Bootstrapping from Finland: Vainu CEO Mikko Honkanen (Part 3)

Sramana Mitra: You had a bunch of paying customers before building the product. How much were they paying for the annual upfront payment? How did you find these companies?

Mikko Honkanen: We used our own product. To find the first unaffiliated customer, you need to do sales and marketing. So, we focused on all the companies that bring in lots of sales people. If a company has a lot of job openings in the field of sales, that was a sign for us that they invest in sales. Typically sales people needed to do prospecting, so we went after those companies.

We also started content marketing early on. We were writing on a blog once a week and asked our network to share that. We got quite a few good inbound leads at the very beginning. One thing that I want to mention is that we had started developing the product when we got the first customer. We hadn’t released the first version.

Sramana Mitra: How much were they paying?

Mikko Honkanen: Back then, the average contract value was around €3,000.

Sramana Mitra: You had 10 of these?

Mikko Honkanen: We started in August of 2014. By the end of 2014, we had 26 paying customers. That was the moment when we decided that we can actually have an office and we can bring in employees. We hired our first employee in January 2015. Before that we operated out of my living room in Helsinki.

Sramana Mitra: How long did it take you to get the first version of the product out there?

Mikko Honkanen: We started developing the product at the beginning of 2014 and then we released it in September. It took nine months.

Sramana Mitra: What happened in 2015? How did the company grow? What else did you do that was interesting and strategic?

Mikko Honkanen: In January, we got our first office space. We hired four people at the same time and one person joined the tech team. Basically, we had five new employees. Suddenly the cost base went up a bit. Then you know that you need to do an excellent job with existing customers so they’ll continue with you. You need to sell quite a bit so that you have positive cash flow. There was this feeling that this is a real startup.

Before that, it was just four people in my living room. The feeling is completely different. That’s what we did. Q1 2015 was one of the best quarters we have had because all the new people were successful. Everyone is still with us. We were releasing new product versions all the time. In the summer, we had already upgraded the office once. We decided to go international. Typically, when Finnish companies want to go international, they open up an office in Sweden. That’s what we did as well.

Stockholm is very close to Helsinki. Even though the language is different, it’s a similar culture. We hired one Finnish guy who speaks Swedish and also a couple of locals. We asked them to fly to Helsinki so they get the idea of how we do business. Then they moved back and opened up the second office.

This segment is part 3 in the series : Bootstrapping from Finland: Vainu CEO Mikko Honkanen
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