How I scaled systems and processes to grow from 1 to 50 employees

give it up for Karsten hi everybody and welcome I was really flattered when Nathan called me and asked if I would come over from a Copenhagen Denmark to make the speech today and I really wanted to come because uh first of all I really enjoyed the community and second I have seen way too many founders that never get any money themselves

so I wanted to tell uh What uh I wanted to do it differently how it sort of build up and then how I made a transaction earlier this year the presentation is called how a bootstrapped to 50 mil secondary it was a a clean secondary so nothing went into the company uh and then the subtracting systems and processes increasing from 1 to 50

full-time employees were actually uh 25 full-time employees when it when the transaction happened that was in April well now we're 50. it could also have had the subtitle in the state with only six million people because we really got to that transaction stage by focusing uh only on our home state and then getting uh only in the last few months getting

International sales or the subtitle could be and how it became larger than Google analytics which apparently according to the Danish Ministry of Commerce we are today in our state so um over the next 20 minutes I'm going to tell you about sort of the stage so it went through it was a long and a very painful birth uh first of all getting to product Market fit

which took me forever uh scale and then how to actually do the secondary and sort of what's what's at heart for me is that it was really important at least for me to find a niche that I really had a genuine interest in that I thought you know the world needs this then make an MVP at an absolute minimum cost because there was no one to finance that but me

um and then after that to build a really robust Tech stack then I had read the book you know crossing the chasm and I never realized what it was until I was there and being really close to bankrupt uh then how ex complexity exploded we needed to focus on minimizing friction by focusing on what we could control and

then basically take it from there uh and finally uh why I didn't go to the VC route uh and why I still had an urge to sell some shares even though we're a double hyper Growth Company that's cast positive and makes profits um so first I wanted to show you sort of a simple graph of the metrics that sort of

got us into the deal area and I just founded the company in 2011. and it was a consultancy company with me and a student since 2016 until 18 where we launched the actual SAS product and I was never able to make to invoice more than 200 000 USD a year as a consultant and I realized I could never ever

scale this company at the same time I was getting super frustrated at the end of 17 the gdpr was coming up finally there was a requirement for consent Solutions sorry is the cookie pop-up that you're probably being annoyed with on on every website that we do and they were just popping up on websites across Europe and in my opinion they were all wrong they just didn't work they were not compliant and I just

felt am I the only person in this world that can see this is basically a scam it's it's not working so I really wanted to just get it right and deliver a solution that works so we launched an 18 and then you can see sort of got the first 500 clients spent 19 making sure not going bankrupt and then we started to to to grow and then once we passed that 5 million ARR threshold

then we were very uh we seemed to be very attractive to a number of potential partners because then we had demonstrated that we had stamina and there's a a stable growth that can be sustained so most of you have probably seen this cartoon before and I just associate so much with it I I lived that cartoon

uh from I first got the idea and eight and I thought I was a genius and that the world needed this and when I look at it today I just think I was pathetic at the time like super pathetic uh but it sort of grew and and I'll just take you through these stages so I'll take you back to where it all started 2008 I was invited to Harvard to do some empirical studies on how

personal data is collected from websites and used for commercial purposes without people knowing and without the websites knowing and after doing months of research and presenting my my findings to the professor and saying I think the world needs a legal requirement that the transfer of personal data must be consent you need to inform people first that need to consent otherwise people will lose confidence in digitalization and they will not use websites and apps

and he thought I was brilliant and we're having a glass of water and I just felt I had an epiphany and he approved and now I would go and make the world a better place and it just I was pathetic it it didn't work I don't want to talk to believe in it people saying what on Earth is this no one is interested in it um but I couldn't forget about it and in

