#7: Building an Infrastructure for Contract Management: The Tesla Approach, Niels Martin Brochner

Niels: What we're doing right now is that you're building an infrastructure like Tesla. Like Tesla isn't successful because they built a fast car with Warp speed. They're successful because they build an infrastructure to charge these cars.

Christian: Welcome to the Messy Growth Show, the podcast that dives deeply into the heart of B2B growth stories. We are here to unmask the raw, the real, and the often messy road to success, because let's face it, growth isn't always neat and tidy. Join your hosts Soren and myself, Christian, as we sit down with top leaders mining for proven strategies to accelerate your business. Welcome to the Messy Growth Show. Your roadmap to success starts here. Welcome to the show, Niels. You're the CEO of Contractbook, and you have been on a crazy Growth journey, and we would really love to hear more about that. But, first, you know, tell us what is the problem that you're solving and for whom? Give us your elevator pitch.

Niels: Oh yeah. So first of all, thank you for letting me, inviting me here today. So our elevator pitch is we're. We're doing contract management for SMEs, so basically small mid-size enterprises. Our, where we kind of solve the biggest headaches is from 11 to a thousand people. We are basically industry agnostic. We obviously have industries that work better than others, but fundamentally we are, we are a industry agnostic, holistic contract management software. Where the biggest differentiator between us and most of the competitors is the fact that we are based on a database where all our competitors or most of the competitors, based on a PDF or a digital signature platform, which means that we'd never kill the data, which means that you can always use the data in the rest of your operations in the business and automate the processes around the data and the contracts, which we believe is the foundation of your business. So if you peel down your full business, it is a bunch of documents like sspa, employment documents, et cetera, et cetera. It's not your CRM system or your HR system it is the documents.

Christian: Sweet. So how did you end up there? Like, you know, starting Contractbook? Like what happened with like, before that you'd made that decision?

Niels: Yeah, so, I worked, my first job was at Shell Oil, which is like one of the 10 big evils of the world you could work at. And that was an amazing time, especially on during ramp. Where you learned a lot. Like I came, it was my first job after my bachelors degree, and then I worked there and I was co-leading, with an older, more experienced woman, co-leading, the implementation of the SAP system in all the Nordic. And, it was a really weird experience for me because I, basically most of the people I was under me, I was 23 or something, could be my parents. Which made it a very difficult kind of process going out of studying your first job. And then you have a lot of employee, like employees basically, or team members who's way younger than you, or older than you, and you're way younger than them. So they kind of question your authority and they question your ability and your, and your experience, et cetera. Right. So that was an very interesting kind of ramp for me. I obviously had a very, experienced woman next to me who helped me a lot kind of dealing with it, but. At the end of the day, I figured quickly out that wasn't for me and I didn't enjoy like working there. And I think that I kind of, my stomach feeling told me that it was due to my team. Like I wasn't enjoying working with my team. And, so I quickly figured out I quit and then I went back to studying a Masters. And during my masters, I came up with my first. Idea for a company and I raised money for that during my master's degree. So basically I wrote my masters while starting my first company. And, yeah, that's back in, that's in 11. And then ever since I've been working on, doing this, so yeah, so I've been doing this for a while.

Soren: What, triggered you to start, Contractbook? What was the trigger? The pain point, the, I gotta fix this.

Niels: I got fix, this was one of our clients. We had a media, I, at this point I had with my co-founder in Contractbook as well. I had a digital studio where we helped, companies and we also invested in companies. And one of our, clients at that point, was a company called Frank Juice. And, so we helped them build their infrastructure and their brand and their shop and their local and everything, you know, back in the days when they started, because that was kind of what we did, right? And so we also kind of formed a pretty thorough young, in their, like, in their journey as well. And so we formed a pretty kind of close relationship with these guys. And, the co-founder, of that company, Christian, he called me one day and said, There's something about this contract management thing that's weird, and I was like, okay. And then we met up at a cafe on a Sunday, I think, and just had a couple of coffees in the evening and just sat and talked to the idea through, the way I remember it is that basically he said that, I've been working on this for some years and I can't figure out how to get it done. And then he said, what you could at solving problems, how you do it? And I said, I would say, fuck the precedent. And then he looked at me and he was like, what do you mean? And I think both Jarek and I were very in love with the data, like the data format and all that at the point I talked about. So I guess it was like more like, you know, when a face, when you're like, oh, NFTs are smart and everything, everybody talks about it, please. And we talked about Elixia and JSON and the data format and databases and stuff. And I assume that was high on my kind of like way of thinking and then, I said, I would say, fuck the precedent. I was like, what do you mean? I was like, I would build it so it looks like, you know, PDFs, but I would build it as a database and I would be stubborn on it because, you know, word is from the eighties, PDF is from the nineties. DocuSign is from the zeroes. Like what does that tell, it tells us all the technologies is like the youngest technology is, you know, 20 years old and the oldest technology we're using today in this industry is 40 years old. So, Obviously they have a lot of advantage, but they also have big disadvantage, the fact that they're built on the past and like the past technologies, so if you want to make it fit into the future, you probably need to kind of start dealing with the future. So it became evident for us without knowing what contract management was, that the data would be the foundation of it, but also, We had no idea, that would basically be like what you're doing, what we're doing right now is that you're building an infrastructure like Tesla. Like Tesla isn't successful because of, because they built a fast car with Warp speed. They're successful because they build an infrastructure to charge these cars.

