Lessons learned from 140+ startup investments

3 takeaways from the conversation with Kim Väisänen

1. Angel investing is an index game

Kim has made over 140 startup investments, and his biggest lesson is that success in angel investing comes from volume, not luck. You can’t pick a few startups and hope for the best; you need dozens of bets. “If you invest in three or four startups, you’ll lose your money,” he says. “You need tens of them, it’s an index game.”

2. Hope is not a strategy

Whether you’re running a startup or a public company, Kim’s advice is simple: act, don’t just analyze. Too many founders wait and hope things will get better instead of taking hard decisions.

3. Growth requires focus and courage to let go

Kim believes all success comes from focus. Companies fail not because they lack ideas, but because they chase too many. Focus means letting go of good ideas. The same applies to leadership: know when to step aside, when to pivot, and when to demand more from yourself, your team, and your country.

Watch the episode:

Transcript

Josua: Kim, welcome to the show.

Kim: It’s my pleasure as [00:00:30] always.

Josua: It’s a great to have you here because you have a broad background.

Josua: I mean, entrepreneurship, um, investing, and, uh, there’s a lot of fail, failing fail. Well, okay, we’re gonna, hopefully we’ll be able to talk about that as well, because you probably learned a lot from those [00:00:45] failures.

Kim: Uh, if I would have learned more, I wouldn’t make the same mistakes.

Josua: Mm. Mm-hmm.

Kim: Mm I wouldn’t.

Josua: Mm.

Kim: Uh, but quite often you find yourself in a place that, Hey, how on earth I did that again? [00:01:00]

Josua: Yeah. Those are probably some of the most frustrating ’cause making new mistakes. It’s like it’s forgi. I mean it’s understandable. Yeah. But making old mistakes is kind of a

Kim: Yeah. But you tend to learn Yeah. Over time.

Kim: ’cause when you run out of the money, you can’t make [00:01:15] any more mistakes.

Josua: That’s good. That’s true. Um, poverty is a great constraint and foc like not having money is a great focuser. Like it

Kim: Yeah. As they said that, that the hungry predator Hans best. [00:01:30] That’s probably true. It is true.

Josua: Um, let’s start with, with your, um, first, I think it was probably your first like entrepreneurial journey with, uh, with Blanco

Kim: Actually I not Correct.

Kim: We did within the same groups, uh, same [00:01:45] companies.

Josua: Yeah.

Kim: First we did a remote controller for the engine block heater.

Josua: Okay.

Kim: Total failure always meant went bust. Um, had few hundred thousand on my name, not money, debt. [00:02:00] Well, it makes you hungry. And then we actually created a computer locking device, which wasn’t too bad.

Kim: Uh, but we then we sold it to someone else that, that they could carry on, uh, that line of [00:02:15] business. And then we went to Plano, which was a data eraser. Okay.

Josua: Where Very interesting. So where did these ideas come from? Was it necessity? Like you said you had a bunch of debt and you needed an something idea and you saw a need and or

Kim: Yeah, I, I guess [00:02:30] that, because when we e established a Plano, which was first called Finn Innovation Limited.

Josua: Mm-hmm.

Kim: And then the registration officer, Hey you guys, you can’t have that kind of name, but Finnish Innovations Studio are like two guys. It’s not gonna [00:02:45] fly, we’re not gonna approve it. Guess what happened next? We actually kind of, uh, de minus our goal. So instead of Finnis Innovations, we came Ian Innovations with C instead of K.

Kim: And then they said It’s okay. And we started, uh, [00:03:00] working under the name Carion Innovations. We made this, uh, uh, engine block heater or remote control for engine block heaters for the cars. Then we had this, uh, computer locking device, and then we slit to [00:03:15] the exciting world of the data eraser. And data eraser is the est thing on Earth.

Kim: It’s almost as exciting as us, uh, looking when paint tries on a wall. Not [00:03:30] exactly as interesting, but almost as interesting. So what, and then we came number one in a world and the company company’s still number one, um, uh, in a world for that.

Josua: Hmm. So you mentioned it was a really [00:03:45] not a very exciting business to get into.

Josua: So what drew you into to start the company?

Kim: Um, actually next year will be my 30th anniversary as an entrepreneur. And then I guess partially it was related to the me and my, uh, [00:04:00] co-founder. We were studying economics and I don’t think we were such a great guys for studying economics. Economics. When you go deeper it becomes purely mathematics.

Kim: And, and, and that wasn’t my cup of tea. [00:04:15] So, um, becoming an entrepreneur was, was kind of way out, escape. And then, then we started to do different things and, and then we split with my co-founder because he said that we should be more like r and d house, that mm-hmm. We [00:04:30] have an idea after an idea, idea after another and another another.

Kim: And I was like, Hey, there’s something here in, uh, data Eraser. Let’s erase everything on earth. And then the journey started. Mm-hmm. And I, [00:04:45] I just went, uh, it is fairly long time when I actually, it now came 10 years when I left Blanco 2015. And, uh, I took a look at the website and, and so forth and went to LinkedIn.

Kim: It has hundreds of people, uh, [00:05:00] working for the company. It’s American led and now actually American owned Francisco Pans, which is one of the bigger side funds, um, in a Silicon Valley is actually nowadays owner of the plan. Co Blanca was short time, [00:05:15] uh, publicly listed company in a modern stock exchange.

Kim: And the out outcome is that, that actually I have established a company which was, uh, um, a public company, which is now owned by the, one of the

Josua: larger

Kim: side, [00:05:30] uh, funds in the us. And then I took a look at this. Uh, they have this, um, what is the term? Assets under management. Mm-hmm. A UM and the Francisco partners had about $50 billion.[00:05:45]

Kim: So I, I essentially hope that it’s a cool home for the plan. Mm-hmm.

Josua: That must be pretty cool to see. Starting from, you know, the very, probably humble circumstances and then going with like, obviously exit public, no

Kim: existing circumstances. There was two guys, [00:06:00] one room, which was, I don’t know, eight, 10 square meters.

Kim: And we had one computer because, uh, at that time, 96, 97 computers were so damn expensive. Mm-hmm. So it’s just like two guys on one sa, [00:06:15] you know how productive that is. Later on, we actually managed to get another computer.

Josua: So that was probably, I mean, it’s a great kind of testament to the fact that you can get started really scrappy because starting a company in 96, 97.[00:06:30]

Josua: Must have been so much more difficult than now. I mean, everything is digital. It’s so easy to start a business and there’s so much knowledge out there. So really it doesn’t take, if you have the drive, it probably doesn’t, uh, take a lot. It can started.

Kim: Yeah. Let’s think about function sauce, software [00:06:45] as a service.

Kim: It didn’t exist. We actually sent floppy disks, floy disks, disks with the data eraser software

Josua: mm-hmm.

Kim: Around the globe. And then at one point there was a, I think in Belgium there [00:07:00] was a factory and they said that you have one of our biggest buyer of the floppy disks. Those don’t exist any longer. They’re kind of gone And, and, and, and it just shows that technology change has been drastic.

Josua: Mm-hmm. [00:07:15]

Kim: The internet was there, but was it really there because bandwidth were fairly narrow. You couldn’t stream 4K movies or something like that. That, that, that when we had our home home [00:07:30] offices, that we had a modems, then we had A-A-S-D-L and so forth, step by step. Mm. And now, um, there’s hundreds of people working in one single company for the making, uh, digital work, [00:07:45] digital storage, reuse, and so forth.

