What got you started on your journey?
I think I have always been an entrepreneur at heart, even at 10 years old when other kids wanted to be a fireman or an astronaut I wanted to be an inventor, to make things and to build things. It’s always been in my DNA.
Later, straight out of high school in 1999, I started my first business and read a book called Microserfs by Douglas Coupland. It was the first book that explained what it meant to build a really big business, not just something small but a major company. They were living in an apartment and eating pizza out of boxes and I was inspired, it was so cool. Then I went back to school and got an education, which made my mum happy.
But then I met my two co-founders, Mikkel and Gert and we decided we wanted to build a company together. Mikkel and I were both working on a consultancy project for the Danish Government helping them digitise trade on a massive scale. We came together just as cloud was exploding and we were working on a very interesting problem, but there was a strange catalysing moment around meeting those guys. We all felt the need to do something different and we jumped in the deep end to set up Tradeshift. One of our earliest investors had a spare garage and we moved in. We were living the dream. Now a garage in Denmark is not a quite the Californian dream, but nevertheless we were on our way.
What was your vision back then?
We wanted to connect every company in the world to create economic opportunity for all. We were inspired by the likes of Facebook and Twitter when we started and we felt we could do the same for business.
Fast forward to today, more than nine years later, the vision has not changed. It’s been incredibly constant. When new employees join us that’s what they hear.
What inflection points have impacted you the most?
There are so many, and every time you pass one, it’s like you move to a new level. However, there are three in particular:-
- The day we won our first big enterprise customer, Kuhne Nagel, that was a game changer;
- The day we won our first North American customer, not just any customer but a huge sports brand, in fact the largest in the world. The fact that a household name trusted us to run their supply chain was transformational;
- And then when we realised we really were a global business. Not Danish. Not US. Global. Today we have more than 700 employees from more than 40 countries. In our Danish office, Danes are in the minority. That’s so liberating and empowering.
Why did you decide to locate yourself in San Francisco?
If you want to play football at the highest level , you don’t play in Denmark, you go to England and play in the premier league, it’s the best in the world.
It’s the same in business. We didn’t want to be the best business in Denmark, we wanted to be the best in our category in the world. And that means being in San Francisco. The decision of who you compare yourself to is vital and we want to compare ourselves to the very best. And in tech, San Francisco is where they are.
What has been your experience of hiring exceptional people?
The first ten hires, set the culture and that’s critical. But as you grow, finding people who have been on the journey before through rapid growth to IPO is crucial and there are more of those people in San Francisco than anywhere else.
We hire people who think big, who think of building businesses on the scale of Salesforce and those people have had a huge impact:
- The extraordinary level of competitiveness – people here just want to win and that’s definitely rubbed off on me;
- The diversity of backgrounds is incredible – cultural, educational, professional – that has been really important to me too, to see different points of view and to embrace diversity of thoughts and ideas.
What have been your biggest challenges?
Talking business, the middle phase is the hardest.
As a start-up everyone wants to talk to you. You’re the next new thing, interesting and cool. Then suddenly the honeymoon is over and getting from the Series A round to the B, C, D is really hard and most fail. Especially when like us they get a lot of hype very early you have so much to prove.
It’s taken five years to go from the early stages to now, when we are ready to scale and there have been a lot of challenges on the way. Keeping shareholders aligned and employees motivated when you are struggling to deliver on your numbers has been tough.
There is a story about a prisoner of war who survived, recalling that the people who died were the ones who thought they would be home by Christmas, as when that day came and passed they gave up. So I say to my team, “Look, we aren’t going to be home in time for Christmas, but we will make it, don’t give up.”
There have been lot of technical challenges, switching from founder sales to scalable sales organisations is a vital step.
But the biggest challenge for me personally has been the need to reinvent myself on a constant basis. I am regularly encountering situations that I have never seen before, and neither has anyone on my team.
It’s OK to say “I have no clue”. That’s never been a problem for me. What is a problem is to think you are always right because you put yourself in a position where you are very brittle and can easily break.
I have always been comfortable with saying “I don’t know”. But I am also very comfortable with making decisions in the absence of all the data, which to be honest is most of the time.
If you wait for all the data, you are out of the game. It comes down to making decisions based on 10% data, 30% gut and 60% having counsel of a great team.
Building a big business on the scale of Tradeshift must take its toll on the founders, how do you cope?
This is an extreme undertaking. It’s hard for people to understand the mental pressure and there simply isn’t enough talk about this. Waking in the middle of the night in a panic because you’re scared you won’t hit the number; worrying you have and will let people down.
I hope it’s changing. Founders should talk more. But the VCs also have a big responsibility. I measure great VCs not just on how they help in the good times, but how they support you in the bad. And that’s why it’s so good to have had an operator VC like Notion with us since they led our Series A, because Stephen Chandler, who sits on our board has had many of those very same experiences, those night sweats, waking up in a panic, when he was at MessageLabs.
So it’s not just a discussion for founders, but also within the VC community. Is it smart or sustainable to have a culture that failure is not allowed? That founders always have to be killing it. Because for three years we really weren’t killing it. But we are now. Building a company is a journey of ups and downs; the rough and the smooth; the good and the bad.
A good friend, who was one of the founders of Skype, would have people say to him, “Wow, how amazing to have been part of an overnight success!” and he’d reply “Listen, it was an overnight success after 8 years of hard work.”
What’s surprised you the most about your journey?
I think what’s surprised me is how much I’ve changed. It’s like running a marathon. No one thinks you can do it and then you do. Then you think to yourself, “Well, what else could I do that no one thinks possible?”. Running a business is like that, you take on seemingly impossible challenges, achieve them and then think, “what’s next?”.
When I spoke to my partner about this I compared it to taking part in the Tour de France. This is the training regime I need to undertake over the next 5 years. I need a special diet, coaches and all sorts of expert support. People understand that in sports. Well this is the same. It’s a five to ten year journey and it’s going to be really tough. But when you are talking about a business in the same way, people start bringing up work-life balance as an issue. You need to accept you are doing something extreme and you need to be good with that. So don’t think running a VC back company is a just a thing you do, just a job, because it will challenge you, stretch you and change you and you need to embrace it.
Who inspires you?
Many people, but two stand out.
Jeff Bezos. The way he thinks about and runs his business is inspiring. In particular the way he things about systems. I’m a big fan of systems thinking. Jeff Bezos has developed an amazing system that is replicated by Amazon over and over. A business idea can be copied by competitors, but a system, a way of working is incredibly hard to copy.
Elon Musk is the other because he is so willing to go against accepted wisdom and opinion. Ten years ago he fired the first commercial rocket into space and now building repeatable rockets is seen in such a different light. And at the same time he built Tesla and has changed how every car manufacturer and car consumer in the world thinks about electric cars. He’s on a bit of a downcycle at present, which he mostly brought on himself, but he’ll bounce back.
If you could go back to when you were first starting out, what would you say to younger self?
Chill out, this is going to take much longer than you think. It’s a marathon not a sprint.
And what advice would you give an entrepreneur considering taking VC funding?
Think carefully about the type type of business you want to build and understand that when you take VC money you are entering a contract. I see a lot of entitlement today from founders, thinking they have a right to the best VC money. When you take VC money you are accepting a contract, in short that you are going to generate a return that is at minimum 10X. If you take the money you can’t then complain about the pressure. This is how the VC risk model works.
If we hadn’t accepted that contract I doubt we would have moved as fast and as far as we have. It’s not for everyone as its scary. But it’s also incredibly exciting and a hell of a ride and I wouldn’t change a thing.