 everyone and welcome to this conversation. So I'm going to go straight in and say that Sammy Martinin isn't your typical serial European founder story. He doesn't have one or two startups under his belt before this one. He has a whopping 13. Now he's on his 14th and apparently it's been going pretty well. Swapy has raised $170 million to date and it's nearing profitability, Tommy, before. So Sammy, is number 14 the one? Yeah, is it slush today? Does the snow usually get your shoes wet this time of the year? Yeah, yeah, this is the one for sure. And I mean like after trying out a lot of business ideas and a lot of things, you learn to recognize some patterns and you learn to understand consumer behavior. And when I get scammed buying a used phone online back in the days, we realize really quickly after doing a consumer survey following that on the next day that like this market can become like as big as the used cars. Like this can eventually be a 50-50 market and that's what we are driving towards and that's what the Swapy's business model is solving. So why exactly did you choose to focus so narrowly on iPhones and phones and not a broader set of devices like a few others in the market have? Yeah, so when we did this consumer survey back in the days, we realized that over half the population would be ready to buy their devices as used or refurbished, but the market was only 5% back in late 2016. And the biggest barriers for people not purchasing around not trusting the quality, like not trusting that the phones work, not trusting that the batteries work, not trusting the players on the market, and that was the biggest issue. And of course like then when people make the decision to buy like it's also about price and some other factors. And so given this, we knew that we like we need to actually get the quality part right and we need to get the price quality ratio right in this market if we really want to win. And iPhones account for like half of the market, so just listen to the consumers there and decide to actually focus on winning one category, becoming the most efficient player in the world in one category, automating our operations, our factory around that and yeah, rather than being okay in many. So just about focus and prioritization. And now that you've grown so much, would you ever broaden that? Is it about starting with a narrow focus and then broadening it or are you just going to continue doing what you're doing and focus on broadening markets wise? So the iPhone, so the thing is that there are still a lot of markets to expand to. We can still multiply our like business like just by growing the existing markets up deep. There are multiple new markets to expand to in Europe, outside Europe. And the iPhone category is still the fastest growing category in the periphery smartphone sector. So we need to keep a tight focus and make sure that we are where we want to be like in terms of like automating our processes and winning every single market we enter. So it will come eventually, but not in the near future. You mentioned earlier that what customers really cared about and were worried about was the quality. And I understand that this is sort of your USP that you do the quality control in-house. Why did you choose to sort of handle that all yourself? Because it's a lot more work. Has it paid off? Yeah, it's definitely difficult. And in the beginning like it's much like harder to scale, right? Like when you're working with an integrated business model. But it's definitely paid off. So our margins are significantly better. Our return rates are much slower than basically for the players not handling that in-house. So it shows in referral rates and customers coming back. And in the end, you need to be really obsessed about the customer. You need to build everything around that. And we just felt in the beginning that we cannot do this well enough for the quality piece or the margin piece. Like if we would go with another business model. And on the margin piece, is that because ultimately after having developed your own tech, you're saving costs without having to outsource to others? Yeah, exactly. When you control the full value chain, like from purchasing the devices from the market, you basically get the biggest margin upside, right? And then if you're the most efficient player in processing the devices, you can actually extract it. And we are selling everything through Swapy.com straight to the consumer. So there are like no other inefficiencies, no middlemen, or no other parties in the value chain. So for me, the really, really fascinating thing where we were speaking before was the 13 companies that you went through before Swapy. And I was a bit confused. I was asking, have you incorporated 13? Were they all real startups? Can you tell me a little bit about that story? How many years was it? Were they all separate incorporated companies or were you just pivoting? What happened there? Yeah, good, good question. I was actually about to correct you in the beginning on this one, because like we actually ran like 13 different business ideas under the same company. And we just did like quick pivots. And the thing here was that I had been looking for another founder for years back in the days. And when I met the other company founder, I just knew that, hey, this is it. I just need to leave everything else behind. We need to quit our consulting summer jobs and just starting, start building stuff. And we had a long list of ideas. And the kind of like rationale why we went there was that we want to maximize our learning and find what we actually want to do. And even if we would fail, we would learn faster than anywhere else. And we have, we maximized the likelihood of actually finding what we want to do. So yeah, it was 13 pivots, a couple of smaller exits. We always used the money into building the next ones. We basically bootstrapped for a couple of years and eventually ended up founding Swappy. And we wouldn't have ever became the fastest growing company in Europe from 2017 until the end of 2021 if we didn't have this background. And we couldn't have ever even probably even realized the market. So to clarify that, did you sort of self fund whilst you were going through those 13 ideas? And my second question related to that is if you'd taken VC money, would you have gone through that process? Did that open up the freedom because you were able to self fund? Yeah, so in the very beginning we were just living off our low, like basically off our student loans and off our savings. So we didn't take any salary for the first couple of years. It was just for the love of the game and just for learning and finding our path. And we used all the basically income we got from the companies into like, you know, growing those and building the next ones and next ones. After like, funnily though, we were not looking for funding, but like after like seven months or so of doing this, we just randomly met a guy who was in one like very early stage fund as an EIR. And he asked us what would we do differently if we had like 50k of like more of cash. So then we thought about it and like decided that we would