Bootstrapping With $15K Even Though He Has Millions?

– with Jorn Lyseggen
Hi, everyone. My name is Andrew Warner. I’m the founder of, home of the ambitious upstart. How does a small, Norwegian start-up, that bootstrapped with just $15,000, how does it generate over $100 million in annual sales? Joining me today is Jorn Lyseggen. He is the founder of the Meltwater Group, a software-as-a-service company. It’s offering include Meltwater Buzz, which is a social media monitoring service; and Meltwater Talent, which streamlines the recruiting and hiring process for organizations. Jorn, welcome. Jorn: Thank you. Andrew: So, we’re talking about how you have the slash through the O in your name. Why is that? What’s the slash doing in your name, my friend? Jorn: It’s something called, umlaut, and it’s really a Norwegian letter. So you don’t have that in the English alphabet. But I’m Norwegian; I may not look Norwegian, but I have been living there all my life. Andrew: Where are you today? Jorn: I’m actually now based in Palo Alto. Andrew: OK. Jorn: So that’s my base. Our headquarters is in San Francisco, but I do travel quite a bit. I travel three out of four weeks, because we have 57 offices across the world. Andrew: So, I want to spend the next hour or so together, talking about how $15,000 becomes this global company with over $100 million turnover, and everything else that goes into this business. But let me confirm that it is bootstrapped. Did you have any outside funding in any point? Jorn: No. We have never had any external funding. And we raised any debt either. Andrew: This is unreal. This an amazing story. All right, I actually kind of feel like when we talk about $100 million plus, that it feels a little hard to wrap their brains around. How long did it take you? Let’s talk about a smaller number. How long did it take you to get to $1 million in revenue? Jorn: Well, the first year of business we had revenue of approximately half a million dollars. Andrew: OK. Jorn: Year two we had revenue of approximately $2 million. Andrew: Wow! Jorn: But, the start of the company was actually pretty rocky, ‘cuz we worked with the technology for an entire year, first. And then we were ready to launch. Then we actually partnered with a company that reached out to more than 1,500 companies. And the result of that was pretty negative, because out of those 1,500 companies, there was one company said, ‘Perhaps.’ So, at that time we felt a little shaky, right, ‘cuz we’d worked an entire with this technology. And that was the first feedback. It was a pretty rocky start. So, we had to try and fail, initially, and we had to experiment with everything from the value [proposition] to the sales methodology, and how to reach out the clients. But slowly we were able to secure more clients, one after another, and once we had actually cracked the code, we were able to scale it, and scale it relatively quickly, actually. Andrew: It seems like a slow start, maybe for a short period of time, but to get to $2 million in revenue from $15,000 investment, and to do that within 24 months, that’s impressive. I gave an example of the products that you create. Maybe you can put a little flesh on this and pick one of the products that you offer–any one of them–and give me a scenario where a customer might use it and tell me how the customer would use it. Then we’ll go back in time to when you launched and figure out how you got there. But I want people to understand the product a little bit better, in a clearer way, than I introduced it. Jorn: Yeah. So, the first product that we launched was a product called, Meltwater News. And basically what it was, was online news for insights. It basically helped our clients to better understand their competitors, perhaps their key clients, their vendors, or their general industry. And there are very different ways that they actually use the service. In terms of clients, we have everything from Apple, Intel, Coca-cola, McDonalds. Andrew: How would McDonalds, for example, have used the product? To do what? Jorn: Exactly how McDonalds used it is, you know, it varies a little bit how much we can share, because some of this is proprietary. I can give you an example of, perhaps, an unusual client and share with and share with you. Because when they set up the office in Hong Kong, that was back in 2006. I was going through the password control, and I hear this guy behind me, he goes, and speaking Swedish. I just turned around because Norwegian/Swedish is basically the same language, right? So I turned around and started speaking with him. And he’s the managing director of a

