Peter shares his lessons learned as a founder of Trustpilot

So if we just get into it. I'd like to take you back to the early days. This is 2007. I'm calling my rich uncle. I have an idea for a website. I say I need a million kroner. He says, oh, that's fine. He gives me 100,000 for half. But think about it. If you had a kid being like 24 years old coming with an idea for a website saying like he wanted like 100,000 or a million kroner, what would you take for that? So I've always thought that that was pretty fair. Now, so then he was 70 years old and I was in the business school. So none of us could code. So we went out and we hired a consultant to do the website for us. And then the idea was pretty much that we would have this consultant build the website. And then we would get it to the front page of all the media. Then it would go viral. And then probably maybe six months to a year later, you would maybe get a call from Larry Page or, you know, Nasdaq was also going really well. And so I was actually very, very lucky because I think I've met 50 people who hired a consultant to do their first website and every one of their companies crashed. Like I think that's the first lesson. Like I was incredibly lucky that the consultant I hired turned out to be a super good guy. Today he's running a company called iPaper. Like he made something that was beautiful. It was scalable. It just worked. He even handed it over to a full time employee. But I would say lesson number one, don't be lucky. I was lucky. If you don't have a technical co-founder, like you have an idea. What is that? That's like a nice post on a blog. That's nothing like get a technical founder. So we built the website then. And so that was step four in this four phase rocket. We said, okay, next stage, get it on the front page of the news. So we started calling journalists. We actually very systematically mapped down every journalist in the country and started calling them. And so four days later, we were on page 17 in one of the free newspapers called Urban with a little note. And I was very, very disappointed with the lack of interest from journalists. And I was at a family party. I had a couple of glasses of champagne. Out of the blue, I got this call from a journalist from Metro Express, you know, like this big free newspaper. And I'm super excited. I finally got a journalist on the phone. We're having a great talk. I really explained to him how important this is, and I have some very good punchlines for him. And at the end of the talk, we probably talked for an hour. So I'm asking him, hey, so, like, are you going to print this? And he says, well, unless something happens with the prime minister, you're probably going to be on the front page tomorrow. So what then happens the day after is that we actually are on the front page. And journalists, they don't think it's okay to call you 0350 in the morning, but they do think it's okay to call you 0400 in the morning. So I'm being woken up by the Danish radio, and they're like, hey, are you Peter Malman, the founder of Trustpilot, and what's your response to the criticism from the Union of Danish E-Commerce? And I'm like, oh. So I think lesson one, like, always focus on, like, I'll come to this later, but always be sober when you're speaking with journalists. And then the second realization, like, if you get on the front page of a newspaper like Metro, that will give you 25,000 visits in a day. And so we went this classical, like, server goes down. We're like, yeah, but it's actually not nice. It's nice when you're in it. And we're at the top of the country for about a day. And then the day after, we had 2,000 visits, and the day after, we had 200 visits, and the day after, we had two visits. And you realize, like, there's a reason they call it fish paper, right? Like, how many of you can recall what was on the front page of Metro yesterday? One person. It wasn't me. Well, thanks for visiting on day two. And then the business model we had, that was Google AdWords. And every time we had 1,000 visits, we would get eight kroners. So the first month, I could buy a kebab and a Coca-Cola. The second month, I couldn't buy anything. But then, like, I think that's the second message, is that really focus, like, initially, if you're lucky, like, I was really lucky. Like, I got this big PR bang. But the next time I'm starting a company, I'll probably focus more on a scalable, like, really focus on the product. Focus on the business model. Because, like, you'll get this one bang the day after it's gone. If you don't have any organic virality, anything organic that attracts people to your business, you won't get anything from the media. So get that first. And then when you have an engine, when you have something where you can actually keep the people, focus on the publicity. The second thing that I then realized is that my third and the fourth step in the rocket, the virality and the Larry Page plan, would probably maybe take a few weeks longer. Than I had planned. So I think today, my estimate is that if you want to do a company, it takes 10 years. Like, 7 to 10 years. You read about Instagram on TechCrunch, and I think they spent 18 months, and they were selling to Facebook for a billion. And then when they did it, I think we were 150 people, and they were 14 people. And they just looked at us, and I was like, what are we doing? Just seeing, like, people couldn't get the printer to work. And stuff like that. But that's the normality. That's like asking yourself, like, hey, why am I not Ronaldo or Justin Bieber or the Pope? Like, the chance of you becoming one of those three people, that's probably the same chance as you making the next Instagram. Like, in 999,000 of a million cases, it will take you 10 years to build a mediocre company. So what I want to say with that is that initially, it's fun to start a business. It's fun to speak with journalists. It's fun to hire people. It's fun to do the product. It's fun with all these things. But then after 5 years, 6 years, 7 years, 8 years, having salary talks with your CFO is actually not that entertaining. Setting up, like, procedures. Like, what's our maternity leave policy? Shoot me. Like, so, well, I guess some people, like, they're the kind of people. Who are more into that than I am. But what I really want to say is, like, you need to find out your why. Why is it that you're doing this? And I see too many early stage