entrepreneurial journey

Can you tell us a little bit about yourself and your entrepreneurial journey?

“I studied at Lund University and got engaged with a company called Famtidsfabriken back then which was the super-startup, the Spotify of the 90s. That was my first encounter with the startup world. My first company I started in Sweden was called Instadia, a web analytics business. It was built as a service and we grew it very fast with clients such as IKEA, H&M, TELE2 and SEB, and even big media publishers like Aftonbladet. It was sold to Omniture in the United States which was later acquired by Adobe.

“After that, I had some money but not my own business idea. Instead, I found a fantastic Swedish-Persian entrepreneur who had the vision of TV going online and he created the first adserver for online video. So we were the reason people hate online media because we were the ones introducing commercials before the video clip starts in Sweden. It was called Videoplaza, and it was a very hyped startup. I stopped working there around six years ago and created Smartclip, an online video network which was mostly about sales. There we tried to convince the big media agencies to move money from their TV budgets into online video advertising. In the end it was sold to Adconion in the US.

“Already at that time I was wondering that if I could sell this much advertising, how can I increase the supply more? And that was the time when the idea of Strossle was born. This is my fourth startup that I start/co-start and execute.”

the idea behind strossle

Can you explain a bit about Strossle?

“It is service that helps connect content providers with the right audienceWhat.. What we do is the result of the four major publisher trends that I have spotted.

1. Syndication. When you have a piece of content, for instance the rights of the Olympic Games you need to work with other companies in order to get the money back for what you payed for the rights, so you syndicate it to several companies. It is the same with an article, you might have to publish your article on several platforms in order to gain the money it costed you to produce it.
2. Automation. Lots of the editorial work is very manual and you can’t do anything about it. But with Strossle, we help automate publishing.
3. Data. If you have data about people who might be interested in your articles, you can present the right article for the right person. Today, very few companies have data other than Google and Facebook, which means that the publishers have very limited data about their audience.
4. Native advertising or editorial advertising.

“Based on these trends we asked: “what can we do?” So we created algorithms that can guess what you are interested in reading. Basically, when you read an article, underneath the article there are content recommendations. Here we feed it with algorithms understanding who you are, what you are reading, what you have read before, what is trending on social media and so on. The many different algorithms try to understand what is the next thing that you as an individual would like to read. That is the core of what we do, content recommendations.”

How do you acquire the data? How can you find out what I, the reader, am interested in?

“Today we work with more than 1000 different publishers such as Prisa in Spain and Stampen, Mittmedia, Bonnier and Egmont in Sweden. So we index and analyze every single piece of content that is being published in Sweden, a bit like Google, and try to decide what is the content about. So if you read, say, 20% sports, 20% culture, 30% business and so on we can do a profiling of you. Then we apply something called machine learning on top of that to understand what would be the logical next thing that you would like to read. We want to try to give you as good recommendations as possible in order for you to click.”

future plans and ambitions

Do you plan to extend your business more to other international markets?

“We are a bit more than three years old today, with 46 people in the team and operations in ten countries. Three weeks ago we launched in Italy. I have a very aggressive plan, to launch in two or three more markets this year. Our next markets are Germany, where we start after the summer and then Poland before the end of the year. We already added Hungary, Czech Republic and Slovakia. Next year I plan to enter another 5-7 markets.”

Where do you see the company in 5 years?

“It will be a global company and the biggest in the world in our field which we call audience development. We understand that the most important thing is content and try to understand how a visitor engages and interacts with it. We want to give visitors a better media experience. Today other platforms are doing the same thing, Facebook, Google etc. But we focus on the publisher universe, where the content is created.”

How do you see the competition in the field of audience development?

“Whatever you create there are always Americans who do similar things, and it doesn’t matter what you do. There are good because they have tons of money and exceptionally good management. What they lack though is adaption and speed, and that’s where I believe we can beat them. We also have a stronger product orientation. American competitors are good at packaging but maybe not the product itself. So we concentrate on speed, production and stronger product offer because you can never beat an American competitor with money.”

Apart from keeping up competitors, what has been the biggest challenge throughout your career?