Kim: More safe by era, the data. So I guess I should be kind of proud of that, but I’m not that much for proud. I was paid, and that’s even better, [00:08:00]

Josua: better to be paid than proud.

Kim: Yeah.

Josua: Um, so when you, what was your role in the company? Were you focused on sales and business development or,

Kim: I have done everything else except done, uh, coding.

Kim: Mm. I’ve never been cod, but I have been testing [00:08:15] the product. I’ve been selling the product, I’ve been writing the marketing materials, uh, and then again, done a lot of sales. And, uh, when you establish a company, it’s about sales. You have to sell the company to the, um, people [00:08:30] who fund it at the time. Now we have, in Finland alone, I don’t know, 70 different funds at the time, there was few mm, handful of the, uh, uh, of companies which could, [00:08:45] you could actually go and back money for.

Kim: And then now new ones are emerging on, on a weekly basis almost. And then, and at that time it was a bit more difficult. And then that was interesting thing that, that we came from out of UN two [00:09:00] and the first few years people kept asking that, Hey, how come you can be a software company out of your nsu?

Kim: Nobody comes from there and ask from them that, Hey, are you asking the same question from people from all. That, that how you, how on [00:09:15] earth you can come from holo, holo had an Nokia, uh, campus and infrastructure and subcontracts and so forth. It was much more, uh, common there. Nobody asked today that, that if you come focusing Kay Kayani has actually some [00:09:30] superb, uh, gaming company.

Kim: Yes. So I have had nobody says that, Hey, how, how on earth you are from Kayani. Mm. Because hey, there’s a thing called internet. You can sell anyone anywhere, anytime. Mm. Uh, via internet. [00:09:45] And that, that’s an interesting thing that, that even the small cities and towns you can have. For example, p Plano had infra planos competitors.

Kim: They were not from the Tokyo or New York or, uh, Silicon Valley. They were from really strange places [00:10:00] from the US East coast or rural Germany or so forth.

Josua: Mm-hmm. Interesting. So you exited the company, I think it was in 2014.

Kim: Yeah. And I then, I had always had a dream to work for the publicly I listed company.

Josua: [00:10:15] Mm-hmm.

Kim: I did that bit over year and now I have dreamed that I will never, ever, ever, ever again work for the publicly illicit company. What happened during that year that made the, uh, yeah, I think that, that it’s called Red Tape and Bureaucracy. Mm-hmm. When I was [00:10:30] ti copy for the company I, the CEO and co-founder, I actually understood something about our balance sheet and income statement.

Kim: Yeah. Then came, um, uh, we had a finished accounting standard. Then they [00:10:45] implemented the I-I-I-F-R-S and I thought I didn’t understand anything. It came so complicated. Mm-hmm. That, that some sales you book for today, some you accrue somewhere, some cost. You book for the day, some you [00:11:00] accrual for some day, and then in the end you’re like that, what the fuck?

Kim: What happened? Are we profitable or not? And it used to be fairly profitable company that we made, uh, return on investment was, or [00:11:15] capital was a hundred plus percent. Wow. We met EBITDA over 30 points. Not bad.

Josua: Very good. So I can, I can understand that, you know, going from that environment to then to the, the red tape was not a good fit.

Josua: So [00:11:30] when you decided to leave then after one year, did you go into investing or, or what did you end up doing? Yeah, actually

Kim: I already started investment in 2014. So this has been, I call, I don’t call myself business Angel because I mostly, I don’t put sweat equity. [00:11:45] I put money and then I might be in a board.

Kim: Some business angels actually don’t contribute anything monetary wise, but they work for the company and then get some uh, uh, shares. So I call myself a startup in Western. So I have been [00:12:00] doing that, let’s say that 10 years. It’s 120. Uh, months, isn’t it? Well, actually if, was it 11 years? It’s 132 months. So I have done over 140 tickets, so I have done at least one ticket each month [00:12:15] for 11 years.

Josua: That’s a lot. It’s a lot for a single person. It feels like there’s a Yeah. Makes one of the most, yeah, certainly in Finland. Most active.

Kim: Yeah. It’s

Josua: a

Kim: code eight digits, which I’ve invested.

Josua: Mm.

Kim: I, when I actually [00:12:30] had a exit in 2014, I actually made a statement, a public statement, and I said that, that Finnish startup economy will get its share.

Kim: And I think that I have fulfilled that promise. Mm-hmm. And I always questioned that [00:12:45] when I should, uh, finish, I’ll say that, Hey, this was my last ticket. Uh. And the reality is that it will take 10 years, at least on average, if I invest that I get something out. Well, the bankruptcies happen [00:13:00] much faster.

Kim: That’s true. I, I think the worst is, was like nine months or something. After you

Josua: invest

Kim: in, then it was done. And you, you essentially hope that the company calls to bust, it calls belly, uh, belly up because then you actually can [00:13:15] write off in your taxation. The worst thing is that the company doesn’t actually, uh, uh, enter to the finished, uh, tax terms to the receivership.

Kim: Mm-hmm. And from there to the [00:13:30] bankruptcy, because then you can’t deduct the losses. Yeah. The zombies are the worst. It’s floating, but nothing happens. And you can’t have a write off. And I, I spoke with, uh, David Ian, who is, um, uh, [00:13:45] founder of I Angels in, in, uh, Israel, and I think that he has two of his own unicorns and his son has, and third one, I don’t know how many unicorns he has.

Kim: Hmm. Uh, up to the day. And he said the test exit is right off. [00:14:00] And I, I kind of tend to agree with him.

Josua: Hmm. Interesting. So, um, you’ve made so written so many tickets and you’ve seen, um, a lot of

Kim: awfully, a lot of tickets or, or, or a lot of awful tickets.

Josua: Hmm. What, what [00:14:15] have, uh, was there anything that you went in, when you first started Angel investing, was there something that you believed that turned out to be completely wrong or something that maybe you were vidic vindicated like this was,

Kim: I have learned if this would be my lesson to anyone who [00:14:30] considers startup investing or Angel Investment, this is a index game.

Kim: This is more index game than stock market. If you invest to a three or if you invest to four startups, you’re gonna lose your money. You [00:14:45] have to have tens of those. And then I, I recently was in a, in a meeting where m told about his, uh, first fellow, uh, remarkable, uh, uh, achievements. [00:15:00] I think they had done like, was it 60 companies already?

Kim: Something like that. Yeah. Yeah. That’s a lot of tickets. Uh, same thing with the Yuri Angstrom, who is nowadays with the Lifeline. He said the, the, the he first, he does fairly small tickets. He [00:15:15] said the first 49 didn’t contribute anything. The outcome was more than zero, and then the 50th was like a hundred x, and then it made sense.

Kim: Mm-hmm. So if you consider going for the startup investments, you have to do a lot of tickets. [00:15:30] And what I learned in the past, I did that. I put her in big ticket. And then the company didn’t do that. Well, I started to put small tickets in order to try to save the company. And most cases I was the, the only one, or some of the few who actually invested [00:15:45] the company, which was complete stupidness.

