo Labs, and Sun Catalytix. Amir also serves on the Partners Innovation Fund and the Investment Advisory Committee for The Engine at MIT, and helped launch the MIT Sandbox Innovation Fund as its active president.

He has been named to the Forbes Midas List of “Top 100 Venture Capitalists.”

Prior to joining Polaris, Amir completed his ScD as a Hertz Fellow in Chemical Engineering at the Massachusetts Institute of Technology with a minor in Biology under the guidance of Dr. Robert Langer. Amir also earned both his MS and BS in Materials Science and Mechanical Engineering at the University of California, Berkeley.

Website | LinkedIn | Twitter

YouTube player

Episode notes

  • company creation by VCs
  • interesting people vs. defined goals
  • learning from people
  • decision-making with people
  • curiosity leading to new people
  • experienced people as co-founders
  • mistakes sole entrepreneurs do
  • building companies in different environments
  • cultural behaviour and approach to risk
  • international teams working and communicating together
  • values and goals
  • persistence, cultural risks, and the meaning of failure
  • salaries vs. equity as remuneration
  • take your bug and turn it into a feature
  • appreciate your limitations and make the best of them
  • COVID-19 remote redundancy by geography
  • time zones as hurdles
  • work and family life on remote mode
  • social and cultural bonds
  • importance of trust
  • defining company culture
  • finding your way of recruiting people
  • setting the culture and making it unique
  • stories and culture
  • meeting Rodney Mullen
  • skating, water polo and surfing
  • MIT Sandbox as a testbed for entrepreneurship
  • central bank money printing and startup funding
  • differences and similarities in biotech and IT startups
  • this decade on biotech
  • ethical considerations in biotech
  • engineering your reality
  • Peter Crisp, founding partner of Venrock
  • efforts create the achievements

Episode links (Rodney Mullen) (MIT Sandbox) (Venrock)

Digital audio courtesy

November 19, 2021

When have you checked your mic? Recorded yourself and listened to your own voice? This is so simple but yet omitted area.

Most people have poor audio quality in the headsets they use for work. It does not bother you since you’re not hearing it but it certainly makes it hard for the people on the other end.

This is not just a technical issue. Often, it’s hard to figure out what people are trying to say. You are not comprehensible because of the audio quality.

There are many possible issues. Sometimes it’s the echo in the room. Or you’re using the same audio source for the microphone and speakers without isolating them from each other.

This week I was attending two large webinars that were those non-profits flagship annual events. What was the issue with both of them? The audio clipped so badly that you could not hear what the speakers were saying. The video does not matter unless you can read lips. Audio comes first.

You don’t need to become an audio engineer to master the field. Just focusing on the basics will get you far.

To get you started I recorded five different audio sources to compare. Four of them were done at the same time, and only one was done separately due to technicalities.

There’s no audio processing done except loudness normalisation.

Which sound do you like the best? When you’re doing the comparisons try with different audio devices. They sound different from your Bluetooth headset, over the ear headset, loudspeakers, computer default audio or from your hifi stereo.

These are the microphones I used: Shure KSM8 dynamic mic, Rode Lavalier, Beyerdynamic MMX 300 headset, iPhone 7 (the default built-in mic) and Airpod Pro.

Notice that different mics pick up different things, and some of them can distract your listeners even though you’re not paying any attention to them.

Here’re the audio samples:

If you want to know which one is which see the next sentence. ˙ǝʌoqɐ pǝʇsıl sɐ ɹǝpɹo ǝsɹǝʌǝɹ uı ǝɹɐ ʎǝɥʇ

Purpose ‘n Clarity

November 15, 2021

I have released a new podcast series called Purpose ‘n Clarity. This will be me talking and focused on the growth company related issues, challenges, tips and insights.

Talks with Petri continues as before but I felt that the new format allows me to express more of the experiences and thoughts since I have not been writing too much lately.

For now, I’m planning to release a weekly episode but this might change in the future. I’m happy to take requests and questions since it’s the interaction that inspires me to share more.

The first two episodes are out now and the show is available on most of the distribution platforms available (let me know if I have missed some).


Why does your company exist? What are the advantages of having a clearly defined purpose? What’s the difference between mercenary and missionary founders?

This episode is jam-packed with meaningfulness, but it may also tickle you to dive deeper into the topic.

The impossible
Business bullies
What, how and who
The work
Marketing and sales silver bullets
Revenue vs dilution

Building leaders with passion and purpose

October 28, 2021

Hans-Peter Siefen – TALKS WITH PETRI

Hans-Peter “Hape” Siefen talks about building an international brand with a loyal customer base, the role of marketing and sales in organic growth and how Jim Collins has shaped their company. He also reveals some amazing moments with Jack Welch and Arnold Schwarzenegger.


Hape is a sales boy who turned into an entrepreneur. He is a family guy who enjoys spending time in nature and on the lakes of Finland. Hape founded Nordic Business Group 11 years ago with his business partner, whom he met at a university lecture. His professional passion is in inspiring and educating people about business and leadership – and also in building a thrilling business himself.

Website | LinkedIn | Twitter

YouTube player

Episode notes

– how to build an exceptional company
– role of passion and purpose
– Customer expectations early on vs. now
– A simple organic growth formula
– Growth via mergers and acquisition
– Sales and marketing in the early years
– First recruitment roles
– Building a brand with a loyal customer base
– International expansion
– Building your business purely with marketing
– Cash-flow friendly business model
– Company culture that delights customers
– Passion through meaning and purpose
– Where the customer experience begins
– Quality of the customer service
– Innovation and the rising customer expectations
– What contributes to customers learning
– Volunteer projects, art and inspirational stories
– Drama and moving people with stories
– Sir Ken Robertson and the Landfill orchestra
– Jim Collins, Jack Welch and Arnold Schwarzenegger
– Amazing moments with Jack Welch
– Arnold Schwarzenegger’s presence
– Live-events during COVID-19
– Slush and The Nordic Business Forum experiences
– Top business events
– Business conferences after COVID
– Diversification and the group structure
– Bootstrapping and the plans for the future
– Internationalisation and deciding the first steps abroad
– Entering the Russian market and its surprises
– Scandinavian expansion (Sweden, Norway, Denmark)
– Opportunistic market entry and its outcome
– Learning and exchanging best practices
– Long-term preparations for the future expansion
– Bootstrapping all the way

Episode links (Leaders Who Change the World – Behind the Scenes of Nordic Business Forum – Full Documentary) (Slush) (Founders’ Alliance) (C2 Montréal) (TED Talks) (WOBI) (Landfill Orchestra) (Tedx 2013)

Learning together makes things easier

September 30, 2021

Sami Benchekroun – TALKS WITH PETRI

Sami Benchekroun talks about the three phases of startup growth from bootstrapping to scaling and raising over €20m in funding. We discuss the role of mentorship and finding the right type of investors but also some French puns are involved.


Sami Benchekroun is the Co-Founder and CEO of Morressier, the virtual conference provider and platform for the scientific community. Sami has over ten years of experience in academic conferences, scholarly publishing, and entrepreneurship. He drives Morressier’s vision forward and is dedicated to increasing the impact and reach of professional and scientific conferences. A frequent industry contributor, Sami serves as a scientific communications lecturer at the Technical University of Berlin. He has a background studying management at ESCP Europe.

Website | LinkedIn | Twitter

YouTube player

Show notes

  • Bootstrapping and VC funding
  • How it all started and the learnings along the way
  • Early-stage science research and its discovery
  • Initial idea sold as a product
  • The early success and positive cash flow while bootstrapping
  • Customers started to call and the demand potential was discovered
  • Go out and expose yourself to innovation
  • Talking to VCs in Web Summit changed the course of the company
  • Even if the product works your business model may not scale
  • Expensive trial-and-effort that failed with friends, family’s and fools’ money
  • How right angel investors and mentors make a difference
  • Professional communities and the role of conferences
  • Choosing the target customer
  • Where your market approach is rather unique
  • How to make money in the research field and provide value
  • The Project Ice Cream (Matrix 4)
  • From conference posters to data teams and content analysis
  • Building a startup with family life and small children
  • Support network for founders
  • Entrepreneurship as a fast marathon
  • Role of honesty and vulnerability
  • Mentorship
  • Listening to other people’s advice and experience is not evident
  • Entrepreneurs’ Organisation for founders
  • What COVID-19 changed in personal life and in the company
  • Raising a VC round in Corona times
  • What changes in later funding rounds

Show links (Web Summit) (Entrepreneurs’ Organisation)

Rudeboy makes people feel the beat

September 16, 2021

Ville Virtanen – TALKS WITH PETRI

Ville Virtanen talks about what happens when you are hit by Sandstorm and how to cope with expectations, success and stay relevant over time. This episode is totally out of control so just feel the vibe and tune in.


Famed for the global platinum-selling smash ‘Sandstorm’, Darude is recognised as one of the most influential artists to emerge from the dance scene. With a DJ style that is a mixture of progressive and uplifting trance, fused with elements of tech, breaks and house, Darude’s music delivers a dynamic energy that gets any dance floor moving.

With over 15 years of heavily touring North and South America, as well as leading shows in Asia and Australasia his resume of accolades is a testament to the exponential growth of his profile as an international artist. Over the years he’s appeared on TV channels such as BBC, NBC, CNN and MTV, as well as having won several prestigious awards such as 2 x German Dance Awards, Dance Star Award, USA Golden Turntable DJ Award and he is a 3 x Finnish Grammy Award winner. His name has also appeared in numerous public-voted polls with previous entries in Top 100 DJs Poll and Americas Favourite DJ.

Website | Twitch | Twitter | InstagramLinksWikipedia

YouTube player

Show notes

– How Darude became an Internet meme
– Sharing your knowledge with others
– Showing vulnerability in your work
– Streaming in the 2020s (Twitch, Instagram, FB, TikTok)
– IRL and online communities
– Revenue streams for music creators
– How to cope with corona times without performing live
– Balcony Darude as a Corona time phenomenon
– Meaning of success
– How it all started and the making of Sandstorm
– Ville’s career aspirations and his early rejections by labels
– Storytelling in the marketing of Sandstorm
– JS16 and the Finnish Denniz Pop & Max Martin
– Agile development in music-making
– Creating music and making hits based on audience responses
– Expectation and influence management
– Changes to music due to COVID-times
– Skateboarding and TikTok
– Distractions in the creative process
– Changes in the listening behaviour and technology over the decades

Show links (Darude – Sandstorm) (Elon Musk’s tweet) Parvekedarudet (balcony darude) (Ironing it out) (2014 Google trend) (The Story of Sandstorm) (This Is Pop, Netflix; Stockholm Syndrome episode) (Robert Miles) (Rejection letter – Poko) (Rejection letter – Sony) (Rejection letter – EMI) (Reddit AMA)

(photo credit Nana Simelius)

Remote-first work

August 23, 2021

Work has changed for many. It’s not any more remote or office work but just work in different places. Often, in the location you choose and where you can be the most productive and also at the most convenient time.

Last year, I was writing about these changes and it’s clear that the adaption of the new is becoming normal. Yet, in some other way, we are just at the beginning like with the forthcoming metaverse. Today’s technology looks like the computer games in the ‘80s. Cute but still very primitive compared to the capabilities and hyperrealism later in this decade.

Just do the work

Fully decentralised teams and companies are different. It changes the dynamics of the underlying structures. Who cares where you live as long as you do the work? Time zones matter but the rest is pretty much your private business depending on your personal preferences, needs, requirement and life situation.

This unlocks a lot of potentials. New physical locations become attractive. Some prefer nature and quiet life next to nature. Others enjoy a good climate or other benefits. If you can do the work from anywhere it becomes viable to optimise your cost structure, too. Why pay high taxes and living costs if there are good alternatives?

The talent buffet

When you’ve practically an unlimited supply of talented people worldwide you should do fewer compromises in your recruitment. Previously, it was not realistic to find the exact match for your needs from a given local area where your office happens to be. This limits your options even though some people are willing to re-locate. The friction is real and for some re-location is not an option.

Suddenly, employees and employers have drastically more options. You can become very specific with your needs and wishes. This is a huge opportunity for everyone, and some are utilising it by questionable means.

Tectonic changes in the appeal of geographical locations

Legislation, public services and local attitudes react slowly. Employee laws may not treat remote workers with the same rights and benefits as the locally employed. Taxation, company law and governance have many aspects that are lagging behind and you hit tons of potholes while trying to operate in this new environment.

Some locations are becoming unattractive for these reasons. If you happen to have an unattractive climate, bureaucratic heavy infrastructure and business environment or you tax labour uncompetitively based on the past local preferences it’s easy to become out of sync with the times.

Politicians care about local votes and popularity. Global competition may stay hidden for long where people are voting with their feet globally. There are no massive campaigns or outbursts. You’re just missing new opportunities, there are fewer companies choosing your location and people are preferring to live elsewhere.

The global supply and demand work both ways. If some location becomes too unstable or unattractive it’s just easier to leave. No point in trying to convince the local ecosystem to change for the better.

The winners are countries, cities and local places that are dynamic and see opportunities. It takes guts to try something new. Change is often unpopular among the electorate. There’s a chance you can massively change things for good but the time perspective is longer than your re-election cycle.

It’s easier to protect the incumbents and resist any changes than shake the status quo.

City vs countryside

If you can work remotely why should you live in a city? It’s cheaper to be outside of densely populated areas. This is a personal preference but expect people to start making moves that were rather incomprehensible just a few years before.

Technology enables last-mile deliveries with omnipresent e-commerce that does not care too much where you live. Currently, there’s a worldwide shortage of semiconductors but also construction materials such as timber. Our current housing needs may not reflect the needs of the near future, and this will be reflected in the real estate market.

Times, they are changing. Ready, Player Two?

New iMac M1 2021 with multiple screens

July 23, 2021

You can use the new iMac (2021) M1 4.5k 24” with more than one external display. This is what I discovered and it convinced me to jump on board and stop waiting for the larger 27-32” iMac coming out sometime soon (or not).

My old iMac 27” served me well for the last ten years with slight modifications along the way.

A larger screen is always nice but you can compensate for that with many screens. Also, it’s pretty nice to have your apps always open in separate screens when you get used to it (and their state stored with Stay).

My current setup is using five screens at maximum. Two 27” external displays (e.g LG 27UL850) are the basic setup combined with Atem Mini Pro and Sidecar iPad Pro when needed. The Atem is used for video conferencing / streaming and iPad for drawing with Apple Pencil (e.g. with Apple Notes or Google Jamboard).

How can you have many external screens with iMac that supports only one?

You need a bit of help from DisplayLink software, and the rest is easy. This method was first discovered last year and it works with all the new M1 Apple computers. It has taken some figuring out and cycling through docking stations but the short answer is that get a DisplayLink supporting hub (e.g. Dell D6000) and then it’s just plug and play. There are some resolution limitations though (i.e. 4K resolution).

Last year I did a post about home office / video conferencing setup. This is my current setup where I have eliminated external illumination stands, upgraded to more stable camera and mic stands (they are monitor mounts but easy to convert to multimedia purposes).

It’s surprising how many cables and adapters you need that are not compatible with each other. Mr Murphy will make sure that your existing cables are not the right type or grade (e.g. USB-C for power only) or they have the wrong plug. Another learning was that the actual devices are either thinner or smaller than the power source with USB-C devices. Be prepared to stack multiple brick-sized (yes, those red analogue thingies) power adapters that emit their fair share of heat. For things I have not mentioned here you may find them in Recommendations.

You will also learn the differences between Thunderbolt, DisplayPort, HDMI, USB 2/3 (and C), and their mini variants. Have fun!

If it’s smart it’s vulnerable

May 15, 2021

Mikko Hypponen – TALKS WITH PETRI

Mikko Hypponen talks about how to protect your company against security threats, why ransomware is so common, the future of cyberwars and why you should trust the cloud. He also reveals how he crashed his customer’s brand new car.


Mikko Hypponen is a global security expert. He has worked at F-Secure since 1991.

Mr. Hypponen has written on his research for the New York Times, Wired and Scientific American and he appears frequently on international TV. He has lectured at the universities of Stanford, Oxford and Cambridge.

He was selected among the 50 most important people on the web by the PC World magazine and was included in the FP Global 100 Thinkers list.

Website | Linkedin | Twitter

Mikko has a book out on the topics we discussed, see for more information.


(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: Hello Mikko, welcome!

Mikko: Hello Petri, and thanks for having me!

Petri: It’s so great to have you here. I think it’s almost like ten years when we’ve seen each other eye to eye.

Mikko: Yeah. Time flies, that’s the way it goes. And they tell me it’s only going faster year by year.

Petri: Maybe we’re getting old?

Mikko: Oh no, no. Don’t say that!

Petri: How many of the Fortune 500 companies are being hacked right now?

Mikko: I know exactly how many.

Petri: Well, tell me!

Mikko: 500 of the 500 are being hacked right now.

Petri: How’s that possible?

Mikko: It’s pretty easy, actually. One of the main challenges we have in information security is that complexity is the enemy of security. The more complex your networks are, the harder they are to defend, the bigger your networks are, the harder they are to defend.

Every single Fortune 500 company has more than 100 000 workstations. If you have a hundred thousand workstations, I can tell you what you have. You have a breach and you have it right now. You simply cannot control every single one of your laptops, desktops, and servers at the same time without having at least a minor breach somewhere at every time.

Petri: That’s quite depressing, isn’t it?

Mikko: It is and it isn’t. It’s a good example of the attitude change that we strongly need in the world of computers. Especially, large companies, there’s massive investment being put into trying to secure the data due to fight against data leaks, against data breaches, against hacks. When you’ve invested hundreds of thousands or millions into your security systems and firewalls and intrusion prevention mechanisms, the last thing you want to think about is that those would fail.

And that’s exactly what you should be thinking about. You should be thinking about that how will you detect when your defenses fail? How do you detect that you have a breach because that changes your mindset from trying to keep all the badness out at all times, to realising that there will be a beach and you will have to be able to detect the breach very quickly if you want to be able to react to the breach.

Petri: That reminds me of Netflix and their philosophy that all of their servers are failing and they have to be resilient.

How viable is this for smaller companies like startups? In Fortune 500, they have a bit more resources than a company with a hundred, fifty, or twenty people.

Mikko: It’s a little bit different, but I suppose there are some general truths about trying to protect your data and trying to protect your privacy, which applies at all levels all the way from enterprises to small companies, to medium-sized companies, to startups, to individuals like things that speed is the enemy of security, which is another truth.

Complexity is the enemy of security. Speed is the enemy of security. And especially with startups, this is a very common pitfall. The faster you move, the faster you develop, the first that you deploy, the less time you have for bug checking or quality assurance or testing. And that is just something you have to take into account whether you like it or not.

Petri: What are your top tips for startups? Let’s just take a regular startup, which is not, well, every company is a software company, but I mean that they may not exactly be just building software, but just general security in a company. Then we can go more into a software development company.

Mikko: First of all, starting a startup has changed so much from the technology point of view to what it used to be like. I know it feels funny nowadays, but starting a startup used to mean that you bought a server. One of the first things you did is that when you start hiring people, you get the facilities where you can work from then you buy a server, so you can have email.

Of course, nobody runs their own email server. This is a great example how cloudification has made it so much easier to start new companies. You don’t need infrastructure. You don’t need to own anything. When you grow, since everything is in the cloud, it’s just a punch of the button to have more resources for file storage or websites or service.

My tip here is to trust the cloud. Cloud works. Most startups choose to go for AWS or Azure or Google Cloud Engine. Not just because they give you this versatility, but also because they are more secure. Microsoft, Amazon and Google invest millions and millions to secure these cloud networks.

Normal companies can never afford the same level of security. So, it is a good idea to use the cloud, but of course you have to use it, right. If everything is in the cloud, then the crucial part is the authentication. What kind of password mechanisms and authentication mechanisms you use? Do you share passwords with users?

Do your users use the same password everywhere? Things like these. Technology can enable so much good, but you have to be able to use it right.

Petri: Does this apply only for the big guys, Google and AWS? You don’t see what’s happening in the other end. Where’s the limit? When should you really do some DD to the suppliers? Can you trust the smaller service providers?

Mikko: This is a very tough problem. How did you know that your suppliers do what you want them to do? Not just what they promise to do. One of the biggest problems we’ve seen in practice over the last year in information security has been widespread supply chain problems. Some of these have made general headlines like the SolarWinds saga. SolarWinds is a US publicly listed company, which makes IT-management systems for very large networks.

The idea in supply chain attacks is that if the attacker wants to break into an organisation’s network, but can’t because the organisation has protected them themselves good enough. Then they find another way in. They figure out the technology the target is using and hack the providers of that technology instead.

For example, in the SolarWinds’ case, we don’t know exactly which US agency was the target. But the Chinese wanted to break into a US agency and couldn’t do it. So, then they hacked SolarWinds and simply waited for the target to apply the latest SolarWinds’ software into their network. And those were backdoored by the Chinese, which meant they gained the access indirectly. This is a hard problem to solve.

In fact, if you follow these steep enough, eventually, you end up discussing about the security of the microcode in our CPUs. How do you know exactly what Intel is doing inside the latest CPU, which you run in your computers? Or what’s inside Nvidia GPUs? The fact is these have become so complex that nobody knows anymore.

Petri: This was actually one question a friend of mine wanted to ask and it’s related to exactly this hardware thing. Your phone is supposed to be the most secure device you have compared to your computers and laptops. That’s what I learned by doing a bit of research. But can you really trust your Android?

Because most of them are done in China and the hardware level there. Is there a secure Android phone in a sense that you can be sure that there’s no backdoors or is the data always piped to some government agencies or some other parties?

 Mikko: There’re no guarantees. But that applies to everything. There’s no guarantees your Apple is a hundred percent safe either, or your iPhone is completely free of all possibilities of backdoors. We don’t know. There’s so many components coming from so many different suppliers. We just have to hope for the best.

Regardless of that, your Android device is massively more secure than your Macbook laptop or your Windows desktop. A traditional computer, real computers are not nearly as secure as these toys, these mobile phones. This is not the way we typically think about it. We think about that real computers have real security.

Then we have these mobile devices, which are just mobile devices. Actually, the operating systems like Android and iOS or iPadOS are massively more secure than your Windows 10 or your latest version of MacOS. This is because they are more restricted. This is a trade-off between restrictions and security.

This isn’t so easy to see. Especially, from the point of view of a normal end user. If you give someone a brand new M1 Macbook and a brand new iPad Pro with an integrated keyboard, they’re basically the same device. The iPad has a touch screen, but otherwise it’s the same.

You can do everything with both of them. They are very powerful. You can browse the Web. You can play games. You can use Photoshop. You can do everything with both of them, but there is one crucial exception, which is that Macbook is a computer. If you are a programmer, you can sit down and write a program for your computer.

Once you’ve written your program, then you can run your program on your own device, and you can give you a program to your friend and he can run it on his device. You cannot, you are not allowed to do this on your iPad. You’re banned from doing this. This is forbidden. The only way you are allowed to run your own program on your own iPad is that you write the program and then you send it to Apple, to California to be approved.

And if Apple agrees and approves, and blesses your program, then, and only then, you get the right to run it on your own device. And this is a very, very restrictive model, but it’s also a very secure model. It’s the same model we see elsewhere like in your PlayStation or in your Xbox. That’s the same model.

Those are also very, very restrictive environments. They are computers just like any other computer, but it’s a computer, you, the owner don’t have the right to program and you can only run the programs , which have been approved by the vendor. The fact is Microsoft, one of the largest operating system manufacturers on the planet, the most secure version of Windows that they are shipping right now is inside Xbox. It’s inside a goddamn games console. Isn’t that weird?

Petri: Well, that’s quite funny. Now, I understand why some are having business meetings in some of the multiplayer games.

Mikko: Yeah. I’ve actually seen someone was doing meeting inside Fortnite. If you disagree with someone else in the meeting, you can just shoot them.

Petri: Yeah. I heard that sometimes it’s an unintended consequence. But maybe sometimes it’s just a bit of venting, chill out.

How about then, if you’re building a software startup and you need to basically own the cloud for the other people. You’re responsible of the data. How do you secure that data? What are the other measures you need to take into account when you starting from scratch, maybe it’s yourself and a dog?

Maybe you building a new company, Mikko? You start to build from scratch. But you’re planning to make it to 20, 50, 100, 500 people and more. How do you do it right the first time and how do you scale it? Are there different steps as well?

Mikko: Well, how would I know. I’ve always been working at the same company and it’s not my company. I haven’t grown a startup from a man and a dog…

Petri: You were there pretty much from the beginning, weren’t you?

Mikko: Yeah. I was an early employee with F-Secure, but it’s not my company. That’s not really the same thing, is it? But…

Petri: Yeah, that’s true. But I guess you’ve seen quite a lot.

Mikko: I’ve seen the company grow. I’ll give you that.

Sure, sure. We’ve done so many mistakes over the years with F-Secure. I think that’s one of the best ways to learn really. One thing I think is a universal fact, is that don’t try to invent stuff which has already been invented. Nowadays, with all the access to shared open source code and things like GitHub and Stack Overflow and well documented and understood libraries make this possible.

A perfect example on avoiding pitfalls when you’re trying to build services for others, is that don’t try to implement complex things like encryption algorithms. That’s going to fail. You will not get it right. And we do have known tested, trusted algorithms, which do get it right. That’s the perfect way of thinking about this.

It’s also a question about when you see an opportunity, you don’t always have to take it. You should really consider it. I remember very well in the early years of F-Secure, back then when the company was still called Data Fellows, when the Web started growing, and Netscape, the browser, invented this great new innovation SSL encryption, which we nowadays call TSL encryption.

That’s the HTTPS connection between between different services. Initially, it was only meant for online shops. If you wanted to buy something online, you needed a way to encrypt your credit card numbers. That’s the initial use case for SSL and HTTPS. And I remember we realised that, Hey, there’s a new business here. Because for this encryption to work, there has to be a certificate.

And a certificate has to be issued, basically sold by someone. And in practice, that certificate is just a text file. It’s just a text file. You’re selling nothing. You’re selling trust. Certificate vendors, sell trust that you can trust us to safeguard these certificates and make sure they are issued to the right parties.

We considered, whether we should go, whether F-Secure should go into this certificate, vendor business. Whether we should start selling these. We realised early on that there might be a business opportunity there. Because if you’re only selling trust, Finland is one of the most trustworthy countries on the planet, according to different institutions.

We already had been around for a couple of years. We considered ourselves to be a trustworthy partner. We did consider going into this business. However, after doing some thinking about it, then we decided not to do it. We wanted to stick with endpoint security solutions and software security solutions we’re not going to do.

Of course, in hindsight, we lost millions and millions in money. They were very few vendors in the business at that early time back then. One of the biggest success stories started next year. They started, well, not from one of the least corrupted countries in the world.

They started from South Africa. That was the company called Thawte, which later sold itself to Verisign for a billion dollars. And the founder, Mr. Mark Shuttleworth went on to start Ubuntu with the money he made from that business deal.

However, no hard feelings. We did not miss that opportunity. We saw the opportunity. We saw here is something we could do, and we thought it through and we actively decided not to do it. I would have a much bigger remorse if we would have missed that opportunity. We didn’t miss it. We decided not to pursue it. And that might have been the wrong decision, but I have no regrets about it.

Petri: Do you think it’s still possible to build a startup who is in the security business and your main clients are big corporates because you need that trust and you need to build somehow that credibility? Or is that established companies game nowadays?

Mikko: It is possible to start new startups. We see it happening all the time. But the challenge you mentioned is a very real challenge and a typical way startups try to tackle that nowadays is by building advisory boards and bringing in known and trusted figures who can vouch for the company, go through the technology and then use their reputation to vote for it.

That seems to work to some extent. But it’s a little bit weird seeing new startups entering this picture with completely different business models than what I used to know and think. I had a very eyeopening meeting maybe three years ago. I was at Google in California.

There was this Google Cloud Engine meetup. During the lunch break, I ended up sitting next to these two Dutch guys and they had this startup from somewhere close to Amsterdam. They had taken in gazillions of VC money and used the money to hire PhDs in AI, which, of course, are very hard to get, but you get them if you have the money.

They had spent all of their investment to hire these brains. What they were doing didn’t make much sense to me at all. Because they were building these machine learning mechanisms to detect anomalies inside processes, inside Google Cloud Engine. I couldn’t figure out how they would make any money with that.

Obviously, it was a very expensive operation to run and I couldn’t see how they could make it profitable. So, I asked the guy, the founder. Okay, what exactly is your business model? And he told me that, well, we have no business model. We’re just trying to get acquired by Google.

Petri: Wow.

Mikko: I haven’t checked lately, but I’m pretty sure they did get acquired by Google.

Petri: Well, that’s a high bet strategy if you’re just doing it for Google.

Mikko: What’s the downside? Your company doesn’t succeed. It doesn’t get bought by Google and then VCs will lose their money.

Petri: And, you will lose your time building the company.

Mikko: Yeah, okay. That’s true. It’s not that easy, isn’t it? But it was a really eye-opening discussion. I tried, for the life of me, to figure out how do they make any money with this. And the answer was they weren’t trying to make any money.

Petri: This reminds me of another conversation you had. Was it also with Google? Was it even in the same lunch where you made the parties really silent, then nobody wanted to talk anymore?

Mikko: I know what you’re referring to, but that meeting wasn’t that Google California. That was actually at Google Switzerland. I managed to crash the mood of a lunch meeting. We were having lunch with maybe ten Google engineers and chit-chatting about this and that and games and TV series, and what have you.

Then I started talking about nation states and attacks against players, which stored the world’s data, the big cloud providers. The thought I just floated was that isn’t it so that the biggest intelligence agencies on the planet wouldn’t be doing their job if they weren’t already trying to get moles to work inside the biggest cloud providers on the planet, like have their own employees recruited to work inside AWS or Azure or Google.

Everybody was nodding their heads. Yeah, yeah, yeah. Sounds right. Yeah, that’s correct. Yeah. They probably are trying to do that. Yeah. Yeah. Which means there probably are foreign intelligence agency moles working inside Google. Then everybody started looking at each other around the table back and forth, and everybody went awfully silent.

You end up in a really paranoid situation where you start to suspect your workmates to work for a foreign intelligence agency.

Petri: I would imagine that you didn’t kill just the lunch, but probably that’s something you’re going to erase ever from working on those companies and in that field because how can you? Because that’s what happens and isn’t that actually what’s happening more and more nowadays?

How can you describe the situation nowadays that there’re government agencies actively hacking companies and doing stuff, and they trying to find all the possible cyberware available to find these hacks and exploits, but then there’s also the temptation to utilise that for the gain of the private companies as well? So, there’s a lot of people knocking on your doors, at least virtually.

Mikko: That’s correct. And the whole idea of government writing malware would have been so hard to believe early on during my career. When I started analysing malware in the early 1990s, all of the viruses were being written by teenage boys for fun. It was sort of like a fun game that we were playing against them.

We would find a new virus and we would try to decode it. And of course, the virus writers were trying to make it hard for us to figure out how the code worked. They had encrypted it and there’s all kinds of booby traps. And we would find all of them and decrypt their riddles and solve them and named the new virus and that detection.

And then excitedly, we were waiting for the next case. Sort of like playing a game of chess against an unknown enemy. But anyway, again, that’s what it felt like in the early days, even though it was a business. We were selling anti-virus solutions, but this is how it felt like. But then slowly and surely it’s changed and all these happy hackers of yesteryear have disappeared.

Nowadays, it’s all about organised crime gangs, making tons of money with ransomware and banking trojans and keyloggers, or it’s what you were just referring to governments, intelligence agencies, militaries, which use offensive cyber power for espionage and for sabotage and in extreme cases for waging war as well.

It has totally changed the nature and the value of software vulnerabilities or exploits that target software vulnerabilities.

Petri: Is this sort of the theme of this decade now that it’s getting more like an ordinary thing and another type of thing we have to take care of? So, it’s not just ransomware, which is quite dominant nowadays, but also that if you building something, which has potentially high value that you have to be quite paranoid. Now, I start to understand the CEOs who are running their business just from their mobile phone, or maybe from their Xbox.

Mikko: I don’t think any executive is running their business from their Xbox yet, but it might not be a stupid idea. But, if you think about cyber weapons, whether you use it for espionage or sabotage, they make a lot of sense. Cyber weapons make a lot of sense from the point of view of the attackers, from the point of view of nation states, when you compare cyber weapons to traditional weapons. Cyber weapons are effective, affordable, and deniable.

You have a weapon which is affordable. It’s cheap. It gets the job done, and you can deny that it wasn’t us. This is something you cannot do with traditional weapons, like a B-52 doing bombing runs, but you end up with comparable end results. For example, if you think about Stuxnet from 2010. Provably United States and Israel were able to delay the uranium nuclear enrichment program by maybe 18 months, purely with software attacks.

They could have done a physical attack. Instead, they could have done a B-52 run and bombed down the Natanz enrichment plant or its supporting facilities around it. But it was probably cheaper and more effective to do it with a piece of malware and the best part is it’s deniable. We know it was The United States and Israel.

They are still denying it today and there’s no way for us to prove this.

Petri: What should you do as a CEO, as a company owner, or a private party trying to do your business, and then there are these huge resource available for the government agencies and other parties who are trying to knock on your doors not in a nice way?

 Mikko: You should realise that you, as a business leader, have limited resources to fight against them. You should put your resources into the right place. And that means you have to do your threat assessments correctly. You have to understand who is likely to attack you. Who are you fighting against?

