We had the pleasure of welcoming three of our Wall of Fame inductees to our annual Fireside Chat to gain some insights into their leadership style, creating a growth culture and the challenges they faced as a deep tech company.
THINGS’ Wall of Fame (WoF) is an annual award presented in recognition of an exceptional individual who has built a successful business empire based on pioneering innovative technology that has come to define the world we live in. Thereby acting as an inspirational role model for the startup community in Sweden.
Our Wall of Fame guests;
- Stina Ehrensvärd, 2018 WoF inductee, is the co-founder and CEO of Yubico. They currently have 240 employees in eight countries
- Nicolas Hassbjer, 2017 WoF inductee, is the founder of HMS and is no longer operational in the business. He invests in tech companies via his investment firm Tequity. HMS has 600 employees in 16 countries.
- Martin Gren, 2015 WoF inductee, is the co-founder of Axis Communications and they have 3500 employees in 50 countries. He is the chairman of the board for Axis Communications.
The moderator, Malcolm Larri, is a Leadership and Transformation Consultant.
Sven Lindström, recipient of the award in 2019 and founder of Midsummer and John Elvesjö, recipient of the award in 2016 and founder of Tobii were regrettably unable to attend.
The invite only audience included THINGS startup members, enterprise partners and individuals from our extended community.
Leadership as something to focus on
Nicolas admits in the first year he “was a pretty bad leader”, the company had ten employees at the time. The turning point was having a mentor catch him out after seeing the queue of employees outside Nicolas’ office. During that time HMS had no board of directors and Nicolas saw the value in mentorship. This mentor subsequently taught Nicolas how to enjoy the leadership role.
“You don’t have to be [the] best at everything.” Stina Ehrensvärd
Stina as a maverick CEO with a personality test that highlighted her non conformist attitude, felt very early on the pressures of being a one person company. The weight of starting a security company that no one wanted to start coupled with limited funds “who would want to work for me if I couldn’t pay” she said.
It was her conviction and passion for her mission of making the Internet safe that attracted a former startup CEO to the Yubico cause. He joined Yubico and helped Stina tackle the responsibilities of being a CEO. The natural ability to evangelise Yubico’s purpose into a bigger vision has paid dividends for Stina attracting the best people, the best customers and the best investors. Stina shared a conversation with a customer who later became an employee by offering him the chance to secure the Internet. “I wanted to be the new global standard just like Ericsson did with GSM. That would secure four billion people.”
In Martin’s case he recognised very early on the need to delegate. In the early days the company grew to 50 employees despite the absence of a HR Manager. Stina said she was “lousy at a lot of things” and confessed her dislike of administration which forced her to delegate. Teamwork made it possible not to be the expert on everything. Her optimism has been and is an incredible asset in times of crisis.
Nicolas’ explained that there are several steps involved in leadership when you create a company. After delegation comes setting up a management team and with the inevitable growth a good HR Manager is needed to execute on recruitment. The next step is training managers on “how to manage” which alleviated the need to delegate in his situation.
Embracing the leadership role
The lessons learned by Martin and Nicolas around core values, implementing and communicating this within their respective companies too several years. Nicolas advises to establish a clear vision, strong corporate values and communicate them. Something that he wished he acted on earlier, in his case articulating them came eight years later. Getting this right “beats any strategy.”
Stina adds, as a leader you need to care about the core values and the corporate culture especially in tech companies as there are more IT jobs then there are people to fill them. Yubico’s main asset is the people, if you don’t attract and retain them you will lose a lot.
Deep tech culture
Forward thinking people tend to have an open mind, are curious about doing something new and exploring new territories says Stina. Especially in the case of deep tech companies, not knowing “is actually the opportunity for growth and innovation”.
“The culture is a reflection of the business model. When people don’t understand the culture sales will decline.” Martin Gren
In Axis’ case, their second core value is to “act as one” which empowers their employees to try and seek the answers when it’s not obvious. The commercial benefits of having these core values are manifold including the innovation potential and retention factor. “Company culture basically reflected who we were.”
The link between sales and culture
This relates to Axis’ business model where they sell indirectly in two tiers, through a distributor and an integrator. In their business of security cameras, it’s important that employees understand that customers want peace of mind. Understanding the culture produces symphonic harmony.
When faced with the serious mission Stina points out that it’s important to nurture the fun by sharing feel good stories that make people laugh as it boosts morale and productivity. She hired a HR Manager with the explicit understanding that they were hired to make people happy. Acknowledging people’s hard work and giving them permission to not be serious all the time is something that Yubico works hard at achieving.
It was not until five countries later that HMS added a HR Manager. Solely focused on sales in his role as CEO at the time Nicolas was happy to relinquish the responsibility of training their 30 managers on how to manage. By lifting the middleman he likened the transformation to “…a miracle in the company…”.