Kim: Nowadays I do in such way that I put small ticket, let’s say 50 K or hundred K, 70 k, I go in and next round I might put 200 k. In the past I did in the wrong way. And then [00:16:00] Andre Miha, who is actually Business Angel of the Year in Europe, uh, he, he, he stated in 1, 1, 1 meeting. Following that, if you have just 5 million, what is open?

Kim: If you have [00:16:15] just 5 million to invest to, uh, uh, startups, invest 30 times a hundred k, which is 3 million, and then you put a remaining, uh, 2 million to one company.

Josua: As a f as a [00:16:30] follow on investor. Yeah.

Kim: Follow on. Mm-hmm. That you follow up. Uh, I said that, that if you just have a, I I, I’m not the guy who says that if you have just 5 million, Andre makes, I dunno, mega millions each year, but you can apply the [00:16:45] same, uh, that, uh, principle.

Kim: For example, if you have just 50 K, you should put, uh, 30 times thousand mm-hmm. And remaining 20 K to one company. Mm. It’s actually really [00:17:00] difficult to get in any company with 1000, it’s normally the minimum you can function 10 K or 5K. Yeah. And then, and I, I would tend to say that if you have

Josua: 5,000,030

Kim: companies, a hundred K, then one to two companies, that remaining [00:17:15] two, I think.

Kim: And then when it comes to is mindset that, that this is an index and, and, and that this is just a probability game. And RTO said, kind of guided, maybe he’s more experienced, of course, much more, uh, successful. He [00:17:30] said that. But in, in, in this particular game, you actually can’t, uh, affect probability matrix by choosing the companies well.

Josua: Mm-hmm. I think you make a good case that this is something, I mean, you have [00:17:45] to have a, a huge, um, spread because you take someone, like you mentioned the example with re who’s a very successful, I mean, he is very good at picking these companies and has great deal flow 49

Kim: complete waste, waste of time and effort.

Kim: Yeah. For

Josua: someone who’s at the top, like he has great deal [00:18:00] flow, great judgment. So if someone goes into, um, into angel investing and doesn’t have that, then you know, they may have the first 70 be bad potentially. So, I mean, does it make sense for, does it make, does angel investing make sense [00:18:15] for. Most people.

Josua: I mean, it seems like it’s a very hard Yeah, but

Kim: if you’re gonna do angel investment, you have to hang around with right people.

Josua: Mm-hmm.

Kim: And I, I’ll give a practical example. Ari and who is one of the founding founders of the Fon Finnish Business Angel [00:18:30] Network. He came me a call and said, Hey Kim, I want you to do this company.

Kim: And okay, send me the deck and papers and so forth. It was actually a company which had been around quite a bit, and I take a look at the [00:18:45] balance. He, I said, no fucking way. This company’s going bust. I don, I don’t know, wanna have anything to do with this company, but he had some persistence. And I said, Hey, could you please that, that we just have selected new CEO and [00:19:00] could you please talk with him?

Kim: And then, because, uh, I’m such a flexible person, I said, okay, I, I’ll talk with the smo. And then started the journey. That, that the company, which was more or less about to call bus and [00:19:15] had, didn’t have a right strategy and so forth. Uh, in the end we had a exit, I think minus was something between 13 and 15 x.

Josua: Mm-hmm.

Kim: And then when I had invested the 250 K, so I got like a [00:19:30] 3 million pack. And then, and then I, I, when I first took a look, I was like, no way. But I was hanging around with the right people and Ari was, in this case, the right person. I said, Hey, we have some faith and [00:19:45] so forth. And in the end we had an exit, but there was none of the original founders was, uh, uh, was um, any longer shareholder.

Kim: Mm-hmm. And then the CEO was like, like, like professional leader [00:20:00] or professional manager, like hired gun. And that taught me that, that it doesn’t matter who was or, um, found a company that the, in the end. The company has to just, uh, uh, [00:20:15] perform well. Nobody gives a damn who established, let’s say Ford, as long as it makes great cars, which I, I doubt that Ford makes any great cars nowadays, but nobody gives if it was Henry Ford or someone else.

Josua: Hmm. [00:20:30] So the, you know, to that point, um, what are the factors when you’re considering making an investment? There’s probably companies in investment cases probably look very, very different, different ca cap tables and different, uh, origin stories and different [00:20:45] issues. Uh, what are the things that, that you like to see or maybe need to see in order to, I

Kim: think the two or three things, which I essentially hope that I have learned, one is that, that the, that whatever [00:21:00] market this company’s going after, total addressable market or whatever you call it, yeah.

Kim: It has to be large enough. And I once had a discussion with the, uh, melatonin inin. Mm-hmm. This, this, which helps you to sleep. [00:21:15] And, and then there was an entrepreneur and we started to calculate together what is the total market for the Finland. It was fairly small, let’s say 20 million euros. It can be a great market for entrepreneur.

Kim: Mm-hmm. But it’s never a market where someone [00:21:30] who’s doing professional investments at, for example, uh, me getting a, let’s say paying a 200 K and getting 10% of the company, that getting my money back at least threefold. It’s almost [00:21:45] impossible that that total addressable market should be big enough that there’s a room to growth, uh, uh, for the growth and so forth.

Kim: And, and I’m partially working for every growth partners. And there I see more or less on a weekly basis, I see [00:22:00] this, you know, this kind of circles without, this is total addressable market and this is the market which we go after. And I, I, I tend to think that for us it has to be billions the market size that we will get excited.

Kim: But me as a startup, startup in Western, all, [00:22:15] as I said, I don’t call myself a business angel, but the business angel, it should be hundreds of millions because you need an exit. This is not the hobby and this is not social welfare. We do this first of [00:22:30] all, of course there has to be a, a real problem for someone which we sold with that company.

Kim: But the end of the day, I want my money back. And I’m like, mark Thatcher in a EU meeting that, that European, what was it? European community meeting that [00:22:45] she had her purse and uh, and she was like saying that no, her back and she was saying, I want my money back. I want, eventually I want my money back, but I’m not in a hurry.

Kim: And this is a thing that, that what [00:23:00] separates, um, like professional funds and startup or business angels, the latter ones are not in a hurry. We don’t have to return the money back to LPs [00:23:15] on certain day. And then, uh, basically most of the funds are 10 plus one plus one year that they collect the money they invested in a five years, just of four to five years to grow.

Kim: And then you should liquidate your ownership. [00:23:30] And then you can have, you can beg from your, your LPs limited partners. Can we have a one year? And one year I can, whenever I say that, Hey, I will stop doing this. And now I’m 53. And this is the interesting question. [00:23:45] It always takes the 10 years for the good companies for the exit.

Kim: Any investment might do this. I will be over 60 and I had a discussion with uc, Halan, and I said, doesn’t really [00:24:00] make any sense that I keep doing this, repeating the same mistake, investing to the young companies that I’m already 53. And then he replied something like, Hey, I’m 67, I just made an another one.

Kim: So Yu will be in [00:24:15] his eighties when he gets his money, uh, out of that investment, if ever.

Josua: Hmm. Um. You’ve seen so many, many companies. Is there anything that stands out when it comes to patterns of the companies and [00:24:30] people that succeed? Do they have certain things in common?

Kim: Yeah, of course it has to be.