I’m really excited about social media. And when it came to the taste. a lot of energy internally fighting a company that wasn’t worth that effort. clients. for that reason. and you don’t capitalize on that information in many ways that’s really neglect. all the way to San Jose. And then they came to us. and are willing to pay me for it? Jorn: Right. if you made the same trip. since they’re selling large contracts. because they are bootstrap. most people actually thought it was too sweet.person company. during the yogurt discussion people contrasted it with existing yogurt brands. our client concluded that they didn’t have to do anything to mitigate this new product launch. perhaps they will get released from their job. Jorn: Right. of their competitors. they know that the decision they’re making is based on informed decisions. But you found a specific entry point with the news. And that way. And the third. that a lot of people discuss yogurt because they noticed this campaign. Jorn: And also they were inspired by Toyota. So the mission was that when executives and decision makers come to work in the morning they have their normal cup of coffee. They expressed their likes. and very nice. Andrew: So. And number two. do you need new windows? And that’s how your software. Now with social media you just have an enormous amount of information every day that is published. ‘So. we wanted to sell [??]. a lot of time. that would be able to fit into most company’s budgets. hey. Within a few years. probably far from how proactively they should do. I love that example. And then you can really look at it from the originally it was online use articles. how proactively do you apply online information? Proactively he applies all the intelligence that’s available online. so I asked him a little puzzle. right? Andrew: I see. ‘I love your service. And he actually sells windows. And did you have a specific customer in mind? Jorn: We really started to focus on medium-sized companies. of course we do that. one. So. burglary. so the original idea. Because small contracts are quick turnaround time and generate cash flow. and our expression was really. And during our conversation we realized that he’s actually a client of Meltwater. Andrew: OK. we have to sell small contracts. or whatever. about your entire eco-system and general industry. your service would pay for itself with him. OK. And through those discussions our client could then actually retrieve a lot of invaluable product insights. and that if you can mine that data it would be valuable. too.’ Truthfully. Now I’ve got a sense of it. And that’s just one product. And when it comes to social media. when there’s a break in he’d call up the company and say. and industry. Andrew: OK. they’ll be sued. Let me go back in time and understand how we got to this.’ And that has secured us a lot of business. Andrew: OK. ‘If Toyota can become the world’s largest car company by selling cars that everyone could afford. We use that as lead generation. I understand the big picture vision that there’s a lot of data. And the challenge of getting to the right information is quite significant. Andrew: Five products.ten. A competitor to themselves. Andrew: What was the original vision for the product that you had? And who were the customers who said. Because otherwise they will be falling back. how do you use Meltwater News?’ And he said. There was a [yogurt company] that came to us a little bit in panic mode. not the software. And they were really scared. he’s a ten-man company. and main conclusion was really that this new yogurt was really not such a big competitor. And you stop and speak with every CEO on the way. but the physical windows. Because one of his major competitors launched a big campaign for an entirely new yogurt brand. Because if information is available. for example. because we want the local and regional news. All right. Because they have to. Andrew: I see. I think most companies today would say. or something being destroyed. I don’t know if that’s five years. You ask that person. So within seconds they get an update on what happened in the world in the last 24 hours. And I think I can give you an example. because everyone agreed that the packaging and everything was really sexy. out of how many products you have now? Is it six? Is it nine? Jorn: We have a total of five products. And everyday there are reports about break-ins. right. you drive through the whole of Silicon Valley. right? So the name of the game in bootstrap is cash flow. for all I know. and their dislikes. . what was it? Jorn: The original idea was really that on the Internet there’s just an enormous amount of information being produced every day. Without that data they might have spent a lot of money. and we started to analyze the discussions online. I would expect all the CEOs would say. For the first time in the history you can have a direct access to your client’s hearts and minds. I can see how mining data could be that useful. these guys need this right now. Jorn: If you envision yourself driving a car all the way from San Francisco. And very quickly we were able to find out. So. But the value of actually getting on top of the information that’s published every day is just enormous.

and we started out with some small and medium-sized companies. it’s of course. if not Google. so every one of these customers was going to get a human consultation before they started using the product that they were paying for from you. what did the first version of the product look like? How close to your vision was it. But in terms of scale. Because on top of the technology you need human intelligence. And . . They used this to understand what was going on online. So the big value that we create for our clients is that our people have a good discussion in needs analysis with our clients to help discover where the information needs really are. why couldn’t they use Yahoo. And as proud as I am of our technology. we were two guys. Andrew: How long did it take you build the first version? I think you said a year? Jorn: Yeah. right? Andrew: Similar? Jorn: It was very simple. very simple. Andrew: Why couldn’t. but now they had some ideas on how they could become better. And that’s really the combination technology and the human personalized consultation that at the end of the day creates value. So. as far as features? Jorn: Compared to what it is today. I’m an engineer. OK. So if you were still launching the product. so the first year of business we had $. And they used this to research stories they were about to write.Jorn: So. yeah.5 million in revenue. it was a lot simpler. The only thing a computer does is execute instructions as it’s been told. So on top of the technology you need to add human context and intelligence. I’m writing a note right now to come back to it because it happened a little bit later in the story. Andrew: So. And then help cater to that through our custom developed search engine and our intelligent algorithms. . Garbage in is garbage out. and that is a big part of the solution today. . I originally researched scientists and artificial intelligence. or some other search engine. Andrew: I see. how did you get revenue? Jorn: Oh. I see. at the time. Jorn: Correct. and we worked tirelessly and pretty much 24/7 for one year. they could. you know. and I want to take this step by step and understand every bit of it because I really want to understand your process for how to grow this business. very simple. So. Jorn: The underlying idea. Andrew: Oh. the second year $. Well. and as proud as I am of our products. statistics and ellipics on top of that.5 million in revenue. And the idea was then to generate cash reserves quickly. how did it match up. . Am I right? Jorn: Correct. the computer has a zero IQ. Jorn: Yes. The first clients we actually sold to were [??] newspapers. I think a deep realization within [??] is that the product alone cannot create the full value. and they said that they loved our service. it took a year. third year of having the business $2 million in revenue. . beyond actually getting notification of news.5 million in revenue the first year. we offered it very price competitive. in terms of sophistication. Andrew: OK. or even Lexus Nexus to come up with the data they needed for a story? Jorn: Yes. Andrew: You also said that you brought in $. I know this was 2001 that you launched the business. Andrew: Oh. Andrew: Why didn’t they just search . Because as smart as algorithms are. Jorn: And initially we only offered alerts to notify you if there was information that was published in the last 24 hours that was relevant to you. the value of our service is based on really two components. The thing is. So the first year you were just building. the underlying basic and technology components are all the same. By incorporating with Coca-Cola and sitting down with the brand managers et cetera we developed a trend and an ellipics [SP] of statistical analysis. I want to come back to that. They had been a client of ours for a long time. Andrew: Oh. Coca-cola was actually a client of ours that approached us.

