I had two jobs when I started this. And Burt! ” – Gustav von Sydow
Four years later Burt holds their own with 21 employees and offices in both Sweden and the United States. Today they have a clear focus: helping media houses to turn their web presence into a profitable business.
We met Gustav von Sydow (CEO) and Fredrik Grahn (CFO) to talk about their road to the successful business they run today, the pitfalls and the hard choices.
Burt is located in the center of Gothenburg, housed in a charismatic early 19th century building. When entering the office there is no question that this is a modern, fresh business. The air is buzzing with an inspiring enthusiasm, people are talking project planning from the comforts of a sofa, and others are standing over a retro arcade machine to clear their minds before going back to the code illuminating their displays. You can tell that this is a healthy and creative environment of a company that is on the forefront of their field.
The idea behind Burt may be simple: to help media houses utilize their available data and analyze this to better focus their efforts on the web. But getting there has not been a walk in the park, in the beginning the focus was not on working only with media houses. The founders of Burt saw that there was a lot of different technologies out there to help with analysing customer interaction with website, however, all of those seemed to be tailored to help ecommerce sites only. So when Burt was formed in 2009, the plan was to help new types of companies to utilize and analyze their data much in the same way as many e-commerce businesses had done before. It is easy to categorize Burt as a Big Data company, but as Gustav says:
“It was not that we started out with a great database technology and built a business around this, but rather that we started building a business around a need we saw in the media, entertainment and PR industries. It just happened to be a big data company that was the simplest and best solution for this problem.”
The road has, however, has not been straight from start to end. A major turn was taken when Burt realized that there were more to gain from focusing on a single type of business instead of working with PR and production firms catering to all sorts of fields. This business was the media houses, who are undergoing a major change and desperately needs help to land on their feet. The sales of good old newspapers are dropping and the advertisement revenue with it, at the same time the media houses have been far too kind in giving away their web content free of charge. It is no easy task for a company not used to work with making web services turn a profit to handle this predicament.
This is what Burt also realized, and had the perfect expertise and technology to handle this exact problem. But as Gustav puts it:
There are a lot of late nights in front of the whiteboards before you come up with something as simple as helping the media houses to gain the same technical edge as the great internet companies takes for granted
Taking a turn with your business like this is no easy feat. Burt had already built quite a large customer base in PR and advertisement firms that they now had to let go of in order to make the change into focusing solely on working with the media houses: “So we dropped almost half of our customers. This was not only tough because we lost much of our revenue, revenues was cut in half from one month to the next. It was also really tough because many employees had worked really hard on getting those deals in the first place.”, Gustav von Sydow says.
When you feel in your gut that you really have something, you push up the price and you then strike a deal with a customer that pays more than anyone has paid before, then you really understand that you have something great, something special.
During this time one of the biggest challenges was keeping the momentum and keeping all employees motivated. Today it is clear that it was a good choice to change direction, Burt now has a single market to specialize in and that has also made it easier to define the company.
Gustav: “What we do has great value in the particular field we focus on. We do not work with agricultural or finance or anything other field. We are very explicit about that.”
It still took some time before the people at Burt felt that the choice they made was the right one. It was around christmas in 2012 that they signed their first big customers under their new banner of helping media houses with their web business, had Gustav and the team stopped and reflected at this point – they would probably have known they were on the road to success. However, it was not until the summer of 2013 that they really understood that all the pieces had started to fall into place and they really realized that they had succeeded in creating a thriving business.
“A lot of people that have been in our shoes have said that: “When you know, you’ll know!”. And then you think: “How will I know??””, Gustav von Sydow says. Fredrik continues on the same note: “When you feel in your gut that you really have something, you push up the price and you then strike a deal with a customer that pays more than anyone has paid before, then you really understand that you have something great, something special.”
Now Burt looks to the future, the main focus right now is to strengthen the relationships with their current customers and continue to evolve their products to cater to the needs of the media houses. On the horizon the market in the United States awaits, but that will be another chapter.
So why is Burt then located in Gothenburg? One of the reasons is clear, both Gustav von Sydow and Gustav Martner, founders of Burt, were located in the city. Gustav Martner is also the Managing Director of CP+B Sweden and based in Gothenburg.
One thing to keep in mind when comparing the difference between Gothenburg and Stockholm, is that on the global playfield both those cities are in the minor leagues, Gustav von Sydow makes the point with the fact that in New York alone – there is at least 40 companies that is larger than Burts biggest account. And compared to Stockholm, Burt sees many advantages with keeping their headquarters in Gothenburg, one is the vicinity to Chalmers. With the type of technology company that Burt is, Chalmers University has been a great source for recruitment.