Kim: There’s, uh, actually Radcliffe’s, uh, law for the, uh, startups, the Radcliffe, I don’t recall his first name, but, but he has invested [00:24:45] this use of Facebooks and Twitters and so forth, right? Right. All the great names. And he has it that, that when the great team meets lousy market, market wins. Mm-hmm. When lousy team meets great market, market wins, but [00:25:00] when great team meets great market, that’s where amazing things happen or amazing things will happen.

Kim: And that applies. I have one of those, it’s a framer phone booth company, fairly, I would say that fairly well known in [00:25:15] Finland. Yes. I invested their, when it had 1 million revenue, half million plus. Not a great company and it, they had pitched everyone and then Mikko, founder of the vintage said, Hey, could you please listen this story?

Kim: That, that [00:25:30] Mikko had his own incentive because he was a shareholder there and the company was about to run out of the money. So I went in, I invested, I was about four years there. Um, chairperson, the [00:25:45] company was 1,000,005 million, 60 million, I think 39 million that was came 65 million and today it’s over 200 million.

Kim: And [00:26:00] there the great team met the great market and amazing things happened.

Josua: Interesting. Uh, I actually, I had, uh, the CMO Daniella on episode 12, I think so people can check that out. Very inter impressive company. [00:26:15] An impressive story. So. You mentioned, I mean, uh, they pitch everyone, but let’s keep in mind that,

Kim: let’s go back to frame Mary.

Kim: That, that it had certain people who were founding that. Mm-hmm. Most of them are no longer, uh, involved with the company, [00:26:30] but that some helpers, which, which, which is one of the co-founders or I think what few, one of the few co-founders, he’ll still still there. And his CEO and he runs a company which has a sales revenue over 200 million.

Josua: Hmm. [00:26:45]

Kim: That’s a great scaling story that somebody scales from the mo less nothing to that, but some wasn’t. Um, CEO, [00:27:00] uh, between. Uh, 1 million and was it 39 million? Mm-hmm. There was someone else taking care. Then someone kind of, uh, return back to the crime scene.

Josua: Mm-hmm.

Kim: That the people can have different roles, but I, I was in the US [00:27:15] it was some kind of, um, seminar for the entrepreneurs and there was some guru, because in us you have these people who tell you what’s cooking and the guy said that, Hey, there’s a 1 million [00:27:30] US dollar company management.

Kim: There’s a 10 million US dollar company management, there’s a hundred million, uh, US dollar company management, and there’s a billion dollar company management, but those are not the same people. Mm-hmm. He stated, and then someone from the [00:27:45] audience, there was hundreds of us and what about us entrepreneurs?

Kim: He try to hang on that. It’s a different thing of mm-hmm. Uh, being a CEO and owner, a different thing of being our CEO and, uh, founder or entrepreneur. [00:28:00] And then we have really great Finnish family businesses or family run companies. Rarely the best ones have someone from the family running the business.

Kim: They always have a professional [00:28:15] management, they have a professional port and so forth. And there are people who are great owners, but they’re not involved with the daily management and leadership and so forth.

Josua: Mm-hmm. So kind of understanding where your skill set is or where you’re [00:28:30] best suited, where you can best fit in and add value.

Josua: And maybe that changes throughout the, the growth journey. Yeah. I think

Kim: my best value is that company grow from the few million to the 50 million, uh, in a, in a value to a hundred million. I’m now involved with the one company which [00:28:45] has revenues about 800 million, and, and, and it’s totally different animal.

Kim: There’s a politics and so forth and, you know, yes. And it’s maybe not my cup of tea. Yeah. But I can do, uh, I think my strength is from here. I help the entrepreneurs to grow from the few [00:29:00] million, the few tens of million. So the exit value might be 50 million, 60 million, 70 million.

Josua: Yeah. Are you then typically helping them with product or with the strategy?

Josua: I’m helping them with everything. Everything. Solving problems. Even even

Kim: somebody once said that, that, Hey, I’m getting married, like [00:29:15] next week that you had a prenup, can you send it to me? So I edit this for you?

Josua: So just doing whatever it takes to Yeah. Whatever it takes.

Kim: But the thing is that, that, uh, I don’t do that in the long run.

Kim: That you can’t hold someone’s [00:29:30] hand for years. Mm-hmm. That they have to be self standing. And the one of the biggest mistakes, which I did as an entrepreneur and uh, uh, I was managing director, not the CEO, to be precise. That, that, that when people had problems, I actually solved [00:29:45] the problems on their behalf.

Kim: Or if there’s a difficult situation, I took the hit and the outcome is that they don’t learn. So it’s better that, that, that you help them to deal with the situation. And this morning we had a, that, that, um, one company, it’s running out of the money [00:30:00] we, I have made. By the way, if somebody who watches this and wants to get one page report, which has everything that company needs, just email me.

Kim: Kim do advise@live.com. I [00:30:15] will return it. It’s one page. In the top right hand corner is cashflow related matters. Uh, uh, uh, left hand side, uh, uh, top there [00:30:30] is sales related matters, and then there’s, uh, six different, uh, boxes where you have project people and so forth. Mm-hmm. Mm-hmm. Uh, and, and then it has everything.

Kim: We, we actually did that with, uh, Yark Bury, who’s a, had [00:30:45] an exit and nowadays, um, board member in also for, uh, for the, for the Finnish Business Engine Network. We did that together and we had this morning with Yark board, and we took a look at, they had the runway now, so zero.[00:31:00]

Kim: And then, and then that just shows that, that, that you have to have a dedication, whatever you do. You have to know what is gonna happen. Mm. But now I believe that, that this one page report, which we created, I have applied companies, which [00:31:15] I’m import or help otherwise, and I always get the snaps. Uh, and like, like a, uh, this kind of really, uh, fast information.

Kim: It’s like a screenshot for the company’s, uh, doings Yeah. And [00:31:30] actions and so forth.

Josua: I think probably very useful because, uh, I’m guessing a lot of entrepreneurs, they, maybe they have a background, you know, they have a strong engineering or product, uh, background, but they don’t necessarily understand the entire business.

Josua: Um, [00:31:45] and there’s cas is scheme, those kind reports.

Kim: Mm. Cas is king. When you run runway runs out, you’re done. Mm-hmm. That’s why. And the thing is that, that when it comes to income statement, uh, and, and balance it, [00:32:00] you can manipulate everything. Sure. You can manipulate it. There are so many different ways of showing same thing.

Kim: But one thing which you can’t manipulate is that how much money funds you have at your bank account, how much money [00:32:15] you have next month. Everything else you can kind of represent in a showing it that way, that that, that it looks better than it is, that it looks worse than it is cashflow. And that the [00:32:30] biggest task for any startup, uh, founder or CEO is that, that take good care of the cash flow if you run out of the cash you’re done.[00:32:45]

Josua: Do you find that it’s, um, when it comes to startup founders that. It’s, it’s difficult for people to combine both this, like you have the, have this kind of visionary perspective on what you’re trying to build and how the market’s gonna develop, but also you have to pay very close attention to day to day not running out [00:33:00] of cash and putting out fires.

Josua: Is it difficult to, for the same or do you need DI would like to,

Kim: uh, quote, he gave this, uh, pre presentation, uh, recently for the people who have actually, it’s called, uh, [00:33:15] it’s like a discussion society anyway. Mm-hmm. People who like-minded people talk. He said that, that he has this, that, that, uh, observe, analyze, act.

