What do Unity, Siteimprove and Tradeshift have in common? For one, their readiness to adjust their business models. Unity changed their focus from making games to making game technology. Siteimprove professionalized their recruitment process, and Tradeshift homed in on implementing their platform at customer level. At Nordic Growth Hackers #7 these and other impressive growth stories were shared by six expert growth hackers.
The crowd was packed at Founders House at the launch of the seventh Nordic Growth Hackers event on the evening of January 25, 2017. Besides informal networking over pizza and cold beers, the night was filled with inspirational speakers who shared their journey leading them to their current business models. All journeys showcased a variety of growth hacks.
Click here to see the interview video with the participants!
Morten Elk, the host and initiator of Nordic Growth Hackers, opened the night by encouraging the participants to share tweets using #nordicgrowth and #cphftw. In Morten Elk’s own words, this growth hack would completely pale compared to the six speakers’ stories about continuously hacking their business models.
Morten Elk, initiator of Nordic Growth Hackers and CEO & founder of SimpleSite
Click here to view Morten Elk’s keynote.
Unity: Red oceans and blue puddles
David Helgason, founder of Unity, went from being co-founder of a game company to being co-founder of a technology company. In this process, the founders moved from a red ocean to a blue puddle, to being a shark in a red ocean.
In Unity’s early days, David Helgason and his two co-founders were focused on developing games. According to David, that was not what they did best, and the industry was a red ocean.
However, in the process of developing games, the three founders ended up building their own technology, which eventually became the game engine that Unity is known for across the globe.
David Helgason, co-founder of Unity Technologies
A once in a lifetime revolution
When the iPhone was launched and the smartphone revolution began, David and his two co-founders dove in and discovered a blue puddle – making Mac-based technology for developing games. These days, games developed in Unity are downloaded more than 2 billion times a month, which means that almost any smartphone worldwide has an app built in Unity installed.
For a couple of years, Unity was the only provider, which meant great opportunities for developing their engine and securing their position in the market before other companies entered the field.
Based on what David Helgason refers to as ‘the Silicon Valley Playbook’, Unity Technologies launched as a freemium model – not an obvious choice at the time. This model was not fostering as much growth as expected, so an ad technology company from Finland was acquired.
The Finns added an ad platform to Unity’s engine, which meant opportunities for scaling the business and moving towards a business model based on networks.
The smartphone revolution can never be repeated, but the resilient search for a working business model is replicable, said David Helgason.
Click here to watch David Helgason’s full presentation.
Tactile Entertainment: Getting an unexpected competitive advantage
The second speaker on stage was founder of Tactile Entertainment, Asbjørn Søndergaard. In 2010, when Asbjørn Søndergaard founded Tactile Entertainment, he thought that developing and building the best game engine would be Tactile’s competitive advantage in the years to come – but time would prove him wrong.
Over the years, Tactile’s competitive advantage developed as a result of Asbjørn Søndergaard rethinking the business model.
To begin with, Tactile’s business model was a premium model. This model changed into a freemium model, further developing into a business model where monitoring users based on performance-based mobile marketing became Tactile’s competitive advantage.
Asbjørn Søndergaard, founder of Tactile Entertainment
From game studio to ad tech company
The development in Tactile’s business model was inspired by a dissatisfactory partnership with an external performance-based marketing company.
Tactile built an MVP to do the performance management that the external marketing company had initially been hired to do. It soon became clear that the MVP was working and that more resources were needed to develop it further.
Today, nine out of 45 employees are dedicated to building and developing tools for internal monitoring of the games’ performances, and the marketing channels have been mixed. Previously, 90 % of the marketing budget was spent on Facebook advertisement, today that has been reduced to 20 %.
The move from solely being a game studio to being an ad tech company has resulted in 80 % of Tactile’s revenue being generated from advertisement.
Click here to view Asbjørn Søndergaard’s presentation of Tactile’s fascinating journey.
Penneo: Just do it
The final speaker on stage before the first of the two panel debates, was Janek Borgmann, CEO at Penneo. Penneo is a digital solution for signing documents using eID.
Janek Borgmann’s main point was the importance of including your (potential) customers in the process of modifying your business model – the sooner the better.
Before getting the software providers to integrate Penneo in their solutions, which was a challenge to begin with, Penneo got the customers onboard to support the business model’s potential. Once the customers were onboard, the software providers got onboard as well.
The customers were initially acquired through a freemium/try and buy model.
Janek Borgmann, CEO at Penneo
We didn’t know that we were growth hacking, but we were
Even though a lot of customers appreciated the product, they didn’t seem to get it properly implemented in the organizations, and Penneo knew that something had to be changed.