Christian: True.

Niels: And.

Christian: Because warp speed.

Niels: Is kinda fun, right? So the idea is that yes, you have Warp speed in Contractbook but without actually being like, we need to build like the rails for the rest of the system to build upon then we have a problem. So, and we can't, you can't, like a Tesla, you can't put a diesel engine into a Tesla. So you can't put Word or DocuSign or Dropbox or something into Contractbook because then you're killing the foundation of the future. So you need to kind of be very stubborn on that, which made it, you know, sometimes go very slow. And we still have a lot of pushback in the industry because they're like, but it's not word, you know? And when our old lawyers come in, they want to go back and forth and emails and words. It's like, yeah, it's fine. And we get it. And that's why we've built this, you know, vendor upload thing. So you can upload, attack it, OCR it and all that. But that's top of the iceberg, right? That's only 1% of the documents in the contract. In the, in the company. 99% of the documents are just like mainstream sales, employment, compliance, hr, upload vendor. I just rented a lot of benches for the, for the garden, you know, what's the, where do you put that contract? Like, and right now, you know, we sat there, I sat at, I remember sitting in one of the big law firms and they had like one of the beautiful offices. And then we talking about like, a infrastructure like system, contract management system that they built for their client. And then they said, so another app, we actually don't really use it ourselves because it's pretty complex to use. I was like, that's kind of the problem, right. And because that makes it very difficult to use your own system for other people, and you're the experts in this system and you are not even uploading the document. Right. So it's like you rented a lot up, let's say, Trip Trap or Skagen benches in the, in the in, outside. I was like, where are they? I was like, they were like, we have no idea. Like, so for them to actually get out of that contract renting, you know, for probably, it's probably a million Danish Corona or something like that. Like, renting, you know, furniture. There's nobody who had a clue. I'm not saying that million, a million Corona is a lot, or $150,000 is a lot for these kind of companies, But.

Christian: When stack it up and take all your.

Niels: All your contracts.

Soren: That's one thing. The other thing is you mentioned law firms and they are zero tolerance for error industry. So the fact that you present them with something that where they have no clue when they know they should have is a big issue. Right.

Niels: Yeah, no, like we have a meme internally where we have like, where it's like the, I dunno if you like, there's a lo, there's a meme with like a, like a storm in the back, and then a guy who's standing in front of a camera like. Like a hurricane coming. And I like, so we used to joke, that was me, the hurricane, and then the law firms, the Danish law firms, because I just like, I would just tell law firms that they were like the biggest morons I've ever met and they had no idea about. And it was like, but, and obviously they're not, they're really good at their craft, but they have no fucking clue about technology.

Soren: Yeah.

Niels: I think that's the point. I think it really provokes me. When people, especially lawyers be who are non-tech on a different level, I on a different level, right, believe that they can build a legal tech company within their own company. Because that, for me, like the logic behind that is like, I need to make one M&A transaction. So I'm gonna build an m and a transaction law firm. That is the stupidest idea. I, and I, and more importantly, I have no idea of how to build an m and a law firm other than I watch suits. You know, at some point that's the, that's the, that's what they're telling all the Dan law firms Basical is like, yeah. So I am considering buy, building my own m a house because I have one transaction, I need two done. Right? Seems logical and I think.

Christian: Terrible idea.

Niels: That's a terrible idea. Right. And then they've all been doing it for 10 years and I was like, yeah, but we can build that ourselves. Like, dude, we spent 200 million Danish kroner building the software. Like, no, you cannot build this. No, it's not, it's not, it's not, it's not something you can build it, you cannot build that. Like you first don't have the expertise at all. We have 10 years of expertise in building this, and we spend 200 million. You have zero. Yes. You don't have 200 million. How does that comply in your head? Like that doesn't make any sense.

Christian: Great. I've seen that pattern before. Like when I was at Planday, an employee scheduling system, we would like some of the really big chains in Denmark for like restaurants would create their build, invest heavily in building their own scheduling system for their staff. I was like, Why are you doing that? That's not your core business, that what good at. You're great at making cakes or serving coffee or whatever. It's like, don't do that. Like just pay us the money for it and then we just run with it so you don't, at least.

Niels: You know what, I spoke with Planday three years ago, building a contract management system. It feels like you did exactly that and I had left at that point. I'm not involved in it. And I would say that the people I spoke to, unofficially in Planday say that it's not great. So.

Christian: Interesting.

Niels: Yeah, so I would say that I don't think, and we've probably done the same, you know, like we've been doing stuff ourselves, but we were pretty stubborn and not building ai. We were pretty stubborn and not build, but we. Built our own signature, right? We could have embedded Penneo or DocuSign or something like that, but we felt that they were too expensive and Damon wasn't a commodity for us, the signature and the storage is a commodity. They shouldn't cost anything. Like it's a, it's a, it's the value, the process that creates, that has a value. It's not because like, it's the opposite of incentivizing people to actually use your platform. Like it actually wants them to limit the use of the platform if you charge per go. Right.