Kim: He said that there’s a lot of fee [00:33:30] CEOs and managing directors, people who run their companies and have fun. They’re afraid of me noticing things and they’re great analyzing. They’re lack one, one skill and it’s the act acting part. And that’s the, the thing is that, that [00:33:45] you can’t be successful any business.

Kim: If you just observe and analyze, you know, analyze is lys that you overanalyze, but you never act. And then, then I [00:34:00] have read quite a few business related books. I have actually stopped doing that because I can summarize every book to three words, all the word best, uh, best seller [00:34:15] business books. It’s do something different.

Josua: Hmm.

Kim: More or less the content for every book do something different. And then I told my friend who’s actually a, uh, professional [00:34:30] board member as well as CEO, has been CEO for many, uh, VC funded companies. And he said that, that, well, well, I don’t like your summary. It’s too awake and too, too long. And I said.[00:34:45]

Kim: Get out of here that this is thousands of pages. I give you three words and you say that, that Mm, it’s too soft. Mm. And awake. And you said that, well, I have noticed that one word is enough, do [00:35:00] fair enough, and in many cases, do is enough. Mm-hmm. And, and, and then you have to remember that, that the hope is not a strategy when you are running out of the cast or you are more, more or less a, [00:35:15] your runway is ending.

Kim: Hope is not a strategy. Doing things, a strategy. You do whatever. And that’s the best thing in the startups. That the, that the startups actually [00:35:30] do not have nothing to lose. So it’s called pivoting or whatever it’s called, that you can fairly fast change course. Something different.

Josua: Mm.

Kim: And I was, the same thing happened when I was an entrepreneur and that, that, that we had several [00:35:45] business models.

Kim: We knew that we wanna do, uh, data eraser, getting rid of data, data destruction, whatever you call it. And then at some point we were that it’s a distributors will do [00:36:00] it. Mm-hmm. Someone will sell the software for us. Then we had it that, that it’s a value added resellers, whatever. And in the end it was that we have our more or less our own people on around different countries.

Kim: So we had a area offices, subsidiaries [00:36:15] or joint winds or whatever that people had just one thing when they, uh, came to work. How am I gonna sell this data? Or is it to customers? And then we had a strategy and strategies that, that you have those things which you do, but as [00:36:30] important are that you say that things you don’t do.

Kim: And it was that we said that we do not sell to the any consumers. No consumer business. And every time when it, we recruited the 51st, 52nd, 53rd salesperson, everybody was, [00:36:45] what about consumers? We’re like, have you read our strategy? It clear it states no consumer business. Mm-hmm.

Josua: That’s probably the hardest thing about strategy is, is listing things you’re not gonna do.

Josua: And like I said, [00:37:00] um, it feels like quite a lot of corporate strategy documents are just a list wishlist of like, this is what we’d ideally like to achieve, both in terms of financial Yeah. It’s like a letter to the

Kim: Santa Clause.

Josua: Yes, exactly. And you have an awfully lot of things, but there’s not a clear, [00:37:15] like, and I also found that, um, it’s quite often that people are maybe not basing it in reality of looking critically at yourself and seeing like, okay, these are our strengths, these are weaknesses.

Josua: Like this maybe would be our dream position, but we’re not in a [00:37:30] position to get there. So like we have to settle for this.

Kim: Yeah. And then, um, there’s a, a great Finnish basketball, uh, coach, uh, Hendrik Deadman who, who was also coach for the, uh, for the German national team. He has this statement that, that [00:37:45] if you have a really great three point shooter, which is not that good in defending, then you put all the effort for him to become a better defender.

Kim: Then you have a guy who can defend and won’t be able to shoot three pointers.

Josua: Mm-hmm. [00:38:00]

Kim: So you have to, in one way or another, you have to lead through your strengths. And sometimes it’s enough that, that you throw the five, three pointers when it’s required, even though you, your defending skills [00:38:15] are not that great.

Josua: Mm-hmm.

Kim: And then that’s a, many companies forget that, that, hey, let’s try, try to improve from the people things, which they’re not that great, and then they close the focus. And then I, I have a new saying, which I, I [00:38:30] keep repeating. Uh, I don’t know if I, if I’m able to translate it to the English as, as well as smoothly as in, in Finnish.

Kim: But, but, um, more or less I stated that all the success comes from the focus. And [00:38:45] focus more or less means that, that, that, um, you have to let certain things go.

Josua: Mm-hmm.

Kim: So it, it comes in and that success is that, that you let things go. Hmm. You abandon great ideas [00:39:00] and so forth. I think every successful business leader would say that, that what are the three most focused, uh, uh, three most important things for the success.

Kim: Focus, focus, focus. Even though carf Van Klau said that, that what you need for the war, [00:39:15] money, money, money. I think it’s the same time focus, focus, focus.

Josua: Mm-hmm. Mm-hmm. And it’s a, it’s a very difficult, difficult thing. Um.

Kim: On. Yeah. We get in, we get excited about so many things. Yeah. It is that, that [00:39:30] I tend to meet bit of people and, and then I get excited about people that they have great, uh, qualities and so forth and, and, and, and starting that, hey, could this person be a, maybe a working for [00:39:45] this other company?

Kim: And, and, and, and I should just keep the focus that, hey, this company already has the people at the moment that, well, we are pleading, pleading cash and we shouldn’t add anyone. Mm-hmm. Focus, focus, focus.

Josua: Mm-hmm. Um, before we move on to another [00:40:00] topic, uh, on topic of investing, you are, you’ve been part of the finished version of Shark Tank on tv.

Josua: Yeah.

Josua: Um, how, how is it in reality, you know, compared to what we see on tv? Is it, you know, you have these people pitching and then you make the investments or Yeah.

Kim: [00:40:15] We, we do not know anything about the companies.

Josua: Hmm.

Kim: Uh. There’s one difference that nowadays we are told first names of the people beforehand, because I fucked it up a few times.

Kim: I called Tommy to, or Nina, [00:40:30] Dina, and it was like that. Now we will have this and that person, but it is that the doors open, we don’t know anything. Of course, it’s, it’s, it’s strongly edited that, that you might get the five minutes, uh, on TV time. [00:40:45] But actually we discussed 40 minutes,

Josua: but, so it’s still, you have like 40 minutes, you know, nothing beforehand.

Josua: 40 minutes to decide if you’re gonna invest or not.

Kim: Yeah. Sometimes you follow your cars fairly fast. Uh, I, I think we once, [00:41:00] it wasn’t this season, uh, last, I think last, last season, we got rid of someone within eight minutes. It was such a bad company. Uh, and I think the second worst, after thought that is maybe 15 minutes.

Kim: Mm-hmm. [00:41:15] But it was painful, you know, that somebody’s so lousy, which they should master that eight minutes was a mercy killer.

Josua: Okay. That must have been an interesting, um, experience to go doing [00:41:30] that. So, I mean, with the camera on it, I,

Kim: yeah, we, we, I’ve done it now three seasons, so what is that, 150 companies or so? Wow. And I actually have invested view of, um, there’s actually [00:41:45] internationally or globally, there’s a 60 40 rule that, that after the, it’s like a letter of intent.

Kim: Which we kind of mentally sign that I wanna work with this company. 60% we actually do deal with. [00:42:00] Yeah, the 40% they have lied, for example. Mm-hmm. They have or they failed to mention something, which is essential.