. what happened is we analyzed all the results. we actually had a partner to do this. and the result.500 nos. would have fought that understanding. Basically. Andrew: If they’re saying back to you. Andrew: How did you do that? What does that mean? Did you send out direct mail? Is that what it is? Jorn: No. It was really through that research that we discovered opportunities for service like [??] news and [??] online news. They needed hand holding. 1. it seems like spending a year developing and then taking it out into the world is a mistake. The information was there. It was a company that presented this. We contacted 1. but they were not able to find that information themselves. then that is something you’ll pay money for and it’s going to be really critical for your business. and I think most companies in the tech space would have said. Jorn: Right.499 no and one maybe. let me ask you about the year of development. Andrew: Ah so. Andrew: I see. If we get to the right information. So it was a sales company. Today. In between there. and the tool was there. no. get feedback and iterate. I want to know how to turn my nos into useful information that will build yes type companies. how do you evaluate that decision to spend a year? Jorn: I think it was actually necessary because it was also a maturing process for us to actually go through and actually develop the product. most of the reasons why people didn’t buy was this product didn’t create any value for them. Andrew: How did you know. of course. et cetera. but what I couldn’t stop feeling was that information is so valuable. you launch it. or do you immediately go to the 1500 customers that that one company helped you reach out to. it’s another thing to get useful information. What we under estimated was personalized consultation. It’s very hard from an idea to create a business. So. we got 1. Looking back. Jorn: Right. That’s when the sales started to come.First. would have said instead. create value. and we got results. interested. We got a lot of statistics that we analyzed. we don’t want it. we need to improve the landing pages or the sales presentation or the technology. Jorn: When we analyzed that data. Back then I was overseeing a two year research project funded by the Norwegian government. The research focus was how can we apply sufficient intelligence on Internet applications. Do you take it to any customers at first or any potential customers at first. So that was actually a mistake we did. OK. there was lots of iterations to come up with a product that really would create a value and compel the user interface and all the things that you really need. Jorn: Well. We came to the realization that people were not able to get to the information that they needed. right? We took the product out and contacted the 1500 companies. But that’s where the deep realization surfaced that the product and technology in itself has zero value or very little value unless you put in human intelligence and consultation on top. not interested. you were asking them why didn’t you buy. This technology was really based on some research work that I did originally back in 1996. So we put a lot of effort into the user interface and the technology and the scaling factors because once we get clients up on this we need to scale across hundreds. don’t create value.500 companies. and they said not enough value. and that’s what we tried. that you quickly want to get to market. Jorn: We had a lot of nos to analyze. right. I think it’s important because it’s one thing to get a no from a customer. Andrew: Right. thousands of customers. Andrew: OK. Jorn: Yeah. Andrew: And so. this is calling for human interaction? Jorn: Yes. the Norwegian Science Foundation. was not very promising. I’m still trying to understand how that data led you to think that they just don’t know that what they’re looking to do is there. We commissioned a company to render it out and present this to all these different companies. Andrew: How did you discover that? I would never have known it. We thought in our naiveté that technology in a product itself would be powerful enough to make companies buy.

Jorn: I just wanted to pick that person’s brain. and they’d say. Andrew: You did. I was curious. what did you do with that information? How did you act on it at first? Jorn: So. You didn’t want to sell high-end cars to a few people. They must be able to communicate intelligently with a business acceptance.000 a year. And it’s a sophistication that’s required that goes vastly beyond selling a product. right? I wanted to understand what they were looking for. if I’m this business owner how much money would I be willing to part with that wouldn’t make me think for a month before I actually made my decision. . were you starting to close sales? Jorn: Yes. I wanted to understand exactly what was going on. Jorn: Yeah. you know. and in doing such a dialog be able to tailor this search engine. right. and relate to that person’s world. why? Tell me? Take it from there. right? If we’re going to pursue this we had to do it very different than our initial tech was. excited. Right? And then we discovered there were lots of articles that were really. To sell this product we need to talk with each other. fundamentally interesting from a business perspective. Andrew: OK. right? Andrew: OK. .Jorn: And that puzzled me. we realized we needed a lot more hand holding than they originally had participated. did you start with new . to relate to that person’s problems. hey. But that was not filtered out at the granularity and the precision that they need to create value. or your strategy. I think at the time it was around $4. Jorn: Yeah. the Toyota of the information business. was it just another business call? Jorn: I was more excited. Because a product is not interesting. to that person’s need. I need to understand how your business really works. it was clear to me that they needed a lot more hand holding. the first person that you called. and then we were able to present articles to them. Andrew: So. how did it feel to call that customer up? Were you intimidated. that’s really what it is. Andrew: $4. . Andrew: You picked up the phone and said. So that was buried in a lot of other information. I did.’ And as they got confirmation that the articles were valuable. it’s like they had this bicycle where they were so busy they didn’t have time to sit down. I need to understand your pain points. Jorn: And to actually get to that granularity and precision. You wanted to sell it more inexpensive. I saw that you said this wasn’t valuable. Andrew: Jorn. we decided that the people we bring on board to sell this must have business acumen. In many ways they had this tool. Jorn: So basically. Andrew: I see. And so. So. was it you who would call up these clients? Did you call up any of the 1. It was more like.500 clients and start to talk to them about it? Or. So they were running next to the bicycle without taking the time investment in jumping on the bicycles and venture off. They didn’t have the competence to configure it. ‘These articles are actually really valuable.000 a year. Andrew: OK. What’s the price? How much were you charging these companies? Jorn: Our price point was. Andrew: How did you come up with the five seats? How did you come up with that price? Jorn: It was not very scientific. for five seats. because I made some deep [??] into the different companies and started to research what articles were really out there. Andrew: I see. Utterly scrap the company and do something completely different. Based on that information I can help create a search service that will meet your business needs. making these phone calls yourself. there were really two choices. You called your business.