Christian: Sure. So the, like, where are you now company wise? Like, you know, you started like what, seven years ago? With like just a couple of people where, how are you now in terms of team size and markets and so on. Just.

Niels: Hundred people, I think we're 110, we were, going towards 170, last year. And then we made a, you know, we made, we made some adjustments in our strategy and our organization and did some layoffs. Was, you know, very good for the company. Fundamentally, it's not because we just didn't have, The company's doing better with 60 people less, and it's not doing better because we're burning less. It's doing better because the top line is better and the quality of the revenue and the adoption is better. So it's a, it's like, it's the focus, right? So when you scale, you've been through it with Planday, most likely. Where you have this accordion thing where you kind of do that all the time, right? So you did that and then you slumped two and then we're probably gonna do that again. Again. We're probably gonna do it again. Right. And, So the organization is around a hundred people. We started, we count from 17 where we raised our pre-seed money. That's when we got in real money and real professional investors. Before that, it wasn't a full-time gig for people. It was just, you know, it was, it was more of a hobby project. So late 17 is where the journey really started from us. I think we quickly was around then. 19 was with the Google and Gradient and 20 with Tiger, and then 21 was, no Beir in 20 and 21 with Tiger. And, that was kind of the journey that. So when you raised with Tiger, you also had a lot of people like, and then you kind of figure it out that some of the foundational aspects of your business wasn't set up to scale that fast. Or even you could argue that the market wasn't ready for it. Like depending on which kind of angle you want to go.

Christian: Okay. So if we are going back to like the early stages, are there like some, what were like key strategies that you used to kick off your. Growth of the company. Like, you know, you get your first, you, any company, you know, you reach out to your friends and family and fools to get the first clients on board. But then the next step onwards from that point is, normally a bit, random. What's going on there? How was it with you?

Niels: Based on the strategies, like based on the strategies, it was basically done on my prior learnings where I built the perfect product to launch and not have the business model in place. And, Which is probably the business school approach. Like when you're Carlsberg or something like that's how you, like, you launched the perfect product and you ran a big campaign and then you hope that people gonna start drinking your beers where the, like the startup ways where you create some kind of beer and then you do like a micro popup shop in a corner somewhere in Copenhagen, and then you hope people like it and then you kind of scale from there. Right? So the second time around it was more like, let's figure out how to, Get paying clients from day one. So we actually sold, we called it like, we called Slideware, so basically we sold slides to get clients in. So we had really good clients like Dominoes and Pinner car and like big brands who and Red Bull as clients before we even launched, which allowed us to, learn pretty quickly, the default and own product.

Christian: Did you close before you even, I'm just curious because, you know, it's a challenge that I see very often from founders that, you know, they want to get the big brands. That gives a lot of trust and credibility to their startup company. But it's like they don't have anything to show yet because the product is maybe not done yet or pretty buggy. Like how do you close like Red Bull and some of those others? If you are not like, ready?

Niels: Those, you know, those explanation and, I don't even know. Remember what you call like markups, which like clickable markups or how it would work. And then we basically didn't charge it before we launched, right? So we signed the document, I signed the contracts with them, and then we said, when we launched you, we charge you right? And, So if we never allow a launch, they never pay. But I think that, I think more for the more important, which is still the case, is that they have a big issue. Like they have a big issue with this topic. They don't know how to solve it. And at that point, digital signatures didn't solve it. And at that point, at this point, digital signature still doesn't really solve it. Like so if you are on the go, if you're a Red Bull salesperson on the go, Like, you can, you can create a document on a, on your phone, on Contractbook. It's, I, it's just more difficult using word on your phone and then putting in and dragging, dropping on your phone into a signature platform and then dragging, dropping into a storage platform. So if you, if you can automate that process where it's just like you fill out three fields and then the reverse is done. That is something that obviously solves a lot of problems. I remember Red Bull drove around, I believe, I don't know if it's Red Bull, but some, one of our clients drove around with a, with a battery driven printer in their car.

Christian: Holy shit.

Niels: This is, this is not a lot of years ago, right? Like it is not, it's is not long time ago. Right. So, That shows the state of very big brands and what they do and what they still do. And I think that if you go in and you look at the time, right? And you look at which, if you do the research with companies like Gartner or whatnot, they would tell you that the market is 98%. It is a 2 billion TAM. Would say that it is 98% occu, like it's probably 2% occupied and they would say it's 98% occupied. And I would say it's 2%. I would say the time is probably 120 billion.

Christian: Sure.

Niels: It depends on the lookout. So if you look at it in how many companies do have to, has digital signature, those companies, like with respect for themselves, most company too, right? How many companies have a clm? I would say 1%.

Christian: A what, sorry? A clm.

Soren: Life cycle manual.

Niels: Management system. I would say 1%. That's the temptation of all your business and all your deadlines of all your stuff. And I would say 1% has, which means that if you can automate that process and basically have a due diligence room for all your business and for all your stuff forever, and you get that for. And you don't have to have a legal department, you don't have to have operations people around it. You don't know. You don't need all that stuff, right? Like so basically when you buy Contractbook at an early stage, you're basically putting yourselves up for having, low no legal people in your organization. We have zero legal people in our organization.

Christian: Interesting.