people being attracted to building the next big mouse trap. Like, they can do this a little bit smarter or they can sell this for a profit. And that's great. And by all means, like, get started with building a company. But I really encourage you to do something that you actually genuinely deep dive into. And that's what I'm down to care about. And also can see that you are motivated about a change that you can bring to the world after 7 years, after 10 years. Because that's the timeframe that you're looking at. I don't want this to be a lot about Trustpilot. But for me, what I like about Trustpilot is that we are making it easier for companies to find out what the customers think about them. Then that will hopefully make it easier for them to improve their customer service. We're making that transparent. So we're making choice easier. So that means that we are making it easier for consumers to find companies that are good. And again, that creates an incentive for companies to improve. And it creates an incentive for employees in those companies to go the extra mile for customer service. So I like to create a world where you are making the great guys win. I like to create a world where really caring about your customers, really caring about what you do, that that pays off. So that's the motivation that I tell me. And I think you reinvent this year after year after year. But start like always. Tell this to yourself. Tell this to your employees. It really matters. Now, then the next thing I want to talk about is your early stage employees. I think my main message there is that the kind of people that you want to have with you on this journey, you have to imagine you landing on America's East Coast. You're landing 300 years ago with a mission to get west. Like think about yourself. You're like with these prairie wagons and you're like just going west, going west, going west. Like whenever you hire someone for your startup, you have to ask yourself the question, would I like this person to be with me on a mission like that? Like all kinds of things will go wrong. All kinds, you'll like, oops, what do we do? We have to get over. Like and the internet will not work. And there's no lunch deal. And you don't have a process for anything. And so you need people that have a certain mentality that they love to solve these problems. They have to be explorers. These are not the people who are driving on an eight -lane highway from New York to Los Angeles today. It's a very, very, very different mindset. And I would say even today with Trust Proud of Our Way 500 people, I can still apply this mindset to everyone I hire. And I wish I had done it earlier and more stringently. Next step then is again about hiring. Focus religiously on recruiting. I think my rule of thumb is if you're hiring more than two people a month, you need a recruiter. If you're the CEO, you need to own recruiting. You need to care religiously about recruiting. I see companies spending 1% of the time on recruiting. And then they spend 99% of the time fixing that mistake. Like if you're running a company, it doesn't matter if you're an employee. It doesn't matter if you're a CEO or sales. Like make sure everybody focuses religiously on hiring. If you're five people, you cannot hire number six without having every five people interview that person. If you're 20 people, you cannot hire someone without at least having five people interview that person. If you're less than 50 people, you cannot hire someone without having the CEO interview that person personally. Period. Then hopefully your company will grow. You will move from the very early stage and you need to hire like some professionals. And this is like one of the trickiest hires to make. I think it still applies 100% that you want these people to be having the same cross-continent mindset. The mistake that I'm seeing a lot of young people make is two things. First of all, they're hiring people from way too big companies. And they're hiring people that are way too much ahead in their career. I think my rule of thumb is you want to have the experience, but you also want them to be stepping into the job. For example, when Mark Zuckerberg hired Sheryl Sandberg, Sheryl Sandberg was not the COO at Google. She was stepping into that job. So even a Facebook that applies. Like if you're hiring the person who ran a 6,000 person sales team at eBay, you're an idiot. But if you can get away with hiring the person who took sales from 0 to 50 at a company, that is your hire. So what you want to ask yourself is what will your C-level be doing personally? Will your chief marketing be taking care of your Google AdWords campaign? Will your CFO maintain the Excel sheet? And if these guys can only operate through other people, then they're probably better suited to be in a bigger company. The next thing I want to highlight for C-level is build your group slowly. Now this is sometimes a luxury that you cannot afford. Sometimes you may even be lucky that you have a founding team and you all scale. But most of the time you will need to build out your management team. And I think my advice here is your group can probably cope with one new member every six months. I hired three at the same time. And that blew me away. That blew up my group dynamics. And I think if I had hired them over, say, an 18-month period, they would probably all have been successful. In this case, none of them are left. And I think that's not their fault. That was me being an idiot, not thinking about the dynamics, how long it takes for people to operate together, to trust each other, and really build that relationship. So expand your team, but do it really slowly. Now we're going to get on to, we have a few minutes left. So I saved the most boring topics for the end. These are not the things you usually think about. First I want to talk about is reporting frameworks. I think for me the problem in most companies is that different divisions care about different things. I have yet to meet a developer that genuinely deep down in his heart has a beating heart for sales and revenue. Marketing. They care more about doing leads than actually... ...the stuff we can sell. There are all these stereotypes. The sales people, they only care about their own commission. They don't give a fuck about retention. I could go on and on and on, and for each division there would be this stereotype about this division. There are