were you able to close sales on just one phone call? Jorn: I never did that. than to have lots of options that people have difficulty understanding. People are too [??]. In their heart they knew there was lots of information there. Andrew: Cool. Okay. Right? So that was a big piece of it. Andrew: Ah. . before I ask the next question I see that you’re very popular on Skype. how did you know that? Can you give me an example? Jorn: The mistake is that people realize that the few features they have the better it is. And what . if you go back to whatever level you want you’ll start to hear the noise. how should I do this? And it becomes a problem. Jorn: All right. So. Andrew: Then. what else did you learn in those initial phone calls to customers? Jorn: It was very clear that this was a huge market.000 probably would be a reasonable amount. ignorant of all the information that was available online. and different industries. Andrew: Let me know when you’ve got that red with the line through it. trying to really pick their brands right. but other people have done it. Jorn: I didn’t do that. instead of hearing the alerts come on. But it wouldn’t be such a large amount that you would create a long and complex decision process. Andrew: What options did you have in there that were just too much that you learned from phone calls? We can cut those out or we should? Jorn: I don’t really remember. And it was just realizing that people need help. super. Jorn: Yeah. It’s much better to solve 80% of the problem without having to configure it and tinker with the system. or you just try to understand? Jorn: Mostly in research. Yeah. but then we decided to hide them. and all the priorities. . Andrew: Did you close any sales. Andrew: But when you were making that phone call to people in that excited state to find out. It was very clear that people were running around blind. super simple. Because if you see all these different options you stop and think. and as people come in and out of Skype your computer’s making that noise. or just learn? Jorn: In that initial stage I just learned. Can you set your Skype to do not disturb. why don’t you want this? This is really good. because they don’t have time.Jorn: So. Andrew: Was there product understanding that you got from those phone calls. And I felt that $4. because if you don’t see them it doesn’t bother you. Beyond the understanding that customers need hand holding. For me it was more to really understand them. and a worry for you. different sciences. Thank you. And that happened many times. In their heart they knew that probably ten to twenty websites that I should go and visit every day. Right? But they didn’t do it. and blindly. after the interview. and the hand holding. It was enough to do the personal consultation. Because it disappears in all the daily tasks. I’ll try to do that. Andrew: OK. . but initially the options were visible. to get up to date. Andrew: All right. Jorn: All right. Andrew: OK. but later I closed businesses. It would be a sufficient charge for us. So I spoke with companies. initially. it was more like testing myself. or anything that shaped the offering itself beyond the need to make phone calls? Jorn: Super. Andrew: You didn’t do it yourself? OK. Were you closing sales through that process. that way all the noises would be muted? Jorn: Right.

You recruited them. that I knew were good sales people that were sophisticated in terms of business acumen that could actually speak with decision makers. OK. Andrew: OK. you know. who are smart people who I want to work with. I imagine you spent a large amount of that on the 1. Andrew: Oh. You set it up for them. all over Europe to recruit people. then? . Jorn: You don’t see them. And then it was important to actually start generating the business for us. yeah. I traveled all over the world. give it to the user in an instantly usable way. Andrew: I see. or one of your people did.000. Andrew: What’s left? How do you have more money to make these trips and to hire all these people? Jorn: Right. . Is that where your customers came from? Jorn: Not really. How do you act on that to grow? How do you go from that understanding to $500. Andrew: To recruit sales people? Jorn: To recruit people. First we had to generate the sales in [??].000 in sales in that first year? Jorn: Right. but I can get more into specifics of what I was looking for. That’s what they needed. And you know. And as soon as they came in. Andrew: So. OK. Andrew: Just recruiting. both in small companies and large companies. they didn’t even to do the initial setup. from 2002 to 2006. simplified the features. So. and paid them on Imagining on the sales that they generated. definitely sales people. Andrew: I see. But I spent more than 50% of my time just recruiting. Andrew: I see.Andrew: I see. Jorn: Right. And what happened. and then you moved on . Jorn: Exactly. we configured everything.000 to use to invest in this business. that’s what got you a little less than $500. So. from then on it’s all about building an organization. They were happy. And it was just basic [??] configuration. is that where you went to actually convert new customers.000 mark. but the original 1. Then you moved on out and made all those trips to find new people to come in and grow the business. the next morning they got an email. in seconds they can get up to speed with what’s happening in the world. with cash flow? Jorn: Super important. You were collecting money upfront for the year’s subscription? Jorn: Yes. Andrew: How did you do that? Jorn: So. when they came to work the next day and had a normal cup of coffee. so that also helps. So now you understand the product a little bit better. we were able to bring in some people I knew from before. Andrew: I want to get to the philosophy of that in a moment. too. It was really from hand to mouth all the time. actually. and it worked. Now you only had $15. Jorn: Yes. if I’m understanding this right. From then on it was all about scaling. basically. you said. Andrew: Where do they come from. And they didn’t they didn’t even need to see. I know a few people who are good at selling.500 companies that you pitched. . make phone calls. but it was useful.500 companies that you were pitching. So. Jorn: Yes. And you understand the sales process. they had a useful product that they could tinker with. And that’s what got you to the $500.