Because you don’t want to use your limited resources to fight against an enemy, which is never going to attack you. Should you worry about nation states? Is your company a target for foreign intelligence agencies? Do you have to worry about activists? Do you do something which will make people angry at your business?

For example, if you pump oil out of the ground. People will have very strong feelings about that now. Whereas people might have very strong feelings about mining cryptocurrencies, for example. That will create attitudes against your organisation. And you have to, in some cases, fight attacks done by those people.

Or do you have to worry about criminals? People who are interested in stealing from you? Or do you have to worry about corporate espionage? Do you have to worry about parties, which might make you to look bad or embarrass you? Do you have enemies? And the answers to these questions are different for different organisations.

If you have a company which delivers food. That’s a very good target for financially motivated attacks, but it’s unlikely to be a target for foreign intelligence agencies. There’s nothing interesting in there from the point of view of foreign intelligence. They don’t need to know who ordered which pizza at what time. That’s not the most important piece of information.

They would much rather target governmental targets or military targets or military contractors or targets like that. But it all starts from understanding who are you? What is your business? What do you do? Who would like to hurt you? Who would like to steal from you? And when you have an understanding of that then, and only then, you can start to put your limited resources and limited budget into the right place.

Petri: Are there countries, geographical locations, which are better, if you have sensitive security stuff or data. You have a limited resources, maybe you’re not a big corporation yet, but is there some governments who are more friendly to support you and lend their resources and actively be the big brother for you in a positive way against these other big brothers, who are trying to knock on the door or do we just need to be suspicious of anyone who is trying to help you?

Mikko: I don’t really think that any government is doing a good job in defending their citizens or the companies in that country against foreign threats. If this is going to happen, it’s it’s yet to happen. I had a very interesting discussion here in Finland with one of the generals of the Finnish military.

The question I had was okay, who defends Finland against cyberspace attacks? And he told me that, well, he is not sure, but definitely it’s not them. It’s not the military. It’s not their job. They defend Finland’s independence against foreign attacks, but in their mandate there’s nothing about defending against attacks in cyberspace.

Petri: Yeah, It’s a foreign attack still if it’s done by a foreign party. So, I think it’s semantics in a way.

Mikko: No, no. They have no mandate to work there at all. They can’t give orders. They don’t have the resources. It’s not their job. And this seems to be a pretty common story around the world. Geopolitics, definitely, play a part. We see this being a vendor, F-Secure as a vendor in this space.

We’re one of the biggest computer security vendors out of Europe. Which sounds fancy, but it’s not saying much because Europe doesn’t have very big security software vendors at all. There’re basically a handful. Some companies you might know. Some companies you probably don’t know, companies like Sophos and Avast and Avira and F-Secure.

But the really big players come outside of Europe. They come from the United States, they come from Asia and they come from Russia. Then when we go into the global marketplace as a European vendor, especially as a Finnish vendor, this sometimes does matter. I’ve been in discussions where companies are interested in consulting services or software security services, but they don’t want to buy Chinese and they don’t want to buy Russian and they don’t want to buy American.

Then you have much less options left. Finland as a neutral country, pretty neutral, actually, even the fact that Finland is not part of NATO has been in some of these discussions. And again, one of the least corrupted countries in the world, this has at some discussions been to our advantage.

Not always, obviously, but sometimes it does matter. This is something which, I hope we would be able to use more to our advantage. Overall, I’m really disheartened by the lack of technology leadership out of all of Europe. When we look at the biggest technology success stories, which come out of Europe, we have pretty much nothing.

When we do have the rare success story, it’s almost always fairly quickly sold either to the West or to the East, as we’ve seen. We really should be doing better. One of the most demoralising lists I’ve seen recently was the list of publicly-listed like stock exchange listed technology companies out of Europe. The first two entries on the list were Accenture and Prosus.

Accenture is headquartered in Ireland, but I don’t really think it’s a European company. Most people don’t think about it as a European company. And second of all, I don’t really think it’s a technology company either, but it was the biggest based on stock value.

Number two, Prosus. That’s actually South African company, not a European company at all. It’s just listed in Amsterdam Stock Exchange and their valuation doesn’t come from anything which has anything to do with Europe really. Their valuation comes from the fact that they were early investors in Tencent, maybe in Alibaba as well.

It doesn’t get much worse than that, does it? The European success stories are South-African companies investing in China.

Petri: It puts me to think that maybe that’s also one of the strategies: buy them early before they become too big. You can get them to the US or Chinese or whatever jurisdiction you want to have them.

Mikko: Yeah. And I think jurisdiction and regulations and rules, maybe are part of the problem. Europe doesn’t have a unified common marketplace like United States, for example. But then again, Europe is much bigger than the United States. In fact, it’s quite remarkable when you look at the amount of Internet users and then different regions of the world, the United States, when you look at the amount of Internet users is so tiny, it doesn’t even matter.

There’s much more users coming from Asia. More users coming from Africa. Twice as many Internet users in Europe than in the United States. There’s more Internet users coming from South America yet all the services we use outside of local media are US services. US cloud, US operating systems, US search engines, US social media.

It’s remarkable how well they’ve been able to rule and become the kings of the Internet. This might now slowly be changing. If you look at, for example, Alexa, which lists the most visited website in the world, out of the top 15 websites in the world, eight are now Chinese and seven are from the United States.

Petri: We have examples like TikTok policies, the data security or non-security and there’s a lot of these things where Europeans have already, for some time, being the ones who are taking whatever is given. The Americans also are starting to experience this now that there are things that are built in Asia and China and the other parts of the world, and you are not telling what to do or you’re feeling not so comfortable and probably things are not customised.

How do you see the future in this field?

Mikko: This is exactly the reason why we’ve seen the US leaders, especially Trump, react with these knee-jerk reactions when they realise that suddenly the most downloaded mobile application in the world is not American. In fact, it’s coming from China. Well, then they have to do something. Then they have to ban it. Or, when they realised that vendors like Huawei or Xiaomi are becoming a very real threat to the local US-based mobile phone vendors, they have to artificially restrict access to these technologies. And I think Xiaomi is a great example and Huawei as well. If you forget about the infrastructure and base station and 5g discussion for a while, and just think about handsets. You look at the most sold mobile phones in Europe.

You look at the top 10 lists and you have OnePlus, Xiaomi and Huawei on every list, pretty much in every country. Then you go to the United States and you won’t find them in the top 30 at all, because you can’t buy them. You have to jump through hoops to find them in any meaningful way.

That’s not natural at all. Obviously, there are worries about national security, but I think there’s also very strong hints about trade war, where USA is realising that China is very much rising. The same reaction we see from USA now against applications like TikTok. That’s the same situation where we Europeans have been for years and years. The technology and the applications and the solutions we use are not local.

They’re being built in far away places by regimes, which don’t care about us and our rules and our traditions and our legislation at all. And who won’t it down to discuss these details with us at all. That’s what we’ve been working with in Europe for four years and years. And now, when the Americans, for the first time, are faced with the same situation, it seems to be a very tough lesson for them.

Petri: You did an experiment sometime ago that you tried to live without Google. How did that go?

Mikko: Oh, it failed spectacularly. It’s not possible. I’m not challenging anyone to try it because you won’t succeed. Sure, living without the search engine, that’s doable. But that’s not Google. Google is everywhere. if you want to live without Google, you have to avoid all of their services.

Gmail, Google Docs, Google Analytics, Google Ads. Every website you visit is loading Google Analytics and using that to track you. You can try to find your ways around that, but it’s hard and painful. Then you have services like YouTube. This is what broke my back. People sending me links like, hey, this is very important. Check out this video and it’s on YouTube. What the hell am I supposed to do? The only way I can watch the video is use Google services, YouTube, to watch the video, or I choose not to watch the video. And that simply was not an option in some of the work cases I had. So I gave up. Google has become too big. You cannot cannot avoid it anymore. It is everywhere.

Petri: A related question, is it actually possible to browse the web even by refusing all the cookies, refusing all these trackers? I think technically that’s possible, but is it like that you’re just reading basically text files, which are just garbage?

Mikko: You can do it. Nobody really does it, but it is doable. Sure. There’s so many ways of tracking you. If you couldn’t reload any other content than basic text to do it, which pretty much nobody does. If you want to find a balance of what makes sense, like where’s the balance that you can actually protect your privacy at the basic level, but still use all the good resources we have online we have to accept some level of tracking. There’s no turning back anymore. We did have a time. We did have a chance of monetising the online services, which would not have involved any kind of tracking but that’s too late now. If you remember when first web browsers became common, like Netscape 1.0n made its breakthrough and suddenly everybody started browsing the web.

Petri: Those were the good times!

Mikko: Absolutely the best times!

I remember the mystery in the early days to me was how are we going to pay for all of this? Because when Gopher was going away and we got HTTP and it was so easy to use. We had graphical user interfaces. We had images. You could click on links.

I realised that this is going to be huge. Everybody will be using this and we will have so many services online. We will have websites with information with news, with weather reports, maybe one day we will have, I don’t know, movies on the Internet. That’s what I thought around 1994/1995. But then, I realised that hold on if you’re going to have all these, valuable services online how exactly are we going to pay for them? For example, newspapers or TV channels are not going to move their services from the current business model to the Web, if there’s no way for them to get paid. I was thinking about this and I came to the conclusion that surely Netscape and other browser manufacturers will integrate a payment button into the interface.

Like you go to read a piece of news and there’s a popup say, hi, do you want to read this? This cost you two cents and there’s a button and you click the button and you pay two cents and it somehow deduct it from your credit card or some online payment system. And then you get to read the thing. I was imagining micropayments. Obviously, this is the way it’s going to be.

There will be micropayments built in the browser and we will pay for content as we need, as we wish. And now it’s 2021 and we still don’t have the micropayment button in browsers.

Petri: 404 instead of 402!

Mikko: Yeah. I mean, you’re right. There is a protocol for that. We could. It’s all in theory there. And even the rise of electric currencies or virtual currencies and blockchain solutions, even that hasn’t made this reality. Nowadays, the closest we have to that is the Brave browser, which has the BAT currency payments built in.

But that’s not in Chrome or in Safari, which is what everybody’s using. So, instead of paying for content with money, the history made this weird turn and we ended up into this world where we are living today, where we pay for content with privacy. We don’t pay for content with money. We pay for content with privacy.

If I want to watch cat videos on YouTube, I can’t pay money for that. I have to let Google to profile me, build dossiers of me and what kind of videos I watch and what else am I doing elsewhere on the Web. Who is my friend and who is my enemy? And then sell that information, sell that profile, sell that dossier to advertisers or in extreme cases to sell it for election campaigns. They can use that to target people who vote. We were close. We could have chosen a different future. But we failed to do it and it’s too late.

Petri: Was it really an option in the early days or was it just the laziness of the people and it’s too difficult to pay for everything?

Mikko: I totally think it was an option. I think we just failed to capitalise on that. There were some early attempts, DigiCash, for example, in the early 1990s was trying to get this off the ground. One of the problems back then was that there were so much opposition from banks and credit card companies, which hated the idea early on, but clearly users were taking all these brand new technology into use for the first time.

And if part of the onboarding process would have been to include your payment information so you can pay for the content online I think people would have done it. It wasn’t simple to build the current infrastructure where all this profiling is being done and turned into money and nobody would have believed how much money there is in this online profiling business.

Nowadays, when you look at the revenues of Google and the likes of them it is a massively large amount of money, which is being done with this profiling today.

Petri: You mentioned somewhere that our generation will be remembered for what did we did: we killed the privacy.

Mikko: Yeah, we did. We were given a free and open Internet. Like you and me, Petri. We were given a free and open Internet. That’s what we got. And the question is, what kind of an Internet are we leaving for the future generations? Will it still be free? Will it still be open? And it doesn’t look very good.

The biggest innovations of our time, the Internet and the mobile phone and all these digitalisation revolution, have given us so much good and so much bad. I believe the Internet is the best and the worst innovation of our time.

Petri: I think we may have a second chance. That’s what some call the web 3.0, the decentralised world. Many of these people who are building it now are from the generation of our age, who experienced the open source movement and the early open Internet as well, because the protocols are back and now they’re happening in cryptos.

There’s still some hope. But maybe that’s just the pendulum going from the centralised to decentralised. Do you have any insights on the decentralisation move or trend? Because certainly, it looks like that you can trust anybody with your own data because it will be leaked. It’s just a matter when it’s not if it’s going to be leaked. We need to keep very tightly to our private keys, or how does it work?

Mikko: I think most of the users online are lazy and they will go through the path of least resistance and use the services that they know and are used to using. Since users have been online on Facebook for 15 years now, I think they will be online on Facebook forever, regardless of new innovations we see happening.

If there will be web 3.0, it is on the shoulders of the next generation. They are the ones that have to build it. They are the ones that have to start using it instead of the old services being built by the gorillas of the Silicon Valley. I do believe there is a real and important innovation in the space of the centralised systems and also in the space of blockchain.

And I know blockchain has a really varied reputation. Some people believe in blockchain solutions like religion and others are certain that any project which involves anything to do with blockchain is just a scam. I think the truth is somewhere in the middle. I do believe that the innovation of modern blockchain, especially the blockchain as described by Satoshi Nakamoto in 2008, that is one of the big innovations of our time.

I know how to detect, how to tell, when an innovation is big and important. An innovation is a major innovation when you explain the innovation to someone else and they are like, huh, is that it? That’s pretty obvious. That’s exactly what blockchain was. It’s just a list of transactions built so that every transaction is unchangeable forever and public forever.

That’s it. That’s the innovation. You can say it in one phrase. When you explain it, people are like, huh. Well, that’s pretty obvious. Well, yes, it is pretty obvious now that it’s been invented, but it wasn’t obvious before it was invented. This is how you can tell that it’s a big innovation when once someone invented it’s obvious, but it wasn’t before.

The solutions that you can build with transaction lists, which are public and unchangeable forever are so much bigger than just financial services. There are so many other things we can build with these things, with blockchain based solutions, which we still have to innovate, but the basic building block is there. I’d like to believe that the future is decentralised.

Petri: What’s your take on nifties or NFTs?

Mikko: It’s really, really interesting, but it’s not quite there, yet. We’re missing some piece of the puzzle and I can’t articulate what it is. But those of you who’ve played any games where you collect things, you know how valuable those things become, even though it’s completely virtual.

Even if there’s no real money payment involved at all. If you play some RPG and you finally managed to collect something, to build a really rare sword, and you know that in the whole global game, there’s only like three of these sword and you have one that’s really valuable. In fact, if you could, you probably would pay real money for a sword like that. When you combine that mindset and the collectibility…the fact that we like to collect things and hoard things it’s built into us when you combine that with math, which can prove that you are the only owner of a digital good I do believe there’s something there. But it’s probably still a couple of years into the future until this really makes the connection. Then we have another problem to solve, which applies to almost all blockchain solutions, which means it applies to almost all NFT solutions, which is the impact on environment.

Petri: Indeed. But for the environment part I have been thinking also that it’s easy to save the cost of electricity and that’s obviously there. But the other question is that, what is it replacing? What does it take to actually have the physical? Maybe not in the games, but if you’re doing physical art, and you have to get all those resources.

There’s a lot of logistics involved. Maybe you need to heat the buildings to have the galleries and people are doing traveling to get there. Then they are shipping those things. These are not so easy to see. My hunch feeling is that probably these are actually more because when it’s digital there’re no atoms involved. When you have atoms, you have to transport them and, use a lot of energy to move them around or manipulate them.

Mikko: I have two points about an environmental impact of technology. Especially, about mining and all that. The first thing is practical, which is traditional mining for proof of work involved in blockchain solutions. It’s pretty obvious that the one with the cheapest energy wins.

The solution is pretty easy. We just have to tax non-renewable energy a little bit more. So, it’s a little bit more expensive. A tiny amount more expensive than recyclable energy. And every miner will naturally automatically migrate to the renewable sources. Taxation in the short run is the easy solution for the environmental impact.

The long-term impact is more ideological. Every digitalisation idea uses energy and clearly we don’t want to go backwards. We don’t want to steer away from new innovation in technology. Yeah, sure. Watching Netflix movies is bad for the environment, but we still want to do it.

Doing Google searches is bad for the environment, but we don’t want to get rid of Google. Mining for proof of work is bad for the environment, but all of these, I’m confident, can be solved with technology itself. So, steering away from technology, steering away from digitalisation is the wrong answer. In fact, if we want to do anything, we should double the stakes and put more effort into technological advancement because that’s going to be the thing which will save the planet.

Now, there will be an innovation, with technology, which will allow us to reverse global warming one way or another, whether it is directly extracting carbon from the atmosphere and getting rid of it safely or whatever it will be, it will be technology which makes this possible. We don’t want to go back to where we were a hundred years ago.

No, we want to go to where we will be in hundred years in the future. We must not try to limit technology. We must use technology to save the planet.

Petri: I’m just thinking now coming a bit more fun stuff for awhile…

Mikko: You don’t think saving the planet is fun, Petri?

Petri: It is a thrill when you’re building new companies and that’s what I doing basically as a living, building the future. So yeah, it is a lot of fun. I’m just thinking that in order not to just talk about these things, more heavier, deeper topics and wanna have some fun for awhile, because I think it’s a few minutes we’ve been laughing. Well, you just did.

One of your first projects, you forgot something when you needed to demonstrate, and you did something which usually would get people fired. Can you tell what happened to the Saab 9000 Turbo?

Mikko: One of the biggest practical failures of my career, in the very beginning of my career, the very first job I had when I joined F-Secure had nothing to do with security. Early on the company was doing lots of custom projects for clients and I was in charge of a factory automation project for a large Helsinki-based factory. The project was late and overdue and it wasn’t progressing as we want to.

Petri: Just a regular software project, wasn’t it?

Mikko: Yeah, like they always are, but this was my first. I was late and inexperienced and I was very junior at the time. This was my first Windows project as well. They wanted to completely renew the systems they used inside the factory to run on Windows 3.0, which was the latest and greatest at the time.

Petri: No Internet.

Mikko: Obviously, no Internet, yes. 3.0 still didn’t support Internet even with outside drivers. Windows 3.1 then supported Winsock Trumpet, which then changed the world. But the CTO of the company got fed up with the late project. He called me and said, he wants to see a demo. He wants to see where we are. He’s going to invite his group together. He wants me to come over tomorrow and do a demo to show where we are.

I worked very late in the evening to try to get it as done as possible. Then I went to the office early in the morning. Our offices at the time were in Hietalahti. And then I jumped on tram to drive from Hietalahti to Arabianranta to show the demo. And when I get there, I go to the meeting room. They’re all there. The CTO is sitting at the end of the table and I’m 22, I think at the time.

I opened up my bag and I realised that I left the floppy disk with the demo at the office. I can’t show the thing that I worked on for weeks that I worked through the night. Because I forgot the floppy disk in the disk drive, which is at the office. The CTO was furious. He didn’t believe me. He thought I was just buying time.

He was confident I had nothing to show and I was just trying to cancel the meeting and that it’s just a story. So I told him, no, no, no. I do have it. It’s just at the office. So he said, okay, fine. We’ll wait. We’ll sit here in the room and we wait for you to pick the floppy and you come back with it.

And I told him, yeah, sure. I’ll do it, but I don’t have a car. So it’s going to take, I don’t know, an hour and a half for me to drive through the city with the tram. So, he gave me his car keys. I got into his brand new Saab 9000 to go and pick up the floppy. And as soon as I get out of the parking lot. I crashed his car.

Petri: So, within five minutes of going out of the building?

Mikko: Yes, yes. And I remember I told this story to someone and,he was just horrified and he asked me that, Oh my God, how on earth did you ever get another job in software industry again? And I answered him that actually I didn’t because I’m still working at the same company today.

Petri: How did you actually get the floppy?

Mikko: I didn’t crash the car so bad it wasn’t undrivable. It was a fender bender, but trust me it was bad enough.

Petri: Yeah, I can imagine. But usually, if there’s another party, unless you just went to whatever wall, you need to sort it out and that takes time.

Mikko: No, I crashed into a parked car and I left a note and carried on with my fender bender Saab 9000 Turbo.

Petri: Well, those things happen. I guess like the other time you were sort of too eager to do an update on the website.

Mikko: Oh yeah, that was another great example of failures early on. I don’t know if you know this, but F-Secure had one of the first websites in Europe. Definitely, one of the first websites in Finland. This was in April, 1994. And I know these because I set up the first website for the company.

Petri: Was it running on a Netscape server?

Mikko: It was actually running on a Solaris’ custom server at the time. HTTP servers were fairly easy to implement if you had a very small site, which is what we did. I think we had like three pages and a couple of images on the first site. But a fun fact about the same Solaris server, which was also our file server and our email server. If someone would have broken into our website, they could have gained access to our emails as well, which is pretty horrifying to think about, but, hey, that’s the way things were in 1994.

I was maintaining the system partially from the Solaris system itself and partially from my MS-DOS based PC, which was running PC TCP-drivers. And those drivers did not support symbolic links or they did, but they turned symbolic links into hard links. Which basically means if you delete a folder with symbolic links if you do it from the Solaris side, it just deletes the link. If you do it from MS-DOS, it actually follows the link and delete everything underneath the link as well. After we had been running our website for a couple of months, I was doing some cleanup because I had a full hard drive on my MS-DOS computer and I deleted a temporary folder.

It had a soft link to our website, which ended up deleting the whole site. So, I deleted our website and we had no backup. Yeah. I remember going to Risto, that’s Risto Siilasmaa, and explaining to him that, yeah, sorry, Mr. CEO. I’ve deleted our website and we have no backup.

Petri: The e-commerce business is down now!

Mikko: Well, I don’t think we had e-commerce at the time. But it was pretty bad, but, Hey, I’m still working here today!

Petri: Risto is a really forgiving man!

Mikko: Yes, I can’t thank him enough!

Petri: He wrote an excellent book a few years back, and I think that’s one of his principles, isn’t it? That you have to give a try do a lot of things and make some mistakes as well.

Mikko: At all times you have to keep your paranoid optimist thought in order. That’s the way he thinks. And that’s, I think one of the reasons why I’m still employed there today.

Petri: Is there anything else you would …because I really loved Risto’s book and if somebody hasn’t read it, I recommend to read it. It’s at least one of the best books, or maybe even the best book I have read about board work as well and corporate governance. It’s a bit of a thriller as well, and also how to save Nokia and what happened in Nokia as well. So, there’s a lot of things happening in that book. It’s warmly recommended.

Mikko: One of my favourite details in the book is going through the actual practical dealings when Nokia mobile phones was sold to Microsoft. It’s just fascinating to read the descriptions about the really physical armies of lawyers getting together at a hotel in New York where you have board rooms filled with paper contracts stacked meter high and going through of signing every contract and double checking that every patent is mentioned that everything is in order.

Then the board members join and do the actual signing. When you do business exchanges, which mattering in billions of dollars, that’s the way you actually do it in practice. I rarely remember reading about that from anywhere.

Petri: This reminds me of the terms and services. So, have you read them?

Mikko: Okay. Yeah. Well, Sometimes I do. As you know, it takes forever. The fact is even our terms and services are full of godawful things like our F-Secure software includes clauses like even if there is a bug in our code, which deletes all of your data by accident, and you tell us about it, we don’t have to do anything about it.

We don’t have to fix, and you’re in charge of all the costs. And we know people don’t read terms and conditions. We tested this. We set up a free wifi hotspot in downtown London on Piccadilly Circus a couple of years ago called F-Secure free wifi. And, and we got dozens of people signing up for free internet access and accepting our terms and conditions, which were the usual ten pages of legalese, which among other things mentioned that if you use our wifi, you will have to give your firstborn child to F-Secure. And if you don’t have children, then we will take your favourite pet.

Petri: How many pets you have in the office?

Mikko: We did have a discussion that we actually should go and pick up a couple of kids, but I was voted down. We never did any of that, but we would have had the right.

Petri: How do you handle a security crisis if that happens to your company?

Mikko: If it’s the first time I would recommend getting outside help and getting it immediately. In fact, I would recommend getting outside help for both the technical part and the communication part. These are hard to do and they’re hard to do at the same time. It’s also the reason why I recommend companies rehearse this. That companies take the time from their busy schedules to do trial runs being run most likely by an outsider who will run it like a war game.

Here’s the situation, this is what’s happening. What are you doing now? Okay. You did that. Here’s the new situation. Here’s how it affected the situation. What are you doing now? Because that’s the only way to learn about things that will affect the environment when you are inside of a crisis.

I’d like to think I have a lot of experience in working in the middle of information security crises, because I was running our labs through all the massive malware outbreaks of the early 2000s. If you remember 2001 and 2002 and 2003, we regularly saw Love Letter and Blaster and Slammer and SAS are these outbreaks, which started from an initial infection and then within a couple of hours affected the whole world. That meant my phone was ringing at 2:00 AM or 4:00 AM. Then I was working 24 hours trying to put out the fires. When we got the technical fixes in place, then I spent the next hours answering phone calls from CNN and MSNBC and BBC and explaining what just went down.

I think we built pretty good processes and infrastructure into handling big cases. It’s very stressful, but I can’t deny it’s also exciting. You do feel very much alive when the phones are ringing off the hook and the whole world is on fire. And you know that you and your team has the skills and the tools to put down the fire.

Then when you are able to do it, in most extreme cases, you shut down the crucial server used by the attackers and the whole attack stops. It does feel very good. You have the adrenaline flowing in your blood and it’s exciting. But of course, it’s exciting only for a limited, like when you get the fourth 2:00 AM wake up all during the same week it’s less and less exciting and more and more tiresome. I’m glad I lived through the virus years of the early 2000s. I wouldn’t give them up for the world, but I’m also very happy that time is now behind me.

Petri: You once said that security is like Tetris: your successes disappear, but your failures pile up. When everything’s working, you don’t get any recognition. And when obviously things are in red alarm, everybody’s concerned about things. And it’s like what happened to one of the biggest ships a few weeks ago: you are even visible from space.

Where should you start? I think it’s too late when you have a ransomware attack happening and you start to think about, okay, I need to Google someone. Oops, Google doesn’t work.

Mikko: Yeah. That’s why I so wholeheartedly recommend testing your defenses and doing trials and doing rehearsals. And I also recommend penetration tests. One of the best ways to figure out where your vulnerabilities are, is to attack your own network. And if you don’t have the know-how to do it yourself, you can hire an outsider, a good hacker, to hack your systems, and then they will tell you how exactly they got in.

And if you want to test your physical security, they will be able to do that as well. This is something we do quite a bit, both physical penetration testing, like basically trying to walk into companies and see whether we can gain access to data centers or confidential data, or what have you, or hacking the networks of the systems.

The thing there, which is remarkable is that our success rates are very, very high. Even when we do a repeat test, like we hacked into a network, then we tell the company what we did, they fix the shortcomings and then to make sure they fixed everything, they hire us again. Then we break in again maybe finding some new mechanism. But in a way, it’s also good to remember that most attackers are not like penetration testers.

Most attackers are after the low hanging fruit. They’re looking for money. Most attackers are in it for money. Most attackers are not nation states or someone who has a beef with you and wants to make you look bad. Most attackers just want money. Which means if your protections are just a little bit better than the average, then the attackers will go after the easier targets.

You don’t have to have perfect security if everyone else has poor security. This means that when you do a penetration test it’s actually much more closure to testing against a targeted attack. Like an intelligence agency, because they won’t go after an easier target. They have a target and they will go after that target only, which is what we do when we are hired to break into a network. Even if your network is well protected, we’re not going to look for an easier target because we are hired to hack your network and your network only.

Petri: So that gives us a bit of comfort, but the world is a big place, so it’s relative the security and maybe you are the weakest link in some exploits.

Mikko: Then you will find out.

Petri: Eventually, at least.

There’s bit of an anniversary Brain.A. It’s not the first computer virus I think that award goes the Apple users but it’s pretty early on and pretty famous and you made a bit of a world tour as well.

Mikko: Yeah, that’s true. Brain.A makes history as being the first PC virus. That’s important because I mean, PC viruses are still today the biggest problem. That’s where most of the malwares problems today are, and PC problems started 35 years ago. Pretty much, exactly, 35 years ago in 1986.

The thing you’re referring to is the trip I did 10 years ago on the 25th anniversary of Brain.A. Because we had a meeting maybe six months before the 25th anniversary of the first PC virus. Our marketing and PR teams invited me to an internal meeting where they wanted to discuss whether we should do something about the 25th anniversary.

They had ideas like we could have some awareness campaigns to tell people about malware problems. I thought all that sounded really boring. My input into the meeting was that why don’t I just try to go and find the guys who wrote the first PC virus? And if I find them, then I can go and talk to them and ask why did they do it then and how do they feel about it and all that. The reason why I brought this up is that I remembered that there’s an address inside Brain.A virus. Brain.A, the first virus for PCs from 1986 has a text hidden inside of it, which is a street address in the city of Lahore, which is in Pakistan.

Petri: And the simplest thing would be to go to Google Maps and check the address and the knock on the door and say, hey, what would like to have an interview? But that’s 1986 and Google Maps was not available at the time. And I guess that was even before your time in the security business. So, a long time, but what are the odds? What happened next?

Mikko: Yeah, the odds were quite surprising because what I learned was that indeed the same street address in Allama Iqbal Town in Pakistan still twenty-five years later hosted the same guys. The guys, Basit and Amjad, the two guys who wrote the first PC virus. They are still there today, even today, 35 years later because I keep in touch with these guys. They’ve never moved away from the place where they were living back then in 1986, when they wrote the first PC virus where they put the street address inside the virus. When I went to visit them, they were there. They’re still there today.

Petri: In the text, when the virus was printed, it says: “Beware of this VIRUS… Contact us for vaccination.”

Mikko: That’s right. The answer to my biggest question, why did you write this, Basit and Amjad, why did you write the first PC virus? The answer was that they wanted to prove how insecure these new IBM PC computers were because these guys had a background from mainframe computers, which had user accounts and security restrictions. Then comes out the 8086 IBM PC, which has no restrictions. There’s no user accounts, no nothing. And they were horrified. So they proved just how easy it would be for someone to write something like this. And it became the biggest outbreak of its time, spreading all over the world, including computers in every city in Europe.

Petri: But it only spread with floppies.

Mikko: It’s spread at the same speed as, for example, COVID-19 is spreading right now. That’s the speed of people traveling. The only way you can spread a human disease from one country to another, is that someone travels from one country to another. Same thing with Brain.A and all the other early floppy based viruses. It required people to travel. You couldn’t spread these over networks. You couldn’t spread them over BBS systems or modems. You had to physically take a floppy and fly. Yet, Brain.A went worldwide. Eventually, Brain.A was even found from the Antarctica South Pole research stations.

Petri: it didn’t even freeze to death.

Mikko: No, it survived everything.

Petri: Like the Bluetooth stuff that happened in the 2000s when people were running around with their mobile phones infecting people. And that’s like the digital COVID-19, wasn’t it? You needed the close proximity to other people and then the only choice was basically to say yes.

Mikko: That’s true. Just like in order to get COVID-19, you have to be within a couple of meters of someone else. The first Bluetooth viruses for the Nokia Symbian devices, they were the same. You have to be close enough to an infected device with your device to get infected. And I remember when these early Bluetooth viruses were a very real problem, viruses like Cabir and Commwarrior. A very typical reaction from people who heard about the problem was to blame the users: “stupid users, why do you accept the incoming Bluetooth transmission? You could just decline and you would be fine. What an idiot getting infected with these Bluetooth viruses.”

It wasn’t like that at all. The early Bluetooth user interface was very confusing. If you were close enough with your own clean phone to someone who had an infected phone, you couldn’t use your phone. You couldn’t do anything with your phone because the other device would constantly send you over and over and over again this request to accept an incoming file transmission.

If you took your phone from your pocket to make a phone call, you couldn’t. The only way you could do anything with the phone would be to accept the incoming transmission so you could get read off this query. Or the other option, which wasn’t obvious, you could just walk away. You could leave the premises to go far away from the infected device, but that wasn’t obvious at all.

The reason why people got infected with these early Bluetooth viruses was a user interface problem. A UX issue. Finally, in Symbian version three, the user interface was changed and this basically killed the whole Bluetooth problem. And we haven’t seen Bluetooth viruses since.

Petri: In a way I think that history is just repeating itself over and over and over again. It’s just different technology, but the gameplay is the same and it’s getting more sophisticated. You can get CEOs paying some non-existent bills and the cons are just longer and more sophisticated, but the basic principles are more or less the same. Just go through the history and find some good classics and rinse and repeat.

Mikko: We can look at every single data breach or data leak or malware outbreak. When you look at the root cause it’s always the same. It’s always either a technical problem, like an unpatched system or a human problem, like a user opening the wrong attachment or clicking the wrong link. And that’s the two root causes we will always find.

Petri: Till we replace the human interface from there and just let the computers write the code.

Mikko: I can’t wait for that. I do think it’s going to happen. One very good way of understanding the intelligence explosion is to think about programs, which program. Like if you have a program which understands its own code and can rewrite itself, it’s pretty easy to understand how that would very quickly turn into something that you and me couldn’t understand anymore. And which would clearly become better and the performance of this program would get better and better until we couldn’t understand the slightest what it does. This is what we speak about when we speak about intelligence explosion.

Petri: In some small, tiny way this is happening already now with all these AI systems or machine learning systems. But obviously it’s not something where they are self-conscious and can describe exactly what they doing and explain it, and then build a better versions.