“God, there are so many! I walk around everyday with constant pain (laughing). My biggest challenge in general is international expansion, to take a clever idea that you have in a local area and try to do it globally. That’s where I put all my attention and that is by far the biggest challenge for me.”

What advice would you give to new aspiring entrepreneurs?
“Think international from day one. Have sales from day one. It doesn’t matter how good your product is if you don’t have sales so focus on that in your organisation. Have a sales manager from day one, think about sales from day one.”

insights into entrepreneurial ecosystem in Öresund region and Stockholm

Strossle has its headquarters in Stockholm with offices in the Öresund region as well, in Malmö and Copenhagen. What do the different offices focus on?

“In our headquarters in Stockholm we have sales and business development, that’s because of the ecosystem in Stockholm. In Malmö, we have more than 20 people. This is where the magic happens: engineering, the machine learning team and the algorithm development team are located here. We moved these from Stockholm to Malmö as it was super hard to get developers there. They are scarce, expensive and the competence level is not as high. So we decided to move down to Malmö to have a better-skilled workforce, more of them and with a more appropriate salary level. In this area you don’t have the big companies that suck up hundreds of people at a time. It’s very crowded in Stockholm, the competition is smaller here.”

Do you see any differences between the two startup scenes?

“Stockholm is amazing, it’s exceptional in Europe, you have so many fantastic examples of successful startups. In the Öresund region, you have several great examples, not that many in Malmö but rather in Copenhagen, but they are pretty invisible. We need to have more great startups talking about themselves in the region.”

What do you think is the reason behind the invisibility?

“It is media coverage. Even though a newspaper can have an article on their first page about Spotify, I cannot see that happening about, say, Trustpilot, a startup from Copenhagen. It’s partly because of the mentality, we see it as either Danish or Swedish, it is not a regional thing at all. There are amazing entrepreneurs in this area  but they are not so visible.”

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Acquires semantic analytic startup Saplo

Saplo, a high profile semantic analytic startup, announced that it had been acquired by Strossle. Mattias Tyrberg, former CEO of Saplo will take over as CTO at Strossle. Saplo has a research heavy background, and got big international media clients, but never really got their business model to scale.

“We have known Saplo for a long time. They were a shining star in 2008 when they launched. They had already back then exceptional good tech within machine learning. By getting them onboard, we take a big step forward and create a solution that’s very competitive internationally” said Magnus Hultman, CEO of Strossle

The cost of the acquisition has not been disclosed, but according to breakit, it is both cash and stocks, in a 7 digit euro size .

“I have worked at three startups before all of which have been acquired up by Americans. One thing that I have learned from the americans is to expand aggressively. We are prepared to make acquisitions to achieve our goal. It matters of course that we have a good cashflow and can afford to aquire others. We have not even raised an A round, but have had revenue since start.” Magnus told breakit.

Rapid 20% monthly growth

But Strossle has not just acquired Saplo, they have also hit a growth stage and revealed some numbers – Magnus has shared that the startup currently sees an impressive 20% monthly growth. Already, a whooping 25% of all swedish media page visits comes thru them. They expect to reach a yearly revenue of € 5 million this year. Great job for a team that started only 2 years ago!

Sprinkle becomes Strossle

The name change has another background however: expansion plans.

“We will start to expand in North America now. We were in that process advised to not try to get Sprinkle trademarked there, as that would fail. You are never proud of having to change the name but it’s better to get it over with” says Magnus to breakit

The new name, Strossle, is a play of the swedish verb “strössla” – to sprinkle.

Transparency: We have used the service for over a year now, and are very happy to support it further.

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MILLIONS OF VISITORS

Sprinkle currently consists of a 13 people team, and its service is giving 155 million recommendations to 4.5 million unique visitors each week. They have also just started up in Norway where they have signed their first costumers.

“It is fantastic to see the response we get from our customers. We started just over a year ago, and now we have over 100 publishers signed with a fantastic 1% churn rate.” says Johan Unger, co-founder.

“We are very happy to see that big, content focused brands such as Red Bull, Disney and Gymgrossisten have started to use our services.”