this is what we’d like to have in your product. so tell me about this philosophy. Andrew: I wrote down to come back and ask you about Coke and trends and analysis. Why? Jorn: I think that they really enjoyed the service. Jorn: It became partly a pride thing. These are some of the most sophisticated brand people out there. It was part of the culture. there are all sorts of new events all along. curious about what other media outlets have picked this up. You were CEO of Mobile Group. and different companies are in the spotlight. it was never abused. we opened the newspaper every morning to see which companies were in the news. and it becomes part of the culture. And these companies.” Tell me. I should say that. And usually it’s both positive and negative. if you follow the normal news. then they’re like “that’s interesting! So do you have more information? And then they got curious about the product. You sold your first startup. but you had a few hits in business before this. You had the money and the ability to raise money. they’re very curious about their media coverage. right? So up until very recently. and their customers would be happy. Andrew: I see. Did you know you’re also. And I think it was something that all of us took great pride in. Andrew: OK. It was part of the culture. and that’s how we were able to get the foot in the door. Right? So the reality is that we used more. “I want us to not have the money. it does something to the DNA in the company. But they came to us saying they had ideas on how to make the product even better. “I put in 150 not just 15 thousand. we could send them examples — “this is the coverage. In 1999 you ran a company called Optosoft which you sold for 30 million dollars. The company had a valuation of 150 million dollars in 2000. Why limit yourself to 15 thousand dollars? What’s the philosophy behind that? Jorn: Well. if they’re in media. If they see a need. “Well. and if it’s boot-strapped. because they were in the media. But philosophically you said. So in the early days you had the builder box with a company credit card. I think they also felt they got a lot of value out of it. Andrew: I see. That’s standard stuff. So it becomes very cost-conscious. So often it has a lot of attention within an organization if a company is in the media. Andrew: What was your search criteria? Who were you looking for in the news? Jorn: Well the thing is. And I loved that. I think I’m a scrappy guy. And how did you know this was important enough to build? Jorn: Well. Andrew: OK.” it still would be insignificant. You still could have found ways to get more. or was this part of your process? What I’m trying to find out is. . Alright. And if a company was in the news you said they might be a potential customer. Andrew: You were using your product to sift through the news? Jorn: Yes. I’m sure there are lots of other people who would see it as well. and you called on them? Jorn: Of course. etc. OK. You obviously had a good track record. Correct. So that was a way where we could very easily get access to decision-makers. The agreement was they needed to put the receipt back in the box. Did they reach out to you with this desperate need. And everyone could use that credit card if they needed it because they knew the pin code and all that. Andrew: OK. It was really something that was exciting. how can a company find out what its customers are so desperate for that they should build. Is it pronounced U-Net media? Jorn: Yeah. Jorn: But although we had such an honor system. but I didn’t take out salary for it for the three first years I think. if you consider the salary I didn’t take– Andrew: But not in the business. And to be fair. Andrew: You sold it in 1997 for 5 million dollars. and it becomes very careful with what it spends. I didn’t talk about this yet. Melfred [SP] never had any cost controlling systems.” and they see value in this. not only in Norway but in Sweden and Denmark?” And send. In your personal–you didn’t pay yourself. And that’s why they reached out. right? And I could also see that if a company is very scrapping. I thought it gave me a lot of kick. How did you come across it? Did they reach out to you? Did you have this culture of feedback? Tell me about it. 15 thousand dollars. Jorn: They actually reached out to us. that’s the money we spent initially. if Coca-Cola comes to you and says. you think.Jorn: So basically what we did. Frankly even if you said.

and for [??] has been that one of the value creating processes in every company is sales. initially. Andrew: How? How did you collaborate with them to do it? Jorn: Basically. But that said. I was sitting there in the lab. Jorn: So that was a very easy call. we just called them up. But Coca. I never even aspired to do business and become a manager. You have a background as an engineer. distinct corporate profile. . And I think it was really. Because if you have different variations of your product. You learn so much. It was something we aspired to do already. Jorn: Never customize the software. But I think it’s something that we learn as you go along. Our core base is very. sitting down. and so on. Very quickly you realize if you’re going to be a business. And I really didn’t have a business idea. you know. very difficult. you need to generate revenue. You learn so many industries. the requirement and for us to do those changes and add those functionalities for Coke was that this was officially see other companies would benefit from. So you’re just approaching it almost as a researcher. Sales is the only one that actually brings money. So. How is your world. it was more enthusiasm than sophistication and technical skills. that’s why I just quit my job and started a company. and you need to support different source bases. I’ve got all this great data. How can I help you solve this problem? Why are you interested in this? Am I understanding that right? Jorn: Yeah. So. And you can contribute with a service.Cola was the one that came to us and initiated that process. At the end of the day it’s human beings communicating. we have one rule. all the things that happened on the Internet. you know. and for me it started out with. Right? Andrew: How did you learn to do sales? How did you personally learn to do sales? Jorn: I think. so what would you like to see? What would be helpful to you? What are the pains that you experience on a daily basis? It’s basically talking. Andrew: Really? Just the same way you did other customers? You said. I was curious. Andrew: How did you get Coke as a customer in the first place? Jorn: Oh. I never aspired to become an entrepreneur in the first place. Andrew: Right. Why Meltwater? Jorn: So. the value they want to create and contribute to the world. Actually my background is on the engineering side. you know. this was something we wanted to do. what are the problems that you want to solve? I was just curious about how your industry operated. And for us it was a no-brainer. But I just realized this Internet that is developing is such an important and significant event in human kind that I just wanted to be a part of it. talking with them. Andrew: Magenta. Meltwater’s actually originally called Magenta News. So. So. and yet your business is built on making sales in a clever way. I really love that. asking them. or a product that helps them. You develop your business acumen in an incredibly fascinating way. You have a background as an entrepreneur. that was really accidental. You learn how different people at different levels think. you want something that stood out. If I’m able to help you. Andrew: All right. So. Jorn: Yeah. You don’t have a background in sales. And. one of the mottos for me. doing my research. the problems they’re have internally. That was just all the excitement. right? Actually. Right? Andrew: I see. Do you want to take a look? Jorn: Yep. the problems they have and they walk around them. we didn’t have any marketing budget. because that will kill your margins. then it’s a win-win situation for both of us. and really helped us spread a really exciting service. if I’m able to help you solve a problem. How did you learn how to do that? Jorn: Well. You listen as much as possible to their pain. and I love that.Andrew: I see. So. Right? And that is one of the things that I find actually exciting about sales. all other processes are cost generating. I didn’t have business training. Andrew: The name. Actually. it really was more a skill you have to develop out of necessity in a startup. And very quickly you realize you need clients. Andrew: Tell me about that. that I became an entrepreneur. hey. I think that’s incredible [??]. you know. And I remember I admired orange for a very strong. in that we never customize the software.