Mikko: Even GPT-3 knows already how to program, which is pretty remarkable. Even the basic query interface of GPT-3, where you can like give it a prompt and it continues your prompt, if you speak German to it, it continues in German. If you speak Swedish, it continues in Swedish. If you speak in Finnish dialect, like Savo, it continues in Savo. If you speak Pearl to it, it will continue in Pearl. When I saw this for the first time myself, I was really blown away. You don’t even have to tell it that, Hey, this thing that I’m writing is in English or in Japanese, it just knows. It’s awesome and scary at the same time.

Petri: When can we expect security work like that? Nobody does anything and it probably happens in milliseconds and it’s already over, like in high frequency trading. There was a security threat and it was already analysed and neutralised.

Mikko: Security software has been at the front of AI and machine learning for quite a while. We started our first machine learning project in 2007. So 14 years ago, and today none of the large scale research laboratories could do their work without machine learning. There’s just so much data to be analysed.

So many samples, so much network traffic. We try to put as much effort into machine learning for security purposes as possible. It has been a great success story. The best part is that, maybe a bit surprisingly, we are not seeing the other side, the attackers, using machine learning yet, which is remarkable.

Clearly they could. They could be using machine learning to create malware, which is able to rewrite its code or code to avoid detection or phishing attacks, which would detect what works, what doesn’t and adjust accordingly. But we aren’t seeing that. I guess the reason why it’s not happening yet is that if you have the skills to build machine learning systems, you don’t need to go into life of crime.

You can find a very well-paying job because there’s such a lack of scale in machine learning space today. But obviously, that is only going to help us for a little while. Eventually, using machine learning systems will become so simple any idiot will be able to do it. And then we will start seeing malware using machine learning as well.

Petri: How do you see the future in 5, 10, 15 years? What are the things you excited about and what are the things you not so excited about?

Mikko: Every time I walk the corridors of Slush or some other startup event like that I get filled with this buzz of happiness about how clever the upcoming generations seem to be and how they are thinking about the world differently and how there’s so much innovation still to be done and how the digitalisation revolution is only in the very beginning.

We’ve only seen the very beginning. Unfortunately, we’ve only seen the very beginning of the problems as well. I see a bright future and a future where we are more and more dependent on technology. When technology becomes good enough our societies won’t work without that technology. Digitalisation and the Internet is on its way of becoming mandatory.

It’s not there yet, but it will be in the future. And that is going to be one of the big weak spots of the future. But nevertheless, I’m an optimist and I think future looks great, but we also have huge problems ahead of us.

Petri: It’s kind of crazy to think about if we go back to the 1880s, electricity was just coming. Then in the 1920s, a hundred years ago, thinking electricity and how it was changing the society. You could maybe make an analog, compare to the Internet as well. We are like in the 1920s of electricity.

Mikko: That’s right. That’s a very good comparison in the sense that when technology is good enough, like electric grid is very nice. It’s so nice that today it’s mandatory. No modern society survives without electricity. And if we get an extended power cut, like six months without electricity, nothing works.

The whole society would crumble because we wouldn’t be able to feed ourselves. We wouldn’t be able to heat ourselves. We wouldn’t be able to move. We wouldn’t be able to communicate. And this is what’s about to happen with Internet connectivity. That’s how crucial it will be. We’re not there yet.

And right now it might sound a bit far fetched that a cut on Internet connectivity would crumble our societies, but that’s, what’s going to happen. That’s how mandatory it will be in 10, 20, 30 years. And in fact, it’s going to be so mandatory that eventually it’s going to work the other way around because today when power goes out, obviously Internet goes out as well. Eventually, when Internet goes out, it’s going to cut power as well.

Petri: If it’s smart, it’s vulnerable.

Mikko: That’s the Hyppönen Law and it’s a very pessimistic law, but it’s also very true.

 Petri: What is your favourite word?

Mikko: My favourite word is hack. Hacking works. Hacking saves the world and hacking is also one of the biggest threats to the world. When I said earlier that the Internet is one of the best and worst things during our time, this is exactly what it means. But, I’m often asking if I’m a hacker myself and I guess I am, but I don’t really portray myself as a one because I know the word comes with heavy connotations and some people automatically assume that hacker means a criminal, which is not true. We have good hackers and bad hackers, and if I’m a hacker, I’m a good hacker.

Petri: What is your least favourite word?

Mikko: My least favourite word is complexity. I’m a big fan of simplifying things or simplifying technology or simplifying thoughts. Complexity is the enemy of security. The more complex our systems are, the harder they are to secure. And if that’s true, then it’s pretty obvious what we should be doing.

We should be trying to remove functionality with every new release of every piece of software. And that’s not what we’re doing at all. We are doing exactly the opposite. Every new version of every operating system and every application and every mobile app has more functions, more features, more layers, more protocols, making it harder and harder to secure our systems. So that’s my least favourite word.

Petri: A startup idea for someone: your complexity is my margin. What turns you on creatively, spiritually or emotionally?

Mikko: Sleep is very important for me emotionally and creatively. I’m happy to report I’m a good sleeper and during normal times I travel a lot. I live in different time zones. I always sleep well. And I think that’s my superpower. It’s very important for me.

Petri: What turns you off?

Mikko: Meanness or mean people, mean thoughts. it’s just unnecessary and unneeded and such a turnoff. Yeah, meanness.

Petri: What is your favourite curse word?

Mikko: Oh, that’s easy. That’s perkele! And I think Finnish swear words are very international. I think everybody understands that perkele means what it means.

Petri: What sound or noise do you love?

Mikko: I’ll play it to you. I’m a big nerd for old technology and old games. So it’s the hyperspace sound from Williams’ Stargate from 1982. That’s my favourite sound.

Petri: Wow! What sound or noise do you hate?

Mikko: It’s very simple. It’s the sound of alarm clock. And that goes back to my superpower of sleeping.

Petri: Are you demonstrating that as well?

Mikko: I’m not because I hate the sound.

Petri: What profession, other than your own, would you like to attempt?

Mikko: If my profession today is I’m a security expert, I’d like to try to be a professional game developer. It’s probably not nearly as much fun when you do it professionally. Maybe a hobbyist game developer, maybe that’s something I’ll do when I retire. I used to write games in the 1980s. I even got some of my games published back then on those home computer systems. So yeah, maybe that’s the one.

Petri: What profession would you not like to do?

Mikko: Well, I wouldn’t like to be a priest. That’s pretty much as far as away from me that I could think of.

Petri: Are you sure? You’re like a security priest, aren’t you?

Mikko: I’m not a security priest. Take that back right away!

Petri: If you could be a co-founder of any startup in any era, which one would you choose?

Mikko: If I could choose any era, any company, I would definitely choose 1972 Atari. That’s such a heroic time that changed the world. Atari had a really lousy fate, like many of the early game companies, but during the first 15 years, it must have been like magic. So, yeah, that’s what I would choose: Atari 1972 with Bushnell designing the first video games, the games, which would change the world.

Petri: It must have been a really magical place to work at the time.

Mikko: I recently visited the old Atari headquarters. I have a lot of old Atari games. When you read the manual for the coin-op, the full-sized games, they have at the back page the street address where the game were built. So I actually went there. I was visiting Apple and I had my rental car. I drove 15 minutes from the current Apple headquarters to the address where Atari used to be. It’s now empty. It was for rent. The building is still there. It’s the same building but nobody’s using it at the moment. I just walked around the building like a pilgrimage to see where magic was done all those years ago. I’m happy I did. I got nothing out of it, except I saw where the world was changed so many years ago. I’m not a priest, but, maybe I did get some kind of a mental feeling of togetherness with the feeling they had all those years ago.

Petri: And even Steve Jobs was doing nights sifts there.

Mikko: Even him. Yeah, that’s right. He was working there. I believe he was not that same building. They were probably still some garage back then, but yeah, it all comes together. Doesn’t it?

Petri: Indeed. Small world.

Mikko: It is.

Petri: Any final words for the audience?

Mikko: It’s all going to get better. I think we should be considering ourselves to be very lucky to be alive during these years. The human mankind has been around for 200 000 years. We happen to be alive during these defining years when we stopped living part of our lives in the real world and started leading part of our lives in the online world. And that will be the norm forever. This change is happening right now and we get to see it, so, exciting times!

Founder non grata

April 15, 2021


Jaakko Villa talks about co-founding a successful growth company Idean and running it for many years but what happens when the co-founders part ways and his legacy is nowhere to be seen anymore. We also cover how to transform from direct sales to digital sales processes and what is an ethical design agency.


Jaakko Villa is a Finnish customer experience serial entrepreneur. He is currently managing Puheet customer community engagement SaaS business. In 2020, he co-founded Alpha Design Partners and already in 1999 the UX design firm Idean. At leisure time, he enjoys motorcycling and sports, especially basketball and badminton.



(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: Why is equality in ownership not a good idea?

Jaakko: If you have equal ownership, everything goes into the trash from so many different perspectives. One of the examples is that if you have, you have the general meeting, you have the board of directors, the management team and the operational team present at the same time. It’s if not fully impossible, it’s nearly impossible to have anything that is under the argumentation to be decided and then move forward. The roles, everything…it’s very difficult to manage the company.

Petri: Sounds like you have some personal experience. Can you elaborate?

Jaakko: One of the first companies I was involved with we had equal shares, 20 per cent each, at the time the difficulties started. I was the CEO for about seven years. When we didn’t have anything, equal ownership was just okay. But when we had the business booming or growing steadily, sometimes faster, sometimes a little bit slower, difficulties started.

One of the reasons was that as a CEO, I wanted to do some things according to the strategy that we had decided. Let’s say I called the management team together, and then we decided to do something. But if in the management team there were opposing opinions or opinions from the owners that they didn’t want to do, according to what I had decided as a CEO or what we thought was the best from the strategic perspective they could do it.

There were no tools, nothing to guide them or direct them or order them to follow up what has happened with the decisions that we’ve made in the management team meeting. That’s one of the issues. And then in general, I would say that in startups and scale-ups, it’s always better to have a master’s voice, somebody who can make the final decision and who has the final go or no go decision in different decisions to be made. If it’s all too equal, it’s very difficult. It’s random. It doesn’t have a dynamic view to the company’s present or forward-looking operations.

Petri: Is it because of the background of the people or can it actually work in some instances? For example, if you split the company between two founders, 50/50, and then you start to take investors and other people on, or is it because those founders are basically in all the roles at the same time? They are on the board and they are owners and they have a shareholders’ agreement and it’s basically the same stuff. Or is it because of the different backgrounds and roles of the people in the company that some are more involved to the business side and some are into other aspects and there’s sort of a discrepancy between the understanding and agreement on how to grow the company, or can you be a bit more specific in what circumstances it works and in your experience as well, what is the setup you would like to do now knowing everything you know?

Jaakko: I think it is a mixture of everything that you’ve mentioned and probably some other things, too. What I would like to have, and what I have practised after that is that there has to be somebody who has always the final say. The final say can not come from the chairman of the board if he or she owns as many shares as, let’s say, the CEO or the management team. Organising the operational structure in the company is very difficult, if you have several owners who own the same amount of shares and to you face-to-face, they say that, okay, let’s do this, but they know that they have always the opportunity to do something else if they want.

Petri: Did something happen because I feel there’s more to the story? Can you maybe walk us through a bit of how did you get started with the company? You were there for seven years as a CEO and building the company, making it international, and you managed to put an impressive list of clients, global companies. I’m sure there’s a lot of stories you could tell us and probably some turmoil as well.

Jaakko: Yes, definitely. We started the company in ’99 with the name Suomen Oujee Oy. We were four very novices, how would I say, youngsters without true professions. I was the only one who had already quit the university and had my master thesis done. I was working just the previous two years in the Theater Academy of Finland, the higher education centre there.

Then one of the three other guys called me and asked me to join a meeting in Jyväskylä, Athens of Finland, to talk about an idea. They had this intriguing and fascinating idea to build a company called Suomen Oujee and start doing educational training, mostly in the Ostrobothnian area of Finland for the municipalities and local entrepreneurs. I thought that this is a crazy enough idea for me to join because I have always thought that if there’s only one thing that you can fully rely on it is yourself. And, with that type of a company, I thought that, yeah we definitely can do something and it might be fun.

I had been doing training and education in Theatre Academy, and I knew how to do it. So, I joined them. And actually in the beginning, in the very first months, we didn’t have equal ownership in the company. If I remember correctly, I had 14 per cent or something. Then we started doing the training programs in Ostrobothnia. We were sort of happy with that because we gained some customers and we gained better revenues than we thought in the first place.

We decided that we will change the ownership so that every one of us four guys had the same amount, twenty-five per cent. That’s what we did. Soon after, let’s say, it was one year after the founding of the company, one of the co-founders, called Mikko-Pekka, came by train from Tampere to Helsinki and I was waiting for him in the Helsinki railway station.

He literally had shivering hands and a shivering voice. He came to me and said that I had this excellent discussion with a guy I met on a train and he’s from Nokia. He’s an executive in Nokia. We have this fruitful discussion and he said that maybe in the future we could do something together. And I said to Mikko-Pekka that now call him immediately and try to arrange a meeting.

It was less than a month when we started doing project work for Nokia. Maybe at the end of the first project, maybe three months or so, Nokia told us that, Hey guys, you have an excellent approach in your work and what you are actually doing is usability testing and usability work.

We didn’t even know such a term existed at the time. They asked us to do some research with some users and give them prototypes of new digital mobile services and that is what we did. Because of our education as teachers, our approach to the users already at that time was full. We wanted to understand why they behave, where they come like they do. Where do they come from? What are the internal motivations, what they like about it, what they would like to see in the new prototype service? We decided to report that to Nokia and they thought that this is a new approach. It’s interesting. It’s fruitful. Nowadays, you might call that approach service design or participatory design. There are many names with that nowadays. Twenty-something years ago there was no domain for that and no terminology. And we didn’t know exactly what we were doing, but it was beneficial for them.

Our business started to move from educational training with Suomen Oujee for the Ostrobothnian entrepreneurs towards commercial design projects with Nokia, and soon after other customers in the booming digital wave that we had 20 years ago.

Petri: You were pretty lucky with the timing. It was booming around 2000. You went probably together with Nokia with your internationalisation?

Jaakko: Yes, we did. Yes. One of the learnings that I have is that timing is everything. It means everything. You can have the best idea for your business. You can have the best team to execute anything. You can have the funding. You can have everything, but if the timing fails, your business most likely fails.

There’s some evidence also supporting that you probably do remember a guy called Guy Kawasaki. He made research regarding the biggest reasons why startups and scale-ups fail. And surprisingly the biggest reason is the timing of the business. And we were very lucky. We definitely were very lucky in so many different things.

Not only timing-wise, but also that Mikko-Pekka was in the train and started talking opposite to a person who was interesting and open to discuss with 23-24 year young entrepreneurs. Then we decided to take advantage of that discussion. And our first projects were successful and yes, we were very lucky.

Also after that, we went with Nokia to Singapore. I might remember this wrong, but I believe it was 2003 or 2004 soon after that to China in Shanghai, 2004 or 2005, and then to London. Then we had 2006, when I was still the CEO, we had subsidiaries in all those countries. In Finland, we had Jyväskylä, Tampere and the headquarters in Espoo. I believe a bit more than 70 consultants altogether. And the biggest reason is the timing and the willingness to utilise the opportunities that come close to you.

Petri: But it sounds like that your ownership structure didn’t prevent you from doing those things.

Jaakko: Oh, in the beginning? Definitely, no. When we didn’t have anything to share everyone was together. Everyone was united and unified in so many different ways. That’s euphoric, it’s ecstatic. You see an opportunity. You run towards it. You manage to solve problems and challenges.

You can accomplish huge things together with your key team. That was wonderful. Then when you have a little slower growth period, and the plans that you have made for fast growth don’t really happen as they are supposed to, or you have a lot to share in your company.

Let’s say you can share out some dividends, you can decide what you want to do with your budget. You can have a real strategy that is not only reactive. You can predict things and you can decide where you put your focus into. That’s when the voices that have been passive during the fast growth, because you had so many things to do, or they have been passive because there was nothing to share among the group.

Then those voices become much louder. When you have more volumes you can decide where to focus, what are the actions that you will do. I believe it was 2004 or something, we made a very small acquisition of a small design company. And the other owner of the design company became the fifth equal owner of Idean. It was no Oujee anymore. At that time it was called Idean.

Petri: Can you explain the name?

Jaakko: Yeah. There’s a story also behind that why we changed it,

Petri: I’m more curious about the story, how it came up in the first place.

Jaakko: You mean Suomen Oujee? First, I need to say that, but how do you call them? I believe there was Yahoo already existed at that time, but there was…

Petri: Jippii was the Finnish another one…

Jaakko: Yeah, but Jippii came after us, but soon Jippii and Yahoo can’t remember the other ones who had funny names like that.

They didn’t give us good karma if you want to say that. We also had some projects in the Midlands of Northern America and the way how they pronounced Oujee was very close to Ouija, the spirit board, and we thought that maybe this is not the best idea to have a company called Oujee from the credibility perspective or internationalisation perspective or from many other perspectives that we could imagine and we were discussing about them. It was Risto, who then came up with a new name called Idean. And we decided to go with that. It was much better.

It was easier to understand. It was easier to pronounce. It was shorter than Suomen Oujee. That’s the story behind Oujee. I don’t know where it came from in the first place. Maybe it was something that somebody said in the first meeting that we should have this new company. Oujee! Maybe that was the name.

Petri: And then you’ll make it national by calling it Finnish Oujee, Suomen Oujee.

Jaakko: Yeah. We had to because the Trade Register didn’t accept only Oujee as our name. There had to be something else for it to pass the registeration process. And then we decided, okay. It’s not only Oujee, which doesn’t actually mean anything. It had to be something else, Suomen Oujee.

Petri: Before we went to that name issue, did you take any external capital or did you grow with the cash flow?

Jaakko: Grow with the cash flow. Only with the cash flow or using other words, money from the customers. We were very cheap in everything that we purchased and everything that we did. We flew where we needed to fly at the time with the most cheap tickets possible.

We accommodated ourselves in the most cheap motels or hotels possible, even in the US. I remember that some of the motels I stayed in there were meant for the truckers. I wouldn’t go there alone nowadays by myself or especially with my family.

It was all with the customers’ money and as I said, as long as we didn’t have a lot to share, we invested everything. Every single euro we received from the customer, we invested in growth and building the business. And there was the timing again because there were so many customers, so many projects. So much to gain both domestically in Finland and internationally that it was an easy decision to invest in growth. But then there was some downturn and that’s when the struggling of the strategic decisions and doing things together started.

And this is moving to something else already, but I guess it’s, it’s okay in this type of free discussion. I hired a COO, chief operating officer, in early 2006, after having discussions with this man. Maybe half a year already before he joined Idean. The main idea was that this man, maybe five years older than the rest of us, who had been a lawyer, who had been taking care of the financials in many companies, who had been responsible for the human resources and all the bureaucracy that I didn’t enjoy that much at the time.

I thought, and everyone inside the company thought that this is a good match. And, he had been working in Andersen Consulting and at least that is what we thought he knew how to put more gas in the flames and how to grow us much faster than we had been able to do before him joining us.

But it was only a matter of some months when I started to realise that, Hey, now the general atmosphere at the office among us owners and the management team has somehow changed. In spring 2006, we ended up discussing about what to do because we had already some millions of euros in revenues and we could do some from focusing and investing in indifferent things freely with the money from our customers.

This new CEO had different ideas of how to grow the company. He was a great salesman to the rest of the owners. This is not a true fact because I haven’t discussed this with the rest of the owners, but I believe that he had so different thoughts about the strategy and how to build the company to the next phase. He said that we need a different type of CEO for the company for the next years. That’s okay. That’s definitely okay. The company needs a different personality CEO in different phases of their growth. That was okay for me.

In August 2006, after several discussions, we decided that, okay, let’s get a new CEO for the company. We chose a headhunting agency for that and started the process with them. After that it was maybe only two weeks or so when I realised, even though I had initiated the headhunting process, I realised that the process is not a real process.

Because the rest of the owners had already decided that this COO will be the next CEO to replace me. And when I realised that I called the general meeting for the company and explained my side of the story and said that, okay, it’s okay for me if we change the CEO, I can take a sabbatical leave and come back later on.

But if this COO, and then I explained what I had felt that he had done during 2006, if he takes my place, I will not work for the company anymore. After that, I took my sabbatical leave that was supposed to be three months or so. I had been maybe three weeks or so of which two weeks with my six-year-old son in Tenerife, I decided that I will never go back to work in that organisation because of what the rest of the owners, the equal ownership owners, had decided and how they handled the process. And, because I thought that the ideas that the COO I had brought to the company were stupid, to be honest. They were not something that I had any belief in. They were also somewhat unethical. I just thought that I have to stick with my ethical principles and still be able to see myself in the mirror every morning. I have to do something. Then in early 2007, I said that guys, now you can purchase my shares and I will leave the company.

Petri: Let me recap. You recruited a COO and then the other founders, the other shareholders, started to get some ideas that may be you need to be replaced. How did that make you feel?

Jaakko: When I realised that I thought it is something temporary and goes away. But it didn’t. And then I started talking about sharing my thoughts with the rest of the founders. The dynamics in the founders, we were five and had equal ownership, but the dynamics were such that there were two more dominating personalities amongst the five of us. I was the other one and then there was another person. I started discussing with the other person a lot. With the rest of them some discussions, but with this guy, quite a lot and we ended up in endless discussions about what should be done, what has been done.

As my style in the leader positions is that I don’t keep my opinions only to myself. I say them aloud and people know what I think about things. What I like, what I don’t like about then, of course, in that type of discussions all the old disagreements and the pain point, everything from the previous seven years started bubbling. First bubbling under and then coming to the surface. That was a terrible time I had.

I believe that we all had a terrible time in 2006, the second and third quarter, and maybe also the fourth quarter. No one wanted it, but somehow we ended up fighting and for me, that was terrible. I thought that the guys had sold their ethical standpoints to a new person who had been there only for a couple of months.

And they had somehow forgotten our successful history of building an internationalising company with only the customers’ money. And I thought that was terrible. I also believe that they didn’t like it, but they had made their opinion.

Then it was myself and the other dominating guy against each other. Even today, when we meet very, very rarely, but when we meet we don’t invite ourselves to visit our families or homes. Which reminds me again, this is a funny story from maybe five years back.

One of the founders, I met him in a Slush evening meeting, and I believe that he had been drinking a little and he came to me and we hugged. We were happily discussinghow life is great. It is a pity that we haven’t met with our families for so long and we should do that.

Why don’t we invite you to our house and great to establish the relationship again and everything? I thought, okay, this is nice. Now, we can fix all the broken relationships. Then it was funny, the next week, I don’t know what type of thing happened, but I happened to see him giving a speech about what had happened in Idean and what kind of growth story it had. He was lying to the camera and the live audience and recording about how everything started and who there were. He had left me out of everything. I couldn’t do anything but laugh. But then I sent him an email saying, Hey, we just met the previous week and we had this great time, 20 minutes. We decided that we should meet with our families soon again, and now you betray at least me in front of the audience. Why do you do this? He never replied. I think that’s a very poor thing for anyone to do. It’s not a very courageous thing to do. I can’t see why, but I’ve also noticed that in quite many stories that have been given about how Idean started, what has happened and how the success story really built itself, so to speak. They have systematically left me out.

I don’t care about it anymore, but I feel a little sorry for them. For us, four original, and then the fifth equal owner who were such a unified core team doing everything together. And then something happened then and one of them which happened to be me, but I’m afraid it could have been anyone else.

Then the person is non-existent also from the past. But I think the story is so good that if they decided they would have made a good story or of it. We had an early CEO who was able to grow the company up to that point when we hired the CEO which didn’t work so well. They had to actually fire the new CEO about a year after they had hired him first because his ideas were terrible and they didn’t work well at all.

But then with the last funding the company had, one of the original founders went to the United States and started business there. And then it really boomed everything, and the rest is history. I think it would have been a good story written like that, or spoken out like that.

Petri: What’s there anything, you obviously have been thinking this quite a lot, I would imagine. Was there any sort of warning signs? So if there’s someone in the audience who was thinking that, okay, Hey, I’m the CEO. I’ve been here like five years, six years. And is there something I should be worried about?

Jaakko: Good question. This is where it comes to the equal ownership structure. These types of things cannot happen easily if there is someone, one person, no matter who, if there’s one person who has the final say in everything. But if there’s an intervention coming externally, someone can make a great sales pitch. Some smaller group of owners buys the stories and the ownership structure allows it, then this kind of thing can happen. The warning signs that I noticed were that the COO, whom I thought I knew from the leisure life and from his previous corporations he had worked in, also started to act a little bit differently towards me and towards the rest of the owners quite soon after he had been in the company.

And that should be noted and should be cleared out immediately when in the management position, in an executive position in the company, you notice that your almost peer person who is in a key position, starts acting weirdly. There’s always a reason for that. You should talk about that before things like the processes I mentioned happen.

Petri: You mentioned in the beginning, you agreed that maybe there’s a need for a new CEO and you find some other role in the company and that’s perfectly okay. So that was not the case. I guess the company was already seven years going and it was like that we’ve been achieving quite a lot, so maybe we need some changes and shift gears.

And you also mentioned that there was some turmoil and something did not exactly go as planned. There was probably stuff happening underneath and just any change is better than no change. Then there was an opportunity which sort of emerged, and it took this shape.

Jaakko: Yes. In the beginning, I couldn’t even imagine that they would like to have a new CEO in the company. But when I realised that it was really difficult for me to swallow the idea that I’m not the best CEO in the company. But after long discussions with myself and the rest of the owners, I just thought that, Hey, that can happen, but I need a sabbatical first.

And then when I come back, let’s see what I can do. I had been responsible for the biggest customer that we had, Nokia, from the beginning and I can’t remember what, but I guess that it was even in 2006 about 50% of the total revenues. I thought that I’m still needed there and there were things that I could do. I couldn’t imagine it, but when I realised that I thought that a change in the dynamics, in the roles, is needed and I was okay with that.

Petri: What happened next? You left.

Jaakko: Yes, I left. I left the building and later in 2007, I started a company called Solutions Space. In less than six months, we opened a branch in Shanghai. I had some network there who were willing to buy our services, which were different from what what we had in Idean. Then in 2008, we opened an office in Japan, in Tokyo.

Petri: How did you structure the new company? You were the only founder and did you get some investment money or how did you get that started?

Jaakko: At the beginning that was one of the principles that I have. I will not own less than 50 per cent of a company if I’m the CEO responsible there. I had two other guys who are co-founders with me. They had 20 per cent in total, I believe. I had 80 per cent in the beginning. We didn’t have any external money before we had our first angel investor coming in.

Maybe that was in late 2007 or 2008. He invested some money and he had also good connections everywhere. He became the chairman of the board and everything went quite nicely there. Soon, we had customers and we decided to start growing the business.

Petri: What did you exactly do?

Jaakko: Even in Idean, I had this idea that there are big companies who especially, during those years, they did a lot of market research and user research for the products and services and business and business models and everything internationally, if not globally. And they didn’t do that systematically. They had consultants travelling from one location to the next location, doing the interviews, the studies there. And then after that to the third, fourth and fifth location, and maybe before they had gathered all the data from the markets and the interviewed all the users they want it. And after those two, three, four weeks, they came back, started doing the research report. Maybe two months after starting the project the customer had had the report and suggestions and everything.

And I thought that that could be done differently. And I started building in Solutions Space a network of independent agencies in different places who could gather the data in a well-thought out environment, almost like a lab type of environment. They would have the research subjects users or consumers ready and, and the customers could simultaneously operate the research project at the same time in different locations so that they could reduce the time, the throughput time of a project from two months to one week or so.

That’s what we started to build in the first place in Solutions Space in 2007. Then I sold that idea to some customers and started drafting software that would support that type of data gathering and also the management of the agencies even from the sourcing perspective and the qualitative aspects were all considered there. And then I went pitching the idea to Nokia and they thought that’s a great idea.

They invested some money into the software development and we piloted it in three continents and the results were great. I thought that, okay, this is a good business. Then I made them an offer for the next years. They said verbally to me that, yes, this is great. Let’s do this.

But unfortunately, that was the month when Nokia crashed in mobile phones totally. Maybe that was even the month when Stephen Elop had had his burning platform speech or the letter for all the people there. Even though it was verbally accepted already, the offer never realised. That was sort of a black swan for the business development at the time.

Petri: Did you pivot the business, fold it, or what happened?

Jaakko: I pivoted it after that. First, actually after realising that this will not happen with Nokia, I went to all the big mobile phone manufacturers and I visited them and said, Hey, we have this ready-made software for you for this purpose. And it has this type of data gathering methodology as part of it implemented it so that you can just take it in use and you will reduce the amount of time spent in this and this much and the amount of money with the sourcing elements it had and everything.

They said, Hey, this is a great idea, but we don’t follow the same methodology. They never accepted it, to my disappointment. That is, by the way, one of the learnings that you have asked previously: do not ever trust one single company as your customer too much. Have always backup plans and have something else boiling or sell it to other customers at the same time.

Because if that one company fails for some reason, external reason, like in that case, victorious Nokia mobile phone manufacturing globally crashed, then your business is part of the collateral damages.

Petri: Recently, when COVID hit, you were also doing a bit of a transformation, not pivot but a transformation from direct sales to online sales. Can you walk us through how did that go? And was there something for other people to learn?

Jaakko: Just to start with that is by the way, the same original company that was doing the software for Nokia. I pivoted it after the Nokia crash and we started doing online communities. It was easy to pivot the business into online communities because maybe 50 per cent of what we have there in the software were usable for these different online communities where you can ask different stakeholders to join a community.

There you can do innovation or testing or marketing inside gathering projects together with them with full interaction methods and you can analyse everything. We pivoted it into that direction. Well, we had to rewrite a lot of the code, but then we had quite good business starting about a year ago in early 2020.

We had many big, good companies who already had, or were about to start online communities with our saas software. But then the COVID happened and it became evident that the few big companies that I had been able to make the relationship with the big direct sales type of methodology were not enough.

Some of them passed the opportunity to start working with us, even though they had already said that, yes, let’s do this, but when the COVID hit, it hit also the big companies and they didn’t want to start anything new there. After analysing what had happened and what COVID or the pandemic does for the sales and for the company, I decided that now we need to change our sales model in full.

We went from direct sales, which had been enough into digital sales. I thought that, okay, it’s easy. It’s simple. Let’s start doing sales with more volumes. Of course, the devil lies in the details and it was not that simple and easy. We had to change everything. As an example in direct sales what you need to do is that you need to take care of your customers in sort of the old fashioned way. Just making sure that everything is right and they know everything that they need and they can do with your services. Everything that they want to do and oversee that the chemistry is okay.

But in digital sales where the volumes are higher, even if they are not higher, you need to take care of the processes, the digital processes that the customers are utilising: starting a new customer relationship or maintaining your customer relationship. When it is more in digital channels, whether it’s on one or multichannel process you have to focus a lot more on them and you have to organise your sales team, customer support team and customer care team around the digital sales processes. For me, who had been doing direct sales for the last 20 years, it was surprisingly different from what I had experienced and what I knew well to go towards digital sales.

Petri: What was the most painful thing and what was a nice surprise you didn’t expect to happen?

Jaakko: I think the most painful thing that there was is changing the culture from direct sales and only a few customers taking care of a few customers, knowing them well and their account managers or whatever they have there in the team, changing that culture towards higher volumes towards digital processes and then managing the digital processes.

The biggest nice surprise that I think came from that is the metrics. You can measure almost everything there. Every action that you do in your sales team, every transaction the customer has with your software. You can even develop different automatic processes. If a customer does something in their software, you can start an automatic process that takes care of that.

Asking what they could do better or taking care of that they can solve whatever that they have been doing there. The most painful in summary is taking care of the people, the change, the culture, and the nicest surprise is how measurable everything in the digital world is.

Petri: Before we went online, we also discussed this and you mentioned that it’s simple, but it’s not really actually simple. Can you remind me and tell the audience what was the simple part and what was the complex part?

Jaakko: Well, the simple part was to announce that now we go from direct sales to a more digital sales mode. But the difficulties become there when we have to decide about the details. How to organise everything, how to manage sales teams’ daily actions, how to create the reporting, how to set up the goals, the sales goals with contacting goals, objectives towards the customer success.

It’s always that conceptually you can announce things easily, but when it comes to the details, even with this, at least, conceptually simple thing of going from direct sales towards digital sales. The amount of details is surprisingly big and you’d have to do things systematically.

We started the process, the change process in maybe February last year. We ended up doing many things better by the end of August but in September, or maybe it was October we decided that we will start cooperating systematically with a company who does nothing but digital sales and digital marketing. We have learned how to do things systematically. Everything that you do, you need to A/ B test, which one is better.

Don’t use your emotions, use the data to always go with the better one and always have something for the A/B testing process. This company whom we have worked with is called Digital Boost 360. The founder is called Mika Heikinheimo, who is a serial entrepreneur. His personality is “cut the bullshit and do the work, execute it immediately” type of personality.

It’s very systemic. You have to do small steps. You have to focus on the smallest details but do it always. Do something every day. Even if the step is very short or baby step, if you do it for six months, if you do it for several years, you end up in a successful business. That’s what we’ve been practising now for a bit more than one year. We see the results. We even have contacts from companies and organisations that we have not even heard of. People read our newsletters quite much. They go into our recently renewed website and they read the blogs.