The freemium/try and buy model was replaced with a subscription model combined with upfront selling of signatures.
The change in pricing model contributed with a growth in used signatures at 300 % and the revenue grew 10x in the period 2014-2016. Growth is expected to continue because, as Janek said it:
“If you are used to the old-fashioned way and go digital, you don’t want to go back.“
Watch Janek’s dynamic presentation of his experiences with Penneo here.
Siteimprove: Setting ambitious goals from the beginning
When Siteimprove was founded with the ambition of finding and improving errors on the websites of large organizations, the founders knew they had to expand aggressively to be successful. Acquiring customers had to be done by skilled salespeople through cold calling, because no one was really demanding Siteimprove’s services at the time.
Morten Ebbesen, co-founder of Siteimprove, shared how recruiting the right salespeople was a great challenge at Siteimprove to begin with.
Morten Ebbesen, co-founder of Siteimprove
Four sales people hired – three of them fired
In the beginning, whenever four salespeople were hired, three of them ended up being fired. Siteimprove realized that they had to do something different – that difference was to professionalize the recruiting process.
An American recruiter was hired to find and onboard salespeople in the U.S. The result was better salespeople receiving better onboarding, which initiated a continuous annual growth of 50 %.
The growth in the U.S contributed to the funding needed to grow in Europe. Today, Siteimprove has four recruiters employed and more than 200 salespeople.
Click here to watch Morten Ebbesen’s talk and find out how love *heart* placed their U.S offices in Minneapolis.
Iconfinder: Who are your customers?
The fifth speaker of the night was Martin LeBlanc, founder of Iconfinder – a platform for purchasing icons. Ever since Iconfinder was launched, Martin has experimented with the pricing model.
Martin LeBlanc, founder of Iconfinder
The first model was based on a freemium model. The freemium model was further developed, and premium icons were added. To buy the premium icons, the customer had to deposit an amount of money and then purchase the icons at fixed prices.
After some months, Iconfinder’s growth stagnated and Martin LeBlanc decided that it was time to find out exactly who his customers were.
Through surveys using Google Forms and answering support calls on Skype, Martin LeBlanc and his team learned that the customers were designers, developers and managers. The designers and developers use the icons, but payment was approved by a manager, which made the process of continuously depositing cash to purchase icons difficult.
The solution: subscriptions
Based on the insights about the customers, Iconfinder changed its pricing model to one based on subscription fees. The advantage of subscription fees is that the customers use your product without thinking about the cost.
Click here to hear more about Iconfinder’s exciting path to the right pricing model.
Tradeshift: A shift in customer focus
Gert Sylvest, co-founder of Tradeshift, was the last of the six speakers to take the stage. Tradeshift is a platform that connects buyers and suppliers, and initially they viewed governments as their target segment.
As time passed, Tradeshift found that working with governments was a very lengthy process. To speed up the process, Tradeshift started to focus on Fortune 500 companies instead.
Gert Sylvest, co-founder of Tradeshift
Working with Fortune 500 companies can still be a lengthy (and expensive) process, which is why Tradeshift only hires sales people who are experienced in selling to these types of companies.
Onboard your customers
Tradeshift’s business model started as a freemium model. This turned out not to be the best idea, because none of the companies invested themselves in using the solution – they had nothing at stake.
To meet this challenge, the model was changed into a subscription-based model, and more resources were invested in onboarding the clients and continuously following up with them.
The result: Clients implement Tradeshift thoroughly and the clients get maximum value from the platform.
Click here to watch Gert Sylvest share his extraordinary experiences with Tradeshift.
From left: David Helgason, Asbjørn Søndergaard and Janek Borgmann
In addition to the six intriguing talks, the night featured two panel debates with three speakers each. The crowd was more dedicated than ever, asking questions concerning anything from key metrics to the founders’ next steps. Silicon Valley was, of course, a topic of interest as well.
Going to Silicon Valley or not?
According to David Helgason, going to Silicon Valley can be an extremely valuable step to take, especially if you are involved in the gaming industry. When the founders of Unity moved to Silicon Valley, they felt the gravity there, he recalls.
In addition, Gert Sylvest shared that the first office Tradeshift established outside of Copenhagen, was established in Silicon Valley, which in his opinion still seems to have been the right decision at that point.
Nevertheless, moving to Silicon Valley is a big step and David Helgason recommended to just start going there occasionally and sniffing it out.
Many thanks to the six tremendous speakers who made sure that our minds were full of fascinating stories and tips for hacking business models.
We are already preparing NGH#8 on May 10, 2017, so mark the date in your calendar – we hope to see you there!