SaaStock 2018 – personal notes and take home messages

Posted on 19.10.2018 by Petri Hollmén

Dublin, here we land!

I was joining the SaaStock for the second time in Dublin. It’s the third consecutive year that this event has been organized. Last year we travelled here with our full management team and the trip was a true eye opener. We learned a lot and we made big changes to the way we run our SaaS-business. Hence there were no question if we would join this year also. But this year we – in addition to our management team – took also our Lyyti Entrepreneurs from Paris and Amsterdam with us.

Before the day #1 in SaaStock, we had already two very intensive days under our belt in Dublin. Working with colleagues from different countries is the ”salt and pepper” of my work and getting everybody into the same place is a possibility not to be wasted.

Lyyti Management Team and International Entrepreneurs fit barely to one (big) hotel room. Well, the goal is that already next year this room is way too small.

So, two days of internal meetings around sales, marketing and roadmap (not to mention the visit at the Guinness Storehouse!) prepared us for the seminar.

Like in Nordic Business Forum, I make notes only for myself trying to actually learn something and take my learnings into action.

This is why I believe in events, why I attend events and what I preach for: they are the most powerful medium to make the change.

Normal text are my direct notes from the content and italic is my thoughts and personal notes about the subject.

Day #1

16.10.2018

What made Zendesk successful: A journey from Copenhagen to SF and beyond

Bummer… an interview. I prefer deep dive keynotes, but let’s see how it works.

Zendesk: 500 M€ ARR. 5B€ market cap.

Success or feeling successful is not what you don’t feel often, because usually you just see more problems to solve. That’s a natural feeling for a founder.

Timing was right for Zendesk. Broken enterprise softwares everywhere. Goal was to build a product which you really like. Timing was right for technology as well. Web 2.0 just came. There were not a lot of start ups and hence no competition. They could concentrate on the product for few years. Consumer friendly!

No investments in the beginning. Just Friends, Fools and Family.

Product – market -fit

We used our own product to serve our own customers. This was the most important thing! We concentrated into critical features. We didn’t have to use customer panels, because we were our own customers!

This is what I’m trying to preach in Lyyti as well. We HAVE to be our own best users.

Eliminate all friction from the signup process. Customer didn’t have to talk to us.

”Love your helpdesk” —> first mission and mantra, because everybody hated their helpdesks.

2009 ARR 1M€. 2010 ARR 10M€. They scaled in the US during that period. ”They have decades of history in building scalability products. They know we need to compete, but also collaborate – like Facebook and Google does.”

Entire company moved to USA and we could hire a CFO from States to help us with all legal stuff.

I wouldn’t move all the company to the US anymore. We offered something to a talent, and Facebook tripled that. But it requires at least one – if not several – founders to move there as well.

We hired our first sales person in 2010, as we had 10 000 customers. We had to move upmarket and to the big companies. We were leaving money on the table. Big companies were starting to use SaaS as well.

2011 we expanded back to Europe as competition got harder in the US.

Brand was always playful and it was good for consumers. We never had headsets in our pictures.

I like this way! I hate photo stock pictures. And I think our Steve the Octopus is pretty cool!

Culture: get diversity in the culture to avoid bias.

How to make sure that all feedback is captured and reflected in the product?

You have to build an organization to get the feedback and reflect it. It includes:

KAM’s
Product managers
Support team

Final decision is made by the Product Team. We are a product first company.

Get inside your buyer’s head to increase funnel conversion rates

David Skok, Managing Partner, Matrix Partners

From nine months sales cycle to shorter.

Wake up moment: They organized one event, got orders and sold for 9 millions in one day!

An event changed their world. Wow!

Buying process and buyers concerns and questions is a barrier.

Solutions?

Free trial —> study the bottle necks in the funnel. Funnels are more vendor centric than customer centric. You are asking your customer to do something in YOUR sales process. It should be other way around.

The Buyers Journey

Pick your partner from the station 30 min early
Spend time in the clothing store, just browsing
Sales person follows you
You test a sweater. Sales person interrupts you.
You don’t like it.

But on the other hand:

You enter the store in need to find something to wear quickly
No sales person talks to you
You don’t like it.

What do we want to to in sales process depends on the situation and no process is the same!

Awareness —> Consideration —> Purchase

Sales often handle the leads as they all were already in the purchasing phase.

But instead leads are as follows:

Awareness: 80%
Consideration: 15%
Purchase: 5%

In awareness phase: do not SELL! Create problem, pain, discuss how other people are solving.

Find the triggers that affect your customers to find the problem.

Buyer Personeae

What objectives do they have
What their boss’ expects
What is important for them
How do they buy
What is their problem
What review sites they are following
Which competitors they will evaluate

Find out what is you buyers buying process! Ask them! Find out what they are doing while they go through your buying process.

Address all decision criteria with your marketing content.

Adding human touch to your sales process makes the costs to explode.

Find the worst blockage point in your funnel. Remove friction and concerns OR motivate to go through the blockage point.

Cold calls int a Cold Outreach —> Invitation to something with value (for them!) Educational event, meet their peers, see data that is of value etc. —> Build relationship —> Build Trust

NOTE: This outlines the power of events AND importance of live events in building the sales pipe through trust and relationship.

Check Clearbit to enrich lead data in SalesForce.

Eliminate steps that have dependencies on other people in sales process!

The product is your sales person.

What is my time to WOW?

Mini WOW – a moment where your buyer likes what they see and continue
Full WOW – a moment where they want’t to buy your product

How to create WOW-moments in Lyyti for a new user?

Sample data
Event templates
Ready made communication plan
Ready made reports
Graphical reports
WE HAVE TO MAP THIS PROCESS!!

Create the easiest and shortest route to WOW and get high conversation rates. You need to get rid of the silos between sales, marketing, product and customer success and make the form the Growth Team.’

About expectation management

Since the next speaker talks about the hyper-growth, I thought to give some participant perspective about handling growth in an event.

I was attending last year SaaStr in San Francisco with huge expectations. My expectations were ruined by overselling the event. I will not join that one until I can be sure that I get what I paid for.

Sadly, same happened now in SaaStock. The Growth stage had way too little chairs and I actually missed a lot of content (that I paid for) due to overselling the event. Or at least the organizers should ask the participants to preselect their sessions and adjust the stages accordingly.