2011 out of frustration I quit my job I founded the company and I had one client and they left after a week I lived in this house you can see on the left in one half of it um and I worked from my from my kitchen table from 2011 to 16. uh hardly able to uh to to make a living

then in 17 I had to sell the house and instead I invested in a chair in a shared office that we were free guys sharing two two chairs uh but I felt I was I was I was getting at it and then uh at the end of 17 I decided all right now it's going to be a very different ball game I hired the The Loft this building

so I had lots of space I still had no clients really just doing some Consulting but now I was ready to business so what I did in the beginning I was really focused while doing the Consultants becoming a subject matter expert realizing accepting that there's a bigger truth to this whole collection of personal data how it's used and what value it creates and to whom I was trying to really tap into it um

and then I had to use third-party Tech because frankly I don't know anything about it been really interesting in contributing to a better world um I was invoicing you know free invoices a month whatever using Excel and every year about 60 of my clients you know I would have done whatever they asked me to do and they would not come back then it's in 17 I started to build some

proprietary software on top uh e-privacy director was kicking in and apparently I was the only one that knew anything about it so I was hired for a six-month geek at the Danish uh business admin business agency to write the uh the Practical implementation order for the e-privacy directive which I did together with the lawyers so they did the legal part I did the Practical part which is about third of of it and that sort of made me really sort of

stand out as the subject matter expert in in our state that also meant that I I had the opportunity to make a 50-minute uh um documentary with the Danish broadcasting Corp which was sent Prime Time Friday night and sort of really got the the the the Privacy um subject uh very public and then I sold my house

uh January 4th of 18 . I thought now now we're gonna really build the SAS company I went to Poland I had 10 developers and uh then we started to build it but I had I had only funding by myself so I had to sell my house I had to sell my boat I had a small crappy boat and move into a cabin and I'm only moved out of that the

this this spring I've been investing absolutely everything in the in this in this company so we launched in May 18 together with the uh gdpr we had instant product Market fit uh got 500 clients and then we started building the tech stack very early on with some proper systems uh Stripes send desk pipe drive and then

one new colleague we got you he was able to make a website I didn't have a website before using Joomla which no one uses believe but that was how we started it continued after the MVP I wanted to be to make it possible for people to actually run a credit card through in the platform and buy I spent 150 000 USD on on building that and one year after

after uh having launched it the annual revenue on that one oh sorry the monthly Revenue was 141 dollars not thousand dollars but 140 dollars and and and and and it was becoming actually if it was very inspiring because it just still felt you know we're on to something they're out there it's just something we're not doing right and

but we're sort of getting to the chasm I are we going bankrupt what what is happening and we just started to focus on on making things more effective so we focused on the on the ux and the cell service uh sign up the product is really good so we we focused on not losing the clients we got in we got the churn down from 60 to three percent per year um we had really low costs

and and then I came up with this with kpi which was that we can spend 80 percent of a first invoice to a new client for the CAC so if the CAC is 80 of the invoice amount we will we will send then we will not go bankrupt and that has been a kpi for us all the way along and it has directed how much money we can invest because you know it's very

easy to get an idea it's enough heavily in something but sometimes it takes longer time or maybe it's just a bad idea um and then we converted all the consultancy into air by making it you know AR ideals as well in terms of systems we upgraded the system so we went from Joomla to Wordpress we changed the starter pack from centesk to a

full-fledged HubSpot implementation we implemented Slack we got striping Asana up and then we changed the company language from Danish which no one understands to to English and we started hiring non-nanged people and we moved into this beautiful office space where we got some 200 square meters uh and in the central part of of Copenhagen to remind ourselves every day that we were important and taking ourselves very

seriously now what happened was if we then fast forward what I showed you before was here October 19 in terms of revenue from what came in Via stripe then certainly we had reduced the friction we had apparently just by fixing things one at a time and studying consumer Behavior suddenly there was just water coming through or money coming through and we increased the revenue by 100 fold within