stereotypes, but some of the times they're actually true. And for a long time I was really annoyed by different departments just not getting it. So then I took all the department heads and I just walked them through the unit economics of the business. I said, this is how we make the money. This is where we spend the money. This is the renewal percentage. This is how much it costs us to make this kind of money. This is how many months we have until we either have to fire half the company or raise more money. Or eventually here at this point we'll go bankrupt. If we don't change these metrics, we're pretty screwed. So you guys, you need to do the things that will improve these metrics. And they were like, oh my god, Peter, that's horrible. Why didn't you tell us before? And I was like, why didn't I? But I think it's so easy. If you're the founder, you know almost everything. Especially in an early stage company. You have your fingers everywhere. You know what's going on. You know what's important. And because you know that, you just take for granted that everybody knows that. So I think the investment and the reporting framework, like what do you tell everybody? What do you measure people on? Like investing in that from the beginning. I figured this out a month ago. So I can't say we're there for Trustpilot. But I think it's important. But the changes in people's behavior, when everybody agrees on what's important, that everybody knows what's important, is really profound. Okay, next picture. Oh, this is a good example. This is a team building exercise. If you don't run in exactly the same pace as the person next to you, the entire group will fall. And that's really what it's about. So this is then coming to the internal systems part, which is also a pretty boring subject, but it's goddamn important. Initially, don't care. Don't care about Salesforce. Don't care about Sendesk. Don't care about your financial system. Like, just focus on building a product and selling it. And they can pay, like people initially in Trustpilot, they would pay us like with a nice gas barbecue or a foosball table. And then later, we added systems to actually get us money. But then the mistake I see people make is that they get the product, they take it to the market, they're successful in selling it, and then they keep adding, they keep really religiously focusing on the product, which is not necessarily a bad thing. But nobody cares about the systems. Nobody cares about Salesforce. Nobody cares about Sendesk. Nobody cares. Like, you have people in finance. What are they like? Like, they're working with some salary systems. Like, pfft. Um. And I think the trouble is that when you're, say, 50 people and want to take that to 500 people, it's actually not the next 10 features in your product that will make that difference. It is actually your ability to add fuel on that fire and add more and more people on the system and add more salespeople to the system or marketing dollars and marketing spend. So when you're about to scale, it's often your internal systems that enables you to do that scale. And it's your reporting framework that you set up that enables you to go through that. So really focus on that. And my rule of thumb that I want to apply in my next startup and that we're, again, like a month ago, introduced in Trustpilot is that internal systems have the same priority as our product. And it is the same people that are responsible for them. And we are working on internal systems with the same methodology as we are applying for the product. So that means roadmaps. It means product owners. It means cross-divisional teams taking care of ensuring the right priorities. Your company is a delivery mechanism. Your product helps. Your system helps. It's the same. Oh, this is a good one. This is the second last slide. Super important. Employees need to make life easy for the CEO. You should almost, like, repeat that. And especially, like, I really wanted to say this because today is, like, a lot about early stage. And this is where I see a lot of the employees in the early stage not being able to continue with the company. Because when you're new, everything is decided over the foosball table or in the kitchen. Like, you're ten people. Like, decisions are often made over lunch. We do this. Yes, let's do that. And you can sort of talk things through. And then later, it's really about thinking in scale. Like, I don't want to get, like, a four-page email where things, like, on the one hand, we could do this, but have you thought about this? And he said, what I really want is, like, for these reasons, we thought about we need to do this. We've looked at these solutions. These are this. For these, like, reasons, we recommend solution A. It will cost so much. Can we continue with that? Yes or no? And I realize that not every email can be like that. I realize that's, like, that would be, like, a hard, not so nice culture to be in. And of course, like, a lot of conversations are not like that. But if you're working for an early-stage startup, try to do that to your CEO. He will love you. Amen. The last thing, you do the startup, nothing works. Everybody hates your product. Sales doesn't scale. A lot of the times, it's hard. But at the end of the day, I also want to say that all the time, all these experience you're making, and I think this is something that you really should tell to everybody that are working in your companies is that that is also the currency. That is the ultimate currency. That is the opportunity. Like, you have a chance to work for a Facebook or for a MySpace. Like, and everybody will either ask you, like, hey, what went wrong? Or they will ask you, what did you do? How did you scale your recruiting? You had to hire 20 people a month. How did you do that? How did you onboard them? How did you ensure that there was alignment between your marketing and your marketing? And your sales strategy? How did you ensure that your database is scaled? How do you, for example, like a painful lesson for me was that if you sell somebody, they won't actually pay you. How do you set up an accounts receivable system? All these things are the experience that any future employer, any future startup will want from you. So, I just want to just like going through all these things. I hope you can tell yourself that is why that you're doing it. Because these are the lessons. That's the goal. That was it. Thank you.