Soren: And.

Christian: What were.

Soren: The approach.

Christian: Huh?

Niels: Because it's an operation system. It's an operation system. So it's like having, beforehand you had a finance department, thousand people operations sat and did invoices. Now you have a system, you know, you have something that does it right. And that's the fun part, is that nobody ever solved the operational part of it because it's not a legal problem, it's an operational problem.

Christian: Huh.

Soren: Instead of, instead of, seeing like most of the industry does today, that you need to have a system to put in the contracts that you have made so that you can manage those that you have made.

Niels: A system.

Soren: Go other way around because now the system becomes the source. You have all the standard phrases that you pick and choose, and then your contract is done and you send it out. For signature, an internal approval process, et cetera, before that, so now it becomes the source system instead of a support system for completed contracts.

Niels: More importantly, more importantly, these documents are now transacted in a, in a live data format, which means that you can also import and export it like real time in and another analysis. So if you or a new person or whatnot, You can book a new computer at Amazon, you can in Slack, right? We want this deal. This is the details of the deal. You can say in Slack, whatever, you can put the people, the information into the people software use, you use, you can do, you can run automatic NDAs and compliance documents on the behind of sales, et cetera. All that stuff happens automatically when you use an operation system for this. It's not a legal problem, it's an operational problem. So, and that's what the people have misunderstood, in my opinion. In. In this kind of software, because if you make a legal problem, you have people making the decisions who are educated and carried to your point, Sean, in precedents, they don't, the precedents is the exact opposite of innovation. Like they do what's proven to work? They will never do what the, what Operations people are like Rev ops, that kind of people are their functioning companies, is to innovate and to make the operations more effective. So that's the ex, so if you target one group, you're getting the most innovative people in the business versus the people who's the least innovative in the business.

Soren: Because then there you make a system the least innovative. You make a system that supports the current process, which may be hugely ineffective.

Niels: Exactly.

Soren: So, what we'd love to get back to is the understanding of how you got leads and customers in the beginning, how that changed. And like we talk about in the, in the pre-interview. There might be something that you wanna share in terms of, well that certainly didn't work, and I think you also said, oh, and there's been a lot of times where we said, oh, now we got it, and then we didn't. So a brief story on your journey from how your lead generation and revenue has developed over the past seven, eight years.

Niels: One of the, one of the beauties in Contractbook is, the virality something you call, like in the language? In the, in the, in the industry you call it the K factor. And the K factor means how many users does an existing user invite and. That number. I see. I don't remember the, I don't, I haven't looked at the KFA number for a while, but I think the average is, like for every user you have, they invite half a user per quarter, which means that when you have half a million user, they invite, you know, they, the theoretically invite quarter million user per quarter and then that number like, so the most effective source of branding and thereby indirectly marketing was. People used our platform pretty quickly and felt that it was useful because that meant that they got exposed to the Country book brand. And then when they saw some commercials, they got exposed to it. And start with, in your journey, your targets are pretty low, which means that if you convert, you know, 50 clients, in a quarter or in a year or something like that, it's pretty good, you know? And so, but if you have, if you're exposed to 50,000. People via your signature platform, like your signature and storage platform, not creation. Creation is only 50 who's using it, but they are inviting a lot of people to use it. Then you get exposed for a lot of stuff. So I think that, I think for a while, I think it was like towards seven, 10, up to 20% our revenue that came from first exposure as recipients. So we had a lot of, let's call it indirect marketing, for companies who received a sales contract from another company, and then they got exposed. They're like, oh, that was a pretty.

Soren: Like PayPal.

Niels: Then, yeah, exactly like PayPal or Zoom or whatnot. So you have these, you have this built in, and that's the biggest, to date, the biggest opportunity in conjure because it basically means you can do free marketing. So the more people use it, they're gonna, so every time you invite, you sell a client. That client invites, let's say 20, that client has 20 seats. They decide that we give unlimited seats for the same reason. So they said, okay, so I have, I need 20 people to work on me. That means that was 20 people gonna invite seven people an average to the platform per quarter, which means that those 20 people just sold at hu, let's say a hundred thousand Danish grown. They're now inviting, exposing you for 600 new clients per year.

Soren: Yep.

Christian: That's a nice Growth machine.

Niels: We nailed, have, did we think we can like to put a point of thinking you converted. Like to start with I was like, alright. I was sitting, I was listening to my, at that point favorite artist, Drake, and I was sitting in the old office at the, and sitting in window and I was like, I got it. We gotta charge $4 to seat. And then everybody's gonna buy it because it's a fantastic system at that point already, and this is many years ago, this is, this isn't 17 or 18 or something like that. I was like, everybody's gonna buy it. And then it's like Google Drive, you know, dollar per seat or something like that. It's a bit more expensive, but you know, everyone's buy it. And then, we just have a self-serve machine and we use strip as the engine. And then we have, we get exposed for all these clients and they're gonna keep on inviting themselves. The problem is the self-serve product in the c LM industry doesn't work because nobody have ever tried it. Like where the reason why self-serve for Pipedrive works is because somebody worked with Hotspot and Salesforce before. It's not because Pipedrive created a self-serve machine, it's because people accepted that they need a serum system and now they can get the cheaper serum system over here and there and that, but that's a self-serve thing with lesser capabilities. And book was obviously, In the CLM industry at that point, the lesser product, like it was the lesser product, I would say that we're not the lesser product anymore, but at that point, we're the lesser product, the less complex product. But we, but the companies who were in front of us have never, they were never at the stages as HubSpot or Salesforce, which means that they never created the industry. I would say it's a date that the CM industry isn't created. There is no, I wouldn't point at anybody to say, oh, that's, Google, you know, that's, I would say I, when, if you read an, like, I have an article on ware, right? That I believe our biggest competitors doesn't exist yet. I don't believe that anybody out there look at them is like, yeah, fine. You know, cool. Like, yeah, you might be, you know, 5 million ahead of us in revenue, but there's none of these who are cities. You know? It's not, have you been to Google City? Like it's small buildings. At maximum, like it's a floor like us. Like it is. It's not, it's not substantial.