Managing hyper-growth

Interview by Jos White, General Partner, Notion Capital

Interviewed: Conor O’Loughlin, CEO and Co-founder, Glofox

How to manage the growth?

Glofox is business management software for gyms, jogastudios etc.

Deal size is around 4000USD, over 30 000 customers, US main market.

Small internal market makes you to search for global market since day one. SMB SaaS having a completely inbound channels for sales.

US customers are more visionary and future thinking, hence it is easier to sell remotely to the US market. At the beginning they supported US customers from Dublin, which was hard. Co-Founders now moving to LA, USA and hiring a COO in Dublin to run the local HQ.

Employer branding and success rates in recruitment become super important when you start growing your team. For key employees, it takes a year from the original idea or need to the moment you have a new person on board and producing.

Cross-fertilization of culture between countries.

How to generate customers on autopilot for 2018 & beyond

Eric Siu

CEO, Single Grain

Evergreen traffic engine

Website from 0 to 2M visitors in a month.

Problem is that we rely on paid adds. It’s not creative and does not separate us from others. Five steps on how to create an evergreen website traffic engine.

Step #1

Why does Wikipedia ranks so well?

Word count is growing rapidly.

(Actually I didn’t get the step one…)

Step #2

The content reusage workflow

If content is outdate, update it
If it is not relevant, re-write it

Step #3

Evergreen content brings visitors over and over again. So you are building on existing audience.

Step #4

Remember link building

Step #5

I didn’t get the point, to be honest…

Check Prive / Wheelio to get email converse rate higher.

The guy spoke so quickly (American) and run through the slides that it was actually really hard to follow and get the points.

Take home message: content that you created once, can be used many many times by updating it and redelivering it.

How to be a marketing opportunist

Kieran Flanagan

VP of Marketing, HubSpot

Growth is not linear

What are your growth ceilings? How to break through them?

It’s first and foremost about the people. Leader’s main job is to hire and retain talented people. And best teams are diverse teams. Problems are diverse!

When you hire: Team Values, Core Skills, Technical Skills

Tactic: use LinkedIn Recruiter

Provide remote work culture!

Setting up people for success matters (a lot).

Metrics to success should be same to all teams that contribute to the effort. And people should form cross-team teams in order to reach the goals. Full stack dream team.

Canva example: internal start ups with ”funding” aka resources.

Five key reasons why we grew 1000% YoY

Gideon Pridor

VP Marketing, TravelPerk

Three key reasons for growth

Agressive targeting: start narrow, then expand
Extreme focus: Do less, don’t go for quick wins
Early Outbound: Start earlier than later

Tight definition of targets

Tight MQL definition
Focus on maximizing profit per customer
You can always sell higher than you think!

”Outbound is making a huge comeback” – but with more sophisticated way using data, social selling, etc.”

Why focus on outbound if you have inbound?

How did they do that?

Note: it seems that every marketer have their own podcast today…

The evolution of our customer relationships: How we acquired, nurtured and grew our customer base to 15,000 with no marketing, sales or funding

Bridget Harris

CEO, YouCanBook.me

Bootstrapped, 3M€ ARR this year, 15 people

They had exactly the same strategy as Lyyti: serve all customers, go for quick wins 🙂

MVP eight years ago was just like Lyyti 🙂

Free users are not customers! Your free tool is a different product. Free users are your marketing list.

Complicated pricing confuses also the company itself.

It was great to hear another story about bootstrapped company and it was so similar to ours in Lyyti. Our problems, faults and mistakes are not unique.

Problems in event executing

In the afternoon unfortunately the problems in running the event continued. They have an app for the schedule and you really need the schedule, since there is a lot of good content available.

But the app (which was recommended to be downloaded) gave us frequently wrong information about the schedule and hence we ended up sitting in wrong places in wrong time.

I mean, if I buy a red Volkswagen and get a green Ford, four weeks late, I will return the product. With events that is impossible but failing to deliver affects the purchasing decision for the next year. What I also don’t like is that the organizer retweets your positive feedback in Twitter but ignores the complaints. Come on, it’s customer feedback trying to help you get better!

What bothers me also, that the organizers didn’t communicate anything about the changes via the app or in Twitter.

Another issue that actually degreases the value of the presentations, is that each session is about 20 minutes, with no breaks in between. Hence the host needs to hurry people to sit down and speakers need to literally run through their presentations – usually missing the last slides. Rather 30% less speakers and 10 minutes extra to all keynotes. And funnily, on some stages the keynotes were running 10 minutes AHEAD of the schedule. So, as you thought to arrive for a good piece of information, the speaker was already ending the presentation…

How Datadog became one of the fastest growing SaaS businesses

Discussion between Olivier Pomel CEO, Datadog and Shardul Shah Partner, Index Ventures

I was actually not going to join this session, but since the app failed with the schedule third time in a row, I ended up sitting here.

Decide your pricing philosophy – are you going to be the premium vendor or price disruptor. That defines your packaging.

Find a pricing model that suites your customers: number of users, amount of activities etc. How to grow with customers if you don’t charge per user?

Key lessons about moving from single product to multi product company?

Hardest thing was to know, which advice to listen and to find your own way after all.

Not much to learn from this keynote…

Be a data-driver: Scaling analytics to fuel hyper-growth

Ernesto Ongaro

Sales Engineer, Looker

Data should be available to everybody in the company, not just C-level.

Breadth vs Depth —> rather get the big picture than dive really deep in a small operation.

First build a lasting data culture and then optimize specific process.

At the end of the first day we had a chance to visit Hubspot HQ in Dublin and meet with the Customer Success Executive. That one hour was super valuable as we had a chance to benchmark our processes.

Hubspot

Customer Success team —> only goal to prevent churn

What do they do?

Sales person own the customer and gives it to CSM team.

Onboarders just onboard and give the customer to CSM

Renewal management team. Renewal manager serves the customer when renewing the deal.

My thoughts about our situation in Lyyti

We’ve been trusting too much to our automatic renewal.

What to do with long tail customers? Only reactive support.

Segment the customers. Who goes into long tail, who gets CST and who CSM

Revenue retention for metrics for CSM

CS vs. Product: internal NPS metrics inside the product, ”CS roadblocks” logged and went through with the product managers.