They do things that we hope them to do. They even reserve time from my or our sales persons’ calendars to get a demo. The volumes are slowly, in my opinion, but they are getting higher every month. I believe it is only because now we are doing things systematically. We focus on the details and we try to improve our digital sales methodology every day and every week.

Petri: What happens when we can fly again and travel and do basically say direct sales, do you change anything?

Jaakko: I don’t like to say that I will return back to direct sales or I will not do direct sales at all. I think that we will focus a lot on digital sales and do it even better every week, also in the future. We can most likely, if everything goes fine, we can start doing digital sales elsewhere from Finland, maybe at the end of this year, in six months, if everything goes fine. My understanding is that it will not happen with direct sales anymore. There will be a need to meet people face-to-face in some locations. I don’t yet know how I will structure digital sales in the future for international business. But I guess that it will be with the digital sales methodology that we now have: scaling the volumes. Even nowadays you can focus on certain areas with your critical marketing efforts and sales efforts and I believe that’s definitely the only way, almost the only way to go for us in the future.

Petri: How do you see the role of communities in business nowadays? Is it a competitive advantage? I was just reading David Spinks’ new book called The Business of Belonging, which just came out a few weeks ago and he talked about how to build businesses or how to build communities. He sees a lot of similarities between them that you have to treat your community as a business in the sense that it needs to be self-sustaining in order to thrive, it needs resources and dedication. It is more like a startup when you’re starting it.

Similarly, a company, when you start it, it’s like a community. You have a mission, you have a purpose, and then you’re rallying people around you. Then you start to build from there. You need resources as well. It’s not that much different, but when you already have a big company or you already have an ongoing business, you can still have a lot of these things and involve people. What are your thoughts on this matter?

Jaakko: Utilising online communities in the Finnish business climate is very poor. There are not many companies who have done it successfully and who know what to do with it. I would say that almost the only companies who do it well in Finland are some of the big consumer companies who just have so huge volumes that if they decide to start a community, there’s always some 10 or 20 per cent of their consumer customers who will join it. And of that amount, there are maybe 10 or 15 per cent who are active there.

To build a successful community online you need to act as a startup. It is definitely like that, but that is not the only perspective in the online communities. You might have an online community for, let’s say, research and development purposes.

It is more like you tell about your new features and new products and people give their feedback and you can do some testing and you can do some development and maybe even some product innovation with your crowd or with your community. You could have a more sales and marketing oriented online community where people get to see your latest fancy innovations. Maybe if they take part in that type of online community they receive something as incentives to be the first to purchase them. If you want to do it well, you need to…that’s, by the way, something that we have built into our community methodology, you need to have the purpose and the mission.

You need to know what you want to do with your online community. Then you need to organise your ideas, the themes in the community accordingly. You need to have there people who in the beginning create the content that is needed and who create the first interactivity for the smaller group that definitely, in the beginning, you have there in the community.

You need to have someone who is overseeing the online community from, let’s say, a startup entrepreneur’s perspective and trying to understand where are the trends, where are the most active discussions, how could I utilise them? Where are the next opportunities? Where I can go to and how I can build on something that has been brought up by a community member and how I can grab the idea and just utilise that for the core purpose that I have and the mission that I have in the community.

That’s probably one of the biggest reasons why many online communities fail. They don’t realise that they need to do their homework, so to speak, or the business plan for the online community in the beginning, when they start it.

Petri: You also have been founding another company just recently. You said that you paid a lot of attention to the values and that it is based on proper values. Can you elaborate on what you meant by that?

 Jaakko: I had to go back to the design industry. I’m fascinated by the design industry. I’m not a designer myself, but I value a good, great design and the designers and great products and designs that work for me and they look nice and they are easy to use and so forth. I have been in different industries for almost 10 years.

Then I had an opportunity to start a new business with a friend of mine who was one of my first customers in Nokia about 20 years ago. In his personal life, he had an opportunity to do something new and he wanted to do something new and then we ended up discussing the new idea of an ethically sustainable design company business model.

After some sessions, we decided to found one by ourselves. There are some principles that we would like to follow in this Alpha Design Partners company. One of them is that we should never do anything that is not good for us and for the customer. We have seen also design consultancies or agencies, who come, sell, make a great sales pitch, execute the project.

Once they have ended the project they leave and then the customer is left without any support and they should start implementing the new designs. It’s not a rare thing that the new design is shining and polished, but it has some elements that are difficult if not impossible to implement into the product.

That’s one of the things. Then from the consultancy professionals or the designers’ perspective, if they’re working in an agency it’s not really rewarding in the long-term if you do a project. You get excited, you get yourself and the team energised about doing yet another project, and then you do it with a huge amount of energy, a couple of weeks or months. Then when everything is ready to be implemented from your perspective, you leave and you’re starting another project.

We decided to change that structure a bit and it has worked well. We have already in these few months interesting both domestic and international customers and we are doing not only the fine-tuning of visible user interface elements or the pixels perfect stuff, but we are also doing a little bit more deep changes for our customers. Maybe the service structure or the product structure, and we are helping them to do a transformation towards a more modern style of design operations and design teams management.

It’s very interesting. I believe that the learnings I took from Idean at the time. The experiences coming from Solutions Space in Asia. We did also some design-related stuff there. Then building my own software company business. They all somehow come together in this new Alpha Design Partners venture that we have. So, it’s interesting. It’s really interesting.

Petri: What is your favourite word?

 Jaakko: I guess that I have mentioned it many times here. It’s probably for sure.

Petri: What is your least favourite word?

Jaakko: I don’t like world-class. I don’t like that at all. I think it doesn’t mean anything. World-class doesn’t mean anything. And for different reasons, I don’t like the word, honestly. Those are probably the two least favourite words.

Petri: What turns you on creatively, spiritually, or emotionally?

Jaakko: What turns me on, I think that the moments and eras of creating something new that solves a big problem that relates to many people.

Petri: What turns you off?

Jaakko: That’s easy. It’s two-folded. The other one is proofless negativism and the other one is backstabbing.

Petri: What is your favourite curse word?

Jaakko: There are many. I’m a heavy user of curse words. I use them on different occasions in different tones, but should I have only one?

Petri: Pick your most favourite one.

Jaakko: I guess that I use perkele a lot.

Petri: Can you tell what it means for the English speaking audience?

Jaakko: It’s the devil.

Petri: What sound or noise do you love?

Jaakko: At least something that I have now wanted to hear more is team sports, indoor teams sports noise. And the other one that I like more and more is silence.

Petri: What sound or noise do you hate?

Jaakko: Speed camera flash. It doesn’t probably make any sound into the car, but it is something that I had as a concept. It’s terrible.

Petri: What profession, other than your own, would you like to attempt?

 Jaakko: I’ve always enjoyed writing. I have always enjoyed travelling and getting to know new people and new cultures. I would say that it would be some type of nomad journalist. I don’t know if there is a profession for that.

Petri: What profession would you not like to do?

Jaakko: Politician. Definitely not a politician. I’ve seen and I know some politicians and political organisations and that is a game I would not like to be involved with. Probably, if you listen to this interview from the beginning, you understand the reasons.

Petri: If you could be a co-founder of any startup in any era, which one would you choose?

 Jaakko: That’s not an easy answer. That’s definitely not an easy one to answer. I would like to be in a startup company that would preach and practise some kind of expertise of versatile thinking skills. It would probably go somewhere…an easy answer would be religion, but I’m not a religious person. And I don’t like them so much. So, I wouldn’t say a church, but something that would help people in developing their thinking skills.

Petri: Any final words for the audience?

Jaakko: I think that being an entrepreneur is one of the best things a person can do. At least, as a style of living it’s exceptional to many others. You can experience the worst and the best parts of life during one day. And you can be part of them. For me, it’s really intriguing and fascinating.

The art of NFTs

April 12, 2021

Does your NFT exist if you mint or buy it but nobody sees it? It’s easy to focus on the technical aspects of something and forget where the real value is.

If you can do something it does not mean that you should or it’s worth the effort. When PCs first came out with the productivity tools they did not convert everyone into artists, writers or other creators even though they had access to word processors or photo-editing suites.

After the initial success of Beeple, 3Lau and other crypto early-movers there’s no shortage of others following the success. If the original Cryptopunks are too expensive, how about PicassoPunks or procedurally generated art or even just a picture of melon?

It’s trivial to mint NFTs after the initial learning curve of getting up-to-date with the crypto basics with wallets and the ecosystem players.

The bigger issues are conceptual mind shifts. What is value? How do you value something? Is physical better than something digital?

NFT as a term is a rather misnomer. A non-fungible token does not tell anything about the underlying functionality or value. It’s a descriptive term for something that is unique. Every purchase receipt is unique, too.

They can be as credible or fake as their digital counterparts. A public list of ownership of something is a powerful concept but in itself, it lacks context. Often, it also lacks content and purely just refers to the actual item (or not).

When everything unique is also an NFT what has changed? A lot, actually. But, the fundamental shifts happen in business models and enabling capabilities, not in the content itself.

When everything is a token value is where value has always been: in people’s minds and perceptions. Something has value only because we perceive it to be valuable. This can be a social function (e.g. fame, emotional like a shared moment or fandom) or with utility such as a store of value or means of exchange. Most of all, scarcity is at the root of the value concept.

Making something scarce more fungible can be called shared or fractional ownership. This is another aspect of tokenisation that is very interesting and have wide-ranging applicability from financial products to enabling larger reach and depth of inherently unique items such as the Mona Lisa painting.

Most of the people have seen either a picture of the painting or visited to see it in Louvre. Yet, there’s only one physical item but its social value is enormous because of its wide reach. The more it is shared the more valuable it has become.

This is an interesting aspect of the NFT phenomena. It’s no coincidence that the successful NFT sales have been done either by people who already have a large reach or by concepts that are widely known even if it’s a meme, famous essay or tweet.

The abstraction of value has just started. B.20 token is a good example of a new social currency that is not backed by a central bank but a digital art collection.

The experiments of value creation and derivation are running wild and now it’s not only the privileged and well connected that can practise it but everyone. Enabling creators to connect directly with the buyers is a huge shift that allows value creation, transfer and wealth to be more evenly distributed.

It’s possible to earn a living by following your creative path if you find your fans that are willing to support you on your journey. Thousand fans concept has been taken into another level where there are more revenue streams available in addition to the traditional subscription, donation, crowdfunding and publishing models.

Putting something out there does not mean that anybody pays any attention ­– a fact anyone with a social media account or blog knows. Most of the content is ignored. Only the highly valuable, desirable or something with a compelling context gets attention.

It’s all about storytelling and emotional connection. You need to move people. Authenticity takes guts. Often, it’s hard work and lots of labour of love for years. Ali Spagnola painted for 14 years and has produced over 2800 paintings. And she gave them away for free. Does it pay off now, finally? She has not done it for the money but she has a following and certainly, the 2800 painting holders have a vested interest to see her succeed (here’s mine).

Overnight successes happen at times but often it seems to take many years of traversing the path less travelled. That’s what makes these concepts and people unique, different, authentic, and at times successful.

Wrapping something in an NFT is not the important thing. It’s all about the conceptual context it represents. What’s the value of it?

The Business of Belonging

April 9, 2021

How do you build a community-driven business? David Spinks shares his practical knowledge and extensive experience in building thriving communities in his new book The Business of Belonging.

When features are easy to copy companies have been turning into other aspects that are harder to imitate for competitive advantage. Community-driven businesses have realised many benefits that go beyond raising the switching costs for customers.

Spinks describes the community-building process from the start and shows the reality that many are not willing to admit. It takes a lot of effort, hustling, trials-and-errors, silent or no response disappoints at first.

There’s no one way to build a community nor can you just read a manual and expect it to work. Yet, there are methods, guidelines and processes that make it possible to succeed in the endeavour.

Community-driven businesses can have higher trust, lower costs and scale in their operations that touch every part of the organisation. The trick is to treat the community as a startup or a separate business that needs its metrics, resources and dedication for success.

Giving up control and trusting the community is one of the first and hardest hurdles. The top-down approach and regarding the community as an extension of the organisation or outsourcing outlet yield limited results. Communities have the numbers that can really help companies to grow in scale that would be even impossible otherwise. The control should be pushed down to the lowest level possible where the problems need to be solved and where the people are the most familiar with the issues.

Building communities take time from 6-12 months or even longer for starting to realise some business value. Yet, focusing on the business aspects alone will result in inauthentic communities that most likely will not thrive. Each community should focus on how it brings value to its members but also for the business. Community members are looking for belonging and emotional aspects as well.

Spinks reminds us that a community is a business and a business is a community. Great businesses serve people and build amazing cultures. Great communities are also financially sound so that they can keep fulfilling their purpose. To thrive, both need a good reason for their existence (i.e. mission and values) and a sustainable business model for continued operations.

The biggest reason communities fail is not lack of engagement but lack of resources. If you cannot measure and show the business benefits it’s hard to secure the resources and keep building the community. You need to be able to show how community engagement impacts company’s growth and revenues.

The book introduces SPACES (support, product, acquisition, contribution, engagement, success) model for measurable outcomes that communities will drive. The metrics for each aspect are familiar business goals such as customer lifetime value, reduced R&D time and costs, customer churn, reduced support & onboarding costs and times etc.

For the community and tactical level the book introduces two other frameworks that help to grow and build healthy communities with many practical tips, guides and words of wisdom.

If you’re thinking of building something together with other people Spinks has managed to put together an inspirational guide that is a must-read to walk you through the practical steps towards a vibrant community.

Startup CEO

March 26, 2021

Startup CEO is a book for everyone who finds themselves in a CEO position. It’s a job that you learn by doing, but you can benefit from the experience of others.

Leading an organisation is a tough job, but if you need to figure out your company’s direction, traction and keep enough cash in the bank without revenues everything escalates to another level of difficulty.

Matt Blumberg tells his more than two decades journey in Return Path and shares his learnings with us. It covers everything from authentic leadership to storytelling, growing and managing your organisation to governance and finally exiting the company.

The second edition has the benefits of the experiences of surviving the dot com crash, financial crisis, and covers even the latest COVID situation. Building a company from zero to +100m revenues and over 500 people is a journey with many phases. Building the company for the long haul is something that brings benefits and perspective to the discussion that you don’t get if you exit in 5-8 years after founding the company.

Marketing 5.0

March 18, 2021

Marketing has taken some 70 years to reach human-centric marketing from product-driven and customer-orientated focus. The next phase according to Philip Kotler et al. was the transformation from traditional marketing to digital where both the offline and online where co-existing with an omnichannel approach.

Marketing 5.0 talks about three challenges that we are currently facing: a generation gap, prosperity polarisation and the digital divide.

We have currently five different generations from Baby Boomers to Generation Alpha giving marketers different challenges to target and serve customers with different expectations, values and tech-savviness.

The authors define Marketing 5.0 as “the application of human-mimicking technologies to create, communicate, deliver, and enhance value across the customer journey.” Technology should follow strategy and humans should be working in symbiosis with new technologies utilising the best leverage and advantages of both.

Machines are good at recognising patterns of actions (behaviour) whereas humans are adept at underlying motives for actions (attitudes and values of customers).

Marketing 5.0 consists of five components that technology enables: data-driven, predictive, contextual, augmented and agile marketing. The three middle ones are interrelated applications that are built on the first and last organisational disciplines.

Since everything is tech-based the whole approach relies on big data capabilities that drive the whole marketing but also product development and the rest of the organisation in providing new customer experiences that are frictionless and compelling.

The book outlines and describes the reality of startup companies that are from the outset agile and often also data-driven by necessity when trying to find their product-market fit.

The golden right of first refusal

March 15, 2021

Erik Byrenius – TALKS WITH PETRI

Erik Byrenius talks about scaling his startup and the intriguing turns with strategic investments that led to an optimal exit situation. He also shares his lessons from +50 angel investments and where to find the best ice-cream in Manhattan.


Erik Byrenius is a Swedish foodtech entrepreneur who turned investor. He has spent the last few years giving back to the startup ecosystem by doing investments, working with philanthropy and building with free resources for startups. He is now running Trellis Road, focusing on high-impact foodtech and agritech startups globally, investing at seed stage.



(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: How does it feel to sleep in a car?

Erik: Oh, it’s cold but you sleep like a baby. You wake up in the middle of the night screaming and wondering where you are. But it’s a good experience because you learn that some things are more important than others and the bed is really nice.

Petri: I thought it’s too cold in the Nordics to sleep in the car. In the US, they do that but how do you do that in Sweden?

Erik: You can’t really do that in the winter. When I slept in the car that was when I was running my own startup and I totally bootstrapped. Me and my co-founders went on sales trips to meet restaurants and try to sell them online ordering system so we could put them on our marketplace.

We couldn’t afford to stay at a hotel or hostel. We had to find a way to bootstrap. One way was to sleep in the car. We tried to get free food as well, which wasn’t that difficult because we sold to restaurants and all the restaurants wanted to show us that they had the best pizza or kebab or salad or falafel in the city. We were offered more free food than we could take.

Petri: Which was first: you wanted to eat pizza or the business? Or is there some crazy story why you decided to focus on pizzas?

Erik: It’s always there, your own needs first. Food was number one. It all started that me and my co-founders, we were slightly hungover on Sunday while we were studying at university in Sweden, in the city of Linköping. We wanted to order pizza, but we didn’t have any cash. We used all of it the evening before apparently. We didn’t remember, but obviously, that was the case. We wanted somehow to be able to pay by card and we didn’t really want to go to the restaurant to pick it up. We wanted to have it home-delivered. We realised that this wasn’t possible. This was back in 2005. It was pre-Facebook and pre-smartphones. We decided to try to build that service ourselves, which lead to become what we in Sweden called OnlinePizza. It’s now under the name Foodora.

Petri: There was a previous episode where Elias Aalto, a co-founder of Wolt, was referring to you. He was saying that “we thought we were up against basically Pizza-Online, which was back then a very web-focused and early 2000’s kind of product.” Then he goes on talking about how they are a mobile-first company. To listen to more of that episode, check it out yourself.

Was there anyone else doing that or you were pretty much the first one in the market? You came to Finland and other markets as well.

Erik: We were the first ones in Sweden. There was one company that had just started in Denmark called Just Eat, which is now a UK-based company. I don’t think there was anyone in Europe as I can remember, at least. We were starting out. We could look up to Just Eat as role models, but they were so early.

We basically had to invent everything ourselves. What we did see there were some attempts to try to do something online for restaurants but nothing that was built into a marketplace and nothing that worked that you could order from. We saw that others had the idea, which encouraged us that maybe it’s not that stupid after all.

You have to remember that this was 2005. Online ordering in general was very immature. I think the only kinds of products that you could order then were like books and some things related to travel like hotel rooms and flights you could book online, but that was about it. Ordering anything else online was weird.

Petri: Can you imagine that there were no iPhones, even paying something online wasn’t that easy and getting orders and getting restaurants in there, a lot of hurdles. The stack was not really where it’s today. It might be even for some people quite difficult to think about all the obstacles you’ve been going through at the time.

Erik: Yeah, it’s a good point. It was early days. It wasn’t just about the consumer behaviour that wasn’t there already. It was also about how you build the business. There was no startup ecosystem. There wasn’t a hoard of angel investors who you could approach. We didn’t have entrepreneurial role models to look up to who had been in the same space before.

We didn’t have an extensive framework on how to develop an e-commerce site. That was basically how we started out. We spent the first five to six weeks learning how to build an e-commerce site and getting it online and writing everything from scratch. Of course, everything ended up as a terrible spaghetti code that no one else than me and my co-founders could understand.

Possibly not even us at the end. Everything was a hassle. I’m so happy for entrepreneurs nowadays. There are so many things that you could just use as a foundation when building a startup and you have lots of guides and lots of events. You can meet entrepreneurs. You can learn from them, just a totally different ecosystem today. I’m so grateful for everyone else who can leverage that.

Petri: How did you get traction? Because you needed to sign up the end-users, the hungry students, whoever they were, the first ones to get to the system, but also the restaurants. I don’t think you had deliveries as a third component or did you?

Erik: No, initially we didn’t. To put it simply, we spent more than a month just learning how to code and developing a very rudimentary online ordering platform. Then we spent one month going around to restaurants locally and trying to convince them that it’s a good idea to be online.

That was very, very hard. But eventually, we managed to convince two or four restaurants locally in the city where we lived. When we had those signed up, then luckily for us, it was about time to go back to school in August after the first summer that we spent building the company. We went back to school and brought some flyers that we were printing at the school printers, and we started handing them out to students.

We assumed that since we were students and wanted the service, then hopefully there are other students who also liked the service. We started spreading the word by flyers and it worked. It wasn’t an overnight success in any way, but after a few days, we saw that we had to first order from someone we didn’t know. It wasn’t one of our friends we forced to order.

Eventually, it picked up speed. It was really a very simple approach to how to get traction. You tell people about the service and then you sit around and wait and hope for them to order.

Petri: When was it exactly? I’m starting to think about Facebook and their early days on campus. It sounded a bit similar type of…

Erik: Yeah, I wish I could compare ourselves to Facebook. Thank you Petri for bringing that up. Of course, there are some similarities in terms of starting on the campus, but I think that that goes for a lot of different businesses worldwide. But going to students is usually the less difficult path than trying to access another user base somewhere. Students are relatively easy to find because they go up to campus every day.

They are usually more open to trying new things and especially if the product was developed by their peer students then it’s easier to convince at least a few of them to try it. That was a good step for us to try and it worked then. It also turned out that later during the year students were a very important customer group of ours.

Petri: You had some trouble obviously as well. You were first fully digital, even though you needed to build quite a lot of things yourself. But then you started to do something in the hardware space as well. Why was that?

Erik: Oh, the hardware. Yeah. Well, so what happened was that we started in the city where we lived. We could do everything digitally. It kind of worked. It started growing. When we went back to school in August after the first summer, we didn’t have much time to spend. We spent evenings and weekends but that wasn’t enough really to grow the business as fast as we wanted to. We decided to spend the next summer, 2006, trying to expand to new cities. We decided to go round to restaurants in other student cities with campuses in Sweden. And try to convince them to join and then copy what we did in Linköping to start from the restaurants and then go to the campus and start handing out flyers.

It totally failed. I think we had 100 or 150 meetings with restaurants that summer. I think we signed one. We couldn’t really figure out why it was so different from Linköping, but eventually, we understood that the restaurants felt it was too complicated with them having to get a computer, getting an Internet connection.

It was still 2006. At least in Sweden, it was rather uncommon with small businesses having their own Internet connection at the time. We had to help them get a computer. We had to help them get an Internet connection. Probably, they didn’t always want to tell us, but they thought it was perhaps too complicated and a little scary, to be honest.

We didn’t always get the true reason why they didn’t want to join, but we eventually understood that the complicated Internet set up was definitely part of it. We realised that we have to find another way to get the orders into the restaurants. We can’t expect them to have a computer. And also for us, we learned from Linköping that even if we help them get a computer then we end up as IT-support for the restaurants and we get called on Friday night when someone working at a restaurant can’t play a game on their Windows machine. It wasn’t the ideal setup for us either. We wanted to be an online food ordering company, not an IT-support company for restaurants. We decided to try a few different ways to get ordering into restaurants.

All this was before smartphones, we couldn’t just get a smartphone or an iPad or something. We had to come up with something else. We tried to give them a mobile phone so you can send text messages, but obviously text messages are very brief and it’s hard to get a big order over text messages.

It just led to failed orders. We tried using a fax machine. It sounds crazy today, but that was the best solution we had for quite a while. We helped them get the fax machine. I don’t remember how long it was used for, but especially in Germany where we later made some business through a partner, I know that they used fax machines quite broadly, many years after the release of the iPhone. Fax machines, they’re not that bad. From our perspective, you can send the full page or several pages. It’s easy to read. There’s an automatic printout. It’s not as a digital message that someone at the restaurant has to put down on paper and give to the kitchen.

You don’t get a full confirmation that someone at the restaurant actually read the fax messages sent, but you do get the confirmation from the fax machine that it has received the message. You somehow knew that probably they have received this message.

Petri: Unless it’s not out of paper!

Erik: Exactly! There were some of those risks and that was one of the reasons why we couldn’t keep going with fax machines because we couldn’t really know if they actually read it or not. And of course, for us, one failed order was a disaster. We wanted it to be a hundred percent success rate in delivering the orders.

Otherwise, we would lose trust from the consumers. What we did was to try to create our own fax machine that corrected all the flaws with fax machines. We didn’t want it to occupy the phone line when it was used. We wanted it to have some sort of bi-directional communication.

When a restaurant had received the message, they had to push a button or something and give a delivery time. So, we could show that to the end-user and give them confidence that the restaurant has really seen your order because they even said when it would be delivered. That was the ideal step we wanted to reach.

And we couldn’t find anything on the market. We were thinking that, okay, so maybe it’s not worth doing this. Maybe we’re just too early. We have to wait until something comes along, but we were still studying. We didn’t really have that much else to spend our time on. We thought it was really fun.

We said, okay, why not? Why not try to, instead of us just closing down the business, why don’t we try to build something? Then we’ll learn something more. The option wasn’t really just to focus on running a digital business. The option was to stop running a business because we couldn’t keep going the way we did.

Petri: This was like two years in?

Erik: So, this was autumn 2006, after our very failed sales summer that was when we realised that we have built something. Then we started googling. Luckily, Google was there. We did get some support. We realised that there were different kinds of hardware components we could put together probably somehow.

We started ordering what we found online. In the end, after months of trying, we realised how hardware works and how programming hardware works. Eventually, we did create something that became an ordering terminal that we could put at restaurants. They just plugged it into the socket and we could send orders wirelessly to the mobile network.

It was basically an ordering terminal with a mobile modem inside using GPRS to transfer data. We put a SIM card inside. We put a small speaker inside so we could let the restaurant know when there was an order. We built in a receipt printer, a very small printer that could print the order for the restaurant as they didn’t have to type it on paper themselves.

And we attached some buttons so they could reply and say that we will have a 30 or 40 minutes delivery time today. And that totally changed the business for us. All of a sudden from being those complicated dudes going to restaurants and asking them to to get engaged into Internet and computers we were the ones coming with one piece of hardware and saying, if you take this piece of hardware, you put it on your counter and you plug it in it won’t occupy your phone line or anything. Then you will just get more orders. And we only charge you per additional order you get. That was a no-brainer for restaurants to try at least.

That was the turning point for us from being close to closing the business, to realising that, wow, this really works. Now, it’s just about scaling. There was a Eureka moment for us.

Petri: Until that point, at least, you were bootstrapping. There were no external investors.

Erik: True. We invested ourselves about $80 every month, the three founders. We had $240 per month. That was our burn rate for the first three years, basically. And then, of course, we started generating some revenues that we could use that as well.

Petri: But do you need it to build the hardware as well? Isn’t that expensive?

Erik: The hardware, we saved for a few months. We saved those $240 for three months before we could order the components we needed to build the first version. Then what we did was we didn’t charge the restaurants. They didn’t have to buy the hardware from us. They could borrow it but they had to leave a deposit.

They’d left a deposit of, don’t remember exactly, let’s say $300. But the hardware only cost us $200 to build. We promised them that you can any day call us and say, I don’t want to be part of this anymore. I want my money back and I’ll give the hardware back to you.

That was the promise to restaurants. But of course, when we received the money from the restaurants, we used that to order more hardware so we could build for the next restaurant. And all of a sudden we were in a situation that if 10 or 15 of the restaurants would call us on the same day as they would want our money back it wouldn’t be possible because we used all this money to buy new hardware. Our bet was completely upon being able to deliver value to the restaurants. Otherwise, we would fail from one day to the next. From that perspective, hardware wasn’t that expensive. It was a few hundred dollars per piece and we could finance it by revenues or in this case deposits from the restaurants.

But I mean, you’re definitely right that if we would have had more external money somehow, then we could have grown much faster because then we could have ordered much more hardware and probably had lower prices on our hardware. But we didn’t really need that because we were also limited by our own time. We were still studying.

We couldn’t spend all the time going around for restaurants selling. We were anyway limited in how fast we could sell and scale up and add new restaurants to the system. We couldn’t spend the time needed to do marketing anyway. It was kind of okay for us to grow slowly.

Of course, if we would have started the business in today’s climate, we would surely have had investments early on from angels. And we would have probably quit our studies to focus full-time much earlier than we did, but for us it worked okay.

Petri: How did you scale? How did you manage to get new restaurants in new cities? Eventually, you started to do also acquisitions and go abroad as well.

Erik: The first scaling in Sweden, we did basically the way I will describe in terms of ourselves going around to two different cities, knocking on doors, sleeping in the car, eating free food at restaurants. Still bootstrapping. That worked pretty well. After a while, our name OnlinePizza in Sweden became more well-known among restaurants and consumers, of course, but especially restaurants.

Then all of a sudden it started becoming possible to sell by phone as well. We didn’t need to visit all restaurants because they already understood how the concept works, because they read about it somewhere or they knew someone who used us. Then we started scaling a little bit faster and that was about the time when we also realised that it can’t just be the three of us founders.

We started recruiting people both in customer care, people helping us with entering all the menus and delivery data into the system, and salespeople’ as well. Then we started scaling. When you start scaling in terms of employees then also the business goes faster and then we could scale even faster.

At some point, we realised that, okay, this is going really well in Sweden now. We should try to focus on going international as well. And that was when we started looking into acquisitions and mergers in other markets. It’s a bit funny, but I think when you explain something in retrospect, it sounds like everything was so clear and strategic. But I think like most entrepreneurs know it’s never like that you’re being very opportunistic and you change your mind from week to week because you learn new things.

And for us, when we started the international expansion, the plan wasn’t really to do any mergers or acquisitions. The plan was just to make a brief market analysis of all the countries in Europe and close to Europe, realise which countries are the best and then we’ll just launch in those countries.

It sounds so simple. And of course, it wasn’t so hard to make a market analysis and see where do we have e-commerce growing quickly, where do we have a card payment going quickly? But when you know which countries are on top of the list…if I remember correctly, I think Greece was really high on the list for us. I think that was like the number one priority.

Okay, we know we want to launch in Greece, but how do you do that? How do you launch in Greece? We can’t just sit in our office in Sweden and run a Greek business. We need to find local people. How do you find a country manager for Greece if you don’t have the network, you only have been students living in Sweden, all of you? It’s really hard. Do you put an ad on the job board somewhere saying, Hey, we need a country manager for this online food ordering business? Probably won’t work. Probably won’t find the right people. What we realised after a while was that we have to think the other way around. We have to start looking for people in any of the top 15 European markets on our list.

Then when we find the right people, then we decide which countries to go to. And that was also what led us to do some acquisitions in other markets because we realised that maybe the right people to run our business were people who had recently started building their own similar business because they understood the business already.

They believed in the market, but maybe they didn’t have the resources to grow quickly. And they most surely didn’t have the hardware terminal that we had developed. If we could invest in them or acquire them somehow they could use our technology, then it was just a win-win. That was how they ended up. But to be honest, it wasn’t planned. We learned along the way.

Petri: Do you remember what was the first acquisition you did? How old was the company? What were your revenues and how many people you had, how early-stage were you?

Erik: We didn’t do that many acquisitions. What happened was the first international expansion we did was to Poland. Where we found a Swedish-Polish entrepreneur who we tried to convince for a while to run this business. The problem was he was living in Sweden at the time and he had no interest in going to Poland.

We thought it was brilliant. You speak Polish. You have lived in Poland. Of course, you go to Poland. You start this business. He didn’t really understand why he would go to Poland. He was living in Sweden. We didn’t really understand each other, but after a few months, maybe up to a year he got back to us and said, Hey I met my girlfriend.

She lives in Poland. Do you still want me to run the Polish business? And we were like, oh, okay. Yeah, for sure. Let’s do it. That’s how we started in Poland. But then we realised that this process was also quite complicated. You have to try to find the right people and start from scratch. After launching in Poland, we said that, okay, let’s see if we can find acquisition targets instead. The first one we did, to be honest, I’m not sure which country it was, but it was either Finland or Austria because those were the two next markets where we launched via not full-scale acquisitions, but first step as investments and we later acquired those companies.

Petri: Can you give some tips or hints or share some experience for those who are thinking, or maybe now starting to think about it: maybe I should actually start to do acquisitions instead of building everything from scratch?

Erik: I think what we learned was that we were very happy that we didn’t fully acquire the businesses because then that would mean so much more overhead for us at the headquarters. We would need to probably find new people to run the businesses if we would fully acquire them. We want the local entrepreneurs to have very strong incentives.

We want them to still have the majority in the companies. We had shareholders’ agreements. We still had some vetoes and some control, but we wanted the entrepreneurs to have a huge financial upside. We want them to feel that it’s still their company. Just going in acquiring something is in my view very complicated and you need a strong organisation to be able to actually make use of that acquisition.

There’s a big risk that the business loses its value if you don’t take care of it properly after that acquisition. It usually looks better on paper than in practice after the acquisition. That’s something I would be careful about. Really thinking, how will we run this business afterwards? There’s a difference between if you run a business like ours, where you need a strong local presence. In those cases, it’s obvious that you need a strong local team. There are other kinds of acquisitions where you don’t really want the team. You’re more looking for some assets. Maybe I have a global business where you sell software online and then it doesn’t really matter.

Maybe you don’t need the team. Maybe you just want to buy the customer list or the IP. Then it’s different. Then it’s more easy to incorporate that into your business, I would assume. It’s also easy to just start doing it prematurely. You need to understand your own business.