12 months uh which was a very big thing for us we also had Direct sales and you can see on the graph down here to the to the left how that just sort of kicked off as well it was via Network effects people just really liked the uh the solution and sort of Word of Mouth in our in our country sort of it it spread and by the end of 2021 we had uh by focusing on

product Market fit just making something good 70 of the top hundred companies in our country and public sector uh were using our service uh so what we did was that we just repeated every time we found something that that worked we just repeated it I wasn't bothered about making money on it it just had to be really cool it had to be something that people just wanted to use

and then sort of profits would would come and then anything that would you know good ideas that didn't add value would just killed them so we found out that an inbound strategy was good for us being you know thought leaders publishing all sorts of things really worked and we were able to put it in the system and just scale it up uh we started to have to build a SS

sales department and that's grown quite a lot since and then we started to automate everything so we started using templates and workflows in HubSpot uh we we just we introduced DocuSign so it was no manual processes in terms of contracts we started to work professionally with the website with ctas checking out the effectiveness of various flows Etc

and then we reduced the Cs team from eight when we had the MVP to four even though we had a much bigger uh uh company and then we moved the office to this ugly building but it's very nice office uh and this is uh here you can see sort of how we went about standardizing things so we sort of looked at it the whole uh flow from we get in contact with

people and until they are onboarded and then we made activities that we control so we are not depending on any resellers or anyone outside the company but it's like it's webinars it's publishing things and then we will keep track of how much they deliver and it's very consistent so we always get between 40 and 150 participants in a webinar we do and that means we can just repeat them

and everything here we could just repeat we are then we we did some you know in terms of the the sign up flow for the 30-day trial you know we had automated processes how we get uh when how we email people what behavior that would trigger that we call them Etc and complexity just went exponential so from sending out um 50 invoices a month uh within three

and a half years we were sending out 1200 even though most of of our clients are on annual plans and we reduced so from from being eight in in cust in CS team we went down to two that are handling almost 30 000 uh requests within a six-month period because everything is just super effective and there's uh there's a lot of Automation in in these

things and in the annual report of of the Danish business agency here from 21 uh they are saying that we are now actually the second largest internet service provider third-party internet service provider in this country owners are passed by uh Google um uh this is Google analytics this is Google apis and Google tag manager

uh we handle at that time six million consents an hour uh every day uh sorry every hour every day in the week [Music] um from there we started to to get some International traction we could see that we would need to grow out of Copenhagen we had in 18 established a sales office in the neighboring state it just did not work

things very technical they develop fast in our company and they were just behind all the time so we I closed that and then instead we had even more International people so now we are 20 National analysis in the Copenhagen office I think we're only eight that are Danish out of four to five people which is a great way of building a global company we standardized everything all all the contracts so

at that time we had three thousand paying customers and there had been so many custom contracts and you know contracts on the back of a napkin etc etc so we standardized everything we made a price harmonization so everyone pays the same for the same service and uh we made sure that we have absolutely no

paper anywhere in in the company what really helped us also was that we worked to eliminate manual invoicing so now that's all all automated we introduced intercom which helped with our conversion uh and we introduced a number of other software that are really robust and can sort of handle the growth

so by the end of last year we had reached 5 million ARR and I was getting a lot of calls from from from VCS but what triggered me to start a transaction was I could see now we're getting this very Global demand and and I cannot continue investing everything I have I was still living in a shed basically I've been doing that for five years at that time

uh and have to reinvest all the time so I thought I really want to want to make this sort of a global concept what we're bringing on and I wanted to have a partner and I was very happy to hook up with a good advisor in this case it was Deloitte we had a structured process uh covering Europe and in the U.S and we ended up with nine firm top offers and

we did the transaction in uh in April uh this is how it looks after you sign um just normal people really that they want to to win to to buy shares in a in a decent company that that has a future so what I have I think what I what I hope I have showed you

is if you really run a a if you are really genuine and build a company it's it's a long way but you can you know you can scale it and then you can actually get out of this with with money uh yourself so this is me and if any of you guys are interested in or seeing any opportunities in in me then please feel free to reach out thank you very much