Day #2 17.10.2018

Massive scale, escape velocity: The secrets behind Slack’s success

Interview

Cal Henderson CTO, Slack

Philippe Botteri Partner, Accel

Personal note: now we have a true tech nerd on the stage. CTO of one of the biggest SaaS softwares is interviewed in shorts and short sleeved shirt. And it’s like +10 celsius outside…

Notes and learnings from the interview:

You can’t build the architecture for your biggest dreams. But when you grow, you need to work with your scalability, but infinite scalability is not your first target, when you launch your product. Resources are scarce and you have to prioritize.

If your tool is considered as a commodity (meaning, that it’s an essential part of the daily life – like tap water), you have to target 100% uptime. Nothing less is not acceptable.

How to on board people?

Early hires are the most important. They create the culture. You can’t the culture yourself, but the way you, founder, behave, sets the tone for the culture. Artifacts, rituals, are very important.

How to make sure the culture stays as you grow?

CEO have to be visible and constantly repeat the most important messages over and over again. If you get sick of your message, that’s the point where most of the people say that I have heard this maybe before.

Last tips for the founders?

Build users first – business will follow, if people love your product. Be clear on what problems you are trying to solve.

Cancer, hardship, and the f*ckery of being a founder

Patrick Campbell

CEO and Co-founder, Profitwell

”Founder fun”

Guy is a two time cancer survivor, which is a merit itself. In addition to this he’s running company.

Learnings:

When you found a company, don’t take part-time co-founders. Everybody have to be in 100%
Assume that expectations are 100% miss-aligned. Then talk about them.
Don’t put up with bull shit, since your time is limited. In other words: don’t work with jerks. Ever. You can also choose your friends accordingly.
Create ”If I die” -docs that tell what to do in case you, or some other key persons, are gone.

To read: Radical Candor

Five biggest mistakes in customer success

Dave Blake

CEO, ClientSuccess

Used to run Adobe’s customer success

Silos are bad thing from customers’ perspective

Implementing customer success as a ”Fix”

Do not use it as a bandage

Break the silos and create team around the customers with customer based KPI’s!

Everybody have to have empathy for the customer. Make all the leaders to live the life of a customer: search the website, read the contracts, use the products.

Customer success is not a part of the strategy. IT IS the strategy.

2. Letting your customer experience evolve organically

If you don’t run this, it will run you
80% CEO’s think they have superb service, 8% customers think the same

”We innovate by starting with the customer and working backwards.” Jeff Bezos.

3. Too much focus on churn prevention

Customer success is not churn preventers.

”The only thing a prevent defense does is prevent you from winning.” John Madden

Churn prevention is like a ER doctor trying to keep the patient alive. Customer success is more like a doctor in olympic training center trying to help the athlete to succeed.

Drive intense focus on your customers’ performance.

4. Not truly understanding your customers

It’s about the customer, not you.

Understand, evangelize & deliver to your customer’s definition of…

Your most unhappy customers are your greatest source of learning. – Bill Gates

5. Being fixated on the negatives

Front line CSM have a hard job. They are always on the front line with ”red accounts”, angry customers etc.
Negative Churn – double negative for growth. Shift the paradigm towards the positive. Celebrate growth and renewals as much as new customers. Focus on growth. Understand your happiest customers. Understand why your customers stay. CELEBRATE SUCCESS!

The biggest growth hack of the year: Eliminating time wasted in meetings

Jessica Weisz

COO, Soapbox

Growth hack -> have better meetings

45% of meetings: no clear decision is made

What fixes bad meetings? Mindset and manners

Mindset

Rules don’t fix the problem. Be a leader and example – behave as you wish others to behave.

Meetings are not a time to chill. Coffee break is for that. Meetings are work.

Receive something from each meeting.

Manners

Most productive meetings have less than 8 people

45% of the people join too much meetings

Decline more meetings, if there is no agenda, it will be waste of your time or some other person can be there instead of you.

Speak directly in meetings.

Give feedback in the meetings. Hold people accountable in front of their peers.

Read:

Give and Take
Servant Leadership

Positioning in crowded markets: How to make any offering obviously awesome

April Dunford

Founder, Rocket Launch Marketing

Today almost 7000 marketing softwares in the market. How to stand out?

Market category

First: pick your right market category. In which business are you? Can we let our customers to decide that? No. They are bad in it.

Our positioning should advantage our unique strengths. Only some features are truly differentiating. Ask from your customers, what are those. That is your secret sauce!

Your best category puts the strengths at the center.

Trends

Market vs. Trends.

CRM vs. AI

CRM is a market category, AI is a trend that is not category specific.

If you are on the right market and benefiting from the right trend, you are well positioned.

Summary

How to conquer Europe: Strategy for scaling B2B SaaS

Olli Nokso-Koivisto

CEO, LeadDesk

Hey, a Finnish SaaS company on stage!!

LeadDesk is number one in contact center solution. High growth (35%) with 20% profit.

Timeline

About the same countries as Lyyti: first Sweden, then Germany, Netherlands, Norway etc. They conquered the beer drinking Europe 🙂

Startup strategy

Learnings

People:

Nothing build culture like recruitments
Get in-house recruitment expertise ASAP! Outsourced agencies, specially abroad lead to big turnover. Get the on boarding right!
Customers. Early adopters love foreigners, but that’s about it. Get local people to talk with local people.
Language matters! Local culture matters.

Product

There is a lot of features in the product, that work in one market, but create unhappiness in the other market. Like tipping in the restaurant: some countries needs that and some countries hate it.
Compliance as a Service: product is adjusted to the local market, laws and expectations.
Different countries will be in different stages. Some country is scaling, some country is a startup. They need different kind of management and steering and also from the product.

Growth

Initial idea was free trials and online sales. —> lot of churn. Company failed to understand that what kind of a deal you are doing initially. Average price is 20k€ ARR and nobody wanted to buy it online.
”Land and expand” -strategy
Get advocate customers from the foreign markets!

At the end: some tips from Olli for reading.

Interrogating the good and bad when it comes to SaaS pricing strategy

Carrie Osman, Founder and CEO, Cruxy and Company

”Price is what you pay. Value is what you get.”