And that’s when we realized. we have challenged that Newspaper Licensing Association. So. Deutsche Telecom actually had a trademark. I think so. right? Andrew: Yes. And then we actually brought in a naming consulting firm. Jorn: Right. Jorn: So we discovered after being in Germany for a couple of years that we had to change the name in the German market. We wanted to be a global distribution. that’s why we established offices from Dubai. And that’s how we started with Magenta. Jorn: Exactly. Australia. and so on. every new product that we’re launching we expect is going to be $100 million business by itself. And so. because that’s bright pink. if that should be their interpretation of copyright law. right? Andrew: Which was the first business that you launched after Meltwater News? . Andrew: I’d be an offender in a heartbeat. and nurture our people. and starting from scratch.Jorn: But. that you actually. At what point did you decide it’s time to add a second product? Jorn: That was really the philosophy from the beginning. But outside we are very ambitious. Right. So. in the U. So. We did a lot of research we actually concluded in our quarter. we focus a lot on developing our people. starting with $15. that went in front of a tribunal that ruled against you in the lawsuit? Or am I looking at a different lawsuit? Jorn: You’re talking about the copyright in the U. the philosophy’s very simple. it lends itself well to a very clear profile. the Links. right? So. that’s so counter intuitive. Our aspiration was really to be a global distribution. and that I have to get permission before I link to people. Andrew: I mentioned in the beginning of the interview that you had five different products. orange. as well. and Magenta in Germany.000. Tokyo. you know. And to me. but my thinking is.. It is tough and soothing on one side. or put a collection of links. very quickly. And so. 2010? Jorn: Yes. Internally. once we had the global distribution. which they really like. there are all sorts of cross selling opportunities and synergies. And the second stage was. if you have a name like. Andrew: I’m looking right here at an offense. we rolled out new products during 2009 and 2010. And secondly.. Jorn: In addition to that. we believed we could do it again. you know. U. if we sent links to our clients. Andrew: OK. Berlin. Andrew: Do I understand this right. Jorn: Right. And then. we can roll out new products. and will build and grow very. And we put that in front of the copyright tribunal. it makes millions of people offenders every day. it’s still unclear what will happen.K. And part of what they liked in Meltwater is it gives them association to our Nordic heritage. In many ways it reflects the dual nature of [??]. That was the first stage of the company’s development. It has the strength of changing and transforming landscapes. Jorn: But for some reason. we want to have one name that we can use globally. And that’s a little bit how we look at ourselves. you know. and some people might even say we’re aggressive. So. Meltwater has this interesting duo quality. Andrew: I see. I was thinking is there a color that we could own. right? Andrew: OK. they want to slap a copyright fee on the Links that we send to our clients. to put a copyright fee on that does not make sense to me at all. Andrew: How ridiculous that suddenly there has to be a copyright of a link. $100 million business. So.S. Andrew: I see. On the other side it is very strong. that if you’re able to build a global business. because I’ve got my research on U in a collection of links. Jorn: Right.K. we basically challenged their position. Because.