You need to understand the market well before you start acquiring others. Otherwise, you won’t know how to incorporate them in the best way. I think we were lucky in the way that we had spent several years bootstrapping ourselves, learning a lot about how to run this business at a detailed level.

We didn’t acquire anything that we didn’t understand. We understood completely, exactly, where they were, what they needed. You can look into their metrics and see that they should be able to improve that metric by 10%. And we could also learn that they’re really good at that metric and we could probably prove 5% on that metric.

If we would’ve had totally different businesses, but just sharing some customer groups, then it would have been much more difficult. But since we acquired more or less identical businesses to ours it was easy for us to understand.

Petri: What was the process of convincing other entrepreneurs to join forces? Because I would assume that quite many of them have ideas that they’re building their business and they don’t need anyone else. And maybe they were not even thinking of anything along the lines of joining forces?

Erik: I think the key for us was this hardware box that we had and potentially that we could also invest some capital in the businesses. Because the acquisitions we made in Finland and Austria, they were still in the early days. It was before the bigger startup hype. It was still pretty hard to attract investors to that kind of business.

For us coming with the hardware box and showing them how it works, showing that it really helped us scale in Sweden and Poland and also being able to inject some capital in the business, I think that was very tempting. I would guess that those entrepreneurs, you should ask them, but I guess that those entrepreneurs considered us to be a helping hand along their journey of building their business.

Petri: Sounded like you were more like a hardware company than an actual direct competitor.

Erik: On a global level, we were strong competitors. I would guess that if any of the entrepreneurs that we approached for acquisitions, if they would have a global target, then it probably wasn’t the best strategy to have us on board. But if they were more focused on building a strong local business in their country and possibly neighbouring countries than us running a business in Sweden or Poland, didn’t matter. Then we just benefit to be part of something bigger where we could learn from each other and use money more efficiently.

Petri: Were there some markets you wanted to enter but you didn’t find good acquisition targets or cooperation partners? Or you were just flat out maybe outed from the market by other competitors?

Erik: When we did our market analysis we also based that partly on how strong the local competition was. Luckily for us, the competition was very weak in almost all the markets. There were very few players that had popped up in a few markets, but it didn’t really limit us that much. There were so many more completely open markets to attack.

I mentioned Greece that that was one of the countries very high on our list, but where we just couldn’t find the right team or entrepreneurs and we couldn’t find anyone else who did it in Greece already. It was the market that we would have liked to do but we couldn’t at the time. After we had made acquisitions in Finland and Austria we started looking for new, bigger markets after that. We became market leaders in all of our foreign markets, but we also felt that if we’re going to take another market, it should be a much bigger market. We started looking into especially China and South Korea as possible next steps that would make a big difference for the company.

But of course, it’s hard to find the right team in those countries. We were a little more mature ourselves as a team and an organisation at the time. We’re probably about a hundred people in our four countries. We had some better network and some more capital. We had some more resources trying to find the right people.

This was about the same time as we started thinking about being acquired. It wasn’t so much about us planning that it was more about two other players on the market being interested in acquiring us at the same time. While we’re thinking about either we declined those acquisition offers and we go all-in on one new big market or we start discussing with these potential acquirers to see if this is good timing for us to exit. So, it wasn’t really planned, but we realised that having two of the biggest players in the world in our space who wanted to acquire us at the same time, put us into a very good negotiation position.

Petri: Can you name those who were interested of you?

Erik: Yeah, sure. One was the previous Danish company, I mentioned Just Eat, which at that time was a UK company.

They were the biggest ones in Europe at the time. To make a long story short, they had also invested in us before and they were on our board. We were already somehow partners with them. They knew everything about our business almost. They felt that it’s probably about time to acquire by now, before we grow too big for them.

And at the same time, we were also partners and we had made a small investment in German Delivery Hero when they started up in 2010. All the major players in Europe are really interconnected. It’s quite complicated. Us investing in Just Eat’s worst competitors while Just Eat was on our board. That was complicated.

Petri: What was the reason behind that? Was it some kind of hedging or keep your enemies closer type of thing?

Erik: Yeah, I guess you could say that. From Just Eat’s perspective investing in us, I don’t think they would ever confirm it, but I think it was a way out for them initially when it first happened. Because they had launched in Sweden in our early days. We were fighting head-to-head with them in Southern Sweden. Especially, they were running some of their operations from Denmark.

We were running it from Stockholm and Linköping at the time. We were really fighting hard with them. They had all the capital they needed. They were well-funded at the time. They had experience. They also had a hardware solution quite similar to ours. But they didn’t have the strong Swedish team. They tried to do it mostly from Denmark.

We were fighting that big giant with energy, passion and trying to innovate all the time. In the end, I would say it was too hard for them to succeed in Sweden because they didn’t find the right team. They had to somehow explain to the world and to the shareholders what happened in Sweden.

I think they couldn’t really say that we just failed. We lost it to these three students who didn’t have any money and experience or time. They had to find a way out. Their way out was to accept to invest in us because we really needed the capital at that time to go international. We accepted their investment and they got a strategic stake in our business.

Then when Deliveroo decided to start up slightly later in Berlin we knew the team from before. They learned a bit from us about how to run the business. We strongly believe that this team will be able to build something big. They had a slightly different strategy from ours.

They really had a landgrab strategy and growing as quickly as possible, raising a lot of money, which wasn’t very suitable for us. We were much more focused on building a strong presence, becoming market leaders, driving revenue and reaching profitability. We had quite different ways of running businesses, but we realised that they’ll probably succeed with their strategy. Then we thought it was better to keep them close. We did a symbolic, tiny investment to them. Partly, so they could show to other investors that these OnlinePizza guys believe in us. They have even invested in us, even though we would eventually somehow globally become competitors.

I think it really helped them. We also licensed our hardware to them. They could get going quickly when they launched. And of course, this was a complicated thing with having Just Eat on board because Just Eat also had partly a landgrab strategy. They would become more direct competitors with Delivery Hero.

Petri: How do you navigate all that? You obviously have some information you don’t want to share with everyone and everybody’s competing with each other and then you are all in the same board meetings, maybe.

Erik: Yeah. How do you navigate that? Maybe it sounds more complicated when you describe it later because now it sounds like everything was so chaotic, but at the time it was spread out over a couple of years. We had a lot of time trying to understand what are the incentives of everyone? How are we working with everyone? What do we have to share? What are we legally obliged to share to a board member? In the end, I would say that, of course, it was complicated, but I think it was probably slightly less complicated for us than for Just Eat and Delivery Hero because we were so different in our approach to scaling. Since we focus so much on our core markets and being very, very strong footholds on those markets and Just Eat and Delivery Hero were more direct competitors. Of course, for us having competitors as shareholders and board members pushed us to really understand what does our shareholders’ agreement say? How can we adapt our shareholders’ agreement so we don’t end up in a trap somewhere?

 But in the end, it’s business. It’s about relationships in the end. Of course, we could have a shareholders’ agreement, but in the end, we had to make sure that no one felt that we were being hostile to them. And that’s about building relationships. That’s something you must never forget even if you end up being in legal discussions: in the end, the agreements are usually just a reflection of what you have anyway agreed upon and the handshake is sometimes more important than what it actually says on paper.

Petri: When you wake up one Sunday morning and you want to exit your business, what’s the button to push? I guess there’s no PizzaOnline box where you say that I want to exit now, please?

Erik: No, but the truth is we didn’t really want to exit. It wasn’t that we didn’t want to, but we were definitely not looking for an exit at the time. We had probably realised by then that at some point in time we’ll make an exit. We are probably not the ones who will run this to a huge IPO and be global leaders. We will probably make an exit someday.

We already had a few acquisition offers that we declined naturally. We had mentally accepted that at some point in time, we would probably be acquired. We also felt that we probably need to do this for a few years before we will be in that position. What happened was that Delivery Hero had just raised even more money and decided to grow very quickly using M&A.

They didn’t want to start from scratch because it was too slow. They wanted to do M&A in lots of markets at the same time. Their storytelling to their investors and to the market was that they were very early in a few markets. They were early in China. They were early in South Korea.

They had come some way in Germany and a few other European markets, but they also needed to show that they could be really profitable at some markets so they could tell the story that look, we’re having these really profitable businesses in country X, Y and Z. Then we have these other huge markets following the same trajectory and in a few years they will eventually be at the same profitable level. And then we’ll be super valuable. They wanted to sell that story, but then they needed the really profitable countries, which they didn’t. Of course, they looked around and see who are having some really profitable countries with nice margins.

And to be honest, we were the only ones that even remotely could be acquired. They started looking at our countries. Especially, Sweden and Finland that were the most profitable countries and realised that if they could tell their story and show that Sweden and Finland have these nice margins, then fundraising would be so much easier for them.

If they were able to generate some revenues they didn’t need to do as much fundraising. I think that was the rationale why they more or less suddenly realised that we should acquire OnlinePizza.

Petri: Did you realise at the time that you have leverage that you were the only one? You had that position when starting to go the valuation and exit prices.

Erik: We realised that it was probably important to them. Yes. Even more, what was important for us in terms of leverage was that we had Just Eat as a shareholder. We had a shareholders’ agreement that said that all shareholders have a right of first refusal. It means that if the other shareholders wanted to sell their shares to someone, then the existing shareholders have the first opportunity to buy those shares at the same terms as the third party offered to buy the shares for. It means that if we want to sell the company to Delivery Hero then Just Eat could say, okay, but we’ll do it instead on the same terms that Delivery Hero offered you.

This meant that we could convince Delivery Hero that if you’re going to make an offer on us then there is no point doing it for a valuation that is rather low because then Just Eat could just say, great, we’ll take it. And then we would be legally obliged to sell it to Just Eat. We wouldn’t have an option then. There’s no point for Delivery Hero doing it unless they could put the valuation at the number that they thought that Just Eat wouldn’t accept.

Because that’s the only way for Delivery Hero to be able to acquire us at all. And they only had one shot. If they missed, if they put the too low number, then Just Eat could just acquire it and they would lose the deal. And that would be the worst possible scenario for Delivery Hero. It would be Just Eat acquiring us.

Petri: That sounds so beautiful afterwards!

Erik: Yeah, it was beautiful. That’s one of the few things I’d say it doesn’t sound much better afterwards than it was at that time. We were obviously in a very nice spot at that time. We were lucky. Of course, we built a business that was sustainable and profitable and we were not in a rush. That put us in a good position as well, but the specific timing of Delivery Hero being afraid of Just Eat acquiring us and Delivery Hero needing us to tell their story. That was luck. We could without telling Just Eat that we could negotiate with Delivery Hero and push them to put a number that we together thought might be too expensive for Just Eat.

It turned out that Just Eat didn’t think it was expensive enough. Eventually, we received an offer from Delivery Hero, and then we had to go to Just Eat and say, Hey, okay, now we received this acquisition offer from Delivery Hero. Do you want to take it?

Then Just Eat started thinking for a few days. And then they said, yes, we definitely want to take it. And then we thought we put too low a number. Not that it matters so much to us who would acquire us that wasn’t a big thing. It was more like, we realised that, okay, we probably could have pushed this number higher, but then it was too late for negotiation.

We had the number on paper. We told Just Eat that we have received this offer, which meant that according to our shareholders’ agreement we had to sell to Just Eat at the same terms if they accepted it. That was their right. And they said we take it. That gave them 60 days to complete due diligence and to negotiate final purchase agreements with us.

The offer from the Delivery Hero was more a term sheet saying that these are the headline terms: this is the valuation, we should complete in this time and some other major terms such as how is it paid, and so on. But it didn’t include all the specific details on warranties and all that you put in the share purchase agreement.

Just Eat had to spend some time doing their final due diligence before the board would decide if they really wanted to acquire us or not, and negotiate the agreements with us. Just Eat were in a slightly difficult position at the time, because they were just planning their own IPO, which meant that everything they did, especially bigger deals had to be formally a hundred percent correct and compliant in every way.

They couldn’t take the risk of missing something in a due-diligence that close to the IPO turned out to be a disaster because that could ruin their own IPO. They had to do a full, complete due diligence with us, even though we were still quite a small company. It was quite a small deal. I think it was a $55 million deal.

It wasn’t huge, but it was big enough for them having to do a proper DD that took a lot of time. We were quite an unorganized company at the time. We had businesses in four countries. We had about a hundred employees. We had never had a big formal investment from any VC before.

We hadn’t gone through a proper DD process. We didn’t have our papers in order. It took a lot of time for us and for them trying to finalise the DD. Eventually, they did complete the DD, but there was still some question marks that they didn’t have time to dive into.

There was some question about the VAT levels in Austria if I remember correctly. It was like one of those things that they didn’t have time to figure out. In the end, they said after the 59 days, okay, we need three more days. We need to figure this out. We can’t sign the papers until we figure this out, but we are confident that we will. But we need to have it on paper before we sign.

And we said, okay, but you know, you have 60 days to sign the papers. We are ready. Just call us in the evening on day 60 and we sign the papers. But eventually, they never called. They said that they needed one or two more days. Of course, Delivery Hero knew this. We said to Delivery Hero that, okay, now 60 days have passed, it’s 1:00 AM in the night. We haven’t had any phone calls from Just Eat. Now we’re up for grabs. Then Delivery Hero flew in their management team from Berlin to Stockholm. We met at 9:00 AM in the morning. They started doing their DD in parallel with negotiating the final purchase agreement.

We had parallel tracks at the lawyer’s office. It took some time but compared to Just Eat’s 60 plus days, after 21 hours, 6:00 AM in the next morning, they were happy enough with what they found in the DD and with the share purchase agreement. And then they signed the papers.

They by being super quick and entrepreneurial, and of course, to some extent, being willing to take some more risk because they couldn’t finalise all the legal DD, they decided they trusted us. They’d worked with us for a while, not as long as Just Eat, but still long enough for them to understand that this is a good business.

They could compare our metrics to their metrics. They didn’t care so much about the legal details, more about the commercial details. Just Eat was much more focused on the legal aspects of things, not so much on the commercial. They were just much quicker understanding that even if there would be some legal trouble somewhere, it doesn’t matter so much to us.

Petri: Did you manage to do something with the price?

Erik: No, we couldn’t. We were not allowed to. That’s how the right of first refusal works. We received the first offer from Delivery Hero. And then we had to show that to Just Eat. We couldn’t negotiate the price with Just Eat because we also had to show them what we had already accepted.

Then after those 60 days, then if we would change anything in the terms, then we would have to go back to Just Eat again and say, okay, so now we have received this new offer. Now we have 60 more days. We had to do everything on the same terms not to lose the deal. Unfortunately, we couldn’t leverage that, but we could instead leverage the situation with Delivery Hero to push them into having a very friendly share purchase agreement because those details were not in the offer. They needed the offer that we showed to Just Eat. There were still some details to negotiate and we could get those very seller friendly. They didn’t have to pay everything upfront because they didn’t have the money.

They paid some upfront and then they paid some things a year later. Then we could have our whole company as collateral. If they wouldn’t pay, we just get the company back and we didn’t have a long lock-in. I had six months lock-in, which is quite short in that kind of business where the founders are still expected to run and grow the business for a long time.

We could negotiate some of those things, but not the price. We ended up at 55 million, which compared to today’s numbers, it’s ridiculously low. But given where we were and where the state of the startup ecosystem was at that time, it was quite a lot. Especially for us, the founders who still owned the majority of the company.

Petri: You were in the university when you started. Was this your first job? And then you exited it. It’s a quite nice number from there.

Erik: Yeah, it was. We started in university. And I like to stress that starting a company while you are studying is probably the best time in your life when you can start a company because you don’t take a lot of personal risk. In Sweden, at least, you can live decently on what you can get in terms of grants and loan for being a student.

We didn’t need more income. We could take $80 per month and invest in the company instead. That’s a really good time. If it fails, okay, that’s it. Then you go back to focusing on your studies or start something new. You don’t take a lot of risk. We did start doing and then pause the first attempt. I had been involved in other projects before, but nothing related to starting a business.

I had met my co-founders at the university while we were active in student organisations. We hadn’t built a commercial business before, but we had worked on projects before, so we knew each other.

Petri: What happened after that? Again a Sunday, but now you have a bit more money in the bank and probably nothing to do?

Erik: I had money on the bank account, but still that money was never the primary driver for running a business. It sounds like a cliché possibly. I’m very well aware that money makes things so much easier, but it doesn’t change so much in your passion and your day-to-day activities.

I still wanted to see things grow. I still wanted to learn. I’m a curious person. I couldn’t just sit around and try to live off the interest rate. I would be depressed by doing that. From that perspective, it doesn’t change so much. I mentioned that we had a six months lock-in from the buyer, but I stayed for almost one and a half years in the business trying to recruit new people to replace me and my co-founders and making sure that those people learned the business before I left. The business was still my baby. I didn’t want to leave. I had a gradual phase-out from the business.

But eventually, I started thinking about what to do next. Should I start a new business? In that case, what business? I made a list of different potential businesses that I wanted to start, but I also realised that I shouldn’t just jump the gun and start something immediately. I should spend some time learning about the different markets, the different business models that I was curious on and possibly learn from other entrepreneurs who had different experiences than I had. I started reaching out to entrepreneurs, asking them to tell me everything they knew about their market and their business models and learn from their backgrounds. Of course, they started asking why should I spend my time doing that? That strategy didn’t work. But then I realised that if I invest money, what do you do then? Then I became an angel investor, offering money basically to learn.

From that perspective, it’s probably more for the money but still, that worked. I became an angel investor to learn while figuring out what is the next big step for me? What is my next business?

Petri: How many companies have you invested in?

Erik: By now about fifty. I don’t know the exact number. it’s about fifty.

Petri: Fifty lessons to learn.

Erik: Yeah. You never learn everything you want to learn. What I did realise was that It’s so much fun doing investments because of all the learning you do. I started doing investing in 2013, a year after our exit. I did realise that I enjoy doing angel investments so much that six years later I was still looking for the next thing to do myself.

I had to confess to myself that, at least, right now in this phase in life, I’m probably not going to start a new business. I’m probably going to spend more time on many different businesses. It was just the model that attracted me slightly more than starting my own business at the time.

At that time, I didn’t have fifty investments. But I did realise that I have to do something more focused. Then I started looking at a few different side projects where I could spend some more time myself. I started thinking about not only investing generally in software that was my only focus at the time but trying to be more niche somehow. Because then it could learn more about the one or a few spaces that interested me even more.

Petri: What are your experiences and the lessons learned from being an angel investor? I understood that you were also learning that process by doing and having different stages and steps, and different approaches also to investing?

Erik: Yeah. That’s a good question: what have I learned? I did this for so many years. I learned so much. It’s maybe hard to tell what was the learning from actually doing the investments and what was the learning from life itself. One thing that’s become more and more obvious to me is that I think all investors think that later-stage investors, they lack conviction. Yourself, you see that, okay, this is the future. This is going to happen in a few years, I have to invest now. And then when it’s time for them to raise the next round, you think that the later-stage investors, they don’t have the conviction.

But you also always think that the earlier stage investors, they are just shooting from the hip. I think this is true for every stage in investing. You can ask a Series-B investor and they will think that Series-A investor is shooting from the hip, and Series-C investors, they lack conviction. It’s so easy to convince yourself that at the stage you’re at, if you’re investing at seed or A-rounds, it’s so easy to convince yourself that this is the next big thing and I want to be part of this hypertension journey, even though it’s high risk. When you looked at it a year later, when it’s time to raise the next round, then others don’t think at all that it’s that obviously, this is the next big thing or that these companies are the ones who are going to solve it.

 I learned a little bit about not falling too much in love with a product or an idea or one potential or one team but trying to be a little more realistic about what will the next round of investors think. How will they determine if this is a proper series-A investment for them or not?

Petri: How do you evaluate now new startups if you’re thinking of investing in them? This is also maybe advice for those who want to approach you. What is important?

Erik: I have learned more and more that even if it’s a cliche, it’s true that the team is super, super important. I spend more and more time trying to figure out how the co-founders work together. What the relevant experience is? Have they run a startup before? That can be quite important. How are they at recruiting people?

How were they at pitching to investors? Because I realised that most of the companies I invested in, they will definitely need to raise quite a few more rounds. They need to be good at pitching to later stage investors as well. I think initially I was more focused on the product and the solution and the product/market fit. But I have come to realise that teams are really, really important.

That’s definitely one advice to early-stage founders. Think about the completeness of the team. Maybe you need a third co-founder, who has more experience from something that you’re lacking. If you’re a deep tech company you need strong scientific expertise somehow or technical expertise in the business, but you will always need that startup/commercial experience as well. And by that, I don’t mean someone who just worked with selling stuff before. Because sometimes I feel that technical co-founders think of commercial as one thing. And assuming everyone is good at selling, they’re good at everything related to commercialisation and raising money and recruiting, but it’s really different things.

Understanding how to run a business, it’s not the same thing as being a commercial co-founder. You have to understand how to recruit people, how to maintain them, how to pitch to investors. There’re lots of things related to operations as well. I mean, someone in the team has to like doing the operations.

There’re so many different aspects, but it all depends a lot on what kind of business you’re running. But really think about the completeness of the team and think about the skills that you are lacking or are they so crucial to the business that there should be a co-founder with this skill or is it enough to recruit someone who is more of a senior role in the company with this skill, or could it be an advisor even? It’s not always clear to me how much of that skill you need on a daily basis and how much it could be as an advisor. But I think you as a co-founder should probably understand it better. That’s one advice: focus on the team.

Petri: With +50 companies there must be so many stories, a lot of drama, a lot of successes and failures.

Erik: There are quite a lot of failures, for sure. Some of the worst ones I’m not sure the entrepreneurs want me to speak openly about them.

Petri: Maybe if you can do it anonymously. The point is here to learn and not repeat the mistakes. If you can pick the wisdom from there.

Erik: I can definitely do it on an aggregate level because I’ve seen enough of them. A very common mistake is to be way too focused on the product itself and not being enough focused on the value that you’re actually creating for the customer, understanding the customer needs.

I understand this is something that’s been repeated quite a few times, but I have to stress it again and I’ve seen it so many times in my own companies. That goes partly back to myself that I’ve been too focused also on investing in teams that have a good product.

Maybe I myself haven’t understood the market needed enough. Definitely not saying that it’s the fault of the entrepreneurs only. It’s also the investors. But that’s a very common thing. I’ve been pretty lucky in not seeing too many co-founder dramas. But I know that there are. I have a few of those in my portfolio and there are quite some investor friends of mine who have more. But I guess my focus is on the team. Especially, in the last few years have hopefully led me to companies where the co-founder team is more stable.

Petri: You’ve been doing good as well. There’ve been some initiatives. I understood you’ve been trying to help free someone from prison and you’ve been also pledging a bit of your money to other causes.

Erik: That was actually how I got to know my co-founders for OnlinePizza in Italy. They were both active in the campaign for a Swedish citizen, who was a journalist, who was born in Eritrea but lived in Sweden and was a Swedish citizen. Then he returned to Eritrea to help start a newspaper there.

Then just a few days or a week after 9/11 2001, the president of Eritrea decided to become a dictator. He closed all media, imprisoned all the journalists and opposition politicians. Almost all of them have been in jail since then. That’s almost 20 years ago now.

This journalist, Dawit Isaak, he’s still in prison. There are quite some signs that he’s one of the few people who are still alive in that Eritrean prisons. At the time, when we started learning about this case in 2004 he was and maybe still is the only European citizen that Amnesty adopted as a prisoner of conscience.

There might be a few more now. From that perspective, the case was quite unique and should have received a lot of attention. What we realised was that we didn’t know about this case. This was about three years after he was imprisoned, which we thought was weird. If there is a Swedish citizen and a journalist in prison without a trial for three years why don’t we read about that every day? Why don’t we hear politicians talk about it? Why isn’t that the big thing for the Swedish government or the European Union? Eventually, we learned that people didn’t know about it. We spent some time trying to inform people about this. We started working with his brother who lived in Gothenburg trying to spread the word about it, get media attention and get politicians to act.

After about a year of doing that, luckily, the major newspapers started picking it up. There were other freedom of press organisations in Sweden that picked it up and started to run the campaigns. That was how we got to know my co-founders. Initially, we had worked together on that, also bootstrapping as students. That was one of the learnings about how politics works by being not involved in politics directly but by trying to affect the politicians to run things and understanding why hasn’t the media been writing about this? Well, because he is black, it’s a country far away from Sweden.

That was the honest truth that we heard from the major newspapers in Sweden why they didn’t focus on this case. If it would have been a Swedish name, white skin and it would have been in Russia then we would be pretty sure that he would be on top of the agenda every day. It was kind of depressing to learn about how reality works as naive students as we were at the time. At least, it led to the EU and the Swedish government engaging in it.

From one perspective, it’s still a failure because he is still in prison. But from our perspective, the most important thing was to get bigger organisations with better networks and more money and political power to start running the campaign instead of us. We couldn’t do that much we felt at the time. Of course, it led us to start a new business. That was also something good that came up from it.

Petri: And that leads us to the Founders’ Pledge. Now, we have closed the loop on how you started your business and went to angel investing. Now, you have to do something with the money and you have pledged some.

Erik: Founders’ Pledge is an organisation that approached me a few years after they were started. Founders’ Pledge is an organisation that helps founders and investors to do good even before they have liquidity. Which sounds weird, but they do it in the shape of a pledge where you as a founder promise and you’re legally bound to, by signing a pledge agreement, you promise to when you have an exit, works for investors as well, when you have an exit from your portfolio, then you promise to invest a certain percentage that you decide of your exit proceeds to charity. You decide yourself to what charities, you decide yourself how much. I think there’s a minimum threshold, a few percent. You can do anything from a few percent up to a hundred percent, if you want to. It’s up to you. And by signing this pledge you become a part of the Founders’ Pledge community, consisting of all other founders and investors who also care about philanthropy and doing good. The basic level, it’s a pledge, but it’s really more about building the community and meeting other people and you also get to meet very early-stage charities who have good traction, but still early days.

Maybe you as a philanthropist want to support them in the early days so they could show and get metrics that what they’re doing is this really effective. And the way Founders’ Pledge works is that when it’s time to donate, they have their own research team. They’re also working with an external research team trying to figure out which are the best charities that you can donate to given your own criteria. They are very much experts in understanding the charity landscape and how to convert one donated dollar into real value for the world. That follows the effective altruism idea or trying to do as much good as possible for a certain input.

I’ve been supporting them since I heard of them and trying to help them get going in the Nordics, especially in Sweden. I can really recommend them. Maybe this sounds like a sales pitch, but I think it’s worth it since they are really that good and inspiring.

Petri: I think it is a sales pitch. There is also the counter-argument, just to take another point of view. You’re saying that you cannot allocate the money better and do more good with doing by yourself, maybe investing in some startup companies or you just take the portfolio view.

Erik: It’s a good question because it’s really one big debate in effective altruism and Founders’ Pledge working a lot of this as we speak on how to balance between doing long-term investments, growing the capital and donating later compared to donating to the best charities today.

That mathematical model, how to model the value of doing investments today, is quite hard. There are strong indications that, at least, some of the money should be invested long-term, not so much because we expect that the value of the money that will grow so much faster than the value that is created by donating today.

But rather that we learn so much every year from how to use the money, the donated money, integrating value. The effective altruism movement is still very young and I’m learning a lot every year. And we expect that in 10 years, maybe we’re twice as good at converting donated dollars into value.

That’s a strong reason why it might be good to invest instead of donating today. But the research on this topic is definitely far from clear yet, and it’s still going on. It’s kind of hard to know at this point. I’m doing both. I’m not investing only to donate everything later, but I’m also investing to learn and to have a lot of fun while doing it.

I try to balance between doing the investments and donating as well. But it’s hard. It’s a hard question and it will definitely be up for debate for many years ahead. We might still not come to a strict conclusion on what is best. What is clear though, is that if everyone would only invest their money and there would be no donations creating value today that would not be good.

There’s a strong reason to believe that investing some of the money could probably lead to even higher value creation in 10 or 20 years.

Petri: You’ve been also doing something for the Nordic startup community by means of documents, What was the reason behind it and can you explain briefly what is it about?

Erik: Right. That was one of the learnings when I started doing my own angel investments in 2013. I realised that when I was about to invest in a company, I couldn’t figure out myself what are decent terms to invest on. It didn’t seem like anyone else knew either. I started asking around a lot, what are normal terms in a seed round in Sweden, and I got a lot of different answers.

I started more or less crowdsourcing different term sheets from seed rounds and realised that very few terms existed in all the term sheets and very few ones that were very odd compared to the other term sheet. I summarised this, picked everything that seemed to be more or less common and said that, okay, now I have my own term sheet.

This is a normal term sheet. It’s not founder-friendly. it’s not investor-friendly, but it’s balanced. It’s basically both investor and founder-friendly in that sense. I started using that, but realised very quickly that, okay, now I crowdsourced this, why don’t I share this with others so others can use it as well?

I put it online and it gained some traction. It led me very quickly to understand that it’s not enough to only have a term sheet. You also want the investment agreement and the shareholders’ agreement that correspond to the headline terms in the term sheets. I started working with a lawyer in Sweden to develop these agreements, put them online, started receiving even more traction and more questions about other kinds of documents.

Entrepreneurs wanted employment agreements and agreements for stock options, NDAs, convertibles. I realised that, okay, I should probably spend some time working with lawyers to create these standardised, balanced templates and put them online. I spent some time doing that and it’s all for free.

The lawyers are working for free in exchange for exposure to documents. They basically get leads from companies, who want help with documents. It started in Sweden, but now it’s also in the rest of the Nordics. The latest launch was in Finland in December together with Now, I have some plans to grow this into a sustainable business. Today, it’s fully supported by my personal money that goes into the project to pay for everything. Like most charities, many of them would be better off if they also had some sort of revenue model. It would be sustainable and not dependent too much on donations.

 That’s the plan for Startup Tools to try to keep it going to make sure that it can keep delivering balanced, standardised documents for at least the Nordic startup ecosystem, but hopefully more in Europe as well.

Petri: I think one of the exceptional things when I first some years back learned about Startup Tools was that you were also checking the taxation, which is not usually the case. Lawyers are so good with the legal stuff, but they don’t want to bother with taxation. And that’s very important in Scandinavia and Nordics because of the high taxation and sometimes the laws are not exactly on the side of the founder when you’re doing exits or you’re doing some kind of transactions and giving incentives for employees as well. You may have some consequences in the taxation perspective, and those may not be reflected in the contracts.

Erik: This is something that’s bothered me for a while. Lawyers tend to be experts in one field. Either you’re a tax expert, and then you’re only know tax, but you’re usually not that good at understanding a startup journey and understanding how to adapt contracts to them. You only know the tax rules or you’re an expert in something else but you don’t know tax.

That makes it difficult for founders who might not be able to afford to have several different lawyers coming in and working on helping them. But as an entrepreneur when you’ve been through some of that, then at least you learn where it is important to think about the tax consequences.

I could then support entrepreneurs via Startup Tools by having tax experts take a look at a few specific areas where I know that it can be tricky for founders. Especially, when it comes to taxation for receiving value from the company in terms of options or founders with vesting and so on that are traditionally more risky areas than, for example, a sales agreement or an NDA.

Petri: Where is Trellis Road?

Erik: Trellis Road is…that is a good question!. Where is it? It’s a place in the future where we have, sorry, I can’t explain that one. Sorry!

Trellis Road is the company that I started with my now co-founder Anna Ottosson. She was running a company that I invested in myself before. They were doing a deep tech, B2B solution for the distribution of data. So, very different from the food tech that we are now focusing on.

Petri: Pizza again!

Erik: Pizza is food but pizza is not that much food tech. Online delivery is food tech. We focus on the impact aspects. We started talking more than a year ago about doing something together. Yet, again I thought that maybe I’m about to start my own company again, a real startup. But I realised that it probably wasn’t the right timing for many different reasons.

We started talking about doing something together, and we had both been through starting a company, exiting a company, started to think about what to do next. We’re in a similar personal situation as well. I just had my first baby and Anna was about to have her first baby. We both had started thinking more about our legacy as well to the next generation.

We concluded that we have to work on something that really reasons with us that aligns with our passions. It sounds like a cliche but when you are in the luxury situation that we both were not being dependent on a daytime job you would have the luxury to start thinking about what is my passion.

We both concluded that we want to feel that we help to improve the world somehow as a combination of impact but also startups. We know both worlds and we see there is a huge overlap that traditionally has been a bit neglected. The overlap between high impact and high profitability. I think five to ten years ago investors at least thought that you had to choose between impact and profitability.

It has been obvious that it’s definitely possible to build huge businesses that combined both. Where one unit of economic growth in the company also generates one more unit of impact. I mean, looking at the food industry that we decided to focus on, you have like Swedish for example, that replacing milk with oat drinks, growing tremendously in aiming to 10 billion IPO now in May, I think. Beyond Meat with the plant-based burger replacements who didn’t IPO in the US, there are some of those cases that I know went all the way to an IPO and there are much more coming. We definitely see that this is a great idea for entrepreneurs and artistic investors to focus on.

We also looked into a few different areas before deciding on food tech. We look at the energy sector, for example. But realised very quickly that to make a big dent in the energy sector, you need a lot of money. It’s quite dependent on big corporates and it’s quite dependent on policies. We didn’t really want to be dependent on those things.

We thought that we want to find some area where you can make more of an impact as a small startup and small investor and realise that food tech is that space. And there are lots of things happening in food tech, both on the research level but also on the commercialisation level.