Who are my customers?

How do they calculate the ROI in their business?

Do you talk with their language, when speaking about the value?

What are the features that they truly value?

Are you pricing those features accordingly?

CFO’s will make cost based pricing.

CMO’s will give everything away for free.

How are you going to extract value

retention
upselling
acquisition

Once you anchored your price point, it will be very hard to change that. And market will judge you.

Retention

Appcues

Underpriced – over delivering. Change in the pricing model with zero lost customers. They ”grandfathered” their customers, didn’t force to upgrade, but offered more value with higher price.

Upselling

Mention

Know what your highest value customers want
Pricing per user was not for them, because the value was in number alerts, not in the number of users. Where the value of Lyyti’s customers lie? Is it really at the number of users

Acquisition

Mealime

Market was free app-market, but the app was paid. They reached the ceiling of potential customers willing to pay.
They made a big change in the pricing in 2016 and lost a lot of the MRR for a short while.
No idea how they actually made the money after…

What next?

Where is the value and for whom? Write it
Are you trying to go against the market?
Execute like f**k.

Unleash your superpower: How to build a killer brand in B2B SaaS

Edward Ford, Growth Marketer, Advance B2B

Hey, a Finnish company on stage again! Cool. Torilla tavataan – let’s meet at the market place. Well, this joke opens up only to Finns… But actually we were quite many at the seminar. We are actually having a SaaS scene in Finland!

”Conversational marketing”

No more forms -lead generation. How does this work?

Hubspot – creator of inbound marketing

Helping the world to go inbound.

Now they speak only about growth. ”Help of millions or organizations to grow better.”

Do we need to create a new category to build a killer brand? No…

Terminus

Brand is the punainen lanka of your customer story

I hope, if you read all the way here, you got some out of these notes. Like said, they are made for myself, but if anyone gets some benefit out of the, I’m just happy to share.

After four days, we were almost exhausted. But even at the airport the spirit went up again as we met our colleagues from Loyalistic and Seidat.

On the way home, the feeling was like this:

No, there is only one thing left.

EXECUTION…

Nordic Business Forum 2018 – recap of day 2

Posted on 27.9.2018 by Petri Hollmén

It was my first year that I didn’t join the parties during the evening. It seems I’m getting old. But good thing about getting old is that you wake up early and are ready for the day with full energy!

At the very beginning I met friends from up north, Miika from Flatlight Film and we changed few words and – sorry Pep – missed the start of the day two.

AIVA – artificial artist

Session started with a song called Midnight Sun, which was created by artificial intelligence and Pierre Barreau.

It was my first time that I actually listened to artificial intelligence made music. Sounded like human made.

Don Tapscott – Winning in the Second Era of the Internet

Writer of 16 books. Wow! Some books about the blockchain. And Digital Economy already in 1994. Have to be a real visionary 🙂

Speaker is a grandpa-lookin like a guy. Started the keynote with ”Hyvää huomenta” and got applause. Made some jokes about Obama. Didn’t get applause.

”Within 50 years Helsinki will have most cars autonomous.” (Actually, I hope that much quicker…)

Now: the internet of information. —> Internet of value —> we need the Middlman to handle transactions and to create trust. 10 years ago some problems arose. Lehman Brothers crashed and it affected the trust. Middleman lost part of the trust.

Cross border email payments is as crazy thought as paying for cross border money transaction in the future.

Bitcoin and Toshi Nakamoto solved the double spend problem.

Blockchain is the second era of internet. It created trust between people.

Miners have 20-50 times more computing power globally than Google. In order to hack the blockchain, you need to hack every single block in blockchain. It’s like making chicken nugget back to chicken again 😉 Almost impossible…

Rethinking the financial services industry

This is a funny machine, which is our banking system.

Combination of Blockchain and AI can replace everything in this picture.

ICO – Initial Coin Offering

Crowdfunding campaign in blockchain
25% of the value of VC money

The Theory of the firm (by Nobel Prize winner)

Transaction costs in:

Search
Coordination
Contracting
Establishing trust

With Blockchain all these transaction costs will disappear.

Eight open networked enterprise business models

Cooperatives – creating a true sharing economy. Uber, without any company: Suber.
The Rights Creators – such as Music Industry. Internet destroyed the rest of the value for musicians. In blockchain the song has a bank account and the lawyer inside the song.
The Re-Intermediators – such as Western Union. Creating new value in the middle. Now you pay 10% and takes 7 days to transfer. Now it goes in seconds and with 2% costs.
The Blockchain new supply chain – trade finance is done in blockchain. It becomes a cognitive network, which is learning. Such as Sweetbridge.com.
Animating the Physical World – ”Fence talks to sprinklers – that is the first line of defense against burglars. IoT need ledgers.
The Platform Builders – Metronome for example
The Data Partners – OLD: Digital Feudalism. You create the data, but someone else owns it. Privacy is freedom. NEW: Citizen owned data. Big question for Google and Facebook.
The New Public Sector -1) Better, cheaper government (finally). 2) Strengthening of our democratic institutions. Now a crisis of legitimacy. E-voting, Transparency, Accountability to citizens through smart contracts. New platforms for citizen engagement. 3) Reinventing Central Banks. Lighter touch on regulation.

”What an amazing time to be alive.”

Leadership for Transformation

How does my company / country find leadership for change?

Starlings murmuring in the sky: there is no leader, but there is leadership. There is a code in their DNA and rules. Like ”Hit nobody and don’t crash.”

”Trust is the expectation that the other party will act with integrity.”

This keynote left me with more questions than answers. This topic needs so much more studying and learning in order to understand this.

What to change? Well… I know way too little in order to make any concrete action. So: study and learn more.

Andrew McAfee – Why We’re Still Underestimating Artificial Intelligence

Minds and Machines – How to share the work between our minds and machines?

Playing games is important – for humans and AI as well. Why?