right? There are companies breaking their neck trying to establish themselves in the U. we wanted to make sure that we had the distribution in place. That was a very crucial crossroad. Meltwater Talent. Every company out there needs information. we were ready to roll out new products.S. if they get a chance. we are only going to cater to software with our research. I was itching to get started in other products. before it generated any revenue.S. So from the get-go. right? And we weren’t so far from closing the business down. Jorn: There are two moments that I would bring forward in that regard. Andrew: Why didn’t you focus in the beginning on a niche and say. Meltwater Drive 6. And if you want to be a global player. How do you create a system where people who want to be successful within the company actually get to express that desire and get to see progress? . because you hear about these stories of European companies doing really well. And we discovered we had a product that is really not industry specific. Andrew: [laughs] Jorn: Why? We just had to get the management to the side and then . Andrew: So far we’ve talked about high. Why did this work out? What can we draw from that? Jorn: I think that is one of the strengths that actually really made Meltwater grow from $15. Then there’s Meltwater Press. So. whatever.000 to $100 million. we always aspired to become a global company. initially. And I wouldn’t say it was a low in any way. and that is we worked a whole year for the product. you have to be big in the mother of all markets–the U. Andrew: I see. car. or we’re only going to cater to Window repair companies. does all the things in social media that we used to do in [??]. before we embarked on new products. because it was a very risky move. continuous growth of people that comes from below and keeps shouldering responsibilities. which is in social media. as well. I understand the thought process behind another product. It was just natural. So what we did was really take that challenge very. right? That was a real. we were four people who made a pact. I want to be fair to the full story and talk about a bit setback. maybe a time when you said. And that’s really the low-hanging fruit. . right? Did I say [??] in the beginning? Jorn: Six.Jorn: After Meltwater News we had a product called. right? To develop the product. but it was a very critical moment. we wanted to complete. And then we jumped on a plane and went off to the U. Every company out there needs intelligence. but when they come to the U. of A. Why say. And it’s really based on a philosophy that people. house. . in the story as we told it. but you know.S. I better sell and get out. the build out the global distribution. We sold all earthly belongings in Scandinavia. basically. and packed the stuff we needed in two suitcases each.S. to abroad? Jorn: Well. Jorn: The second one was really when we decided to go into the U. Every time you move forward you seem to achieve a new high. And we had spoken one thousand times to the companies. Andrew: Then.S. Andrew: OK. Or. I shouldn’t do it again. The first one we just talked about. we’re not coming back until we have fixed this. we wanted to be a global player. right? We open a newspaper to see what is the news today. they get their a** kicked. And the pact was. that evolved without really thinking much about it. and then we launched it. a lot of times management leaves and things just fall apart. There are a lot of people who want to be successful that haven’t really got the chance to try themselves. legitimate scenario at that point. Andrew: Yeah. the thing is. Andrew: Why? Seriously. So that basically was a very natural thing. Meltwater Reach. And the key strength that Meltwater has in that regard is the growth of people. And once that was done. because the four of us were really the management of the company at the time. high. high. So. Otherwise. you know. why wait eight years before you launch the second product? Jorn: Because I like focus. what has been accomplished in the media. right? So what happens to a company when you send the management team off to the other side of the world? What then happens to their European business? Andrew: Right. Beyond what that says is we are not a chicken-s**t company. So. If you’re going to do this you do it in a big way. it started really that in an opportunistic way. we don’t bother. Tell me about a time when you hit a low. Meltwater Buzz. And that was a critical stage. high. And we talked a little bit about that. Or. you know. I shouldn’t be an entrepreneur. I never met a person that didn’t want to successful. very seriously. they will grow into their responsibility. Jorn: And their [??] was that the European business delivered better than ever. So that.

And there’s enough enthusiasm that if . you go through all sorts of ups and downs. or is it just a culture and immersion? Jorn: No. together with one other person. and you tell me if I’m wrong.Jorn: By challenging them early on. Andrew: One thing I think that enables you to do it. and all those offices having hatched out another existing office. And then they sent them back to Sweden. So very simple. that was hatched from Norway. They go to Ikea together. Andrew: Who moved in with them? Jorn: Yeah. Jorn: Right. Andrew: OK.000. And now we see the Asian operation as one of the fastest growing business units. there was this guy that was celebrating his 24th birthday in Oslo. that was our first Asian office. as well as the token acquisitions. He was British. right? So. that continues to scan the market for trends. How did you know that’s the next product we have to create? Jorn: So. but initially there were no manuals. am I right about that? Jorn: Very good observation. we had very well developed methodology for that. and when you send them back they know that that’s going to be their office. we can talk a lot about that. Later he set up our office in Tokyo. What about competition? You tell me about the high margin. The next day he jumped on a plane to Hong Kong to set up the Hong Kong office. initially bring people to Oslo. or whatever it is. Andrew: I see. and to find and launch a new customer. for $6 million. They were completely immersed in the culture. Right? The key part of that is really empowerment. they were the one with the guidance from a person from Oslo to build an office there. when we set up the first office in Sweden. Andrew: And how do you create that system so that when someone hits the ground in a new country they can count on it and know that all they have to do is localize it and adapt to the situation that they’re facing. And to set up a business in Hong Kong. Once the product is built. They’re asking. And that really will give them in all offices we set up across the world. And this has always seen that the establishment of our business lines. you tell about the reach. trained them there for three months. the corporate bench unit. You’re taking them. that’s partly a number of things. . which is one I postponed from the beginning of the interview about Meltwater buzz. So. You need that emotional attachment. etc. do you have this [??]. Then let me ask you the next question. We have our own unit. We went to Sweden. We were just working with them. is there a manual or anything like that where you guide people.000 a year for five seats. with them. What about. but at $4. But he was able to work himself through that and became Managing Director of the Hong Kong office. You tell me about your system. then [??] about when the company’s going to be profitable. And that is part of the [??] view. etc. We have now 57 offices across the world. OK. build the furniture. there’s a lot of margin there to pay people good salaries so they can continue to grow the business. right? They feel this is my office. do you have this kind of product. it takes people to launch a new customer. So they have ownership. how do you do that? Do you set your company up almost like a franchise. the way we do business. Andrew: So. Andrew: I see here JitterJam here acquired this year. but maybe have to customize it to the local market? That’s what it is? Jorn: Yeah. to know that your investment’s going to pay off in office space in people because there’s enough margin that you don’t have to close that many sales. where there’s a set of systems in place that if someone moves to a different territory they get to use that system. and had been working with the company for six months. So you [??] three token acquisitions in social media. and an understanding of how you built it and come in? What’s the defense against them? . . Partly it’s input from clients. and also helps set up new business lines. or that furniture. And realistically outside their reach right there and then. And then. we have manuals. leading by example. but it’s really important to pick the right people. Andrew: Can you give me an example? What do you do with someone early on that sets them up for success later? Jorn: So. They buy this copy machine. We brought three people from Sweden back to Oslo. Beijing and Shanghai. for example. what they’re thinking about the company. And partly we also try to stay on top of what’s happening outside there. It was learning on the job. and giving them continuous opportunities that are a little bit outside their comfort zone. Jorn: After a while we withdrew from the Stockholm office and then were running the office themselves. and I feel like why don’t more entrants come into this market with $16. Andrew: I see. And through that process. based on the research media in that corporate venture unit. hired people in Sweden. is the high margins on the product. They get an ownership to that office and that business in a very realistic way. is very challenging. Singapore. tucking them into the product instead of building yourself. for new opportunities.