That shows that even small startups can have a path to become huge, without being too dependent on policies or big corporates and letting them grow. You can compete as a startup. I think it’s partially because of the consumer focus of all food. In the end, there is a consumer that’s going to eat the food.

Everything along the food value chain all the way from agriculture to packaging and e-commerce is to take the consumer into account. If consumers start changing behaviour, if they start being attracted by new brands, for example, then that trickles down all the way down to agriculture in the end.

That’s a way for startups to affect the whole industry without being too dependent on external factors.

Petri: Is this a journey you’re planning to do as you go or is there some big idea already behind it?

Erik: If you ask me in five years, I’ll tell you there was an excellent strategy on how to become what we have become in five years. But, like most other things I have to admit that it started out as we decided that last year we should spend at learning as much as possible.

I had spent some time in food tech, but not high-impact in any way. That was online food delivery. I didn’t really know how the high impact aspects of the food industry work today. We didn’t have the networks in that niche. We didn’t have the connections with the entrepreneurs that we wanted to invest in either.

We had to spend lots of time learning about the space and finding entrepreneurs, finding investors, finding the experts. We decided to spend last year investing our own money in high-impact food tech startups at the seed stage, alongside big investors who have been in this space for longer. That was the way for us to learn.

We did about seven investments last year, $50-200k tickets. Just as the way to learn. Now, I’d say that we have learned a lot. We have realised that this is the perfect space to focus on from our respective, both us small investors, but also from an impact perspective. The more we learn about the food industry, the more we learn that it’s really one of the few key areas in reducing the negative effects of climate change and human health can be radically improved by the food system as well. It’s a super interesting area from both of those aspects. We have also seen that it’s definitely doable to change things from the startup perspective, which was also one of our assumptions.

We are going to spend all our time on food tech. We are thinking about how to leverage that more than just investing our money in super small tickets. But that’s up for discussion what it will look like. We have spoken to a few other individuals and organisations that are also doing their own direct investments.

We’re thinking that maybe we should start working together somehow pooling the money, perhaps. But it’s still too early to tell. I’ll probably have a great story in a few years on exactly why we chose a certain path, but, right now, it’s still a bit up on there. What we do know is that this is happening.

We definitely see that food tech is changing the world for the better. It could be faster. We think we can help accelerate it. We should definitely be active and do a lot of investments in the space that will be great both from an impact perspective and financial perspective if we don’t mess up. But it’s hard to tell exactly what the best model is. We definitely want to jump on the train before it leaves.

Petri: What is your favourite word?

Erik: It’s serendipity. I have love that word for many years. Ever since I went into the best ice cream bar in the world, I think, in New York in Manhattan. There’s an ice cream bar called Serendipity, which I didn’t understand the word by then, but I thought it sounded funny to say serendipity, just tasted it.

It’s so fun to say. And then when I realised that it means happy coincidence I just fell in love with it. I wanted to name my own company serendipity when I started investing, but then I realised there was another investment company in Stockholm named Serendipity. I couldn’t do it. I was frustrated for days I couldn’t use the word serendipity, but at least I get to say it here. That’s fun.

Petri: What is your least favourite word?

Erik: I don’t think I have one. I tend to dislike negativity, so I guess maybe the word no is something I usually don’t like to hear. I don’t like the idea of limitations or negativity or obstructions to people who want to be creative but are limited by other people or by systems, like stopping things, I guess.

No is a word that symbolises that. I also think we tend to as individuals value the negative consequences of actions higher than positive consequences. Even if an action has total positive consequences, humans are likely to oppose it if there are also obvious negative consequences or risk. Especially, if the negative consequences come first. I’ve been so frustrated more and more, but especially like the last year or so when I spent more time in food tech and realise how, even though I do claim and think that startups can really make a difference by being innovative and creative, but I still get so frustrated every time I see that there are big corporates or politicians trying to stop creativity, trying to stop the future from happening. There was a tweet not long ago from the French Minister of Agriculture when he read that Singapore was the first country in the world to open up for cultivated meat, lab grown meat to be sold to consumers. Then his first gut reaction was to go to Twitter and say: “This will never happen in France. Not under my watch. The meat will always be natural for animals and never be grown in a lab.”

I think it’s just such a tragic attitude that the new things cannot happen because…well, you should ask him why. But, the French are known for protecting their farmers. By protecting an old industry that we know is in many ways crazy, especially, for the climate. It’s just tragic. Sorry. That was a long rant on the word no.

Petri: What turns you on creatively, spiritually, or emotionally?

Erik: I really get excited, when I’m around people who are intellectually honest and have that curiosity and energy to question their own beliefs. I think intellectual dishonesty is increasing or at least it’s become more apparent lately with the filter bubbles on social media and access to the information on the “facts” that you prefer yourself.

Maybe that makes me appreciate it even more when people obviously are willing to question their beliefs and not make up their mind too quickly, but showing their willingness to listen to contradictory information. There’s a model I heard about, not long ago called strong opinions, weakly held, which basically means that you try to make up your mind early, on a certain topic, which helps you structure your thinking about it.

And if you wake up in the middle of the night gun to your head you know what your decision or your thought is, but the opinion itself is very weakly held, which means that it can always be changed when new information appears. And if you commit yourself that this is my approach, it’s easier to accept that.

Yes, of course, I do have opinions, but they are also changeable. I have been using that more and more the last few weeks since I heard about that. I think it really helps to structure your thinking and being more open to changing your mind.

Petri: What turns you off?

Erik: But that has to be the opposite. Sorry, boring answer. When people are not curious and don’t want to learn or improve things, just lazy and happy with the status quo. Partly, that’s a good thing from a happiness perspective that you can be happy with what you have.

That’s great. And I practice that a lot and you should definitely try to do that, but only doing that and not being curious, not trying to learn that really turns me off.

Petri: What is your favourite curse word?

Erik: It has to be Swedish fan, which basically means the devil. But, I guess, more translated it means fuck or something. I’m not sure if I used it that much, but it feels like easiest to say when you ask for a curse word.

Petri: What sound or noise do you love?

Erik: It has to be my one-year-old daughter laughing. I guess this is a cliche as well, but that’s just irresistible.

Petri: What sound or noise do you hate?

Erik: I really love my daughter, but when she wakes up at 5:00 AM in the morning and I hear her say “daddy play.” I know that now it’s going to be impossible to get her to fall asleep again. I mean, hearing that it’s not what I’m looking for.

Petri: What profession other than your own, would you like to attempt?

Erik: It has to be something where I can use both my body and my brain and create something, see something being built like a baker or building furniture. But it has to be a baker. I enjoy bread more than furniture.

Petri: What profession would you not like to do?

Erik: Definitely, a politician. There are probably lots of them, but top of my head being a politician. I mean, just looking at the politics taking place in a hundred person startup that’s more than enough for me. I really hate when things are not focusing on rational, improving things or if people are not focused on meritocracy where the best ideas win or the best facts wins, but you start running politics either in an organisation.

I think that’s just politics on a high level when you become a real politician. I spent some time trying to figure out how politics works. I can’t even imagine what it would be like to spend my days working with that in practice.

Petri: If you could be a co-founder of any startup in any era, which one would you choose?

Erik: One of the ideas I had when I came out from my own business and started thinking about a new business, which I still haven’t seen happen, and I’m happy to give that idea away. It’s tricky to execute, but I really want to start a startup or see someone start a startup. I’m happy to fund it!

Ping me, if you’re starting this. It’s a health tech startup that somehow is able to collect lots and lots of global anonymous, of course, health records, including personal background, symptoms, diagnosis, treatments, results from those treatments, long-term effects. And ideally also collect things like DNA, regularly measured blood tests, poo samples, like everything that we today think is important to the health of an individual.

If you can get access to all that data, then by applying machine learning, I’m pretty sure that we could create virtual doctors that are much better than anything we can imagine today. And by doing that, we would also be much better too proactively realise that something is going on or soon going on in a human being and be able to prevent that before it even becomes a disease. I think that would be a major leap forward in terms of human health. I’d like to start that startup.

Petri: Any final words for the audience?

 Erik: If you are thinking about starting a startup, do it! It’s all just easy to sit around like I am doing or have been doing for a few years, trying to wait for the perfect moment. But if you have the opportunity to do it and especially if you’re still quite young, maybe you’re still studying, maybe you have somehow secured your personal financial situation. Then even if you don’t have the perfect idea, it doesn’t really matter. You can do it just for learning. And then when you have the perfect idea, maybe it’s easier for you to make the decision. Yes, just do it!

Petri: Thank you, Eric. This discussion has made me hungry.

Erik: Thank you, Petri! Me, too. Let’s have a pizza!

Bootstrapping your way to success

February 15, 2021

Heikki Väänänen – TALKS WITH PETRI

Heikki Väänänen, the co-founder of HappyOrNot, talks about his entrepreneurial journey from bootstrapping to raising over 40m EUR funding and scaling the company to +200 employees, and stepping down from the CEO role after 20 years. He also tells why it’s a good idea to wear a company T-shirt.


Heikki Väänänen, 40, has worked most of his life as an entrepreneur. The idea of HappyOrNot was born, when at the age of 15, he received bad customer service at a store he visited. He wondered whether there would be a better solution to give feedback and came up with the idea of the new service. However, he did not execute his idea right away and let it mature for a few more years. In those years, he graduated  as a Master of Science in Technology and founded, at the age of 20, his own gaming company Universomo. He has held board member roles in several technology and services companies, with a proven track record of increasing sales and profitability. With his combined experience and expertise, Heikki has directed the successful strategic development and sale of six Finnish companies, including the sale of Universomo to THQ – the second largest gaming company in the world. 

In 2009 HappyOrNot was born. The Smiley devices measuring customer satisfaction can be found at various locations, like grocery stores, pharmacies and airports, in more than 120 countries around the world. The HappyOrNot service has currently collected 2 billion feedbacks – a record in the customer feedback market space. While the idea of the Smiley devices is simple and the way of giving feedback is easy, the feedback data enables actionable insights and empowers companies to develop their business by improving their customer experience.



(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: Hello Heikki, how are you doing today?

Heikki: Good, good. Thank you. How about you?

Petri: Not bad. It’s quite nice here. It’s a winter day and the sun is shining. I think things are pretty good. Two billion satisfied customers or was it clicks?

Heikki: Yes, clicks. That’s the situation where we are today after ten years of building HappyOrNot.

Petri: What is HappyOrNot? Are you happy or not?

Heikki: We are providing service for our customers so that they know how happy people are at different physical locations. You may have seen our terminal or device somewhere. For example, maybe at the airports where there is a device asking that how happy you were for the security or how happy you’re aware for the retail experience. Then you can push one of those four smiley buttons and tell how you feel.

Petri: Sounds pretty simple. Does it really work?

Heikki: When we started the business that was one thing what we needed to learn because the idea felt so simple. Also, we were not 100% sure that this will work. For that reason, we agreed with roughly five customers to test the idea and see and learn if the data has some value for the customers.

Petri: Can you walk me through it? Usually, things are not simple in the beginning. Why was it simple in the beginning? Why did you think that you have the audacity to think that it will work because it’s such a simple thing or was there something hidden what I don’t understand?

Heikki: The idea felt so simple: let’s just put a device with four smiley buttons and a question sign. From the tech perspective, there is nothing like a miracle there. We were thinking that because the implementation is so easy from the tech perspective maybe someone has been trying this before and failed.

That’s the reason why we didn’t need like 50 developers and engineers to put this first prototype together to see the first results from the customers.

Petri: But it was not an easy ride. I understood that a lot of people were laughing at you. And they didn’t believe that it works or it actually adds any value.

Heikki: When we were negotiating and discussing with the first customers we were also discussing with one person who is a customer experience professional. And we were representing this idea for her as well. The feedback from her was that that idea won’t ever work.

That’s the worst idea I have heard in a long time. She felt that that device will be just in front of everyone and everyone will hate those devices. Why would someone use that kind of terminal? And of course, because that feedback was coming from the customer experience professional we thought that she knows a lot about this market and space. For a few days, we were thinking that, okay, maybe that’s the case that this doesn’t work but at the same time like giving up is not something what we do easily. We made the decision that let’s continue and let’s collect more feedback. And let’s start testing the concept.

Petri: How many feedback loops and how many months or weeks or days it took that you were convinced that maybe it’s not time to give up yet?

Heikki: Maybe the first test was the most interesting one. It was one retail chain in Finland that made the decision to be the first one on this. We took one device to Valintatalo. It was a small grocery store site. We put the device there in the morning and together with the customer we were thinking that maybe we get like ten or five feedbacks per day.

Normally grocery stores are getting maybe three feedbacks per month or maybe ten feedbacks per month. They were thinking that if we can get the same amount of feedback per day that would be pretty amazing. After the first day, we had roughly 150 feedbacks collected. The customer was really surprised because they could for the first time ever see how happy people are per each hour. And of course, we were surprised that lots of people are giving their feedback. That was the first really positive sign that actually this can work.

Petri: What are the questions you’re asking in those terminals? Do you remember what was the first one, the very first one you were describing?

Heikki: The first one was how happy you were for the service today? Of course, in Finnish here, locally. It depends on the vertical. If you are within retail, usually it’s about the customer experience, it’s about did you find the products, it’s about the cleanliness of the location.

When thinking about the airports, then it’s about the security experience, about the package claim experience, about the happiness for different areas on the airports. And on healthcare, it’s different kinds of questions, like how happy you were for the doctor visit and so on. It depends on the customer group what’s the optimal setup of questions.

Petri: Why should I push it as a customer? Is it to vent the bad experience and to express myself? Can you also describe what happens after I push the button?

Heikki: That’s one thing. Based on the discussions that we have had with the people, not with the people who are working at the sites, but people who are giving the feedback, some people get nice feelings. They are able to tell how they felt about the experience.

Both, if the experience was great, it’s nice that you can tell that. But also if you are not happy with the experience that’s also sometimes really nice that you are able to tell that to someone. Then from the company perspective, it’s nice that people there know how people are feeling. For example, I was discussing once with the person who has been working at the grocery store for 20 years. And of course, people have been every now and then telling you are doing a great job or similar. But she didn’t have any statistics on how well she is performing.

For the first time ever she saw that their location is the number one when comparing different locations and retailer sites to each other. It can give really positive feelings for the people. The reason why people give feedback is that then those locations can improve their things and give even better experiences for you in the future.

Petri: You were the CEO of the company for many years from the founding onwards and now you have stepped down already. So, it’s been quite a journey I would imagine, but how did it all begin?

Heikki: The idea of this concept is from more than 20 years back when I got this idea about how about if giving feedback would be much easier. Instead of filling in some online surveys or paper surveys or answering the phone, when someone is asking how happy you have been for the different services?

That was the thinking what I had. And also, when helping other companies, I noticed that companies are usually asking…or back then companies were usually asking customer feedback maybe once per year or maybe once per two years.

And I felt that can’t be the case on the term. Customers are the ones who are bringing the money to the companies. It felt weird that you would be asking every second year how you feel if at the same time you are the one who is paying my salary.

Petri: Can you apply these principles and what you have learned in a startup environment? If I’m building a new startup and starting today, now, what you know based on that 20 years experience, what would you tell someone that what are the things to implement and how to do that? Even though, they may not be in the retail space?

Heikki: There’re a few things on that. When starting a startup nowadays the great thing is that you have really good tools to get a lot of data in so that you can optimise your offering much faster than you were able to do maybe 10-15 years ago.

Building a startup today it’s pretty different compared to how it was before. There are Power BI, Tableau kind of tools. There are a lot of free tools within marketing, within sales and also for product development and how customer satisfaction relates to this is that when you are building a startup you may want to know that your flexibility within marketing, your messaging works well. Of course, you will be following maybe some controversial metrics from leads to marketing qualified leads and sales qualified leads, and so on. But you may also want to know what people are thinking about the messaging you are using.

Or within product development, it can be the same that you can follow the metrics from the first sign up: what’s the percentage of the people who are using your service again. Maybe the drop off is let’s say 50%. So, for some reason, your customers will use your service once and then 50% of your customers disappear. Then you may want to ask what are the reasons why you didn’t come back and then that’s something that relates to customer experience. You want to learn the reasons behind the drop-off.

 Petri: How quick cycles can you have in this feedback loop and improving and trying again?

Heikki: I would say in days. That’s pretty typical nowadays. Not maybe within the hours because of the volume. You may wanna have at least maybe 100-500 feedback in total. Usually, it’s about the days that’s how the most successful companies are working nowadays. It’s about testing things and seeing in a few days if the new idea works well or if it doesn’t work well.

Petri: Let’s take an example. You’ve been in the gaming world before. If you’re building a mobile game and you would like to test some parts of the new improvements in the latest version can you do that by applying the principles and ideas of what you are doing?

Heikki: The principle is the same. In game development it’s the same as developing, let’s say, software for the B2B environment. For example, you may want to test that are people able to increase the volume and you are maybe doing that by sitting next to the person and testing different ideas. Let’s put the volume icon here, and let’s see if people are able to recognise that.

And if people are not able to recognise that then changing the colour or putting the volume icon somewhere else. Or if you can’t be physically there then you can do that online as well and ask for feedback there.

Petri: Can that be done in a COVID world type of way? People are around the world and you have a new software release. Can you somehow put the buttons or how do you know how they are feeling when they downloaded the new version or played the game or they are onboarding, is there a way to know what’s working?

Heikki: It can be done, for example, with a video connection. In some tests, you want to follow what the person is doing. You want to follow where the person is watching. You may also want to tell the person that please continuously tell what you feel and what you are doing and what you are trying to do.

If someone is playing a mobile game, the person may tell that, hey, now I wanna add my friend here as well, but now I’m trying to find the button or the way how to do it. And if the person recognises that it will take, let’s say five minutes to do that then the learning is that okay, we actually need to do this in a way that it’s a bit easier for the users, because otherwise there will be maybe drop off and you will lose the players and the person will download some other mobile game, which there are a lot of available today.

Petri: HappyOrNot has been getting quite a lot of media coverage. And I remember in 2018, you got The New Yorker to write an article about you. And that was a big deal. And obviously, it is a big deal but I mean that it also had a lot of business impact.

Can you explain and tell how you can get such a nice article in The New Yorker?

Heikki: That was our goal always that it would be amazing to be recognised by the top magazines in the world, and especially in the US. How this The New Yorker opportunity came was that we were at a trade in the US, and there was this person from The New Yorker going around. He came to see us. He came to our booth and was asking about what we are doing. How this is working, and so on.

One person who has been with us for a long time, Tod Tyson, was in the booth and he was telling the store how everything started and how this works, and so on. How we are changing the way how retail companies can improve their operations. Luckily he got so excited about us that we agreed to a follow-up call with him. During that call, he was asking a bit more questions, and eventually, we agreed that they will do an article about us and they also let us know that they will be a few days with us.

And, also they will fly, for example, to San Francisco to meet our customers and so on. Normally, when these people are putting these articles together, they may be spent maybe two hours, three hours with the person and the company but this was pretty different. They were spending many days with us and even met my wife and were asking a lot of questions about her. What she has been doing when she was young and so on. It was more questions than you are getting in a job interview.

Petri: Wow! What was the impact? Nowadays in the tech world, we tend to think that it’s more about Twitter and social media and regular media doesn’t have that big effect anymore. But I would assume in your line of business, it had a great impact?

Heikki: During that time we had some presence in the US. We had some customers from the US.

Petri: Can you name a few customers to get an idea?

Heikki: For example, Rite Aid was our customer. The Space Center in Florida was our customer, a few hospitals were our customers. I think we had our first terminal at Walmart as well.

When a European company is going to the US it’s about building credibility. And if you have only European customers unfortunately for US companies it’s more critical for them that you have local references. And so that those people can maybe have a chat with the people who are already using your service.

We had some customers but we were missing parts of the credibility there still. Where this article was helping us a lot was that …because even for the US companies it’s almost impossible to get an article on The New Yorker. That’s the magazine what well-educated people are following and reading. After we got that article and when we were telling them on the call or on the meeting with the customer that here you can read the six pages story about us on The New Yorker then the comments were like, wow, how you did that? We have been trying to get an article on that magazine too but we have never been able to do that. How did you make that happen? It was a big thing from the credibility perspective and doing the deals became much easier after that.

Petri: You have your US headquarters in Florida, which is becoming a hot place for startups now. People are moving from San Francisco and different places to Florida, but you were early on there. Why Florida?

Heikki: Of course, I could tell that we made big research and we saw this happening in the future that companies are going there but that wasn’t the case. A few things which were critical for us, one was the time difference. When you have employees in Europe, Asia and in the US it’s easier if there wouldn’t be too big a time difference between the teams.

We are from Finland. We have pretty cold winter time so our first persons who went there…we just started from Florida. We didn’t think too much about that. We made small research, but not the long one.

We were thinking let’s start here and let’s see how things go. Our customers were, basically, everywhere in the US. We were not in a position where we would have like 100 potential customers in the US and they all are in New York. Then it would have been easy to pick up New York. Because our customers were everywhere and anyway we needed to fly to different cities.

We started there and that’s the place where we are today. We have people in some other locations as well in the US but the office is in Florida.

Petri: You’ve been having some ups and downs in recruitment like any founder in any company. Can you elaborate a bit and tell some of the stories you’ve been having during the time? Maybe when you were moving to the US, for example, how did you find the people?

Heikki: That’s maybe one thing also for the European companies. When you go there people in the US they are amazing at telling their story and presenting themselves. When we were doing the first hires there it felt that In the US, there’re only amazing candidates.

 All of them were able to tell the things what you wanted to hear. That’s a bit different compared to Nordics. You’re going to have amazing talent in Nordic but on the job interview, they are just telling me that I have been doing these pretty small things. And the reality is that they have done some amazing stuff.

Because we were scaling fast we were also hiring people pretty fast. During that journey, we made some less expensive and some a bit more expensive mistakes. It would have been good to get more local support while doing those hires.

We were even hiring one person who had a really bad criminal background and we found that out a bit too late and we were in trouble for a while. We were able to solve that but that’s something when you’re doing things fast and when testing things fast, you’re also like sometimes making mistakes.

Petri: What are the most expensive mistakes? What type of mistakes?

Heikki: One area is the hires. Because you’re maybe paying for some company who is helping when you are doing the hire, but it’s also the lost time what is expensive. If you’re hiring the person for the sales role or if you hire the person who is leading the sales that’s something where we did one mistake early on. We hired a person who was supposed to lead the sales and we learned that this doesn’t work. Then it means that you basically have lost maybe even a year. When calculating together the time when you are interviewing the candidates, then that person has maybe three months notice period after he or she can show in. And the person starts, there is maybe three to six months onboarding. And after that, you noticed that, okay, this is not working.

So, you have spent one year without getting the company to the next level. In the tech space, one year is a long time. We are not anymore in the cycles of two years or four years or ten years. In the tech space, great products can only last, maybe let’s say, three to five years in total. If you do one mistake, which costs you one year that can have a huge impact on your success.

Petri: How can you avoid those mistakes? What’s the lesson to learn from here?

Heikki: That’s a really good question. Especially, if you are starting the business for the first time without networks then I would have maybe encouraged you to get some help and be data-driven there. Doing some tests and making sure that the profile equals to a really successful, let’s say, sales leaders who you are looking for. That’s one way to do it. That’s the way how we are operating nowadays that we are using as much data as possible when doing the hires to make sure that we would do less mistakes there. But of course…

Petri: What you mean by data?

Heikki: There’s a lot of great tools available nowadays. You can run different kinds of tests for the candidates. For example, we have been using the Caliper test globally and that has been working really well. The results are pretty much trustable, and if the person gets really good scores on that test it usually means that the person is also successful.

 Maybe the other way to do it if you have some networks and if you know some people who have been successful before, and if you are confident that those people have still energy and a willingness to run, maybe then hiring those persons who you know and are from your network and have been successful. That has been one great way to do good hires.

Petri: How are you using HappyOrNot within the company? Are you testing and having the pulse of the staff as well?

Heikki: Yes, for the whole company’s history. That’s something what we are doing and what many companies globally are doing. Every day when people leave the office, they can give feedback on how they felt. That has been really helpful. Especially, for the management, it’s more about if there’re more employees than normally who are not happy. With the follow-up questions, you can also find out what are the reasons. Compared to yearly surveys the management and the employees get the information about the dissatisfaction the next day. That’s helpful for the teams so that you can fix things fast instead of waiting a year.

Petri: How do you figure out the root cause? If people are just not happy how can you try to figure out what’s the cause of that?

Heikki: The version of what companies are using nowadays a lot is the tablet version. And then you have follow-ups. If the person wasn’t happy then there’s a follow-up question: was it maybe because of the leadership or because of the workload, or maybe because of the office environment?

And if the person says that this was because of the leadership, then the person that can also type a bit more details there that like what were the reasons. Maybe I had unrealistic goals for this month or maybe the way how the supervisor is managing the team.

Maybe there is something what can be improved there. It’s still anonymous, so that’s something. Something like what we want to make sure that people feel safe to give feedback because otherwise there will be less and less feedback for the companies.

Petri: As a CEO, I think you’ve been the entire time till you stepped down the CEO of the company. Can you describe the process of how you’ve been changing your role from the beginning and what have been the most difficult and maybe the easiest and the unexpected ways you have grown in the process and things you wanna share with other ones who are facing the same thing?

Heikki: Mm. I think like for this topic we got to use maybe one or two or three days. There’re huge differences if you have five employees, if you have 20 employees, if you have 40, if you have 60, 100 or 200. All those stages are a bit different.

If you have a small team of, let’s say, six employees, then you are looking at one supervisor and the team. All of those people can be in the same room and they always are on the same page and you can change the direction of the company in one day, or you can change the direction of the company even twice per day if you just agree with the team. You are pretty agile. When you have 20 employees, you are not maybe the supervisor for everyone. You will start to have a bit of structure there, but still keeping all the employees on the same basis is pretty easy.

When going into the stage of +100 employees, then things will change a lot. Then you have to start thinking about different processes. What’s the way how employees are managed within your company. Let’s say that you have a marketing team, you have a sales team, you have a research and development team. Let’s say that you hire a person from Oracle to lead the marketing. You’ll hire a person from Salesforce to lead the sales and then you hire a person from IBM to lead the product. If you just leave it there and you’ll work with only your team members, what you will find out that actually, we have three different ways how people are led in the company. There is one who is leading the people how people were led at Salesforce and one person who is leading their people how people were led at Oracle, and so on.

One advice I would give for the teams who go beyond 60-70 employees, then you have to start thinking about things like how people are managed, how people are led. What’s the way how we are doing that within this company?

That’s a big difference and also the step for the founder. If you’re a founder of the company, when you have 20 employees, you know everything about everything. And if you have let’s say 70 employees you don’t know anymore.

You have to start trusting on your team members. When you have 150 employees, you don’t even know everyone’s names. And that’s one step where I felt that maybe I’m losing my memory because I can’t remember everyone’s names. But that’s one phase.

When you are experiencing that for the first time, it may feel a bit weird when you are meeting someone at the office and you are like what was the name of this person? I can’t remember. You are working in my company, but I can’t remember your name. That may feel a bit weird.

If it’s let’s say three years from the situation when you had ten employees and you knew everyone’s names and even the kids’ names of the persons. When the company is smaller, it’s a more personal experience. And then when the company gets bigger, it’s more about building the structure for the founder who is also leading the company.

Petri: Was there any phase where you were thinking that, okay, this is getting a bit out of hand you’re not comfortable with the speed or something happening and some rough patches in the growth?

Heikki: Many times. We did the A-round and the first round when we had about 60 employees. We started a collaboration with the investor and we put the hiring plan together. Within that hiring plan, we had roughly 100 roles.

Petri: Who big was the series-A round?

Heikki: It was about 15 million.

Petri: Did you have any investor money before or did you bootstrap with your own money or was there some angel round or seed round?

Heikki: No rounds before that. It was bootstrapped until that.

Petri: Okay. How many years were you bootstrapping?

Heikki: Six years.

Petri: You were a few founders and owned the whole cap table?

Heikki: Yeah, and also sharing the shares for the team members. That’s something what I’ve been doing, and we have been doing always quite a lot. Not keeping the ownership only within the really small team, let’s say two or three persons. We have always preferred the way that we share the shares of the company for the team members. I think it’s better to own a small amount of a really big success than owning 100% of no success.

Petri: This was a big deal to take an external investor because then it’s not in your hands entirely anymore. Was that something you must do or you wanted it to do, or can you explain a bit about the process?

Heikki: We spent quite a lot of time with different investors. There were maybe 100 investors contacting us during that year. And all of them telling that, Hey, please, take our money and you can do amazing things. We spent with one investor called Northzone quite a lot of time.

We had the plan going forward without the investment but also with the investment. The difference of what we saw there was that actually we can do things and we can speed up things so much that let’s see if we are able to get reasonable terms or good terms. If the package feels good, if the team at Northzone feels good, if all the components feel good.

One thing what we did was that we are asking from the investor that can you come and give a presentation about yourself to our employees before the investment? So if our employees will say that this sounds really nice and exciting and good then that’s one positive sign. And, like you mentioned that it’s a pretty big thing when the company is not any more within your hands. But it’s not like investors are coming to you and telling that this is how their business would be led in the future.

Of course, the team who is building the company should have the knowledge. And, the role of the investor is to bring more money to make sure that the company can move fast and expand the operation fast and become even more successful.

Petri: You were not knocking on the doors of the investors they were coming to you and you were like let’s see if this works. Did I get that correctly?

Heikki: Yeah. That’s how the environment and space works. When a company is getting to the point of, let’s say, 5 million euros or dollars in revenue. There are a lot of investors who will be then contacting you. And especially if you’ve been growing 50% to 100% a year on that scale, all good VCs or investors, they have a group of people who are doing research and they are trying to find you. Usually, they find.

What the investors are doing they are investing money what they have to invest somewhere. They can’t be without investing that money.

There is competition in that space as well. There are not one or two or three investors who are investing in companies. There’s also competition between the investors and they want to make sure that they can give money for the teams which are the best ones and capable of scaling the businesses because they want to get a good return for the money they put in.

Petri: This is not your first company. You have been successfully building and selling companies before as well. Has that been critical in the success of your current company?

Heikki: It made the first years a bit easier. We haven’t been on this scale. Now, we are going beyond 100 million in valuation. We haven’t been this far before. But the first years were definitely much easier. We had a small software development company, roughly 10 employees. Then we were in the mobile game business.

And that business was growing really fast. We sold the business when we had roughly 40 employees in total. If you have done something or maybe two times then the next time the things will be a bit easier. That’s the same in everything. Also when building businesses. The first years I would say were pretty straight forward when our team had experience from the previous companies.

Petri: When you were building the first product and prototyping, I understood that you were not paying everything out of your own pocket. You were saying that I don’t have money now, but maybe if this is successful, we can compensate you. How did you manage to pull that off?

Heikki: Yeah, that was something what we were testing. So, thanks to the people within our network that they had the trust. How the story went was that we knew that to put the terminal together we needed some skills and help there.

Also when building the first version of the reporting service where people can actually see the results we also needed some great help there. We met a few people and we told them about this idea that, Hey, like this is something what we are planning and are you willing to help in case we need some.

Basically, everyone told us that, of course, if you need any help, just let us know. I was discussing it with Ville, the co-founder. Hey, how about if we would be able to do this kind of deal that we don’t…we had only 2500 euros on our bank account. We can’t buy stuff.

If you buy product development from somewhere, you at least spend 50k or 100k or even more. The one option we would do the round immediately. Or we test and see if people can help and the way we agreed was that if the company is successful then we will pay a lot for those people.

Petri: What is a lot? Can you give something concrete that if I want to do the same thing what should I suggest?

Heikki: Let’s put some figures. Maybe that makes it more concrete. We had people who were helping us, for example, with some graphics or with the device, and they were maybe using, let’s say, 100 hours for something.

We agreed that if this is successful then they will get 30 000 euros. If you work for 100 hours, you will get 30 000 euros. We were thinking that that’s pretty good compensation, especially back then many of us had just finished the studies and many of us didn’t have a lot of money in our bank account.

We were thinking that maybe that’s fair. We went and met some friends and people and told that this is something what we can offer. And of course, there’s a really big risk that this is not successful because usually companies fail. But if you are willing to take this risk, if you really are willing to help, this is something what we can offer.

All those persons said yes. They are happy to help and we also made some papers about that so that we have something documented as well. That’s something what we have been always doing that let’s put stuff on the paper so that we don’t have to discuss after a few years what we actually agreed. That’s how it was working and after the company became successful then we paid those out.

Petri: You have been also taking money after the A-round. Can you explain something about the process there as well? Does it get easier – are there any changes when you start to put more alphabets into the series?

Heikki: It’s a bit different. When doing the smaller rounds and then the requirements from the investors are not so tight. When doing the bigger rounds then there will be much more requirements, for example, related to the data quality. If you are putting the following rounds together you most likely have then the experience from the previous rounds.

You know all the terms. You may have read a few books and some articles and you have gone through the process. From that perspective, it’s easier. You also maybe have the network already in place. Sometimes the investors who are in the B-rounds are maybe a bit different.

Maybe the biggest difference is when doing the bigger rounds then the requirements for the company get a bit more strict. You have to be able to provide a lot of data. You have to be able to provide a lot of data pretty fast.