When Burt have positioned themselves to take their pick of recruits from Chalmers, they have done so by building a reputation of continuously forming raw talent to experts in different fields which makes them a very attractive place to work. In Gustavs words:
If you can be known as a company that has a track record like us, to take new recruits with raw talent and to make them experts that goes on conferences in Germany, England or the USA. If you can be that company, in Gothenburg, now that is awesome!
Gustav continues: “A lot that has happened to us during our journey can be written up to coincidence or luck. But the idea that we have to help our employees to be better at what they do than employees anywhere else; that has been with us from the start. And that is something to be proud of. That we actually have managed to deliver on that idea.”
Another great thing about being positioned in Gothenburg as opposed to Stockholm is that in Stockholm there are more companies that can recruit the type of people that Burt needs and that does not only increase the risk of losing potential recruits but there is also then a greater risk of losing the employees to another company.
Burt truly is one of those companies that started with a great idea and managed to get through the rough times, make some hard choices and now have become a blossoming business. We picked their brains on what is needed to make this journey:
Gustav: “The general advice early in the process, when you more a concept than anything else, is just to keep working on the fundamental issues. Don’t spend too much money on fundraising and slide decks. Just work with customers or users it that’s relevant, the product and team and make sure you get there.”
There is nothing that can replace if you have something really good, a team with all the right people to take you a bit down the road. Many people underestimate how far away they are from that point. And you can usually build that without much money.
Fredrik: “Don’t sit too long thinking. You have move from the thinking stage and start contacting prospective customers and cooperate with them and get feedback. Don’t just sit in your lair and think about how to solve that specific problem.”
Fredrik: “Seek help from other people early on. Many entrepreneurs fear in the beginning that they will reveal something that somebody else can take advantage of and start a business…”
“…the odds on that competitor being from Gothenburg is microscopic! I think in Gothenburg you can be more generous with information. If you compare it with a big startup-hub like say, a Silicon Valley, a New York or an Austin. In those places you need to be more careful since your biggest competitor could be located four blocks down. But here, in Gothenburg, you should just take advantage of all the help you can get.” Gustav fills in.
How important are startup-forums and organizations?
Gustav: “The more public forums might not be as productive as you might think. My simple advice is to be true to yourself and think about if you really have something. It’s so damn unusual to have a good team, in a good field of work and a good product that going somewhere. You just have to fight until you get there.”
Fredrik: “If you’re more of a “product person” with a good idea but no business experience, you can always seek counseling via Venture Cup or visit Connect Väst. They can teach you how to commercialize and package your product and you can meet people who might have a few ideas. “
When you are a new startup in Gothenburg, how do you take advantage of that?
Gustav: “The “club scene” for startups is much larger in Stockholm than in Gothenburg. But that goes for just about anything, not just in our field. I believe that if you want to get somewhere you just need to sit down and talk to people under calm circumstances. You need to have a very clear idea of where you’re going and how you should get there.”
Fredrik: “We’re in Gothenburg, Sweden’s biggest small town. It’s not that complicated to get in touch with someone. It goes for us or anybody else.”
Gustav: “Gothenburg isn’t in the middle of nowhere. At least there is costumers for your product. And if there isn’t you should seriously consider what you’re doing. Then you’re not heading for hyper growth. Gothenburg is a great city if you want to get in touch with people. To make a long story short, I called the Group CEO for one of our now largest customers in the Nordic Region through the switchboard when he was in Thailand. It illustrates the difference of being here. You can reach people. But you have to give them a damn phone call. You can do that in Gothenburg. You can’t do it in a much larger city.”
How do you handle the rough times?
Gustav: “We have tried to involve everybody and made sure that everyone can contribute with their thoughts and ideas. It is important that if nothing is happening, that everyone know why that is and can be a part of the solution to that problem. You will not get by with just going around and cheering on people with: Go! Let’s do this!
In the end it comes down to one important fact: often the important thing is to feel that you are moving, the direction is not as important.”
How do you go about raising funds?
Gustav: “You have to understand that you’re competing for money. There are two competitions. One is the market. You need to have a product that the customers want. The other one is the financial market. And even if you have software product, you are competing against people who are selling shoes in Russia.
You have to understand that you’re competing for money.
You get the feeling that many companies with only two or three people is seldom in need of a very heavy investment in the beginning. It’s just damn hard. It’s tough as hell to get somebody else’s money. And it should be. And it’s hard wherever you located. It’s not that easy in Silicon Valley either.
There is nothing that can replace if you have something really good, a team with all the right people to take you a bit down the road. Many people underestimate how far away they are from that point. And you can usually build that without much money.”
And to the people out there with more questions?
Gustav: “They can visit us. It’s really simple. Just send us an email.”