Soren: That, was that the beginning of your growth engine?

Niels: Yeah. That was the whole idea. That was the concept behind it. The concept behind it was that users invite more users that then convert automatically, and then we lower the price to make them convert even faster. But then people start buying it as a digital software at digital signature software because they, it, they, that's the only thing they ever tried. You could argue that DocuSign, which was a 42 billion company, was a real Magen. Right. Like a real company. Right. That you would be, you know, that's difficult to work with. So everybody just used to like DocuSign basically. And then you're a shitty version of DocuSign because then if you're just a signature tool, then DocuSign is a better tool. But if you're a contract automation tool, like an operation system, you are way better than DocuSign. Like you can't compare it's apples and pairs. But if you're adopted as a digital signature platform, then you go in to compete with 200 other digital S platforms on a daily basis. Like who can beat the cheaper?

Christian: Put the right. Positioning here is super key. Like, do you want to compete face, like head to head with DocuSign and hell no. Like, can we put ourselves in a different category so that we suddenly look like an amazing Ferrari? Yes, please.

Niels: Exactly. Exactly.

Soren: Product led growth has been, the engine, feeding the growth of, Contractbook all along. You have not had to drive other channels of lead generation and growth.

Niels: I would say right now it's not at all. Right now we're paying a fuck to the money to paid advertisement like and building content strategies and all that stuff. Like I think that, When you get to a certain scale, you can rely on one. You need to be multi-threading. You need to kind of figure out like what channels work for us, what doesn't work. And sometimes they work for a quarter and then they stop working. You know, that's just the name of the game, right? Podcast work for, you know, years. And then before that it was the blog. And then before that it was newspapers or, you know, articles in the newspaper, right? Like it was, So you need to multithread and I would say that we've never been fully reliant on it. We always build content strategies. We also do, but I think that the secret source was the branding. You couldn't measure like the branding in the exposure to getting so the adoption and contract program is pretty, and like today, like you can call a lot of companies in the Nord, especially Denmark, can say, Hey, it's blah from Contractbook, and they actually know you and they receive and say, yeah, I've received three documents last year from you. Like, whereas so when you call them even back in 18 or 19, country book wouldn't be like completely unknown. Especially in the micro segment where we were, where we were heading to start work, which is like the startups, startup people knew us there. They, that's where they knew us. And so we had like a name and then you can grow from there. And then, so the conversion rates were better because of the branding? I.

Soren: Okay, so the, so the initial, the initial, product led growth where people would have to sign, documents and saw your brand name. Has actually helped you in your lead generation, both paid organic and social afterwards because there was some recognition.

Niels: I think it's very difficult to measure, but my personal assumption is a hundred percent. But because you could see it, like, you can see that in the US right now, like we're a leap of faith still. You're hoping that it's gonna work where like we're in, like when you're, when we're here and you're like, yes, we've got, Cleo and Luna and whatever. And, whatever big companies like the law firms as clients, they're gonna be like, it's not a leap of phase. Like, it works, you know? So, but. For us to get those brands that required some brand recognition. And I think that the biggest, and I think that we estimated that the brand recognition would come around a thousand logos in the market. And I think the data showed there was around 400. That's when that virality and the, like, the real kind of, and the usage and the, and the spread was.

Christian: Okay. The ketchup effect. We got that one on Planday. Remember, if we had enough restaurants in one street, suddenly our growth locally down on that street would just go through the roof because they would talk with each other, how they would deal with the employee management. I was like, yeah, we use that system. Great conversion.

Niels: Like we have a VP marketing who came from toast, which is the same industry, right? The payment tool in the US Toast. And I think that they did, I think there are 250 million error, something like that. And, or no, that was when our VP marketing left. And I think that's the same exercise that plan-based saw, like they just saw that via the community and a. A lot of, a lot of community activity and referral activity was actually what made it work for them.

Christian: Sure. So one thing is having an amazing, product and having the funding to grow. And the other thing is the team, I know you have been, talking about this, bit on Forbes least. So do you have some insights in how to like, build and nurture a good, strong team culture, for that's ready for growth?