When things get big enough if thinking about investments of, let’s say, +100 million or acquisitions +100 million I just heard a story where there was one acquisition happening in +100 million category and the company who was doing the acquisition sent the data request for the company that please provide this churn information on us.

And the company was putting that data together and sent the day within the week back and the feedback from the company who was doing the acquisition was that this was too slow and we will cancel the acquisition. At this stage, you can’t answer these kinds of basic questions in seven days, you have to be able to provide the answer within a day or two. And for that reason, we cancel the acquisition.

Petri: You have to have everything ready and anticipated all the time?

Heikki: Yes. When you get to the category of, let’s say, +20 million rounds and especially if you are working with the US investors. They require more in terms of data quality. When scaling up the business you need the data for the investors but also you need the data to scale up your business. There’re many reasons why to focus on data quality.

Petri: How much have you been raising so far?

Heikki: Roughly 40, now.

Petri: What is your plan for the future? You still need more rounds or you want to go public, or what’s the big plan?

Heikki: The plan is to continue building the business and create an even much bigger success story. How we see it is that when you build amazing companies then you also have options. You can have an IPO or you can maybe sell the business. You can maybe continue as just like having the company maybe. If you have investors, of course, they have to do the exit, but there will be then some other parties, who can maybe then buy those portions. Our focus now is to continue building the success story and going from there.

That’s something what I also advise people to do. This COVID is now a really good example of that. If some companies had in mind that let’s sell the business in the summer 2020, that’s our goal. We do everything to get there.

We streamline our cost structure, and so on. We sell the company then, and now we know that COVID happened. There can be some external things happening. If you put your eggs in the one basket you may have not so nice surprises. If you have an amazing business, then you also have many options.

Petri: What’s your take on the board and the board work and starting from just a few people in the beginning and now having a lot of employees and also investors? The governance structures and the management needs to also be up to par. What’s the best way to do that? Now, looking back is there something you would do differently? And what’s the advice for those who are building their company now?

Heikki: It depends on the situation. There is no one single answer to that. If you have the team who knows what they are doing, they know their business, they know their market well then I think you can go without the board maybe even to 10 million scale or something.

If you feel that you have a great team but it would be actually helpful to have someone external from the finance perspective, from the product perspective, from the sales/ marketing perspective, from the scaling perspective sharing more some experiences for the team who is doing that first time, then it’s maybe good to have the board in place and to have the skills there what you need.

When you are below, let’s say, one million in revenue the board is maybe a bit more operational and not having meetings like every second month. It’s more about having the WhatsApp group and discussing different topics maybe every week. How we did it, was that I think we had roughly two million in revenues when we got our first official board together. Until that we felt that we kind of know what we are doing. But at a certain point, I felt it would be good to have some supervisor for me as well and it would be good to have the people around you, who you can discuss different topics and get some help.

The first board was set by the group of people who had really good experience about scaling their businesses from the marketing/sales perspective, from the finance/funding perspective. And nowadays, it’s more about having also like investors on the board. We usually have had five or six members on the board to make sure that there are enough ideas, but not like too many ideas.

If you have a board of ten persons it may be tricky to do the decisions if you have like, let’s say five persons on the board you can also get decisions out.

Petri: You were planning to step down from the CEO role and then COVID happened. Can you describe the changes and how did you actually then finally come up with the new CEO?

Heikki: I have been in the CEO positions for roughly 20 years and a bit more than one year goal it started to feel that it would be really interesting to do something else as well. And this again is about testing different things. I was thinking that now I want to test that how does it feel to do something else as well?

At first, I told about this idea for the investors and at first, they were like, okay, that’s an interesting thought.

Petri: What’s wrong with the company?

Heikki: Yeah. Why you are doing that? This is not something what founders normally do. I was telling them if we can find an amazing person who has amazing network, skills, knowledge about scale the business, what will we lose?

 I’m an engineer and trying to think from a pretty practical perspective. I was proposing that let’s test this. Let’s see how it works. After that, we were discussing with the board and basically the feedback was the same. Eventually, we agreed that let’s start the process and let’s see what kind of candidates we can find, and then COVID happened.

We were on the journey for scaling the company towards 300 employees globally and the COVID came. We have this hiring process going on. Then we had to agree that, okay, let’s now manage this phase. Our new business sales dropped roughly 90%.

Then I had to focus on the situation what we had within the company and the employees there. But also I continued together with our chairman the discussions we had with the candidates. Eventually, we actually found the person from our board.

We have had Miika Mäkitalo as one of our board members. He has been scaling up M-Files from 40 employees to +500 employees and has amazing global experience in scaling companies. I was asking him what are your thoughts about the future? What kind of plans he has and eventually discussions got a bit more serious and we were discussing about the option that if he would join. Eventually, we agreed on everything at the end of last year. He started in early December last year. That’s shortly the story.

Petri: How do other people react to success? You say that in the beginning, you had a hard time convincing anyone that it’s working, at least some of the customers. Then there’s obviously a lot of people who look at the four buttons and say that this is so simple. What’s the experience? What to expect?

Heikki: It’s being on the roller coasters. You will maybe analyse the experience more after you have gone through instead of while having the experience. Before building the companies, I was thinking that maybe there is a lot of, I don’t know, parties and emotions related to that during the journey. But at least in our case, the journey has been so fast. We have been just doing a lot of stuff, moving fast, having fun and, and every day trying to learn something new, improve things. Maybe we should have stopped a few times for a week and just to discuss together what has happened and what are the learnings and how to go forward.

But it has been more about a run for ten years and maybe the detailed analysis will come later when we have more time for that.

Petri: In one episode with Jurgen Appelo, he had some interesting experiences in Canada. I think you were traveling to Canada, and something happened?

Heikki: Yeah. This is like one thing when going fast from places to other places from countries to other countries. Sometimes you are so focused on the business, you are so focused on the customers and improving the business that…I was in New York and meeting some investors and customers there.

And I was planning to fly back to Florida when we were living there, but my colleague sent a message: please fly to Canada, to Toronto and let’s meet there and I will send you all the details via email. I took the ticket to Toronto and went there to the airport and I went to the security line.

And the person who was asking what is the hotel where you are going? And I was like, I don’t know what’s the name of the hotel. And then he was asking that who are the people who you are going to meet? And basically, he was asking the questions and I didn’t know answers to any of those questions.

Then the person told me that you have to go to the room there, and they will have more questions. I went there and again the person was asking the same questions and a lot more questions like what do you are doing here, and so on? And I had all the details, all the information on my mobile phone, but the issue was that they told that in security in Canada you can’t use your mobile phone. I was telling them that I have all the answers here on my mobile phone. And if you don’t let me use this, I don’t have any answers to your questions. It took about one hour and eventually, they told that, yeah, you can go.

Petri: How did they were convinced that okay, you may be telling the truth?

Heikki: I had a HappyOrNot T-shirt on, and I was going to speak at an event there. I told them that, hey, you can see these smileys here. You can see my face on the trade show material from the web. I’m going there. I’m actually going to meet the people from Toronto airport. So, I’m going to meet your colleagues as well. But I don’t know those names because I have those on my mobile phone, but you are not letting me use this mobile phone. Eventually, they gave up.

Petri: What was the button you pushed? Or they didn’t have the terminal there yet?

Heikki: Yeah, they didn’t have the terminal yet there.

Petri: What is your favourite word?

Heikki: Love.

Petri: What is your least favourite word?

Heikki: It’s kind of the sentence: “I won’t ever learn this.”

Petri: What turns you on creatively, spiritually or emotionally?

Heikki: It’s freedom and space.

Petri: What turns you off?

Heikki: Limits, small rooms.

Petri: What is your favourite curse word?

Heikki: Mm mm. Let’s go to the next one.

Petri: What sound or noise do you love?

Heikki: Sound of birds.

Petri: What sound or noise do you hate?

 Heikki: How to say this in English: when someone is giving up without any reason.

Petri: What profession other than your own would you like to attempt?

Heikki: Hmm. Maybe something related to music or something related to entertainment.

Petri: What profession would you not like to do?

Heikki: Hmm. Doing something what is against the situation of what we have globally now in terms of temperature increase and the climate change what we are having now. Things related to that.

Petri: If you could be a co-founder of any startup in any way era which one would you choose?

Heikki: Maybe Facebook. And the reason why I say this is that I think it would have been amazing to be part of building the new ecosystems within the B2C space and getting all the learnings from there. Maybe Amazon is the second one, which is amazing from the culture perspective and when building really big things. Also failing with pretty big things.

Petri: Any final words for the audience?

Heikki: Hmm. If you hear that someone is having a somewhat good idea about something that, hey, should I maybe start the business and especially if the person is, let’s say, between 18 and 25 years old, and maybe that person is studying at the university, please encourage those people to try because that’s the time when you are usually used to live with pretty small amount of money and taking risks during that time is much easier compared to the situation when you have family and maybe two kids. And you need that 2000-4,000 euros or dollars per month to provide food and have a warm house. There definitely can be more successful companies globally.

That encouragement can mean that we will then hear about some amazing success stories because you have been guiding some people in that direction. We need support from each other, especially during these times.

Petri: Thank you, Heikki. It’s been such a satisfying experience, a lot of smileys!

Heikki: Thank you. Thank you. Likewise.

Miscommunication is the norm

January 24, 2021

I don’t understand you! It’s safe to assume that what you intend to communicate is not heard the same way by the recipient. This saves a lot of time but it’s hard to do it in practise.

The complexity is manifold. It requires clarity to express something simply and with minimum ambiguity. Even if your thoughts are clear the recipient does not share your life experience.

You write a lot between the lines when you’re expressing something. You bundle your impressions to the symbolic links we call words. They have many meanings.

Add cultural and generational differences and the mix is becoming so complex that it takes a supercomputer to keep up with the variants.

How about when you’re not thinking clearly, communicate in hurry or you have some misconception or ambivalence in your message?

In reality, we have some expectations, hopes, fears, cultural norms or behavioural patterns that smudge message further either in the receiving or sending end, often in both:  a real-life broken telephone.

Setting expectations, hoping to reach the deadlines or trying to decrypt the intentions from a few lines of words or video calls takes a lot of bandwidth. The guessing game is endless.

Yet, it’s useful but pointless at the same time. We never know what’s happening in the sender’s head or what their real intentions are. They can just have other priorities, distractions or life events that take precedent over your cause.

It’s easy to start to take offence and imagine things that have no base in reality when you’re waiting for a response. The higher the stakes the higher the pressure and the temptation is there to just end the uncertainty. It only takes a few words and one action to end it all.

Remote communication puts the noise level higher. Here’re a few things that might help:

1) Give the benefit of the doubt: assume that everything is done in good faith (unless proven in action otherwise).

2) Avoid quick gut reactions: before sending anything, consider is it constructive and does it progress towards your objective? If not, just venting or expressing your emotions may be best expressed at your end only.

3) Assume it’s not you: the world does not circle around you and people are mainly concerned about their own issues.

4) Be clear, concise and consistent: actions matter more than words. Show your trust and intentions with actions that align with your message.

 5) Communicate your concerns: assume that other people don’t know how you feel or what are your concerns. State them firmly but with kindness.

Individual ownership

January 17, 2021

Last decade gave us our individual voices with social media.  Now, it’s time to take the control back from the big platforms and take ownership of our content, audience, business, finances, and the rest of our property.

Intermediaries are valuable but when they can deplatform you at their whim it’s time to reverse the process. Fortunately, the technology advancements enable this now.

Blockchain, DeFi, edge computing and other technology solutions make it possible to take direct ownership and control without relying on any external party.

This is a huge paradigm shift in our societies. It will take years but it’s a necessary move. Incumbents are not giving up their position and leverage voluntarily. The only way to turn the tables is to create something better and make them irrelevant.

In some cases, this is rather easy. Facebook’s Whatsapp created the perfect gift and opportunity for its competitors by announcing its change on the terms and services. We are lucky to have better alternatives immediately available such as Signal.

In other fields, the choices are more limited. It’s harder to stop using USD if your trading partners, salary or other dependencies make you still to use it. Yet, it’s unsustainable when a currency is printing money at the rate what the US is doing at the moment. They are deplatforming the rest of the world and ending their global currency domination by their very actions.

When everyone is only 100 ms away, it’s easier to start to ask questions that were much harder to consider when we tended to think more locally. Now, much of what we do happens online and the physical boundaries are irrelevant.

This mental shift will disrupt a lot of old ways of doing things in the coming years.  Your business is no different. Customer expectations are shifting and leapfrogging. What was acceptable a few years ago is totally out of order now.

When you have tasted the freedom and control of your own affairs in one aspect of your life it becomes harder to keep up the reverse ways in others. Individual empowerment is starting to penetrate areas that were incomprehensible earlier.

Public sector and central governments have started to feel this disruption.  Expect more turmoil and redefining of all the ways of doing things. We are recreating, rebooting and questioning a lot at this point.

Change is good. We just hate the uncertainty. Enjoy the ride and build something better.

Embrace negotiations with a creative mindset without compromises

December 6, 2020

Joshua N. Weiss – TALKS WITH PETRI

Joshua Weiss talks about why you should not compromise or plan when negotiating, how to avoid common misconceptions, how to deal with bullies and power moves but also become a better negotiator and embrace the process. He also reveals why he did not become a lawyer.


Dr. Joshua N. Weiss is the co-founder, with William Ury, of the Global Negotiation Initiative at Harvard University and a Senior Fellow at the Harvard Negotiation Project. He is also the Director and creator of the Master of Science degree in Leadership and Negotiation at Bay Path University. He received his Ph.D. from the Institute for Conflict Analysis and Resolution at George Mason University in 2002.

Dr. Weiss has spoken and published on leadership, negotiation, mediation, and systemic approaches to dealing with conflict. His newest book is entitled The Book of Real-World Negotiations: Successful Strategies From Business, Government, and Daily Life. The book shines a light on real-world negotiation examples and cases, rather than discussing hypothetical scenarios. It reveals what is possible through preparation, persistence, creativity, and taking a strategic approach to your negotiations.

Dr. Weiss is also the co-author of a storybook trilogy for children ages six to 10 to learn negotiation and conflict resolution skills. The books are part of the Emo and Chickie series. The first book is entitled Trouble at the Watering Hole: The Adventures of Emo and Chickie and seeks to teach children creative problem-solving. The second book, Bullied No More:  The Continuing Adventures of Emo and Chickie addresses the difficult issue of bullying. The third and final book, Phony Friends, Besties Again: The Continuing Adventures of Emo and Chickie focuses on a social media conflict and how best to address it.

Dr. Weiss has conducted trainings and consulted with a number of organizations, companies, and governmental entities, including Microsoft, General Motors, United Auto Workers, Houghton Mifflin Harcourt Publishing, Christie’s Art Auction House, CDM Smith, Deloitte, Genzyme, Harvard University, Mass Mutual, the Massachusetts Institute of Technology, Yale Medical School, the United Nations (Mediation Unit, UNAOC, UNITAR, and UNDP), Government of Canada, the US Government (State Department, Federal Emergency Management Agency, National Park Service, and Transportation Security Administration), and various state governments. 

​Lastly, Dr. Weiss delivered a Ted Talk in 2018 entitled “The Wired Negotiator” about the role of technology in negotiation and how to use it most effectively. 

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(NOTE: The text may contain errors, misconceptions and even comical unintended contexts. Please use it only as a reference to the actual audio conversation from where it has been transcribed.)

Petri: Hey Joshua, how are you doing?

Joshua: I’m doing great. Thanks so much for having me. I really appreciate it.

Petri: Why should you not plan when you’re doing negotiations?

Joshua: It seems a little counterintuitive to think that way because most people want to plan. They want to have a clear sense of how do I go from A to B to C to get to my desired outcome. The problem in negotiation is that it’s rarely linear. Negotiation ebbs and flows. It goes down roads that we often don’t see and can’t really see coming until we’re in the process.

We actually use what we call the 80/20 rule. There’s about 80% of a negotiation that you can prepare for and about 20% that you can’t. You have to just react and respond to. When you have a plan it doesn’t account for that 20%. And that’s often where people get really confused.

They get disoriented because their plan isn’t going in the way they imagine. And so they start to panic. They start to get nervous. Instead, better to approach negotiation from a contingency planning point of view. Which means that you think about what your goal is but then you think about three or four different avenues that can get you to the same goal.

Petri: What is actually a negotiation if you start from the beginning? How often do we negotiate and when it’s important or is it always as important? We have seen in the movies and TV series all these hostage negotiations and high stakes negotiations. Is that the only game in town or what’s the magnitude and when should I care about negotiating?

Joshua: That’s an important question because I think a lot of people tend to not see themselves as negotiating much. But in fact, my view is that you’re negotiating all the time. At work, you negotiate with your boss, your co-workers, people you oversee. You negotiate with clients. You negotiate with subcontractors and then at home with your spouse or your parents or your kids.

And in the world around you, with a company that you might disagree with, buying a house or a car, all of those are opportunities for negotiating. If you don’t realise how much you negotiate, I would encourage you to begin now because it’s not too late. And to learn about negotiation. This is the big challenge. Most people do what I call intuit their way through it.

They take an intuitive approach to negotiation. They don’t prepare. They just think that they’re gonna find their way through the process by the seat of their pants. And it doesn’t work well. Really one of the critical elements of negotiation is that planning phase and doing your research, understanding the parameters of negotiation in all of this.

I believe very strongly that negotiation is something we do every day, all the time. You utilise negotiation for three things. The first is to create a deal. In the business world, it might be to sit down and to try to work out a deal with another company that seems to make sense with you.

The second is to build relationships. This is something I do a lot of where I’m negotiating with people and I’m negotiating the relationships so that in the future when I want to work with them or engage with them, I can. That’s a much longer process. It’s a much more subtle process.

The third usage of negotiation is to deal with conflicts and problems that arise. In fact, negotiation is really our primary tool for handling conflicts in a peaceful kind of manner. If you think about those three realms, that’s an awful lot of opportunity for practice and for usage in your own life.

Petri: And yet it sounds so paradoxical in a way. It’s like the previous episode we talked about selling. It sounds so simple, you just sell, but most of the, even business schools, universities, they don’t have a sales department. They have marketing, they have accounting, all these things, but somehow sales is not there.

For some reason, I haven’t gotten a lot of education from negotiating and I don’t think there was anything, at least in my formal education, about how you negotiate. So putting it like that. Okay. There’re a lot of opportunities to train, but then you say again that we don’t actually really practice that, and we are not even probably conscious that we are actually negotiating.

Where to start and how to do that properly?

Joshua: I would say that I think things have changed. I think now when you look around most, for example, most law schools in the United States offer a negotiation course, at least. Many business schools, many undergraduate schools here in the United States as well are focusing more and more on negotiation.

And I would also say at the middle school and high school level here, maybe 10-18 years old, those kinds of classes are becoming more numerous. That’s good that there’s hope there. I think there’s a recognition that we do this quite a bit and we better learn how to do it effectively.

Where you start in so many ways is with educating yourself because the key to negotiation in so many ways is awareness. For example, when somebody plans to use perhaps some dirty tricks on you, some manipulative tactics. Those tactics only work when you don’t know about them. When you know that another person is taking a good cop, bad cop approach to the negotiation.

In other words, one person is going to look good and the other person’s going to be the bad guy and they’re going to play off each other. When you know that’s what’s happening. You recognise it quite easily and say, okay, I’m now playing the good cop bad cop game. And I know how to do that. The good news is that there’s a lot of information out there on negotiation.

If you Google negotiation books there’s a tremendous amount. It’s a realm that is in some ways open for sort of self-study, if you will, because the books are very accessible. They’re written in many ways for a popular audience. They’re not too academic for folks. That’s really the first step.

When people start to learn about negotiation, what happens is light bulbs start to go off. They begin to realise that if they learn more and more in this realm, it’s going to help them at every facet of their life. I’m currently teaching a class in the master’s degree program that I run.

It’s the first class in the program for students and it’s an introduction to negotiation class. I continually get emails from people saying I can’t believe I didn’t know all of this. I’m 50 years old or I’m 40 years old, and this is so helpful and I can already feel myself feeling more confident.

That’s where you begin and once you start down that road, you realise that when it comes to negotiation you can learn all of this and it will make you much more confident in your approach.

Petri: At least for me, I think the most important thing when you’re starting to think about doing a negotiation if you are consciously doing that is that you go there with the right mindset. It is so important that your mind is in the game and you’re preparing yourself for what’s coming.

For many people, negotiations have a negative connotation.

Joshua: It does and I think that’s due to their experiences. Most people, again, here in the United States, most people’s experience when it comes to negotiation if they’re not doing it in a business context, is buying a car or buying a house. In particular, cars here.

Petri: Lemons!

Joshua: Lemons. But the process itself with the salespeople is often uncomfortable.

Petri: It’s unfair well, isn’t it? They are professionals. They’re selling every day and you’re buying a car, you know, once in a few years or something.

Joshua: It used to be unfair. I would say it’s not as unfair as it used to be. The reason I say that is because negotiation is about access to information. In fact, to me, information is the currency of negotiation. If you think about maybe 30 years ago when there was no Internet, car dealers and the salespeople involved, they had all the information. They knew what they paid.

They knew what things cost. It was very hard as a consumer of a car to know what that information is. Today, however, there are a number of websites out there for you to do your preparation and planning so that you can learn more and more. What you’re actually seeing, certainly here in the United States, is that people have moved away from that model of negotiating car prices.

There are a lot of places here that just have a no negotiation price because so many people don’t like that process. Now, of course, there’s a problem with that, which is that the dealer’s the one that puts the price on there. And that’s usually higher than it ought to be. In general, the problem is that most realms in life when we’re uncomfortable we don’t do well and we don’t want to be engaged with it. That’s where a lot of the anxiety comes from and the uncertainty of it. If we don’t know what the parameters of the negotiation are, then we feel like we’re grasping in the dark. We’re not able to really get a good sense of where I should be headed.

That’s again, back to your research and your planning and your preparation, why that’s so very important.

Petri: What are the biggest fallacies, the biggest mistakes you can do when you start to negotiate?

Joshua: There’s a lot. You referenced one about mindset. A lot of people come into negotiations and the world tells us this. It’s somewhat natural and normal, I suppose. But the world kind of tells us that there’s going to be a winner and a loser. The best negotiators that I work with and have worked with for many years know that’s not true. The majority of our negotiations are with the same people over and over again. Probably not when you’re buying a car but when you think about your negotiations at home obviously they are. But even in a business context, you’re tending to negotiate with the same people time and again.

Having a win-lose mindset doesn’t really help you. If you’re trying to negotiate with a client and maybe you squeeze a little bit more money out of them. But they walk away from the table feeling badly about it or realise after the fact that you took advantage of them, they’re not going to be your client for very long.

You have to have what I call a mutual gains mindset. I don’t think there’s always the opportunity for a win-win where everybody gets everything they want. But I do believe that there is an opportunity for mutual gain for you both to do better than you can when you walked in the door.

That’s the first thing. The second thing…

Petri: Can we pause here just for a sec? How can you set that? If you’re coming to the negotiations with someone, maybe someone you know, and you already know that they may not be in that mindset for whatever the reason. Maybe we were talking with some organisation and there’s a new person coming in, but the relationship between the organisations is an old one.

Is there a way to set the stage in a way that you’ll stack it on your favourite that’s more advantageous for both parties that outcome, or at least at the outset?

 Joshua: Yeah, there absolutely is. The first thing is something that I would call naming the game. When you walk in the room and let’s say you start negotiating and you can tell that the other side is defensive and holding back information and trying to play different games.

One of the things that I tried to simply say, look, we can negotiate this way where we both kind of hold back and push back, et cetera, but I don’t think that’s going to help us over the long-term. Let me propose that we try a different way of negotiating where I think, because we’re going to be doing this for a long time, hopefully, where we can both really try to come up with the best deals possible.

One approach is to just name the game. And it’s interesting because there are a lot of people who don’t realise there’s another way to negotiate. They think what they see in the movies, as you mentioned or on TV is the way to negotiate, when in fact, it’s really not.

That’s one idea is to name things directly and try to highlight for the other that there’s another way to do this that would be very likely more beneficial to both of you over the long-term. That’s one.

The other one that I use and I’ve been using more frequently and comes out in my recent book is using stories to help them to understand how taking a different approach would be beneficial.

What I’m noticing in my negotiations is that when I say, let me share with you a story of how I’ve done this in the past. And lay out a scenario where it looked like we might have a win-lose negotiation, but we reframed it and ended up having more of that mutual gains approach that I told you and that we found value, and it was a much better deal than we would have ever had.

By painting that picture using what we often call illustrative specificity, painting an example very clearly for someone, it can be very persuasive in an almost non-confrontational manner because you’re telling them a story. When you say, let me share a story with you, people’s minds almost immediately go back to say when they were children and an older person, their grandparents sat them on their knee and told them the story. It’s disarming and that’s…

Petri: Once upon a time…

Joshua: Exactly. It’s a nice way of trying to change a dynamic that often exists in a negotiation. That is, by the way, one of the harder things. Because when people come in with a certain mindset, that’s what they’re looking for. If everything looks like a nail, they use a hammer. And the idea is to replace the hammer with something else.

Petri: And you can do that even if you are the weaker power party there if you realise the situation?

Joshua: Yeah, you absolutely can. And in fact, when you are the weaker power, one of the tools and tactics that we often talk about using is framing the agenda and framing the negotiation the way you would like to, or at least trying to, because people don’t realise that the frame that you put on negotiation is critically important.

It’s what you’re going to talk about. So, who gets to frame the negotiation and who gets to lay out the agenda matters greatly. One piece of advice for people who don’t have power in a negotiation is to to try very hard to write up the agenda and frame things in a way that would help you.

That’s one of the tactics that you’ve got at your disposal to do that. And you mentioned, by the way, other mistakes, the other one that I wanted to make sure to mention is this notion of compromise. Often people equate negotiation with compromise. Which is another reason by the way that people don’t like it. Because they look at it and they say, well, so I have to give something up in order to reach some kind of an agreement but I don’t want to give something up because it’s really important to me.

That’s not an effective negotiation. To me, negotiation is about creativity and problem-solving. You can always compromise later at the very end. It should be the last stop on the train, not the first one. What you ought to be doing is thinking I’m going to go into this negotiation and I’m going to try to get the other person to think in a creative way with me and to problem-solve. And to think you and I, as negotiators have a negotiation problem in front of us, how do we solve it? How do we create the best deal possible? How do we manage this conflict? Much of the time I find a compromise is not necessary. It’s only necessary because people seem to rush there and think it is. I would really encourage folks to hit the pause button on compromising and instead think more about being creative and problem-solving and taking that orientation toward your negotiations.

Petri: You’re saying that actually, they skip the process because it’s probably painful and they don’t want to be in that position. And they start to compromise before you should talk about more like, okay, what are we doing here? What is the big picture? Why are we here?

What’s the value for both parties? Set the objectives and see that we are in a bigger frame on the same page and everybody understands what this is really about. When we understand the values and the dynamics there, then later it’s easier to go to the compromising or if you need to do some kind of trading.

Joshua: That’s exactly it. People compromise typically for two reasons. One is that a lot of people, as you mentioned, have anxiety about the negotiation process. And so they don’t want to lose a deal or they don’t want to if the other person is putting pressure on them, they’d rather just compromise and get something.

But the other is, as you mentioned when a difficult issue comes up in a negotiation, people often say, well, let’s just split the difference and move on. The problem with splitting the difference and moving on is you don’t really know what’s important to the other side. You haven’t explored in the way that you just talked about.

What do you value? What really matters to you here? Because what matters to you is how you create better deals. If you don’t dig down for what we would call interest and what’s really motivating people then you’re skipping a big part of the process. When you rush to compromise, that’s exactly what you’re doing.

You’re not really probing for what is it that’s really important to this person. It’s not what they tell me. What they tell me is what we would call their positions. But what’s really important for them. What’s going on on the surface are their interests. And their interests are all of those things that bring them value in a negotiation. If you haven’t dug down and really figured out what’s going on in the negotiation, you’re missing all kinds of opportunities to create those better deals and to not compromise.

Petri: And this goes back to the research. You have to understand what is it even the hidden value or the hidden agendas in there that are actually driving them? What is the most important thing for them? And it may not be any of those things you think that you have to give up in order to achieve a good deal for both parties.

Joshua: That’s exactly right.

Petri: Were those all the fallacies? You just wrote an excellent book and I think there was like five or probably there was something still missing or did we cover most of them already? I just want to make sure that we close the loop.

Joshua: The other one that’s missing is that a lot of times people see their goal in negotiation as reaching an agreement. When in fact that’s actually not the purpose of negotiation and a lot of people are very surprised when I say that. The purpose of negotiation is to…

Petri: Yeah, it’s counter-intuitive. Isn’t it called an agreement…

Joshua: Right. People are like, what do you mean…

Petri: ..what you are supposed to sign.

Joshua: Right. People are like, what do you mean I’m not supposed to reach an agreement? And it’s not that you’re not supposed to. It’s just that that’s not your objective. That’s not your goal. People get things confused in that way. Because if my goal is to reach an agreement…I’ll share a story with you.

One of my first jobs in the world of negotiation consulting was with a small company. I got a call from the CEO and he had a sales team of six people. He said I’d like you to come and do negotiation training with my sales folks and figure out why they’re bringing back such poor deals because they are.

So I said, sure, no problem. I went into the training and then during one of the breaks, I think it was at lunch. I said, your boss told me that you guys are coming back with deals that are not very good for the company. Why would you do that? One of them said, well, it’s our metrics.

And I said, what do you mean it’s your metrics? And he said, well, we’re gauged as salespeople on whether we reach agreement or not. Not on whether it’s a good agreement for the company or not. But whether we come back with an agreement. That’s how we get our bonuses. So, I went back to the CEO…

Petri: You just get what you measure.

Joshua: Yeah. So, I went back to the boss and I said, actually, you’re the problem. I said you’re giving them instructions that are counterintuitive. They are missing the mark. What you ought to be saying to them is that these deals need to be profitable. They were so fixated on reaching an agreement that they didn’t care whether it was actually beneficial to the company because that’s how they were gauged.

The point is that in negotiation we have a goal. We have an objective that we’re trying to meet. That is how you should gauge your negotiations. Did I meet my goal as best as possible? And if you didn’t then…I often say to people because we talk about a concept called your BATNA. And your BATNA is your best alternative to a negotiated agreement.

All that really means is if you can’t reach an agreement with the other side, what are you going to do? What are you going to walk away to if you will? For me, if I go through a negotiation process and I realise at the end that it’s actually more beneficial for me to exercise my BATNA, to walk away from this particular deal than to sign on the dotted line that’s a successful negotiation to me.

A lot of people would say you failed. And I would say absolutely not. Because to me, it’s about meeting my objectives and I can meet my objectives better by walking away to another deal than I can by reaching this agreement. That is again, it’s where you look, it’s where you focus and put your attention.

But it’s a really important difference because when people believe that their goal in negotiation is to reach an agreement, they reach bad ones.

Petri: Yeah, because they want to finish that. They want to have an agreement like in your story. I think it also shows in you, if you have already accepted, I may not have an agreement and I may walk away without a deal and that’s okay.

Joshua: That’s right. It takes the pressure off, actually. You’re exactly right. That when people sit there and they say, you know what? I actually think that especially when you’re planning you also know what the parameters are of what you should accept. This is back in that preparation phase. You do your homework and you say, if they aren’t willing to go past this point, then this deal no longer makes sense for me.

If you don’t do that if you’re thinking to yourself, I need to reach some kind of agreement here, you don’t define those things and you’re really subject to making bad deals because you have not defined the limits for yourself.

Petri: Was it even in your book, this is like a self-harm situation. You don’t have a deal when you walk in. You did a bad deal and now you actually are in a worse position because you did a horrible deal. Maybe you are losing money and you’re tied up and you cannot do anything else. It’s actually way better just to walk away.

Joshua: Yeah. One of the case studies in the book that I share is about a company who was based in the Middle East. They had signed a deal with a shipping company to transport ore, aluminium ore because they make aluminium products. They reached a deal and literally within months, this was back in 2008, we had that global economic meltdown.

For them, the deal they signed was $25 a ton or whatever it was. The market dropped to $10 a ton and immediately they were in this really difficult position. They had to try to think creatively. How do we renegotiate that?

There are factors and there also lots of circumstances that change along the way in negotiation that are important and out of your control. That’s the thing that is really important for people to grasp and it’s back to that 80/20 rule. Which is, there’s a lot that you can determine, but there are a lot of factors in negotiation, whether they’re market forces or other things that might prevail now, but in six months could be very, very different and make it what seems like a reasonable deal then something quite bad now. There are a lot of those factors that come to play. That’s exactly right.

Petri: One of the interesting things I’ve picked up from your book was Post Settlement Settlement. Can you describe what that is?

Joshua: Sure. Post Settlement Settlement. It’s a very interesting idea. It was started by a colleague of mine named Howard Raiffa at Harvard Business School. It ties back into something we talked about, which is compromise. He was convinced that most negotiators compromise. They essentially did not explore for what really mattered to people for all the value in a negotiation that they were compromising too early and too quickly.

He proposed an idea called Post Settlement Settlement sort of the least sexy name he could think of, I think. But the idea is important. What he basically did is he said to parties in a negotiation: come to me. And if I can make your agreement better for both of you, you’ll give me a percentage, not just one or the other, but for both of you.