We try to teach AI to be good in games created by people. When machine starts winning, something big is happening. 1997 machine won Garry Kasparov in chess. Chess is basically a search (algorithm) problem.
Game of Go. Purest strategy game human have ever created. 2014 computers were bad in it. Why? Nobody on the planet can tell you how to play Go. Even team of programmers can’t program a machine to play Go, because a good player can’t tell why some moves were made.
”We know more than we can tell.” – Michael Polanyi – ”Polanyi’s paradox”
March 2016 Google’s Alpha Go AI beats GO master Lee Se-dol. Famous move 37. Commentators thought that there is a bug in the code.
2015 Humans beat computer in poker match. Game has hidden information. 2017 technology won.

AI has learned it’s own way to do things. It’s not handicapped anymore by the rules programmed by humans.

AI has learned to diagnose pneumonia better than best doctors.

AI could help us with cooling the planet.

AI in science and for example fermentation.

Zymergen. Technology, biology, automation, computation
AI finds the hidden layers in data
Results: old method 7% improvement in 10 years. New method: 15% improvement in 1 year. 15 suggested genome edits. 2,4x net margin improvement: 3 on pathway – 3 explainable – 6 not explainable – 3 ”no known function”

Will we still need minds?

We have a lot of cognitive biases (check for ex. Wikipedia)

We think yes because….

Common sense (example for example Uber prising during Sydney siege)
Asking questions ”Computers are useless, they can only give answers.” Pablo Picasso
Social Skills
Partnering with machines

In the future:

Machines open up new territory
Minds and machines explore it together

Keynote was interesting and concrete. I liked it.

What to change? Well, my attitude towards the AI. It’s not bad, it enables a lot and I, as a leader, should know a lot more about it. So, study again more!

END OF PART ONE, DAY TWO

Niklas Zennström – A Conversation on AI, Technology and Scaling from Europe

Co-founder of Skype, which used to work before Microsoft bought it. Interview with Timo Rein. To start with, my attitude towards interviews, fireside chats and panel discussions in this level of event is slightly negative. I think that when a person is left alone on the stage for 45 minutes, you are able to create so much more energy and really dive deep into certain topic. But let’s see….

T: Niklas, how did you do your success?
N: It was mainly luck.

T: What drives you?
N: When you can make an impact, you want to make more impact. It’s a feedback loop that feeds itself.

N: After selling Skype, it was clear to me that I will not retire. Now one of my ambitions is the Baltic Sea. I’d like to improve the situation of the sea.

T: About AI… what’s changed to enable the evolution of AI?
N: Dotcom crash happened. That wiped out tech from Europe. Founders got burned and lost money. We had to rebuild whole thing. Today we have several tech cities around the Europe. Lot of smart graduates want’s to get into tech. And students want to be entrepreneurs. We also want to build bigger, global companies. Supercell, Spotify etc. proved that it can be done. We made so many mistakes, but all those mistakes became learnings. There is more experience around. Today almost 50% of successful founders are investors. You can make money by investing. Firms are scaling up and even pension funds are investing. Non-tech corporations are getting involved in tech, because there’s digital revolution going on. That ecosystem is now working and creating successes. This year many tech companies in Europe went public with big valuation. Scale is getting bigger. This is also encouraging scientists getting out from the labs.

T: What do we need more to keep this going on?
N: Talent. Talented people into companies. Not only engineers. Talent is the shortage. Capital is flooding in into ecosystem. Recruitment is the biggest constraint. Diversity is also a problem. Most engineers are men. Founders are men.

T: How do you spot opportunities? How can we learn that?
N: Try to look things from different angles. Try to think what things could be. Most likely outcome is failure, but you needs to be comfortable with it, because that is the way to learn. Kazaa was a failure, but without it we wouldn’t have a chance to found Skype. Build a culture of trying and failing.

T: Try and try and try?
N: Naivism is really important. You have to think like 5-year old. You have to try things almost foolishly.

T: Growing company goes further from the customer and their pain. How to avoid that?
N: Culture, where everybody in the company understands the customer. Everybody does customer service or takes part in user testings.

T: Can one person make this change in the organization?
N: It’s up to the culture of the company. CEO’s should think how do you encourage the challengers in your own company. Encourage people to destroy your own business. Don’t fall in love with your legacy technology.

T: You see a lot of new tech. What’s going to change the world?
A combination of different types of technologies. Tech build on different tech stacks. Today we use Amazon web services, open source etc. so we don’t need to concentrate on the basic technology. AI is machine learning, which is learning from big data set. Today we see lots of implementation of machine learning. IoT is not exiting by itself, but together with other technology, it is very important. Everything can be connected and fed to machine learning system. This is maybe not going to disrupt your business, but it is going to improve it a lot.

T: AI is not a hype?
N: It’s going through the hype curve, like every new technology. When it’s not mature, it falls and starts to grow again in more mature way. Singularity is quite far away, but it’s not science fiction. Question is when, not if. So much data is being collected today and it’s also scary. All of us use some kind of AI algorithms every day. We are In it, but it is now optimization.

T: You are a channel for the future. What is going to be in 3-5 years?
N: It’s too close. 3 years is in a roadmap. Let’s talk about 10 years. No one knows, to be honest. Prediction is hard. There are discussion if AI will take away jobs. We don’t know. High likelihood is that autonomous vehicles will be there. Today we have some of them. Finnish winter is hard for them. Finns are better drivers. (Applause from the audience. It’s so easy to do that: speak about Finnish rally drivers or hockey players.) There’s 3 million truck drivers in US. It’s possible, that they are out of job in the future. Automation is going to replace jobs. Technology has alway done that. Farming, industrial revolution etc. But other jobs come as old goes away. Tech might make it faster and that makes people nervous. Most jobs that will be replaces are really manual. Basic accounting is not really a good job in the future. Manufacturing, basic law etc. are not good ones in the future.

N: Back in the 70’s there was a lot of optimism, but now it’s different. We have to fix the global warming, or the future is not nice. We still should be optimistic about it and entrepreneurs are part of the problem solving. There is more and more founders the found companies with positive world impact

What to change? I’m not sure, if I actually learned anything new. Nice conversation, anyway.

Sheila Heen – Difficult Conversations – How to Discuss What Matters Most

Talking about blame and accountability.

When you have conflict in your team, you will be sympathetic on the other side. But both sides contribute to the conflict. Conflict can rip the whole organization apart.

This is blaming culture. It makes collaboration hard, innovation hard and it raises risk. It has impact on trust and morale and you will loose your talent. Information flow stops. Problems get bigger. Decision-making gets hard.