They report that they have managed to get Gymgrossisten a x4 return in ad spend with their service and a great campaign.

“This is what we want to encourage more brands to do, we see a huge difference in campaign results when their content is entertaining, informative and up-to-date.”

It’s an interesting product, that you will see on this site soon as well – and with promising results to show so far. Sprinkle also has a new version of widgets in progress, that has resulted in even better numbers in trials.

The lead investor in the round will be Spintop Ventures, a Nordic investment company. Spintop has said they will invest in 15 Nordic tech companies from the newly launched Spintop II fund.

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A startup conference for investors

The conference, which is an evening and one full day, is limited to 70 participants. It’s focus is unlike most on the investors, and not the startups. This is noticeable in the participants – being mainly business angels from all over Scandinavia and venture capital firms from all over Europe and the US. Ten startups from the Nordics were invited to present their businesses to what was a high profile crowd. Many video transcribing services were also hired so as to help the participants who were not fluent in English, understand the discussions that were going on at the conference.

The aim of the event is twofold – to build relationships between investors in the Nordics, as well as being a good place for later stage startups to present themselves for further investments. The smaller size of the event achieves an intimate and open atmosphere.

Quality over Quantitiy

The attendees list included some of the biggest international venture capitalist firm in the startup community, including Accel Parterns, Balderton Capital, DFJ Esprit, Wellington Partners, and Early Bird Ventures, as well as most of the local Nordic firms including Creandum, North Zone, Open Ocean Capital, MOOR Capital. Northcap and Conor.

Besides this there were also a lot of business angels, including both those that are in the spotlight as well as those staying out of it. Hampus Jakobsson, Thomas Madsen-Mygdal, Göran Tollstam and Klaus Nyengaard, as well as others from all over the Nordics such as Henrik Torstensson and Erik Byrenius where present. You can view some of the featured guests here: here.

What do venture capitalists think about business angels

One of the highlights was a panel discussion with four venture capital firms present.

Participating where:

• Chrysanthos Chysanthou from Accel Partners – who invest in B2B SaaS, mainly series A rounds.
• Katja Bergman from MOOR Capital – Private investment firm from the Rovio founders. Only 6 investments so far, but because they are evergreen the feel no pressure to invest.
• Wayne Gibbins from Notion Capital – Who invest from € 0,75 M to € 50 M, but who have a sweetspot at Series A levels)
• Harry Briggs from Balderton Capital – A Europe focused VC firm, also mainly focusing on Series A rounds.

Some of the topics discussed where business angels, and how they looked at business angels roles in a startup after it has raised a series A or B round. There was no consensus, and some said that they like business angels to stay on board and provide further help and guidance, while in other circumstances early business angels cannot contribute efficiently any longer after a larger investment. It is really a focus on what is good for the startup and it’s product, that is the most important.

There we also talks about new ways to raise financing. Wayne said:

“We did B rounds with angels. We brought in startups to pitch a $ 10 million investment round, we took the lead, and filled up with angels.”

Something which he said worked remarkably well even with those sums involved.

Also, angel list and its new syndication focus was mentioned multiple times, as well as crowdfunding and the signals it sends as investment oppertunities

“We look a lot at crowd funding” said Harry

Business angels was a recurring topic in the VC panel session. That business angels can cause problems, especially if they have the wrong focus or attitude, was mentioned.

“High profile angels from big companies can be problematic” said Harry

What is meant was that they to easily have the ‘if you have a hammer, everything looks like a nail’ perspective – that they often think their own solutions to problem they have faced before are the right ones. Which can be a misleading thought, because it is hard to judge what effects were really effective afterwords, and too easy to overestimate ones own importance.

Investment in gaming

Nikolaj at Sunstone held an talk and open discussion about investing in the gaming sector. He talked about the evolvement the gaming scene has gone thru, from big blockbusters and triple A titles, to todays apps.

“Gaming is no longer video games. Old games had a half-life of 5 days. Now gaming companies like Supercell and Rovio have stayed on top for over 24 month.”

He things gaming startups should see themselves not as games, but rather as the new Hollywood and compare themselves to the movie industry and entertainment business.