Niels: I wouldn't say that I have a playbook, I have a sensation, but I think that I was actually doing a panel yesterday with, Christian y CEO at Plan Day and we had a pretty good discussion about this because like we agreed mostly, I would say, but we, but it was like, I think that you guys back in the days had, I don't know if you were there at that point, but I, they had this next exhibition. They had a. I don't know what he called it, but basically like a people declaration or something like that. So they talked a lot about like, what's their vision? Our vision is whatever plan-based vision is. And then it was like, the declaration is that we wanna make you better, a better version of whatever you are when you leave the company. That's what we, that's what we aim to do with all employees. And I think that then you got, when you scale, and we both talked about your gut feeling, I trust my gut feeling a lot because. Fundamentally, you know, your brain and gut communicates quicker than what your thoughts come out. So when you have a weird feeling about a situation, it's most likely cause there's something wrong with the situation, even though you don't understand it. Like you haven't still kind of comprehend the how it doesn't work, but you're like, this doesn't work. And if your gut feeling tells you that something doesn't work, like we talked a lot about culture, principles are what they are. You can write them on a wall, you cannot, it's it comes with the founders. How do you live? How do you do it? But building around the right managers who can cultivate the founders and the leadership's actions are the most important. And when you hire fast, you also need to fire even quicker. Because if you figure out that these people. It's not cold spade or even our net. Like you can't have people in managerial roles who are net neutral. They need to be net neck positive in terms of culture aspect because these are the people who have like, because your employees who's not expected to carry the load, some of them will in periods of time be net negative. So if you have a guy who's leaving the group who's only net neutral, Then that person will never have the surplus to actually pick up the other guys. To always, so the group is always net neutral at minimum. Right. And as a company, you need to have a lot of groups of people who are net positive than the company because like that goes back to where I started in Shell Oil, is that my realization there was, it felt to me like everybody's working at 30%. Capacity. And I think the reason why startups can compete with corporate is the fact that everybody works in corporates work at 30%. So like basically if you can get your guys to work at 150%, like with net neutral productivity and happiness and culture and all that, you actually have five employees for each one that DocuSign has. Right? So when I always, I always talked about, I always talked about for us, like going at DocuSign saying, So there are basically what 1,500 people, what, like, how many people does that require? So we just need to be around 300. Then we're competing hands ahead with our, with our culture. Not being like, you know, the but cultivate that is extremely difficult and I don't think there's one manual to do it, but I think that's the mindset if you understand that this is what I expect out of my group for us to compete because it's insanely difficult making a startup company and getting them to outperform established companies with. Hundreds of millions in revenue and stuff, and you're like there with a million, like your guys needs to count for way more. Like it needs to count for 10, five, whatever, X. Like it can't just be a guy, you know what I.

Soren: It, Sure. It's basically in my view, what. What you're saying here is exactly the, what Tesla has shown and implemented because they can give all their blueprints away. It still won't matter because their innovation rate is so much faster than when the others have cut, taken their blueprint and implemented it. They're even further away and they can't catch up this way unless they change exactly what you're talking about. Eliminate doing what doesn't need to be done. Which is another thing of big corporations, right? They tend to invent things to do that's not necessary to do. So get away with that, and then you become, and then a positive attitude, and then you can make do with one instead of three.

Niels: Exactly, and I think that's the thing, so. For me, it's, the dudes like, I always like, so you know the case, like I was out doing a, speak at some point and we have something, we have a breakfast event, on a one monthly basis. And then I spoke with that and then one of the guys, like it was actually was, van, he asked me, so what makes you get up in the morning? And I was like, the 25 dudes. The 25 dudes in your company that you work for, like the ones that get it, that you're like that, like get it. Like there's people who go to work and then there's the dudes who get it. And I think that's the, who have the same passion, the same vision, the same mission. They understand it, and you don't need to talk. You can run for weeks without talking to each other and you're still in line. And, that's the ones that I feel accountable for. I don't feel accountable for, you know, Investors, whatnot. They're betting on you fine. You know, accountable on quality basis. You sit there and have the board meetings, all that, and it's super useful because I think that the board meetings is like your, as leadership, it's like the guiding style, like you need to be like within realms of realization, like you need to be kind of in the world. That makes sense. Right. But also.

Soren: It's accountability.

Niels: It's somewhat, but I don't think that's the primary accountability for success. So if you're looking at the KPIs for the board, it's not what, look, what you should be looking at as a company. It is fundamentally, they should be pointing the same direction, obviously, but it's the journey and the people who make the KPIs work. So if you lose that and the start being too much about the, too much about the actual KPIs, which I think all tend to be ourselves included. Oh, we need to be, oh, you know, X we need to do wow faster and we need to onboard people in like minus two days and we need to, you know, all that, you know, like fine. You know, but that's not, but it's, if you don't have the people who actually really carries the same mission you, and you lose that in scaling, you do, like, that's just, that's a fact. And. When you lose it, you need to follow your gut feeling. Why did we lose it in this group? Is that due to leadership, one person, the four group? What is it? And you need be boosters about it. And I'm not a dickhead, I'm not a roers that way. So I have a hard time actually doing it because I'm very inclusive. I want people to succeed, with me. So, it's, it is a trade I'm learning as well on the go.