Josua: Yeah.

Kim: Some of them just come for the exposure and then they said, Hey, I got my 15 minutes of fame, [00:42:15] Kim, I don’t need you.

Kim: Fair enough. And sometimes it is that there is no match, but 60% are done. And this is, for example, uh, I always said I don’t do consumer coach. Mm-hmm. And then [00:42:30] I ended, ended up investing a head kinan, which creates a sense. Um, uh, and it has been a, in a way, pleasant journey. So, well, we have worked, I don’t know, bit over six months together.

Kim: [00:42:45] Uh, but. The founder has been receptive, uh, receiving fairly well. What have, uh, try to teach, uh, teach our guide.

Josua: Hmm. [00:43:00] Uh, I wanna jump to another topic, which I think is close to your heart, which is sales. And one thing, absolutely. One thing I heard you say on, uh, another podcast is you really, really disagree with the belief that a great product will sell itself.

Josua: So it never sells itself. Why is sales so cri critical? [00:43:15]

Kim: The, uh, which one you want of me with the answer first? Because it’s gonna take 50 minutes each,

Josua: which however you want.

Kim: Yeah. The great pro world is full of great products. Hmm. [00:43:30] Uh, I’m not sure if you use Pinterest, but the thing is that the time to time I have, uh, I come like, like, I have no idea.

Kim: For example, when I do some home decoration or so forth and I go there and [00:43:45] I write a script, so. There comes tens and tens and tens, great products just for that need, which I have and which one I end, end up, uh, choosing. Most cases it might be the stars. It has 4.6 stars [00:44:00] and the other has 4.3. I go with the flow.

Kim: Well, those might be biased or they have bought bots to click there, five stars or what, whatever it is. But the thing is that there’s millions and millions and millions great [00:44:15] products. And then nowadays, I’m Apple, I mean Apple, uh, ecosystem. And quite a few people agree with me that Apple has some great products, and yet they put billions and [00:44:30] billions for the advertising, selling and so forth because the great product doesn’t sell itself.

Kim: That’s why we need that. And then, then the reality is that that, uh, internet has changed the. That, that, uh, [00:44:45] there’s a thing called customer acquisition cost. That, that some companies are mathematical games that they account that each customer acquisition customer we acquire, uh, cost this [00:45:00] much. So we can put, put this many euros per month for the different kind of social media and Google and, and whatever it is.

Josua: Yeah.

Kim: Uh, advertising. And it creates us this many number of customers and we have this much and so forth. [00:45:15] Oh, it might be, I, I, I really like the B2B sars that, that you have to call and visit and so forth. But for example, this mirador the company, which I mentioned, which, and we had a fairly decent exit [00:45:30] there.

Kim: It was, it was freemium that you cut something free. We got the leads, then we tried to contact them, expand it, uh, uh, the customer usage and so forth. But [00:45:45] I, I would claim that no product sells itself nowadays. Hmm. I don’t think it has ever done it. I think that the ancient Romans, there were already sellers.

Kim: Mm-hmm. Because we know that there were people who are sellers and then, then [00:46:00] some technology minded people neglect the role of the sales. And, and, and that’s a really dangerous path. It’s like shooting yourself, Hey, this will sell itself. It won’t. [00:46:15]

Josua: Do you think in Finland that we have, um, maybe a cultural issue around sales?

Josua: It’s seen as something a little bit shady, a little bit dirty almost.

Kim: Yeah. I can’t, there’s a research on this.

Josua: Mm-hmm.

Kim: [00:46:30] Which, um, a weekly magazine it has done, uh, from I think 1967 or something, a long. Uh, run analyzes how different professions are [00:46:45] recognized in Finland, and then it’s, let’s say it’s 375 out of the 10 last ones least respected professions, about five, six are [00:47:00] sales related.

Kim: And, and, and, and I wouldn’t claim that Finland has a two open mind for the, let’s say, um, Muslim community or, uh, Islam religion. Even the imam, the [00:47:15] guy who is preaching in a local place of worship, it’s more respected than Finn salespeople. Isn’t that sad?

Josua: That’s quite interesting. Uh, is it, do you think there’s a, is there a big [00:47:30] difference in like the other northern countries or,

Kim: uh, I, I think that it’s slightly, slightly changing.

Kim: Yeah. That younger people. They understand better or they accept better that sales is important. But I have good [00:47:45] example. Um, uh, I come from the smaller village and there was a guy from our village who was a car salesperson. He did a fairly long career, I dunno, 38 years, whatever it was. And he said that, that his [00:48:00] father kept asking him and he was selling Mercedes, new Mercedes mostly wasn’t selling like, uh, secondhand cars in some car park.

Kim: Uh, he said that, uh, stated that, that his father asked the, until [00:48:15] his father passed at, are you doing an honest job? Is your profession honest? You go and sell new Mercedes. What is the Sadie part there? [00:48:30] Mercedes is a great car. People come and pay a lot of money and the father is worried that, that it’s your, it’s your profession.

Kim: Really honest job.

Josua: Does that come from like a, a very fundamental misunderstanding of what sales is. It’s not about trying to hide the flaws in the product. It’s [00:48:45] about understanding customers needs and then finding the best solution. And the best salespeople probably as, as you know, uh, are, are the ones who are, uh, build a lot of trust with customers and they get word of mouth referrals through that.

Josua: So like, if you’re, if you’re doing shady [00:49:00] deals, you’re not gonna be probably, you’re not gonna have a long career.

Kim: Yeah. Internet actually kills the shady deals that, that as soon as you will start get these one star reviews and people do Google still, even though nowadays we use a [00:49:15] CTP, uh, but people do Google and see that, that what are the, uh, ratings for the certain things.

Kim: Yeah. If you get a lot of bad reviews, that will eventually lead to the, uh, situation that you run out of the [00:49:30] new customers. And then, um, by the way, I love to buy services even though it’s really freaking difficult in Finland because you ask a quote and you have to beg for the quote that somebody actually quotes you in the end.

Kim: That, [00:49:45] that, I always check the companies financials because in Finland it’s so easy. You just go online and you put it finder and, and, and, and, and it tells you. And then I buy from the companies which are fil profitable because I know that they [00:50:00] can deliver. Because if they wouldn’t deliver, they wouldn’t be a great service.

Kim: And it, it, as recently, uh, we renovated our sauna, bill it from the scratch again, and I took a look at, Hey, this company has a great [00:50:15] financials and it had also online creative reviews. And uh, and then the outcome was that they delivered a excellent job. I can say the name, sauna Alter. And afterwards they said that, can we have this, uh.

Kim: [00:50:30] Commercial part. I already had paid my bill. I didn’t get even 1 cent a discount. I was quoted more or less list price, and I said, you need a such a cool [00:50:45] job, uh, timing or the, it took as long as they promised the quality was at least as great as they promised. It looked really nice that, yeah, I do it for free.

Kim: And then we shot in a, a video, [00:51:00] it’s floating somewhere.

Josua: Mm-hmm.

Kim: Uh, but if you’re buying something, do that. Check the company finances. If they’re making a great loss, they’re doing something wrong.

Josua: Mm-hmm.

Kim: Go for the company, which is actually fairly profitable.

Josua: Mm-hmm. [00:51:15] Because the high profit margin speaks to high quality of service.