He was so sure that he could because he knew that most people rushed to compromise that he essentially did about 300 cases over the course of a few year period. In 90% of those cases, he was able to find value for people. It’s a simple question that he encourages people to ask, which is when you believe you’ve reached an agreement, hit the pause button and say to the other negotiator, Hey, would you be willing to look at our agreement and see if we can’t make it better for both of us?

Are there things that we didn’t include before we signed on the dotted line? Are there things that we didn’t include that we could include that would have value for you and for me? And as you say, in the book, there’s a case study of exactly that with a company that does recycling and working with a distributor and they asked that question based on some of my tutorage because I was happy to do training with them at the time. And I probed a little bit and asked them had they had this conversation with the client and it turned out that they hadn’t and they went back and they had the conversation and they were able to make the deal better.

One of the nice things about this is that you already have a deal. You already have a deal that’s on the table and you can always go back there and say, okay, we couldn’t find anything. That’s fine. But back to your point about taking pressure off. There is no pressure when you ask this question because you already have that deal.

Then people are more able to get into a creative brainstorming kind of mode once you know that your fallback is that I already have this deal. So, maybe I could think a little bit creatively and differently in this instance and see what we can find.

Petri: Just a technical question, but I’m curious. Would you recommend to actually sign the original deal because then you have a deal? It’s a signed deal. Because, at least for me, the question comes as well, that okay, if we do this, can I actually blow off the whole deal? If we now start to talk about some stuff and then it’s like, okay, we realised that maybe that the original deal for… stuff happens, you know? What’s your advice, how to do this if you want to do this because it’s not a standard way of doing things?

Joshua: Typically, I don’t. I typically will say, look, I know we have a deal on the table and I’m actually comfortable with it, but before we sign it, can we just take a minute and think about whether there’s anything that we could add from your point of view? I’m going to think about it from my point of view before we sign off on it.

It’s never been my experience that people say, well based on this latter part of the conversation, I don’t want to do the deal anymore. it usually only is an enhancer. It’s only a way of making it better. I don’t encourage people to sign because then there’s a finality to it and I don’t know whether people would take the Post Settlement Settlement process as seriously. Whereas if you’re still holding a little bit of something out there before you sign.

Petri: Can you do that….I’ve seen at least the difference between the big boss or the owner of the company, or someone who has the power to do whatever moves or even exceptional moves in negotiations. And then someone who is sort of a middle-level employee and they just don’t have the power.

It’s not that there’s anything else, but they have their certain limits where they can move. Can you do that in all the levels of the organisation when you are negotiating or is there something in a way that this works better than in other situations?

Joshua: Well, I think you need to know the parameters of what you can do. In my mind, there’s an in most negotiations, there’s an internal element to the process. For example, if you’re negotiating with a client it behoves you to meet with your boss or a team of folks and say, let’s talk about the parameters of the negotiation and where you don’t want me to go beyond.

When you do that, you can negotiate with much more confidence. If you were to go through the process internally you’ll feel a lot more comfortable at the table to do that exploration and realise that, Hey, this is a red line that I can’t cross. So if the other side were to ask you, could you add this?

And you know, you can’t. You know the answer. For me, it’s certainly possible at all levels of the organisation. But in order to do that, I believe it’s important that you ought to spend some time internally talking to those people that the deal is going to impact and saying, tell me your interest here and where are these places that you don’t feel like I should cross? Then within that, you can more freely explore.

Petri: One of the takeaways for me from the book was that leave money on the table. If you have the power position, if there’s something in there, don’t squeeze everything out of every deal. It’s better to take the high road for the sake of the relationship but otherwise as well. Are there some situations where you should not do that or is that always nice and kind advice to the follow-up?

Joshua: Well, I think that when you might not want to do that, and you have to be careful here, but when you might not want to do that is when it’s a one-time negotiation. And you’re really sure that you’re not going to end up negotiating with this person again in the future. As you all know, as you’re listening to this, you know that we never know what the future holds. There’s a lot of uncertainty in life and things like that. If you negotiate with your reputation always in mind you’re going to be safe and that’s the best way to do it. I often say to somebody, it is really not worth sacrificing your reputation for a few more dollars or a few more euros.

If you are in that one-off kind of scenario where you’re purchasing a home and you’re never going to see these people again, or you are buying a car and you want to get the best price or whatever it might be in your business dealings. You’re in an industry where you do have a lot of one-time negotiations and you don’t have a lot of long-term relationships then it’s okay to go for trying to do the best that you possibly can.

In the vast majority of industries, that’s not how it works. I do believe that you need to be really careful because there are a lot of negotiations out there that look like one-time affairs and lo and behold, you turn around and that person is standing there six months later and it’s someone you’ve got to deal with. If that’s the case, you’ve really created a problem for yourself.

Petri: Yeah. I tend to think that people forget the details, the facts, but they never forget how you’ll treat them. The emotional state when you do something and that will stay for decades. It can be that you were the rookie in some company and now you’re the CEO 20-30 years later. And the guy you were treating badly, it’s just on the opposite side. And now you’re getting your payback.

Joshua: Yeah, exactly. There’s a case in the book that is very much about that. About a startup company that needed an infusion of capital and the person who was willing to give it to them did so but really took advantage of them. When he five years later wanted to take his company public, he had to divest of those shares and, and the person involved knew that he could now take advantage of him because he needed that.

As a result, it became that game of one-upping. It’s something you have to be really careful of. A lot of people when they are confronted or when they’re given the opportunity to take advantage of somebody, they might do it without realising that it could come back to haunt them.

I remember my grandmother often saying to me the only thing that you have in this world is your name and your reputation. Everything else is pointless. She’s in the back of my head a lot when I’m negotiating and thinking about some of these things, because it’s a good litmus test to say to yourself should I do this?

Is it the right thing to do, et cetera. And I will tell you that from my point of view, in all the negotiations that I’ve been involved in, I’ve done far better by leaving money on the table, treating the other side in a manner where I know they have a goal as well. That’s the thing about negotiation is it’s an interdependent process.

I need you and you need me. That’s why we’re sitting here trying to figure this out. If we didn’t, we’d just walk away. When you treat the other the way you want to be treated, you’re not going to lose.

Petri: There’s in the book…This is actually about a transportation case. And for those who haven’t read the excellent book you should but just to briefly recap details. I want to ask you about this. There was an ethical dilemma, and it’s not even a dilemma. I want to ask you.

What’s your opinion? You just stated the case there. This case you already mentioned that the price dropped. They had a long contract in the shipping and then they leaked some information in order to gain an advantage and that was kind of an unethical thing to do.

What do you think about that move?

Joshua: I do think it definitely was. I was going to say borderlines unethical, but I think it was unethical.

Petri: Yeah, I think it t’s was a hundred per cent unethical, at least in my books.

Joshua: Yeah. They did a forensic accounting analysis of the situation and they found that there was a consultant that might’ve done some things illegally. They put that out to the press in the country where the shipping company was based. It put pressure on them because the country where the shipping company was based had a very strong, moral and ethical culture.

They certainly being seen in that way was not a good thing. I do believe that you have to be very careful with something like that. That was a very dangerous thing to do. My understanding is that the relationship went forward and they’ve continued to work together over the years.

I think perhaps on both sides, there were some aspects of some of that. But I think in that scenario, it was a very questionable action that did change the dynamics pretty dramatically, but it was absolutely questionable and could easily have come back to haunt them.

They could have easily pulled the plug on the whole deal and said if you’re going to act and engage in that with those kinds of tactics and we’re not doing business with you. I wouldn’t be surprised if other companies would have taken that approach.

Petri: At least in my case, I would ask if I would ever do business with them when they’re going to do it to me? If they’d been doing it once that can happen another time. I’m not sure that I want to be dealing with this type of people then.

Joshua: That’s the prevailing attitude that happens when you have something like this transpire, some questionable behaviour.

Petri: I’ve been having my share of negotiations. A lot of different negotiations, but usually in business, in the startup field as well. I remember one particular case where I was negotiating a deal, a VC deal. That was a series A deal, some millions involved already. I was negotiating with the main partner in the VC company.

When we were supposed to draw the contract and go to the contract negotiations… and that was really weird. I’d never seen that before and afterwards. This happened in Finland. The general partner of the VC company said that, okay, now, the negotiating party, the one who is actually presenting the fund, the actual fund… they were obviously the general partners, managing the fund but the actual fund where the money is coming from, which is just the legal entity is presented by an attorneys-at-law company. What happened was that I already agreed on all the important terms and everything. But then comes the lawyer and this general partner is nowhere anymore. And basically whatever we agreed upon didn’t apply anymore.

And the GP was just like playing the game that, okay, well now you’re negotiating with the lawyer and everything is on the table again. What should you do in that situation?

Joshua: Well, you should begin by asking yourself whether you want to continue with that negotiation.

Petri: Indeed. But if you cannot walk away, you’re already drained out of funds and it’s been going on too long and it’s like the other option is basically folding the company. How do you turn it around?

Joshua: First of all, recognise what’s going on is the first thing. Because they, what I think they were probably doing is…

Petri: It was a good, bad cop type of thing. It was a conscious act to do it that way because they had the power. They were just using their power. And thinking about from the lawyer’s perspective, painting the picture here, they do it by billable hours. They are representing the fund. They are squeezing everything out of it. I will never see that lawyer again. I have to only deal with the general partner later on. Obviously, it was not the smartest move from his side either, but that was sort of the setting.

Joshua: He probably got that advise that if you go in and get some of the parameters down, we’ll come in and we’ll be able to improve things for you. We’ll drop the hammer on them and, and take that approach. So you’re right. You have to recognise exactly what you said. You recognise what it is, which is a good cop, bad cop thing.

When you create a sense of commitment in a negotiation like that you and they have agreed. People tend to not want to walk away from that. They tend to feel like, okay, we’ve committed to this, so we need to see it through. There’s a psychological dimension that they’re also picking up on, which is creating the sense of commitment in you to not walk away from the process.

And then taking a harder line with you and hoping that that will stick. For me, I guess what I would have done one of two things. I would have said, look, I need to go back to the person that I spoke to and discuss this. Like, I’m not talking about this with you as the lawyer.

Petri: The GP refused to do that.

Joshua: Well, so again, that would be a red flag.

Petri: I’m saying this is not the optimal way of doing this thing, but it’s just like, okay, do we fold the company? We are already due. That was the tactic as well. They just want it to wear us down.

Joshua: There’s a lot of that. Back to the popular conceptions of negotiation, I remember one time I was meeting with a union representative of auto workers union. He said we definitely ascribed to the idea that the first person who has to get up to go to the bathroom loses the negotiation. I thought, well, okay.

I don’t really know why, but okay. I guess if you really needed that negotiation, what I would have said is to the lawyer, look, if you’re going to open up this whole deal that I thought we had already agreed to, there are some parameters that we would like to focus in on that we’re not really happy about it.

What I think I would have done is sent the signal that look, I want to go back and talk to this other guy. If you’re not comfortable with me doing that then you need to understand that if you guys want to open up the conversation again from where I thought we were that there are going to be some changes on our end too, and it’s not going to be us just going along with whatever you say.

I think I would also send that signal to them that if you want to play this game. Okay. But the game’s going to cut both ways. It’s not gonna end well for anybody, but I think that because of the tactic that they’re using I think it’s really important to send a signal that you know what people are doing. Because a lot of times people think they’re being very savvy and very clever about using a good cop bad cop thing. And you need to say to them, actually, I’m very clear-eyed about what’s happening here and you need to understand that if you guys, like I said, if you want to open things back up, then we want to renegotiate these clauses because they weren’t as good as we wanted on our end.

Petri: Yeah. So, just thinking about it now, I would probably being in the same situation again or in that situation, I would say that, okay, I understand that we are starting from scratch again. What we discussed before doesn’t apply. You are actually the person now who has the decision making power and the other guy was just a practise run.

Joshua: Yeah, exactly. That’s right. That was good fun. Now we’ll get down to business.

Petri: Yeah. It’s good that we can now close this quickly because we have the decision-makers on the table.

Joshua: Right. And by the way, that’s an important point. And it’s an important tactic that people utilise, which is, and it’s something to clarify early on in your negotiations is to say to the other side, if it’s unclear, do you have the decision-making authority here? Because a lot of times we assume because we’re sitting with them that they did, and there’s nothing more frustrating than going through the whole process thinking that they had the ability to decide, and then they say, okay, well, we’ve made really great progress. I just have to get my boss to sign off on this. And you’re like, wait a minute. What! I thought you could decide. It’s an important point in terms of process when you begin a negotiation that you want to ask that question to see what happens.

Petri: Another thing I come across quite often is that when somebody gives a contract or that’s the first proposal what they are offering it’s so outlandish that it’s not even anywhere near what you are sort of acceptable. What’s the next move?

Joshua: First of all, any proposal, any initial offer is designed to anchor the conversation where the other side wants it. If an offer is so outlandish that it’s completely unrealistic to me instead of … People fall prey to this trap, which is they start negotiating from there.

What you ought to do is say to them. I did my own analysis and my numbers are quite different than yours. Can you help me understand how you got there? Why do you think that this is a reasonable offer? What’s it based on? People don’t ask that question nearly enough.

They just start negotiating as opposed to trying to probe for what assumptions did you make? What were you trying to accomplish? What usually happens when people make those outlandish offers is there’s no basis for them. It’s just a trick to get you to start negotiating there, because then what happens is often they will come down a good bit.

They’ll turn that around and, and remind you of that and say, well, I did start at $5 million and we’re down to a million, so look how far I’ve conceded, right? It’s another tactic or a trick. And so to me, the best way to handle that is to make sure that you don’t get anchored by that but to then turn around and say, help me understand how you got there.

What is this based on? People can give all kinds of outlandish offers for things. But there has to be some justification. There has to be some reason for those offers. I think that’s where you want to go is paint a picture for me about why this is reasonable.

Why should I say yes to this? Usually, they can’t. That’s the thing.

Petri: One of the difficult things is that if the deal is a bit bigger. It is an important deal. You’re negotiating with important people as well and then comes to the lawyer, the in-house lawyer or the legal department who is drafting the contract. Not just once, but a few times as well. This happened that we made some modifications.

I just went through the terms to nitty-gritty details, but the important ones and the lawyer from their side comes back. And it appears that our business partner from the other side is not involved in the process. And those modifications, those comments, those things we wanted to change, they are completely omitted and they do new ones. You see the power game there.

Just giving a bit of a reasonable doubt as well. The benefit of the doubt in a way that maybe the business people were not involved and they just let the legal people to run the negotiations there, the details, but what should you do?

Joshua: Well, you have to be careful because every action that you take in negotiation sends a signal and sets a precedent. If you were to just let that happen, the other side knows that they can manipulate things a bit. If you were to call it out and say, you know what happened to these clauses that were here that we wanted to discuss or whatever it might be. So recognise that in negotiation. If your actions send a signal to the other side, positive or negative. It’s funny because I do a lot of work with an engineering consulting group and they’re often confronted with… They work on very big government projects at the national level and at the state level here. And a lot of times they’ll have the clients who would be the federal state government, come back to them and say, Hey, we need to add this, this and this into the scope. And we don’t want to pay you for it. It’s $50,000 worth of work or it’s $10,000 worth of work.

That’s not included in the contract. Can you just do it? And a lot of times they would say to me, look, we’re working on a $5 million project. We should just if it’s $10,000, we should just do it. And I say, I get it. Yes, it should be a business decision. But when you make that decision, you need to understand that you’ve just sent the signal to the other side, that things that are not in the contract are okay.

And that they may very well come back again and ask you for more things. Because you just said yes to something else. One way to handle that and one of the things that I’ve said to these folks is look, if you’re going to do that, you need to be really clear with them that you’re willing to do this once.

And you’re not setting a precedent about this kind of action. In negotiation, it’s really important, in my mind, to be excessively clear in your communications. I know that sounds like an oxymoron but it’s really important. Because communication should have really been called miscommunication because it’s rare that you really understand what it is that I’ve told you.

If I’m not explicitly spelling out to you that, Hey, we’re willing to absorb this $10,000 cost for the sake of the relationship, but we’re not doing it again. So don’t ask. Something like that. It has to be really clear. if you’re going to go down that road.

Petri: Yeah. Is it even enough? Should you even just ask that to say that they’re not going okay. If I absorb this thing I want something from you as well.

Joshua: Yeah. Generally, what I often say to the consulting firm is your first response to them should be, well, let’s drop in an addendum to the agreement. And, what’s the scope, et cetera. You should absolutely start there. You should definitely ask if something is outside the scope of what you’re talking about.

It’s always important to say, well, is there some kind of back and forth here, you know, we’re willing to do it, but it’s not part of this contract. What can you guys do for us? Let’s just imagine that you happen to know them and they say, listen, can you just do this for me?

We’re good friends and things like that. I’ll figure out how to do this, something for you later or whatever. When somebody asks for a concession for the sake of the relationship. That’s actually a manipulation and they’re not really a friend or an associate in that way if they ask that because it’s a manipulation.

If they’re asking for a concession, they ought to be thinking there’s something that they should be doing in return. Be careful there. Our tendency, when we do like people, is to want to do things for them and help them, but we don’t want to be manipulated. And it’s that fine line.

Petri: it’s also important to understand that sometimes the people you’re dealing with may not be the ones who you’re having the consequences later, or maybe that person leaves. Or the relationship is not there anymore, but you still have to deal with what’s written in the contract.

Joshua: Yeah, I see that a lot with this company, by the way, where the state or federal government will say, Hey, if you do this for us, there’s another phase of the work. And they say, okay, well, all right, well, we’ll do this. And then the person who made that promise is gone, they leave the organisation or whatever, and nobody has any recollection of that promise.

So, right. In that instance, I often will say to them, look, can you get anything in writing that actually demonstrates that there was some sort of back and forth concession here. Because otherwise, you’re leaving yourself…

Petri: So you can call the bluff?

Joshua: Or call in the agreement, right?

If they say to you, Hey, you’re going to be absolutely in line for the next phase of this if you guys were to do this. And, you have something in writing that says that. That carries more weight than well, Bill told me this when we agreed to it. Well, sorry, but Bill doesn’t work here anymore and we have no record of that.

Petri: I can not help to think about while we were talking about this. This is like going back to kindergarten or school. It’s like how do you deal with a bully?

In a sense that we were just a moment ago talking about how you should not absorb those costs. Take something and it’s just not acknowledged that you realise what’s happening here. So, how do you respond to a bully?

Joshua: Bullies typically push hard against you until there’s pushback. For me, when I deal with a negotiator who I think is over the top, you have to let them know that this behaviour is not okay or you’re not going to be forced into anything and you’d rather walk away. Most kinds of bullying negotiators are people who think that they have the ability to just try to force things on you. And when you let them know, one of the best ways to try to deal with sort of that bullying approach in negotiation is to know what your BATNA is.

I mentioned that before. If you understand that you can walk away to something else than what power or leverage does the bully really have? The answer is not much.

Petri: If you understand the value of what the other side is really wanting to get out of the deal. No is a really powerful word as well. Just say no.

Joshua: Yeah, exactly. There are a lot of negotiators who try to use threats. You have to be very careful when you use threats because if you’re not prepared to follow through on your threat as a forceful negotiator, you’ve lost all credibility.

I think we see this in the political realm. I’m thinking of a particular politician that resides on this part of the ocean, who uses that tactic a lot. And, when those threats are not followed up by action, they lose a lot of luster and people look at it and say, well, okay, this is their approach to negotiation.

And by the way, if you’re known as a negotiator who just is going to be issuing threat after threat, not only are you not going to have a lot of deals, but people are going to recognise that this is the way you try to get things done and they’re going to resist you. They’re going to find ways of doing deals elsewhere.

We fail to realise a lot of time that there are different avenues. You’re not the only game in town much of the time. And as a result, if you’re going to just issue threats and things like that a lot of people are going to go elsewhere. They’re going to find another company that’s going to do things differently.

Petri: Absolutely. And the reputation will stick with you or you just don’t see it at first. People start to avoid doing deals with you and your deal flow will go bad and that’s what happens, but it may take some years for that to go around.

Joshua: Yep. That’s right.

Petri: What is your favourite word?

Joshua: My favourite word. I think my favourite word is interesting because it signals to the other person that I might be using it, that there’s something in there that they’ve said or done that is noteworthy. And yet interesting is a vague and general enough idea that it doesn’t necessarily always convey exact meaning.

Petri: Whether you are not meaning it the British way? Because it’s exactly the opposite of interesting.

Joshua: Well, maybe I am, maybe I’m not. When someone tells me something and I’m not quite sure what to make of it, I’ll often say that’s interesting, which means I’m thinking about what you just said, and probably need to think more about what you just said.

Petri: What is your least favourite word?

Joshua: I might be tempted to say interesting as well.

Petri: Now, I hear the lawyer talking.

Joshua: My least favourite word I think is any word that is really definitive. Voltaire said, there’s nothing worse than uncertainty except certainty. When someone is so certain that they’re right or that they’re on the right side of history or whatever it might be, that’s dangerous because you fail to continue to take information in and you fail to learn from your mistakes.

You fail to recognise the atmosphere around you. Any words that have to deal with a very certain perspective position approach to things that makes me very nervous because it means that people are probably not open to thinking differently, thinking creatively, et cetera.

Petri: What turns you on creatively, spiritually, or emotionally?

Joshua: I love what I do. I love working in the world of negotiation. I could have conversations like this every day, all day, because I find them fascinating. I would say that, and also the sort of unknown elements of what I do. I love the adventure of the unknown. I’ve done a few different things in my life where there was a lot of uncertainty.

There was a lot of question. There was a lot of, sort of trusting in taking steps and seeing what happens, seeing what emerges in front of you. In part that’s because when I was a kid, I failed a good bit. I was a bit of a slow starter. I’m not afraid of failure. Not being afraid of failure is really helpful.

Petri: What turns you off?

Joshua: I think the biggest turnoff for me are people that have a condescending attitude toward you, toward life. That they believe they’re better than everybody else. And they act that way. I think that we all need to be humble as we go through life and have an air of humility about us because there’s a lot of things out there in the world that make life challenging.

We have to be forgiving of people a lot of times as well. We’re not nearly as forgiving as we are. When I come across somebody who is really condescending and has a bit of a superiority complex. That’s a very big turnoff for me.

Petri: What is your favourite curse word?

Joshua: I do say shit a lot. I find it to be a very helpful word, a lot to blow off some steam.

Petri: What sound or noise do you love?

Joshua: I guess I would answer that as sort of sounds of nature, crashing waves and birds chirping. I do a lot of walking and hiking and those things really soothe me. They really take me down a notch, and I’m a big fan of the ocean. I love the waves, the crashing waves and watch quite a few shows about dolphins and whales and how they communicate.

It’s all of those sounds in nature. We live in an area that’s right along a bird migration route where Canada geese fly North and South. When I’m walking and I hear them honking away like those things are very soothing to me.

Petri: What sound or noise do you hate?

Joshua: I don’t like whining and complaining. I have three kids, so I’ve heard plenty of it. I’ve gotten to a place in my life where I believe that most problems that we are confronted with can be solved if people put their shoulder to it and put their mind to it. Whining and complaining that you’re bored or that you’re not happy is the opposite of that is not really focusing on the problem, but just wallowing in your own sorrow, if you will. I’m not a big fan of that.

Petri: What profession, other than your own, would you like to attempt?

Joshua: I’m also a sports fan. I grew up as a kid wanting to be a professional baseball player, which I know in Europe, you all wouldn’t understand. But I love sports. It’s a good release and a good distraction for me. Baseball was the sport that I grew up here and it was sort of the national pastime in America. And so I always wanted to be a baseball player.

Petri: What profession would you not like to do?

Joshua: Well, I’m actually not a lawyer. I got my PhD instead because I felt like that process fit my style much more. I think the profession that I would least like to be in is one that is adversarial in nature. And in fact, part of the reason I didn’t go down the road of being a lawyer was because I felt like there was a lot of adversarial aspects to the world of law and it just didn’t suit my personality. I’d prefer to be far more engaged in creativity, problem-solving, brainstorming, thinking that way about the possibilities than about people pitted against each other. That’s why I kind of see negotiation differently. I don’t see it in that adversarial way as much as I can, because I don’t really believe it benefits us.

Petri: If you could be a co-founder of any startup in any era, which one would you choose?

Joshua: This is an interesting question. I thought about it and I thought probably Apple. Mostly because I thought, and I still think that there was so much interesting creativity that went on in Steve Jobs’ garage about what the world could look like and about how technology could aid in that process of moving humanity forward. But I think it was because of the creativity aspect of it in the process that they brought to the table that I thought was so fascinating.

Petri: Any final words for the audience?

Joshua: Only that I would encourage you to embrace negotiation. It’s something that I think a lot of people have run away from. And not run toward. It’s a little bit like the old Chinese finger trap where you put your finger in each end and when you pull away, it gets tighter. But when you come together, it loosens.

When people come toward negotiation, when they embrace it, when they understand its value and its power and how it can really help you in your life, then you get almost entranced by it. It becomes a fascinating process of how you live your life, how you deal with problems and conflicts and situations.

I would encourage people to try to see negotiation more along the lines of what we’ve discussed today than what they might know and maybe just to try to learn negotiation anew. Go out and pick up one of the books that’s out there on negotiation. It could be mine, it could be others.

Petri: Can you name a few good ones to get people started?

Joshua: Sure. Mine is The Book of Real-World Negotiations. If people really want to change their perception on negotiation, I would have them start by reading the book called Getting To Yes: Negotiating Agreement Without Giving In that was written by Fisher and Ury in 1981.

And it’s still in the bestseller list and really transformed the world of negotiation. There’s another book called Never Split the Difference by Christopher Voss, which is also good. There’s a book called Negotiating the Impossible by Deepak Malhotra. There is a book called The Art of Negotiation by Michael Wheeler who talks about how the essence of negotiation is really being able to think on your feet and being adaptable. And as a result, he encourages people to learn the skills of improv as a core skillset.

There’s also a really good one called Negotiating Rationally by my friend Mark Young, but another one called Beyond Reason by Roger Fisher and Daniel Shapiro about the role of emotions in negotiation.

And this is a place where a lot of people struggle which is in managing the emotional side of negotiations. And so they offer up some ideas about how to do that more effectively,

Petri: Thanks, Josh! It was so fun to talk with you. I could do this, like you say, to the whole day long. I thank you so much for having you in my show and good luck with all your negotiations!

Joshua: Thank you. I really appreciate you having me on and taking the time to do it and all your great questions as well.

Why we do what we do

December 4, 2020

The answer to the book’s title questions goes pretty much back to our brain. It’s still a mystery that we are resolving piece by piece. Neuroscience has been steadily gaining insights into our biological system that consumes 20 % of our energy.

If you’re asked why you acted as you did the answer is not obvious. Many of our daily actions are unconscious or habits that we have formed over the years.

How we eat, sleep, exercise (or not) has a huge impact on our well-being. Our long human history of survival has deep imprints on our modern ways of living.

We are still biased towards fight or flight responses and almost everything in us is still tilted towards survival. We discount good news, pay more attention to the negative, and have strong biases and prejudices.

Dr. Helena Boschi has put together an extensive overview of different aspects of neuroscience research and knowledge that is easy to grasp and not too academic. It explains the basic mechanisms simply and has practical applications for personal life as well as for business and leadership purposes.

We are emotional creatures first, and logical only second. The first response is fast, intuitive and emotional. It encapsulates our biases, assumptions and mistakes. This is why it’s a good idea to sleep over big decisions and let the slower decision-making system kick in that is more logical and rational. It counterbalances the first response gut-feeling.

Our memories are flickering. Every time we remember something we are reconstructing the very memory based on our current state. Emotional significance emphasises certain aspects and therefore others see the same incident differently.

It is a good idea to keep a record of your decision-making process so that you can go back to your thought processes and not rely on your (unreliable) recollection that changes on every memory retrieval.

If there’s one magic trick for improving your overall well-being it’s sleep. Have enough of it, and you may even live longer. Another amazing remedy is exercise. The simple things have long-lasting effects but like healthy eating, we just need to stick to them.

Our brain is constantly overflowed with information, 90 % of which is visual. Most of the information is filtered out before it reaches our attention. Sense of smell is the only one that is hardwired to bypass the filtering.

We don’t see what we don’t expect to see, and our brain fills the missing pieces of information based on our prior knowledge. A fresh pair of eyes to any problem from someone who has a different background, experience and knowledge domain can approach the topic at hand from an entirely different perspective.

The book gives ideas for communication, marketing and branding. We respond to nouns quicker than verbs, we see words as shapes and visual associations. It’s easier to accept something new if we are given a good reason, and we are explained why.

Our hardwired programming towards negative emphasises and give additional influence on anything negative sounding. Just seeing the word ‘no’ or a similar word triggers the same hormones and neurotransmitters as what happens in stressful situations. This sets us to expect something painful to arrive and the body prepares to receive it.

Similarly, using ‘but’ in a sentence cancels everything before it. And to add to the confusion, if you’re using “don’t” to tell someone not to focus on something that has the exact opposite effect. We cannot help but focus on that.

So, why we do all these things?

Inked by Jeb Blount

November 29, 2020

When the author starts the book by stating that the topic is boring you might be onto something. Sales negotiations are everyday occurrences, as they should.

Now that you are rightly motivated and still keep reading it’s easier to get some results. This applies to sales very much. It’s the process, stupid!

There are no shortcuts or quick wins. If you’re after those you’re going to be disappointed.

Lack of sales results comes from the fact that salespeople tend to “suck at negotiating” according to Blount. They have limited training, poor emotional discipline, minimal self-investment to their trade, the pipeline is empty and buyers are simply better (prepared and have more alternatives).

There might be some quick wins for the company but not necessarily for the salespersons. Your profitability and even sales may go up by stopping deep discounting and shadow negotiating.

Giving too deep discounts with too large incremental steps empties the deal margins quickly, and discounting is an easy tool that is too often used as a blunt sales instrument as a substitute for sales negotiations.

Blount offers seven rules to follow:

The most important one is that you win first and only then negotiate.

The second opposes the maxim of seeking win/win and guides to go for play to win.

The third recalls the importance to protect relationships unless you’re mostly doing transactional deals. One could state that the previous and this rule are at odds or at least heavily trading with each other.

The fourth states that emotional discipline wins. Often, you are your worst enemy, and silence tends to do your bidding.

The fifth tells to master the sales negotiation by mastering the sales process. It’s a rigorous step-by-step process, and no technique will compensate for skipping steps.

The sixth reminds not to give away leverage for free, ever. If somebody wants something from you, that’s leverage and you should use it.

The final rule is to eliminate and neutralise alternatives, and this goes hand-in-hand with your sales process.

Beyond the essentials, the book is full of practical tips that help in different situations. For example, it’s your job as a seller to avoid long-term negative effects such as resentment or contempt later on. It can happen both ways and destroy the relationship nevertheless.

The human side of the negotiations is paramount. People negotiate for satisfaction and contentment. The facts, objectives and results are important but emotions come first.

Motivation is always personal, even in B2B relationships. The higher the motivation the less the alternatives look appealing.

When you have the sales, buying and decision-making process aligned there’s not much to negotiate if you happen to be in that fortunate situation.

One piece of advice that popped up in my daily activities while reading the book was that do not email proposals, ever. You need a conversation with the buyer, and simply sending something will diminish your leverage and weaken your sales process position.

It’s also good to keep in mind that studies have shown that your IQ drops when you’re in a vulnerable position. A right mindset and having your BATNA (best alternative to a negotiated agreement) figured out help in this internal battle. Keeping your sales pipeline full does wonders to your inner calmness.

The book is versatile in content. If you’re an experienced salesperson you still learn something new and for those starting their sales career, there’s a lot to absorb.

What’s the question -approach

November 24, 2020

If the answer is 42 what’s the question? Even in a slightly smaller scale a similar approach to strategic thinking is helpful and can be easily used.

When you’re doing something, pause, and ask yourself what is the question where the answer is what you’re doing right now. If you’re not satisfied with the question you should probably change something in what you’re doing right now.

This method is very simple but that’s why it is so powerful. I find asking the right questions the most effective way to take the temperature on what’s happening and where we are heading with the current course of actions.

Doing is easy. Movement is easy. The right type of progress is hard. When something has been set into motion it’s easier to keep on doing it and stay the course than stop or do drastic course corrections and question the approach.

A strong impetus is needed for change or to assure that you’re doing the right thing (and keep doing it). Asking a simple question that aligns with your outcome frames the setting and shows the implicit assumptions. It is also easy to test whether you are asking the right question.

Often, the question invokes implications that the scope or the magnitude is wrong (usually too small). It can be used to ensure that you can live with the consequences if the action is riskier or more challenging in nature.

Everyday business life is full of actions that start with some ideas or impulses to do something. The focus is on the methods and not the ends. This skews and limits the outcomes but this may not become apparent till the action is carried out, if even then.

For example, somebody suggests doing a marketing campaign using a certain marketing channel with a brilliant idea that kickstarted the whole process. The focus is on the creative and the execution.

The process did not start from the beginning where the project outcome was laid out, the target audience was defined and then the appropriate media channels for the respective audience reach were decided based on their suitability.

All these steps were already implicitly in the action where the creatives and campaign plans were carried out. Nobody stopped asking whether it makes any sense to do the whole thing from the results perspective using a particular media channel.

By asking the right question the overall setting becomes visible (and hopefully apparent). It’s rare to aim too high and be too ambitious than to focus on mediocre actions that yield weak results at best.

The worst part is not the wasted resources and poor results but the opportunity cost where something great and grandiose could have happened instead.

Is this the best use of my time now?