We spoke to Yaytrade CEO David Knape and Head of Product & Marketing Jon Berglund to find out how they got their funding, the challenges of organizing a business-to-consumer platform, and how to manage the team the right way.
This is a transcript of an interview recorded at Web Summit, an annual tech event held in Lisbon, in November 2019. You can read the interview below, watch it, or listen.
Hi guys! Can you tell us a few words about your company and what you do?
David Knape: Yaytrade is a marketplace where you can buy, sell, swap and rent out products and services, and pay with anything that has value, meaning you can pay with cash, you can pay with a product, or you can pay with a service.
As a seller, you can put any price on your offer and be offered cash, other products, or services as payment. Or even a combination of all of those. It’s a consumer-to-consumer, but also a business-to-consumer platform.
And how many clients and users do you have right now?
DK: We have 23,000 registered users from 160 countries [edit. note: as of November 2018] and we’ve launched the platform in November 2017. The full platform launch was in April 2018. Since then we’ve mostly grown organically.
And how did you get your funding? What was that process like?
Jon Berglund: Mostly by contacting the people we know. Angel investors, friends and family. That was at the start. Then we moved on to bigger angels, the investors we have in Sweden. And now we’re preparing for our A-round, so moving towards the VCs and companies.
You need to have that control and know what everyone is doing, and that can be a problem if you’re outsourcing from the very the beginning.
What would you say in the secret to getting an angel investor interested in your product?
JB: Oh, that’s a hard question… A very hard question because all investors are very very different: some look at teams, some look at the numbers, some look at the product. So if you’re good enough you can manage to find a mix of that. And a good presentation, I would say, is the key to everything.
DK: When it comes to angel investors, most of the time they invest into a person rather than the business idea itself. So I think it’s really important who you are and how you present yourself and the team, because that’s basically what the angel investors invest in. Of course, the idea has to be good, but in the end, it’s up to you guys to run the company and to make sure it does well. So a really good presentation of who you are is good.
And you’re a pretty young company, so how many people do you have on the team right now?
DK: We’re 8 people working full time. We have four developers, who are all really skilled. We have one sales manager doing sales for the business accounts at Yaytrade, and then we have Jon – head of marketing & product, me as the CEO, and another marketing assistant. It’s a small team but we’re very efficient.
And you’ve mentioned that all of your developers are in-house. You don’t like outsourcing?
DK: I can’t say we don’t like outsourcing, it’s a good option to have if you don’t have the possibility to have your team on sight. But for us, there’s a lot of benefits in having them in-house because then we have a lot of control of the product. I think that’s crucial to be able to fully manage your startup team in the beginning. You need to have that control and know what everyone is doing, and that can be a problem if you’re outsourcing from the very the beginning. When you’re moving to a module phase later on, it can be good to outsource as a compliment to your development team on sight.
From the very beginning, it was very tricky to find the right person for the team that you don’t have to pay a fortune for.
And obviously, as any startup you must’ve faced many obstacles along the way. What was your biggest issue or problem you’ve faced when growing Yaytrade?
JB: I think the biggest challenge has been that since we’re a marketplace, we have both buyers and sellers, and we have to satisfy both. So, first of all, we need to have content, but then we have to have buyers who will be interested in that content. It’s working on both sides, and for me that’s been the biggest challenge, and we’ve been working to manage that.
DK: I agree. And I’d say another challenging process is developing a team. When we started Yaytrade we were actually working with a company that provided us with the fundamentals behind the platform, so you could say we were actually outsourcing it a bit. But then, as soon as we could, we got our on developers on sight. From the very beginning, it was very tricky to find the right person for the team that you don’t have to pay a fortune for.
JB: I would say the most important part is filling in the key roles – the CTOs and the [C-levels] who know what they’re doing. And if you’re starting to gather a team and there are people who you’re uncomfortable with, if they’re not doing a great job – start thinking of changing those people out. If you stay with these people for too long, your business just won’t go as well as you plan for it to. Just try to find the right people for the right position and don’t be afraid to cut people off if you feel they’re not right for you.
Many people we’ve interviewed have actually said that firing people from your startup is one of the toughest jobs. How do you let them go gently?
DK: Of course it’s always going to be hard to do that, but in the end, if you explain what you expect from an employee, then the employee will know when they underdeliver, they will know that they’re not doing a good job and the discussion will be much easier. It’s tricky, I wouldn’t say it’s a specific skill, I think in the end it’s about being honest and honestly letting your employees know your expectations, what you expect them to deliver.
JB: And like we always say – communication. Communication with employees and even between management – that’s how you know what they think and they know what you think. Don’t be afraid [to let the other person know what you think], just communicate.
In an open workplace where no one is afraid to share what they can improve on and what they do well it’s easier to share and communicate.
How do you make sure you’re at that perfect communication level? Do you use any specific team management techniques?
DK: Yeah, in a startup I think it’s important that everyone can learn from each other. So you share the knowledge between the teams. When you’re a small company, you work in small teams, and, of course, we meet every day, but we also have set meetings on Mondays and Fridays. On Fridays, we have a more open meeting and I hold a stand-up where I talk about our KPIs, what we have achieved, what’s going great and what hasn’t been going that well, what we can improve.
We then go around and each team member has a chance to share what they think, what they’ve learned, and what they could be doing better. I think in an open workplace like that where no one is afraid to share what they can improve on and what they do well, it’s easier to share and communicate.
And my last, but probably the biggest question: what’s your #1 advice for anyone considering starting a business or launching a startup?
JB: Just go for it!
DK: Yeah, I was gonna say the same! Just do it! And don’t forget to have fun, because it’s really fun. Believe in what you’re doing and you will succeed.
JB: Don’t be afraid. If you start being afraid and not believing what you do is great, then you’re on thin ice. Believe in what you do and keep on going.