“Gaming has the ability to be the new digital entertainment”

“The nordic game scene is great at making enjoyable games. But they are not that good at building IP and characters. Disney would not buy Supercell. The people coming out of Rovio are the best bets at making the change to create strong IP and characters in the region.”

Not everyone present agreed, saying that movie and music studies also have a lot of revenue from old titles and IPs, something the gaming sector has not. Not at the moment at least.

Lessons from investments

Apart from the startups presenting, there were keynotes, panels and a fireside chat with Tim Jackson from Lean Investments. A lot of wisdom and insights were shared. Thoughts of interest for anyone who is in a startup has had an early seed or angel investment, or a Series A.

Tim shared his thoughts on investments in general, and also about learning, both from his background as a journalist, entrepreneurs and now VC. Amongst other he emphasised that as a successful entrepreneur you easily give the wrong advice, because you think what you did was the right thing, even tho it might be mostly luck and hard work that made you succeesfull.

“it’s tempting to teach others what you did was the right thing. But you actually do not know. I believe in life long learning.” was one of his wisdoms.

He also talks about being an entrepreneurs, and how he sees that now compared to before, when he was just writing about entrepreneurship for The Economist and The Financial Times:

“it’s a lot harder then most people realise”

Also shared were some advice from his current position as venture capitalist to what they are looking for. His four must haves in a startup:

“A good team, traction related to the amount of money, a big enough market and barriers to entry for others. Those are the most important. It must be a long term sustainable business, so entry barriers for competitors are important”

When asked what he thinks about pitching and if he has any tips, he emphasised that it all depends on if it is an early startup looking for a first € 100 000 angel investment or if it is a € 1 – 10 000 000 VC investment they are looking for. Depending on that the pitches require very different things.

Interviewed by Joakim Jardenberg, who now is amongst other ‘Chief of Internet’ at the city of Helsingborg, the discussion also was about public services and entrepreneurship, as Tim is on the board of UKs GDS.

“We should definitely keep an eye, and help, the public sector going into the digital age”

What is the difference between VC firms

Another topic that was discussed during the day was that it is hard to tell different VC firms apart – how do they really differentiate.

“All of us VCs say we are entrepreneurial driven, and have a product focus. So in order to see who fits your needs, you should talk to us, and ask us how we do that.“

Nikolaj also mentioned that becoming more focused, such as he himself – investing only in Open Source or gaming startups – is another way to know who is the most relevant. And it also to makes their own live simpler – one of the VCs mentioned they have last year looked at over 900 cases, but only invested in 6 – making the ratio 150:1. Something other VCs agreed with, the ratio startup to investment is very high, and takes a lot of time and focus.

Startups showcase

The startups presenting where from all over the Nordics. They were not asked to pitch, but rather showcase their businesses and present themselves. Being in fundraising mode was not a requirement to be selected – however multiple of them were. Sometimes the best time to build a relationship with an investor is when you aren’t fundraising. Therefor the aim was to seek out interesting founders with businesses operating at different stages and in different industries.

Present where:

• Brisk.io – Hampus Jakobsson told about their ambition to make people love their CRM system.
• Barnebys – making arts, antiques and collections accessible for anyone
• Mapillary – Enabling street view anywhere with mobile technology.
• Clue – Ida, about how they aim to become a mobile technological alternative to the pill for fertile women worldwide
• Safello – Ludvig Öberg about their safe approach to Bitcoin and their new wallet, including their bitcoin ATM machine
• Conferize – Jon Schäffer about how they aim to be every conference online plattform and community.
• Kahoot! – about making a tool for educations, and how they have reached a massive 4 million unique players already!
• Tinitell – About making a wristphone that kids can use, including a GPS tracker. Got a lot of attention lately for their recent kickstarter.
• Sprinkle – making a widget for suggested reading for newspapers and magazine, achieving better returns then traditional ads.
• Airhelp – how they are helping people claim delayed airplane compensation, at a remarkable level!

All in all, a very good event, with a lot of interesting people and a good crowd. Benjamin Page, Michael Hoy, and Daniel Kipowski who organised it did a great job, and we are looking forward to next year already.

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