It’s a disaster. So, don’t blame people… but there is couple of problems, since humans are wired to blame. And if we get rid of blame, we loose accountability.

Lack of accountability. It makes collaboration hard, innovation hard and it raises risk. It has impact on trust and morale and you will loose your talent. Information flow stops. Problems get bigger. Decision-making gets hard.

This is the dilemma. How to know what works and what not? Don’t ignore blame, but channel the energy differently.

Blame —> whose fault? Assumptions. What punishment? Purpose. We have to change both sides of this equation.

Joint contribution —> purpose: improve together.

Whose contribution do you see first?

Absorber (me)
Shifter (others)

Absorber get’s tired after a while to always carry the responsibility.

Common hard-to-see contributions

Avoiding until now
Being unapproachable
Using a channel that doesn’t get through
Dominating conversation
Meeting after meeting they talk about you

Sometimes your coping strategy produces the behavior that you hate in the other person.

Best practices?

What to change? Well, I have to see both sides in arguments…

Steven Kotler – Climbing Mount Bold: How Companies Can Level-Up Their Game Like Never Before with Accelerating Technology and the Power of the Crowd

Impossible has a formula

Moore’s law is not slowing down! In five years a laptop will have more computing power than human brains. This works with all exponential techs.

These technologies are overlapping and they are completing each other. Ellie: worlds first AI psychologist. Soldiers (for example) like more speaking to AI than to a real person and her diagnosis is 80% more precise than a doctor’s one.

Just Add Smartness Economy

Building Organizations for Speed and Scale

New Biz models: crowd-economy, platform economics, DAO’s etc.

Extreme innovation is no longer optional

The Average Life Expectancy of a Fortune 500 Company

Six D’s of exponential growth

Digitalization
Deception
Disruption
Demonetization
Dematerialization
Democratization

Ask yourself: how my organization is going to get involved.

The third industrial revolution

3D printing
The Bionic Man, Age 9

User friendly interfaces are coming to all technologies.

Extending Human Capability: An Exponential Mindset

Appetite for disruption
Massively transformative purpose

Innovation requires isolation

Culture —> Subculture
Nature —> Niche Creation
Organizations —> Skunk works

Flow: an optional state of consciousness

The high flow advantage: speed & scale

Crows powered tools

”We are the ones we’ve been waiting for.” Alice Walker

Keynote was interesting, but didn’t go deep into any subject. Very superficial in many ways. I hoped for more concrete advise and ideas. Title was, however, ”How Companies Can Level-Up Their Game Like Never Before”. I got some ideas on how to leverage on the crowd powered tools, but that’s it…

What to change? I’d like to test some of the crowd powered tools. like inceptive competitions to create the best participant app!

A Moderated Conversation with President Barack Obama in discussion with Niklas Zennström

For the first time I was waiting in the line to be among the first in the seminar hall. Miracles happen. For other speakers the big screen has been quite enough. But this speaker is mr. Barack Obama. I need to see him live – not on a screen. Again an interview, which is not my favourite way of doing these, but let’s see how Obama’s charisma work in an interview.

N = Niklas Zensström, B = Barack Obama

N: Let’s talk about basketball.

B: Great! Participating in sport teaches you important lessons. If you work, you’ll get better. Effort you put in will determine what you get out. It teaches you resilience. It teaches you putting the mission of the team ahead of your own goals. Those are important lessons. In the USA one of the greatest thing in sports has been involving women in sports. They become more confident. Well, sports made in my knees a bit sore…

N: If I look at the world, it seems that we are in a storm. We have climate change, populism etc. And at the same time, it seems leaders are more short term oriented. Business leaders look only short term benefits. World is going through a paradigm shift. As a society, how can we change this? Start thinking long term?

B: I’ll talk about these larger terms. Globalization, technology have all shrunk the planet. Changes taking place are as profound as in previous big turmoils. But now they are faster. Whenever you have great changes, it creates enormous opportunities. Now you have global market that can bring wealth. But if you only an ordinary person, suddenly you find that demands are less valuable for you.

Leaps in productivity also leads to inequality. Absolute wealth is not only important thing. In advanced economies, a lot thinks that they have been left behind. There is a strong impulse either try to stop change or fight against it. Politics look backwards, not forwards. There are people who are afraid of technology. When you get a big gap, that’s when you get into trouble. We need to reorganize ourselves. Part of this solution is going to be business recognizing opportunities. One legitimate criticism is that leaders don’t think enough how the people who were left behind, are been taking care of.

Unfortunately now, the way how voters get political information makes us think only short term. This makes us to think about reactions in social media etc.

Best thing in liberal market based democracies is that we can debate freely. Dialog takes place. It has constitutional relevance. Partly because of the problems described earlier, people turn into strong men who say ”follow me”.

We have to cultivate the institutions that allow debate and dialog to happen. Such as free press. The platform is all based on these rules and institutions.

N: You mentioned technology. Founders wan’t to create companies with positive impact on the world. They need to hire best talent. Millenials want to buy fair trade products, environmentally friendly products. But because tech gets more powerful, I think we need to have conversations about the future. AI can be good, but also negative. If we don’t have these conversations now, we will have problems. With climate change we already lost 10 years. How could leaders encage into discussions and encourage innovation and make sure the society is safe in the future.

B: Governments are slow. They are under resourced. Take AI. As a president I put together a team to solve how do ew think about these issues. Good news is that it is possible to identify these problems. But, administration is not working on these at the moment. It requires also public conversation that is not happening. You cant separate public and business environment.

Take Facebook: I believe that power to connect people is valuable and positive. But is also true that those systems were built in isolation. Oh, we’ve created oh system that facilitates hate speak, for example. This is where business leaders should always engage into discussion. Some businesses try to avoid government as long as they can. But they need to engage.

N: In FInland and in Estonia business people sit down with politicians and have a coffee…

B: Change happens from the bottom. I do think that there is a reason why Finland and Norway, Singapore is able to solve problems in more efficient way. Social cohesion comes from the smaller scale.

Oceans are big problem. You can have Finland, Sweden and Norway to agree, but that doesn’t help, if China, Russia and Brazil does what they want.

We have to create local solutions to local problems but we have to have a web that binds these together.