Christian: The peop, the people that I've seen make the most, like net plus to the, to the team of the company, have been the ones that have the true empathy for the customer. And, you know, really understanding how that pain that we are solving as a company, how it's really impacting them in their every day because that gets them up in the morning. At least it got me up in the morning in without being too much planned day focused. But I was talking with a waiter in UK and in a restaurant, and she was like, after we switched to plan day, I can now tell my mom that we can go, that I can go to her birthday. Because before that it was like complete random, if they should go to work, at any given time. But now it's like it's blocked out in the system and I'm going, and that was a huge change for her. I was like, fucking hell. You know, that gave me a lot of energy to like, we need to spread the word even more so we can give more people that same experience. Right. So.

Niels: I think that's a thing, that's a thing that in my opinion, conjure lost in the growth. We had the best support team, in my opinion, where everybody cared so much. And it wasn't about like, how many logos do you have? How much quota do you carry, and what's the, what's the NPS like? NDR target. It was just, you know, fucking carry. Like you just carried each other and you cared for the client. And that was kind of it. And we knew nothing about customer success. We're just, that was just like, I'm not saying we, because I was a part of it, but it's like we had a couple of guys and there were just like a. Basically a very small team who just made it work for the clients and they felt that they could always put in the chat and they on first name with the people in the chat and that kind of stuff. And then you try to put it on rails somewhat. And I would say that we derailed it, doing that in the skating process. And now we're getting back to the, we're like, Going full back to the fundamental, of caring for every client and wanting them to succeed 100%. And being, but also, but that's also alignment in sales. It's just, it's a lot of stuff, right? Like that's the full customer journey. Because if you say something in marketing and then you sell them something random and then you onboard them in something completely different, and then you're building a fourth thing, it becomes a pretty tricky exercise, right? I'm not saying that's what we did, but it's like, it's like building a fence. Like it needs to be, you know, the pillars needs to meet each other when you're building it. Right. And I think that it doesn't have to be like, you know, every like this all the time, but it needs to be like within, kind of like, it needs to be to meet each other and, I think that's something that I feel that we lost. And that made it an un. Interesting place. When you're losing that, it becomes an uninteresting place to work and see us suddenly because it's not the actual user you care about. It's your NDR score.

Soren: Yeah, if you, if you lose the customer story, we all have the idea about pains we solve, the generic pains. And the impact of such a pain and what it needs to look like and the solution we have. But I, if it's like going to buy a sports car, right? You don't buy it for cognitive reasons. You buy it because it solves a problem for you. And then of course you have to justify the purchase, but. Afterwards for more cognitive reasons, cuz otherwise you can't sell it to your wife, but you, it is purely emotional why you need that sports car, right? That's triggering you.

Niels: I have, I have, I have an Audi S six and it has like 600 horsepower or something like that. And there is abt. I have five minutes to the office.

Soren: You had to buy it as a station car to sell it to your wife.

Niels: I had to buy it cause it made me laugh every time I looked at it. And it actually makes me drive slower and I'm more.

Soren: Okay.

Niels: Because I feel that I have the actual surplus, like I have the ability to do everything in that car. That makes me calm down and be not stressed about the situation where we like, where like, so I get it. So we all, but for me, I'm very carried by, I'm very motivated by stuff, not material stuff. I'm not a capitalistic material guy in my opinion. I care about stuff that make me happy. If it makes me laugh, if it, if every time I look at it I'm like, that's stupid. And then the, because that's what I'm thinking. I'm still, and I turn on like, that's stupid. And then like, it makes me, it makes me, get in a good mood, like somewhat. And I think that's the, that's the user story for that kind of car. There is no point in the world who needs a 600 horsepower Audi six. Just nobody. Nobody. Does it. Like there is nobody who believes it. It is like purely a thing that makes you laugh. For some people, it doesn't make them laugh. Some people it's their shop, Japanese knife, like when they take it up, they're like nobody needs a knife for that's 3000 Kroner. Like, nobody needs it. They can get an IKEA knife for that does the job for a 25 Kroner.

Christian: Absolutely.

Niels: It's an emotional thing, right.

Soren: My point was really that, as Christians gave the story about the restaurant owner that now she can take time off. She's confident and not because she can take time off and she's confident, but because of that, she can now spend time with her mother. I mean, that is hugely important for everybody to pick their own favorite story on that because it helps with the alignment and why we do things, and so that it's not.

Niels: I agree, but.

Soren: KPIs.

Niels: Sometimes the shift also hyper irrational stuff, right? That comes into it like where it's like, I know companies who use Contractbook because they believe that they need to use Contractbook because it's cool. It's like it's what they should be doing. I know people in our company who's buying software because they believe that we should be using that software, but we're not actually using it. Like where it's like, oh, we should be using Slack. I was like, is or should we be used? Like, is it maybe teams is a better solution for us? Like, but like, but Slack is cooler, you know, it's not a rational thing. It's not, I can't act, nobody actually research at any point. But how many weird salesing tools that does weird shit that like one person uses, like, you know, you're cleaning it up now in these macro days, like the, when the economy changes, But the amount of shit that people have, which is like primarily irrational emotional stuff. I'm happy to say that we are in Denmark. We know that we now have a position where startups feel that it's like something they should do because they, heard from their friend that it's smart. Like they don't really understand what it does yet and they, to get the impact, but they heard that it's something you do. I'm really proud of that, but, Obviously when we, when the use case becomes stronger and you have more locals who's adopting it in the same way the Christian just explained, that's even better. Right. And we also have these use stories, but I think that Planday now we, you know, circling around there, I think that Planday also had that if I am a restaurant in Denmark, I'm using Planday. Like it's not, it's not a, if I'm a starting contract in Denmark, I'm using Contractbook. And Cleo and stuff. And that's just like, that's your basic startup pack. Like you need your startup.