Kim: Yeah. In

Josua: most cases, most cases. Unless you’re a monopoly, then

Kim: un unless you’re Microsoft.

Josua: Um, so for people you know, [00:51:30] who are not in specific sales roles, could be a founder, executive leader, manager, whatever, how, do you have any tips for people who, who feel like, you know, it would be really beneficial for me to learn sales, at least, at least the basics. Um, yeah. [00:51:45] How should I go about it?

Kim: Yeah, this most simple.

Kim: I have actually three things. Uh, first of all, you have to build trust. Nobody buys from you if they don’t trust and how you build trust, it’s a wearable or complication, [00:52:00] and it’s based at that. If you promise something, you deliver that you are authentic, you are yourself, and you actually care for the customer.

Kim: That’s the first point. But then I have two other, uh, really simple ics. If I, [00:52:15] how would I describe it? What are the two most important, uh, questions in any meeting or any sales meeting? We had one of those today. Can you recall what, what you asked, how we discussed [00:52:30] how much we have time?

Josua: Hmm.

Kim: Any sales meeting?

Kim: The most important question is at beginning how much we have time because it might have that, that you have booked for an hour. The guy actually has changed his plans that unfortunately I can do 30 minutes. [00:52:45] So then you have to adjust that, that in 30 minutes you can communicate and you can ask the questions.

Kim: And at the end of the meeting is the second more, uh, uh, important question is who decides [00:53:00] who makes the decision? It might be that you have been discussing with someone, uh, totally. Um, irrelevant. And there some thumb is making, um, uh, uh, the decision in of some [00:53:15] other department. Then it goes, wasted the effort.

Kim: So it also tells that you didn’t do your homework, that you actually met with the wrong person.

Josua: Hmm.

Kim: And the third, when I hear that this is, um, abbreviation, it’s A [00:53:30] BAB. In order to close any business, you have to be able to sell the benefits that it’s a great product. It’s, it solves some, some, uh, solves some problem [00:53:45] with the potential customer has first, B then is a authority again, who decides, have you discussed with the right person that, do they have authority to do the decision?

Kim: First they have to buy it, then [00:54:00] they have to be authorized. And then it’s a third one budget. It. Do they have a budget for the making, the acquisition or acquiring whatever you’re trying to sell. And if you can have BAB, [00:54:15] your probability for closing businesses much, much higher. So you have to meet Right.

Kim: People convince them and then they have to have money. Sometimes. I have been doing sales, for example, I sell for the, uh, public [00:54:30] sector in a mm-hmm. Uh, uh, at the, at, at plano, we were trying to sell data eraser well, for the, for some patient data in hospitals and so forth. Healthcare sector. Yes. We, we understand your [00:54:45] benefit.

Kim: Yes, we are authorized to do it. We do not have any money. There’s no budget. Totally wasted effort. Didn’t happen once, didn’t happen twice, happened tens and tens of times.

Josua: Mm-hmm.

Kim: And [00:55:00] believe it or not, it actually happened all over the world. We tried so many places. A healthcare sector. Yeah. We have all the data.

Kim: Yes. We should get rid of, no, we don’t have money for that.

Josua: That’s super, uh, very practical and actionable. So I guess [00:55:15] then you just need the practice and, and people need to develop their own, become comfortable with their own sales selling techniques and styles.

Kim: Yeah. Then it’s a tactics.

Josua: Yeah.

Kim: But in sales you have to have enough quality and enough quantity.

Kim: Mm-hmm. Some people have a [00:55:30] quality that they do. It’s, it’s always so important to do the segmentation. Having the focus and there’s so many terms, uh, lowest hanging fruit or whatever. Mm-hmm. Ideal customer, that they put a lot of effort to that, that, that they have a quality and then [00:55:45] they neglect Totally the quantity.

Josua: Mm-hmm.

Kim: And then I had one of my sales, one of, one of my, one of my best salespersons. He had an excellent metric. He said every workday he wants to [00:56:00] talk with one new potential customer. Sounds fairly low, doesn’t it? Yeah. But we have, uh, 250 workday, uh, 250, um, workdays a year. 10 new minus [00:56:15] from their 30 days of vacation.

Kim: Some, some sick leave, so forth. It leaves still over 200 companies a year. Yeah, a new ones. And of course he had the old ones to follow up, [00:56:30] but one metric every day I wanna talk with one new potential customer. End of the week he had always five new potential customers. End of the month he had a 20, 22 new potential customers.

Kim: And then he, [00:56:45] he had been doing that 10 years, so he had also quite to end Ross. Mm-hmm.

Josua: Mm-hmm.

Kim: Or of existing customers. To whom we could sell the same seed or new seed. Um, we didn’t call it seed, we call it data eraser. Almost the same. [00:57:00]

Josua: No, but that’s really true because, um, it is a numbers game in a sense.

Josua: And I remember, I’ve, I’ve been thinking back to the first business that I had, if there’s one metric, I, you know, I, as, as any business first time from, you know, entrepreneur, you spend way so much time on doing things [00:57:15] that are zero value add. But I’ve been thinking that if I could go back and just put one metric for myself, it would be how many customer meetings did I have last week?

Josua: And then try to improve upon that. And it’s fine if it’s one, but if I would’ve kept like even one per week, [00:57:30] I think it would’ve been a much, much bigger, like it would’ve been huge outcome. And it’s not Yeah. With,

Kim: with the way Jason and so forth, it’s over 40 customers a year. Yeah. But think about this, anybody who’s watching this that they would.

Kim: Could take the same metric. Mm-hmm. [00:57:45] Each day I wanna, I wanna talk with one new potential customer. It might take, sometimes it takes 10 phone calls, or you have a, mm-hmm. LinkedIn tools and you actually have to send 200 emails. Or sometimes it’s the, uh, somebody [00:58:00] picks up at the first, first ring, but you talk with one new potential customer each day.

Kim: It’s a lot of potential customers per year.

Josua: It is up.

Josua: Yeah.

Josua: Um, we’re, we’re [00:58:15] almost outta time here, so I wanna spend, uh, a few minutes talking about the, you know, we’re gonna end on a high note. So let’s talk about the fin economy. Okay.

Kim: Um, now, now starts a depressing Yes. Session.

Josua: Yeah. Um, you, you said, uh, you wrote a, a, [00:58:30] an opinion piece recently and you said that, uh, Finland has quo bad owners and, and bad taxpayers.

Josua: Um, and we don’t demand enough. So, you know, can you, can I expand on that and, and what changes would you like to see?

Kim: None of my [00:58:45] ideas are original, so I stole this and, and, uh, auto content, which is, uh, chairperson for the Finnish Industries Airport. He said that, that in Finland, the real challenge is that [00:59:00] we do not have a growth, we don’t have in growth in our companies.

Kim: And within a week, McKinsey came with, uh, uh, uh. Big, uh, uh, Scandinavia Nordic Research, which stated that, [00:59:15] that the Finnish shareholders, they don’t demand enough from other management.

Josua: Hmm.

Kim: And then came this another study, which had 5,000 biggest companies, uh, on [00:59:30] Earth out of those twenties finish. And on average, these 5,000 companies had grown, I think was it 10 years in the world, uh, had grown roughly 8% points [00:59:45] per year.

Kim: Whereas Finn Equal and these 20 companies had grown three points.