Finding those local units that can create models, that we can scale up. But then we have to give more power to international organizations.

N: There is also a lot of good things happening as well. Way fever people in extreme poverty etc. Are these movements going to continue?

B: I tend to be optimistic. History have been generally positive, but it’s not a straight line. We take two steps forward and then one back. We had renessaince, dark ages, WWII.

I often tell young people that if you had to choose a moment in the history when to be born, you should choose now. World is better educated, wealthier etc. than ever.

How people understand their lives, is socially dependent. It depends on who sits next to you. Poorest American now is wealthier than richest in the 17th century. But this person in 17th century felt rich.

Positives have to be harnessed by ultimately the state. Relatively speaking Finland has lowest level inequality. Poorest child in Finland can go to best school in the world, for free. Finland decided to make investment on this. This is smart policy. Takes creates higher happiness to everybody.

As positive as things are, people have to feel that they are happy. Migration has caused controversy and lot of it is economically derived. I have a phone in a village in Namibia and I can see how people in Sweden live. I could get a training and good life there. News are out. Some people are living much better than others. People in poorer countries want what you have. But that is not sustainable way to live for everybody on the globe.

N: Let’s talk about your foundation. You are doing excellent job with working with democracies. How do you train future leaders?

B: If you empower 23-25 year olds and take them seriously. We tell them to start listening the people you wan’t to lead. In every country I saw this energy of these young people. Who instantly believed that they can mix cultures.

(At this point Obamas answer was rather complicated and I lost it… then the battery of my Mac ran out and I had to run for the train…)

What did I get from this? To be honest: nothing much. I respect Mr. Obama but I would’ve loved to see him speak about some important issue – alone on the stage. And I don’t know how much his staff decides what Mr. Zennström could ask, but I think questions could’ve been much more to todays burning topics. Now we heard discussion about empowering young leaders. OK, it’s important, but not really interesting to listen.

Nordic Business Forum 2018 – day 1 recap

Posted on 27.9.2018 by Petri Hollmén

Usually I write in Finnish, but since all the content is in English, I find it easier to make notes on the fly with the same language. Hence English.

This post is about the biggest business event in Finland – Nordic Business Forum. It gathers over 7500 business people for two days in Helsinki and boasts with a world class line up of keynote speakers. I have joined the event several times and every time I try to learn something new.

But learning is not enough. I think that attending this kind of an event should also lead to new ways to do business. If you want to do that, you need to take your learnings into action and change the way you act. This is why I have tried, in addition to making notes of each keynote, write few thoughts of how I’m going to change my behavior or the way I do things.

Post is published as I made the notes during the event. So I hope you bare with my spelling or grammar mistakes…

Start of the Day #1

Pep Rosenfeld, Moderator

Lively guy. GDPR and Trump jokes were good. But why a GDPR joke? Well, he got the audience warmed up for the first speaker and was not talking too much about himself. After all, event is never about the moderator, right?

Aswath Damodaran – Laws of Valuation: Revealing the Myths and Misconceptions (STRATEGY)

”Old young companies” like Tesla and Uber are like teenagers. They behave sometimes really stupidly. They don’t think about the consequences.

Tech companies don’t have long mature period, because disruptions are always around the corner. This happened to Yahoo, Nokia, BlackBerry.

Corporate finance across the life cycle

Find the mix of debt and equity!
Mix of these decisions changes between the life stages
You should give dividends only if you don’t find better investment target within your own business.

Companies, act according to your age and stage in the lifecycle!

You should understand your stage and age and use right finance tools accordingly. Cash burn is not a bug, it is a feature. If you are young. (Personal note: it’s funny how companies spending is similar to humans: as a child, you burn money, as a grown up you invest money to growth (your kids etc.) and as a senior citizen you start to pay dividends to yourself (spend the money you have earned during your adulthood…)

Start up: don’t borrow money to invest without purpose or to pay dividends
Mature companies: pay dividends!
Declining companies: new business plan don’t help..

At some point, when growing older, cash burn have to stop. (It’s actually like that with humans…)

Amazon is a disruption platform with an army, which can go into any business in the world. It will most likely not make money in that business, but all other players will loose a huge amount of money. It’s behaving like a young company with billions of money.

VALUE = STORY + NUMBERS

With young company: it’s only about the story. Better story can take you from 15B€ to 65B€ valuation.

What is the right CEO for:

young company: Steve the Storyteller

Growing company: Bob the builder

Mature company: Don the Defender

Declining company: Larry the Liquidator

This topic was really interesting, but was left with only one minute at the end of the keynote. Loved to hear more!

What to change? Keynote was a good reminder of doing right things at the right phase. I understood that instead of paying dividends in my own company, at this stage, we should seek more rigorously for growth opportunities. We are still in the growth phase.

James Hewitt – The Key to Sustainable High Performance (PEAK PERFORMANCE)

Winner of the speaking contest. Guy with a very strange cyborg hat on his head 🙂 It was used to measure stress and focus. Speaker knows a lot about cycling, which is always a good thing!

Knowledge work is endurance activity. What is the key to sustainable high performance?

We never rest, we rarely focus. We can’t always be ”ON”.

Apply effort in the right time and right place. Effort at the wrong time – and you don’t win! Follow your own rhythm. That brings sustainable performance.

Better result, similar effort:

Apply at the right time
Rest and recover
Find your rhythm

Rhythms in cognitive performance?

Peak – Valley – Rebound (early birds)
Rebound – Valley – Peak (Owls)

(Personal note: this topic was discussed few days ago in Helsingin Sanomat https://www.hs.fi/teknologia/art-2000005838301.html for subscribers only)

30% of the work could already be automated, 70% not: Collaboration, Creativity, Complex problem solving.

Humans should not try to work like machines. Optimise, don’t maximize. Are you aware of your rhythms? Do your work accordingly?

Plan: Cognitive gears: Rest, Menial Tasks, Focus. We are stuck with menial tasks, into the middle gear.

What can we do? Don’t make perfect an enemy of good enough.

Schedule high gear during peak: 25 min on, 5 min off. Sleep 7-9 hours per night. Create boundaries for switching tasks. Starting the day with an email is starting with someone else’s schedule.

Wellbeing is strategic importance.