Stina recalled the worst advice she received which was not to show weakness and shared her experience of a tough meeting with investors, negotiating terms. Exhausted she burst into tears and got a nose-bleed. Showing vulnerability can help situations and Martin concluded that at Axis being open and transparent is one of their core values.
“Founders really need to complement each other. That’s where the music comes.” Nicolas Hassbjer
Nicolas created a profitable company, 1.3M SEK in rev
enues in the first year and a half before deciding that it was time to expands and employ someone. An old university friend that he had previously worked with became a partner in the business. It’s important to go with people that are “better at other things”. Nowadays as an investor helping companies grow he sees how critical it is to find co-founders that complement each other’s skills.
Stina’s co-founder is her husband Jakob, he only recently accepted the title. Jakob made the first working prototype. She said, in order to build a company you need an evangelist, someone to build a great product and someone who takes care of operation and finance. The latter roles filled by a COO and CFO. They make up the skillset that complements her and Jakob.
At the age of 11 Martin knew he wanted to start a company, in electronic hardware, because that was his passion. Whilst working as a consultant, a common friend introduced him to his co-founder Mikael. With similar aspirations the duo set about searching for the product idea. They settled on the idea of connecting a printer to an IBM mainframe and then realized that they did not know anything about sales. They found the third member of the founding team in Keith Bloodworth. Bloodworth helped them define the business model and set up their two -tiered indirect sales approach.
Scaling the business
The winning formula for HMS was “direct sales to the most demanding customers.” Having no-one in between allows you to be in control of the relationship. Letters of intent at the beginning helped scale the business. Demanding customers, besides providing an income, helped HMS innovate as these clients were the ones specifying the next generation product. This close cooperation with industrial companies very early can also open up new market opportunities. Their customer, Atlas Copco, opened the doors in Japan for HMS. Nicolas explained that the key challenges were quality and production in ramping up volumes. Quality is important if you’re going to sell to Japanese robot manufacturers.
Martin and his co-founders made the conscious decision not to set up in Sweden. Like all Swedish companies they wanted to set up in Silicon Valley. Mikael convinced them to go East Coast and they set up an office in Boston instead. This foray in the US proved unfruitful. It wasn’t until their second office opened in Tokyo that they understood where they went wrong. The Japanese are more consensus oriented, similar to Swedes which highlighted the need to define Axis’ core values and implement them. It was these core values that enabled the expansion to other countries including Europe upon the successes of offices in Hong Kong, Shanghai and Sao Paolo. They finally cracked the US when they opened a second office in the US, in San Diego. Having a scalable business model helps. Not a fan of production the co-founders outsourced Axis’ production to focus on product design and sales.
With clients such as Google, Facebook and Microsoft come opportunities in the form of new investors, keen on building Yubico into a unicorn. With this new relationship comes the pressure of tripling sales every year. Mass scaling whilst keeping the culture, values and quality intact at Yubico is indeed a challenge for Stina. She admits she does not have the formula yet.
The deep tech path
“…when you have more advanced things then you can definitely survive.” Stina Ehrensvärd
Apart from their own companies the guests concluded that there are companies like Apple to inspire budding entrepreneurs. Deep tech companies generally have more software engineers than hardware and the margins are good due to the unique software so coming out on top is high. Stina says there is a big advantage in being a Swedish security company in the current global climate surrounding privacy.
About our WoF guests
Stina Ehrensvärd and her husband started Yubico in 2007 with a vision to make internet security both user-friendly and secure. Yubico has since become a new standard for secure computer log in to computers, mobiles, private networks, and services. Today Yubico has an impressive customer list of the biggest international digital corporates and with 230 employees. With a strong vision, healthy stubbornness, innovative technology, and complementary founder skills, Yubico has become the true world leader in user-friendly and secure internet login technology.
Nicolas Hassbjer, founder HMS Nicolas Hassbjer founded HMS in 1988 as a result of a student project at Halmstad Högskola, with a passion for electronics and embedded software, HMS was an early pioneer of the IoT and is today a world leader in industrial communication. HMS has over the years achieved rapid annual growth and has around 500 employees. With professional management, continuous innovation, and a successful IPO, HMS has developed into a success story within the Internet of things area.
Martin Gren, co-founder Axis Communications Axis was the first company in the world to launch a network camera in 1996, initiating the shift from analog to digital technology. Today Axis is the global market leader in network video, driving the industry by continually launching innovative network products based on an open platform – delivering high value to customers through a global partner network with over 3,000 employees. Solid management, continuous innovation, and a world-class indirect sales organization have made this company started by students in Lund a true success story.
You can find the video link to the Fireside Chat on our deep tech YouTube channel here.