Josua: Mm-hmm.

Kim: And then you deduct from there the inflation, which is about two points in the last 10 years. They grew like one, 1%, uh, per year. [01:00:00] And it’s quite a bit related, uh, to the fact that, that we don’t. Have really good, uh, shareholders, owners, they don’t demand enough from their leaders.

Kim: And this is what McKinsey said. This is what Tel [01:00:15] said, that that, that we are too kind and then demanding things. It’s not that you asshole, it can be that as well, but that, that when you demand, you actually might get some results. [01:00:30] If there’s no demanding from the shareholders on other side, nothing will happen.

Kim: And that’s a challenge. And I said 5,000 companies on average, eight points growth, uh, or 8% [01:00:45] annual, uh, growth Finn equal and 3%. And now we’re talking the biggest finish company. And the one part of this, that Finn companies, uh, owners, they love dividends. Dividend is the greatest thing that, that, hey, I get [01:01:00] something back from the company.

Kim: And then dividends are more or less. Lack of imagination. You don’t have imagination for investing r and d, product [01:01:15] development, uh, company development and so forth. You actually keep distributing your extra cast, your shareholders, because hey, we don’t know how we could be able to grow this company. How many times Amazon has been paying dividends?[01:01:30]

Kim: Guess how many times have

Josua: they? They, I they must have, oh, it’s still zero.

Kim: Yeah. I just check it. I essentially hope that that CTP is right, but I did some research before I came here that it’s stated Amazon has never paid dividends.

Josua: Mm-hmm.

Kim: Uh, [01:01:45] Microsoft didn’t pay dividends. I don’t know, was it first 15 years or so?

Josua: Mm-hmm.

Kim: Because they invested everything back to the business. And now, now we could compare those companies, which got 50% of annual revenues as a dividend and [01:02:00] those which put the 50%. Back to the r and d and other such things, which one actually paid off better for the owners? Mm-hmm. And when it comes to Finnish, uh, taxpayers, we have this really great [01:02:15] term called elo and Better maxia.

Kim: Happy taxpayer. Happy taxpayer accepts what’s our, what is ban? Okay. We spent now our money for the, let’s say, foreign aid or [01:02:30] we invested to the A, B, or C. Every taxpayer should be unhappy and say that I want better, uh, explanation why my money is actually invest or not invest spend here or there. That [01:02:45] don’t be a happy taxpayer.

Kim: It doesn’t pay off.

Josua: So we need more, more accountability on board levels, more accountability,

Kim: more account accountability on the board level. Actually it starts from the annual A-A-A-M-G annual shareholders [01:03:00] meeting. But from there you should put a pressure for the, for the, um, board of the directors, which put the, um, the pressure to the management and leadership of the company.

Josua: Do you think there’s like some [01:03:15] cultural or systematic structural issue at, at, at the core, at the foundation that, that maybe, you know, there’s risk aversion. We don’t even expect any growth. We’ve kind of given up, or

Kim: maybe we are too social democratic country. We think that that, that the, this is [01:03:30] good enough.

Kim: But, uh, if we take a look, what has been our growth for the last 17 years? Well, it’s zero

Josua: and it’s public debt has gone tripled, I think or something.

Kim: Yeah. It’s, it’s just [01:03:45] a devastating even to think about it. But the thing is that, that, that if the Finnish companies would have grown with the same base, then, uh, Swedish equivalent, we wouldn’t have the debt we have at the [01:04:00] moment.

Josua: Mm-hmm.

Kim: And, uh, we can’t go behind that. That public sector is, and public sector debt. Quite a few of these companies actually, uh, operating in the national environment, they have factories and [01:04:15] operations here and there and so forth that you can’t say that, Hey, it’s the Finn. Well, governments luckily change every fourth year.

Kim: Some are better than the others. But you can’t say that, Hey, last, [01:04:30] well, 17 years is like four governments.

Josua: Mm-hmm.

Kim: Four and a half governments, we can’t put everything on them. Of course, they, they have to, uh, improve their game as well. The politicians. [01:04:45] But we owners of the companies, stakeholders, investors, we have to demand more.

Kim: And I’m in as well, I would like to state that all the companies were, which I’m involved with, none [01:05:00] of those is actually planning for the demining returns or demining growth. Everybody want to grow because they know that the, the, uh, when you grow, you have more opportunities. Mm-hmm. Mm-hmm. And that’s the best thing about growth.

Kim: [01:05:15] Growth itself is a really city target, but, uh, what growth brings, it brings you great colleagues, new opportunities, uh, more infra, interesting challenges and so forth. That’s the best part. [01:05:30] And then if you’re in a, let’s say 10, 10 people company, you have fairly limited options for career and so forth. But if there’s 10, uh, people are 10 employees, company grow to 50.

Kim: They start to [01:05:45] be manager, PO position director, PO positions, better salaries, bonus programs, and so forth. And you can have a career development, professional development mm-hmm. Which is fairly essential for quite a few people.

Josua: Mm-hmm. Maybe that’s one [01:06:00] thing that we have ma forgotten or maybe never understood in Finland is, is what you just mentioned, all the benefits that come from growth.

Josua: Growth is not a goal in of itself, but it brings, creates all these opportunities in companies, in society, and maybe we’ve forgotten that. [01:06:15]

Kim: Yeah. And, and, and, and, uh, there was a, luckily we got rid of that, that we had this, the growth. Right. Uh, ideas. Now after one and a half decades of no growth, nobody says that, Hey, D growth is what [01:06:30] we actually is required in Finland.

Kim: Yeah. Because D growth is more or less, uh, uh, implication of D growth is that that. Then you have to start deciding whose cancer we will operate. Sure. Whose kids we will [01:06:45] educate, are we gonna secure our borders? That kind of things. It gets ugly very fast. Yeah. But, um, um, I would like to say that, um, Finland still have a fairly, fairly okay, um, [01:07:00] educated population.

Kim: And, and, and, and we haven’t seen everything yet. The more enormous number of the opportunities, um, new companies, new scale apps [01:07:15] and new unicorns and so forth.

Josua: Yeah. Let’s, uh, absolutely hope for that. And I think, you know, your message about demanding more, I think that’s really good. That’s something that I at least have not really heard in this conversation.

Josua: And I think it’s a good reminder, even if you’re [01:07:30] thinking of a specific single company, is that demanding more will probably produce better results. And it’s actually. It’s not a, it’s a kindness, an act of kindness in a sense. Yeah. If

Kim: 20 biggest Finnish companies have in the last 10 years grown roughly 3% per [01:07:45] year, that’s a miserable failure.

Kim: A miserable failure.

Josua: Yeah. We should demand more. I agree.

Kim: Yeah. I, I’m gonna do my part. Don’t worry.

Josua: That’s good. Kim, thanks a lot for taking, uh, time to come on the show. And, uh, thanks [01:08:00] for, for sharing all your, your learnings, failures, and, and wins. Um, so I wish you the best of luck. Uh, wish you, hope, hope the portfolio proceeds and

Kim: anybody, if anybody needs that, uh, one page reporting, I will provide it.

Josua: I’m gonna also put, uh, your [01:08:15] email, email in the comments, in the show notes, in the comments so people can, uh, I hope people actually reach out. That would be cool. Absolutely. Thank you so much. Pleasure was mine. Thank you.