What to change? James is a great performer and I specially like his background in cycling. It makes everybody so much more professional 🙂

In the future, I try to make all important things in the morning and forget all notifications and menial tasks during those early hours. Then I’ll give myself a permission to sleep, if I’m tired, eat, if I’m hungry and work when I’m in my most productive mood. I try to follow my own personal rhythm more.

Susan Cain – Quiet: How to Harness the Strengths of Introverts to Change How We Work, Lead, and Innovate

Is the ideal leader bold, alpha & gregarious? The ideal thinker?

How do you feal after two hours at a fun party? Does your battery get’s empty or reloaded?

Introverts and extroverts are wired differently
Extroverts nervous system reacts less to signals

(Personal note: It’s not a party, if it lasts only two hours, c’mon!! Well, it seams that I’m quite extrovert.)

Extroverts do fine, when the background noise is loud. And introverts vice versa. There is no ”one side fits all” work place.

My note: teams consists of different types of people and usually teams sit together…

60% introverts and 40% extroverts in the audience according to the ”raise your hand” -test.

Successful companies have Yin & Yang -founders: introvert and extrovert. For example the Apple. (Personal note: I think we have pretty much the same thing, although Rami also knows how to party…)

We are naturally so social, that we pick up each other ideas. If you really wan’t to learn, what is truly you, you have to spend time alone. A lot.

3 people usually takes care of 70% of talking in a large meeting. So should we have meetings at all?

Introverts: speak early! If you wait too long, you drift aside.
Introverts: don’t curb your enthusiasm! Extroverts, you can curb yours a little.
Extroverts: engage introverts 1-on-1 and give them advance notice to prep.

Good to great -results:

All super successful companies were led by a CEO, who were considered with introvert features (modest, soft spoken etc.)

Letter of thanks: leader of Campbell Soup wrote 13 000 thank you letters to outstanding employees!

What to do?

Enter, Exit and Return to your comfort zone
Win your fear by exposing yourself to it – but in small steps and portions
Groom an ”unlikely” leader
Find role models who are like you
Know what is in your suitcase – metaphor for knowing what is important for you. Share it with others.

What to change? I’ll speak less in the beginning of the meetings and give more space to introverts and try to engage them more.

END OF SESSION ONE, DAY ONE

Second session was started by a deaf musician. We’ve seen this before in NBF many times: first this person is on a video (this time in Talent America) and the she appears suddenly on stage – live. For me it was a big surprise how well a deaf person can sing. How? Unbelievable.

Gary Hamel – Building an “Evolutionary Advantage” (STRATEGY)

Picture above tells about the scale of the event. Spot Gary on stage (next to the robot)

World, where change has changed!

Knowledge doubles every 18 months, they use even robots in brothels! Are we changing as fast as the world around us. World is more turbulent that we are resilient.

1998: Walmart against Amazon revenue rate 240:1 in 1998. Now Amazon 5 times more expensive. Tesla sold more luxury cars in Europe than Audi, BMW and Mercedes together.

What business we are in?

Big companies wan’t to get bigger in order to shape the politics and restrict new commerce. They do rather that than reimagine themselves.

People are not against the change! Our organizations and their structure is against change.

How do you build evolutionary advantage?

Cognitive. Future is surprisingly indifferent to our preferences. The top leaders usually fail to write off their own intellectual capital. In other words: they wan’t to stick with decisions they made 10 years ago. CEO’s need to be social architects. Be humble. Treat everything as a hypothesis.
Strategic. Generating new options —> you need to do this constantly. You need to create a lot of options to find the winner. Strategic planning is an oxymoron – there is no such thing. It’s like airplane food. Strategy is creating new options. Options have to come from all level of organization.
Political. Creating internal markets. It’s about how you allocate money. Internal politics (how do we fund businesses) is very inefficient. It is usually done based on the last years budget. Hence: we get more of the same, rich get richer, share the pain, loyalty is virtue (kill your darlings!), defend what’s yours! In most organizations there is only one buyer for new ideas. Gate keepers! It’s like Silicon Valley would have only one VC-company that would make all the decisions. IBM is trying to change this internally by using IBM ifundIT – an internal tool to get multiple opinions about new ideas.
Emotional. Finding a bigger dream. In most companies aspirations equals to resources. That ratio should be 10:1. Then you don’t improve, you invent. Apple understands how to touch your heart.”How do we make you feel?” When did your bank ask that from you?
Ideological. Re-imagining trade-offs. Manage = Control. Without it it’s going to be a chaos. But we’ve gone way to far in this. We have to re-invent control. Peer control is way better than fear. Values are better than rules.

I liked Hamels keynote (the content), but hated his way to yell with a very high note through the presentation.

What to change? I liked the idea that team chooses their colleagues. We do this already. But could team choose their own leaders as well? It’s an idea to explore. As long as I have the majority of shares, I shouldn’t worry about my position as CEO 🙂

Amy Cuddy – Presence: Bringing Your Boldest Self to Your Biggest Challenges

Confidence is a tool. Arrogance is a weapon.

If you are not present, you do not believe in your story. Especially important when selling. Words and body language needs to be in line. Presence liberates other people to be present. It tells that you can trust me.

Instead of concentrating to the outcome, concentrate on the process.

Tiny tweaks —> Big changes

Amy spent like 5 minutes to show different ”winner postures”. I think the audience got the point in two first pictures. Hence, she was in a hurry towards the end.

Keynote was OK and Amy is a good speaker. However, I would rather see this keynote at the ”Retoriikan kesäkoulu” or some other conference for better speaking and becoming a better presenter. And ending the presentation to a kind of a sidetrack, was confusing. I have a daughter and I think that girls (and boys) are important but giving hints of how girls upbringing in a business seminar was rather odd.

What to change? Well… this was maybe the least valuable presentation for me during the day one. I’m going to raise my hands also in the future whenever I win something. That’s for sure…

END OF SESSION TWO, DAY ONE

At this point there were still two keynotes left. But I decided to do what James Hewitt told us to do: go with your own rhythm. My bottom was sore from sitting and I needed to get out. I decided to head to Espoo’s Central Park with my friend Jussi and test his new e-MTB. Have to be honest, two hours in a dark forest with a super cool MTB was the highlight of the day.