Soren: That's the status of proven branding and delivered on the promise that you can enjoy later in life when you have come thus far.

Niels: Clearly. And I think that, I think that the, but I think that, to start with, for us, it was so much about the actual just relationships. It wasn't even about, it wasn't even about being able to tell. I proved that and now I'm like, to Christian's point. Now that woman can go to her mom's birthday. Like I don't think that Contra book allows that, but.

Soren: For people to go to birthdays.

Niels: It does allow people to sleep, you know, safely at night because people know where the shit is. Like if you're a contract manager, you actually know where shit is. Like I know I use Contractbook, obviously we dog shit, right? But, Dog food. But ultimately I know where all our contracts are. I know where they all are. I like, so if you're investing in Contractbook, let's say you two are smart investors, well dumb investors, whatever. And you go and you call in Contractbook and you're like, Hey, one, invest, like we need to get rid of, we need to get access to DD room. The only thing I have to share in DD room is the p and l. The rest is in contract room. And it's done. It's not like I have to collect a lot of shit. Where are employment contracts, where are the sale contracts? Why is the compliance stuff? It's all there. Like it's one place where holistically, everything is there. So there's thousands of documents one place and they can just go in and search and look into the folders and look at the task and look at what are, and they can, you know, and it's better if the ozi is done. Searchable is what you need. And I think that's something that makes me. Solving that problem for other contract owners or company owners is something I'm really proud of.

Christian: No. Cool. I wanna finish up with one question, before we, before we jump off the call, which is, Did you get, like, what's the most impactful advice that you have received on your journey as a founder and like, why did it resonate with you? If you have any magic moment, magic advice.

Niels: There was an investor once that told me, that, you know, you shouldn't be fanatic. Basically what the person like, quote unquote was, do what's ever easier for you. Which meant whenever you asked about should we do bottoms up sales or top-down sales or sideway sales or should we onboard should it be self-served? It's like whatever's easy for you because at the end of the day when you start a business, it's about building to let's say five or 10 million ARR like, and you need to get there before you can start. Like you can be like, how many companies have actually solved the bottom up self-serve motion? 10, you know, so being fanatic about that because you listen to a podcast about, oh, this is how you create the perfect self-serve business and then you're fanatic, but it doesn't fit to your business. The CM industry, for example, like that's how we proved, that's what we thought to explain what we did. And they, we thought that would be how it was. And they were like, but shouldn't it be self-serve? And then a bottoms up and they're like, you could also just increase the prices and then do onboarding if that's easier, you know? Okay. You know, then we'll do that. Like, then you test that out. So you figure also being iterative to get to what's easier for you. I think that fan fanm or whatever it's called, like being fanatic about it, is just like, it's a, yeah. And then Jordan Peterson has a good quote, which is like, said, your bar said your bar low enough. That's not, but I think that's actually a really strong advice because if your, if your aim is to run a marathon the first time you put, you go to a treadmill, you don't run 42 kilometers.

Christian: No.

Niels: You run three and then you run five, and then you run five, and then you run five, and then you run six, and then you run six, and then you run eight, and then you run eight, and then you run eight, and then you run 10 and then whatever, and then you do spots, you do interval stuff, and suddenly you're at there, but you start low enough, like you're not demotivated by the fact that you can't run 42. You're motivated by the fact that you're improving on the journey to get to 42. And I think that's the biggest problem is that most people think that they should be able to run 42 and when they're building the business, they're real building it for launching at 42, but they have no idea how to run 42 kilometers. So they should just be aiming for three kilometers and be happy about it, and then be happy about going to five and then be happy about going to six. Like, and I think that's where people, we do it ourselves. Oh, we should do the perfect internal scoring of our clients. Maybe we should just make sure that all our, all our clients is assigned to CS people to start with. You know, like, you know what I mean? Like it's not about the actual score of the perfect system. It's about like making sure that everybody's treated correctly.

Christian: Oh.

Niels: Then you might get to the perfect score at some point, but if you don't assign them day one to somebody like, then you're never gonna get the perfect score. So you might have the perfect system that tells your score, but because you never, you know, you never did the. Then you just have no chance of actually getting a good score.

Christian: That's a very good advice. Niels, thank you very much for joining us. It's been super fun and interesting to hear, your journey and.

Niels: For having me.

Christian: Yeah, welcome. Awesome. Thank you.

Soren: Thank you for joining us on today's episode of The Messy Growth ShowCheck out the upcoming guests on messy growth show.com. You can subscribe on Spotify, apple Podcast, Google Podcast, and YouTube, And if you do have any comments, feedbacks, or suggestions of topics that are particular importance to you as owner, marketer in the software or manufacturing industry, please do reach out to us on Messy growth show.com. We'll see you on the next episode of The Messy Growth Show.