how can I do this project better? Jorn: How can you do Meltwater better. particularly here in Silicon Valley. pretty much in every market Google’s a competitor. We did talk about that. so pains me to say this a little bit. It’s very contrasting to a lot of other Software as a Service providers. They are overly confident on behalf of their technology in product. as a final question. You only hear the result on their hard work. And also Yahoo. Whether that instruction makes sense or not. finally. intelligent personalized consultation on top of the technology. That’s the biggest challenge every day on my desk. It goes down to… A computer has zero intelligence. in my opinion. we feel like there’s always a tech solution for everything. to understand “these were the different models”. . That’s it. and in the midst of the project everything looked like a disaster. like Groupon. it became successful. I guess. at least like ours. I think the confidence on technology is too big. How can I make it more useful to other businesspeople? To others who are aspiring? Jorn: That’s a good question. I also think another that we have done uniquely is that we’re not shy about betting on young people. Jorn: How do you build the management layers at all different levels in the company and keep people motivated. right? There are lots of examples of that. Andrew: In some ways even Google’s a competitor. is not the product. and “this is how they executed on those business models. too much on their technology. Andrew: And sales. of course. and they go “Oh. and how to organize it well and make it useful. And then. is not the technology. That’s a different take on Software as a Service that we’ve been contributing to. Perhaps your interview was very product-oriented. Mostly the competition rely. you’re here–to talk about their stories. But in a systematic way. Jorn: Right. at the end of the day. that’s the biggest problem. both entrepreneurs and engineers. and to bring their best ideas back to my audience. That’s my life’s mission here. It looks like an active business at times. one way to consider it is that you contrast and compare business models. Perhaps. you seem very excited. yeah. as we talked about. Jorn: Oh. And that was a key realization within Meltwater very early on. how they did it. The guy that went to Hong Kong at 24 years old and one day. You seem very engaged. The biggest challenge is. And I’m into technology myself.Jorn: First of all. that’s great. As a person who knows data.” You only hear one side of the story. Andrew: I enjoy. you mean? Andrew: No.” Andrew: Who would I contrast your business with? What model would I contrast your business with to make it interesting and useful for you? Jorn: Our focus on personal consultation is very interesting. get something. Every market we entered has been five to ten different competitors. How do you grow people and talent within the company? Because. where I bring entrepreneurs the best–as you know. my project here at Mixergy. Jorn: But the biggest problem when you build a company. the buzz over your shoulder as we’re talking. and all that? That’s the challenge. because you really want to know. run out for a meeting. and how different execution of those business models creates different successes. Let me ask you this. Because it’s very easy to listen to a success story and hear what they did. Andrew: I see. It’s just executing the instruction it’s told to. aligned. and technology-oriented. I say we have lots of competition. by the way. Now. excited. I think you’re doing a good job. I think people think technology can solve everything. Yeah. which is a free service. You ask questions and you dig deeper after you get the answer to those questions. how do you scale an organization? How do you enter a new country? How do you build? How do you grow from two people to 900 people? Andrew: That’s a great point. although they are unproven. My goal here with Mixergy is to bring successful entrepreneurs like you to talk about what they did. right? So then. have sales people out there and it makes a huge difference. I saw someone just run behind. lots and lots of competition. And that is so hard for us to understand as people in the text space. You need that human contact. And what we’re discovering is companies like yours. I think.

and show me lots of different people doing it. then show me multiple companies that are doing this so I can understand it really well.” You’re telling me the opposite. you’re not unique. that illustrates it and is memorable. that’s where you find your approach. I love the stories. and an artist writes poetry. which is. . their way of expressing themselves.” Why? What’s the value there? Jorn: To me. And perhaps also to be innovative and contributing. And then if you see the variety and diversity in how companies can be successful. You need to be a little radical. Otherwise you’re just following everyone else. one way to do it. also. you need to be a little bit different. that’s more interesting: to contrast and compare. and let’s understand how their model is different from Meltwater. a writer. you’re saying. if you do the same thing as everyone else does. that solves a similar problem to us with nothing but technology. at the end of the day. Andrew: This interview’s been an absolute pleasure. when an entrepreneur builds a company. A musician creates. I know anyone who’s listening at this point knows exactly what I’m talking about. And also give people the confidence that they can choose their own way of solving the problem. music. effective. and often. “Show contrast. it’s like expressing yourself. If the way is to have people make phone calls to customers. Because. people that there are many ways to solve a problem. I think that can be very inspiring. Andrew: I see. It’s been a great pleasure. Otherwise you’re not contributing. it needs to be distinct to be authentic. Show a company that goes all tech. Give me one idea. So in that middle place between all the other approaches. by the way? Most people would say. I love how analytical you are about business. To tell. An entrepreneur builds a company and it’s their particular voice. I think it needs to be unique. and not just technology. and can express the analysis that went into each step with a story that highlights it. “I want more angles on the same message. Jorn: Thank you so much.Andrew: Why contrast. also. Andrew: Thank you. I’m so lucky that I got to do this interview with you and I appreciate you doing the interview with me. at the end of the day. Thank you all for watching. Jorn: I think so because. That’s why people must do it their own way.

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