just like accelerate the testing phase. So they actually liked what we do, how our approach, like what our approach was into, like testing things with the consumers into just building businesses in general. And they invested into us as a team. So that was it. So 50k for the first three years. Okay, great. And then that sort of gave you a bit of pressure to really hunker down and make this number 14 the real one. It did. And we just didn't want to race before we would actually find what we really want to push, like push forward globally. What was the biggest sort of failure along the way of those 13 or the biggest sort of learning that you took away from those? Was the one that you did pull more money into than others? Yeah. We had to be really, really frugal on cost as we were not like paying salaries to ourselves. And we were basically spending everything like everything we got like on the business. Yeah. So I guess the frugal mindset and kind of like learning to invest wisely, like what that's one of the biggest learnings. And I would say like, probably like how do you like how you need to be customer like really obsessed on the customers. You cannot be fall too much into love with your own ideas. You need to stay really humble and just like try to understand deep down what are the drivers for the customers? Why are they buying in this market? What are their barriers of not purchasing? You need to build your whole business and your brand around it and your whole business model around it in order to really solve the biggest problems in the world. So that's, I guess, that's the like single biggest learning. Of course, like besides that I learned to, for example, I learned to build a wall for our store. We had this like we're selling everything online today, but we had this like small store in the beginning, which was also our first office. And we couldn't get a contractor to build the wall. It was like too impossible, like 11 meter high space, etc. You couldn't support it anywhere. So I watched some YouTube videos and build it myself over the weekend. So yeah, I learned some really random things, learned basics on coding, learned to deliver phones to customer stores on a bike, on a slushy winter night. This all sounds very sort of bricks and mortar IRL compared to most of the text software startups when you're interviewing. In terms of all those pivots, when you did go to investors, and especially when you sort of went to VCs for sort of your later rounds, is that something that they asked you a lot about? And was it a negative at first that you have to sort of convince maybe your early investors that you really were going to focus on this and you weren't just going to carry on pivoting? Was that, did it sort of serve against you or for you? I think it definitely served for us that we had, we had basically like pushed the first three years with basically no money. And we sold our previous company to basically fund the first year of SWAPI. And we got SWAPI off the ground from like zero to half a million of net revenue during the first what, like nine months on the first year. So I think like that spoke for itself and the investor really liked our approach and how like customer focused we are and liked our mission and kind of like the environmental focus. So that's with SWAPI why we did, why we also decided to leave the previous business behind. Like besides making this, like besides our mission of making this category mainstream and making less common as buying a used car, yeah, the environmental side is just too big to ignore. So that was, that was a clear. So was it sort of, a lot of founders told me that pivoting is a little bit stigmatized in Europe when compared to the US. And I was wondering whether you sort of found that at all? Yeah, I have to agree that in Europe in general, especially if you look at the public audience, like we were getting a lot of questions, like also here we were getting a lot of questioning, like, like, like, what are you doing? Like, start, like get a real job done. Like, these guys are like trying their like 12th idea in a couple of years already, like, but I think, like, I think that's changing. At least in Finland, the whole like startup ecosystem, the whole thinking about entrepreneurship is changing super rapidly. So we were basically like, probably in the second wave of entrepreneurs after like, the success stories of like Supercell and, and Walt, Rovio in the, in the early days, in 2010s. And basically, like, I remember when we were asked, for example, in back in university, like over 10 years ago, like, we were asked in our first class, like, how many of you want to be an entrepreneur in general? Like, I think there were like, three or four hands, like, up out of like 230. And these days, it's like one third of the people. So, so kind of like the attitudes, attitudes are changing quickly. And I think also the stigma around pivoting is, is changing at least here. But it, it still exists in Europe. And I think it's still very different to work, for example, Silicon Valley and what, what, what companies do in Y Combinator, etc. It's a huge difference. And in terms of founding a company in such a small market, were you, I mean, you said backstage that you're now in 13 markets. How fast did you scale into those? Were you thinking about that from the get go? What were the challenges there? And how fast did you scale? Yeah, so if you come from a small country like Finland, you have to think global from the get go. You have to think global from day one. And that was the thing with our previous businesses, that was the thing with Swapy. So the first year we, like, focused only in, in Finland, right after, after founded, like, finding product market fit during the first year, like, then we straight up after our first financing round went to Sweden and then to Italy. And after getting the kind of like, three different sized markets working, that's when we decided to make the decision to scale further markets and open, open 10 during the next couple of years. Okay, so really, really fast. And do you think that was absolutely key for sort of surviving and standing up to your competitors? No, I don't think it was key to surviving. Like, I think, I think it was more just about that, like, getting the first mover advantage. We were really early in the market. We have a winning business model. So we can, we basically have thicker margins than our competitors in the space. Better control of the kind of like price quality ratio in general. So like, not expanding when you, when you get the model to work would have been kind of like foolish in my opinion. So we, so wanted to push it as quickly as we could. Like, once we got the next next batch working, like, then immediately launching, launching the next one. And I mean, like that made, made a lot of sense that made total sense in the environment we were in. Would you, would you ever plan on going, you know, further field outside of Europe? Do you feel like you would, you would be too late? Or is that something you would consider? We're definitely not too late. So we have, we have a good head start in Europe. We are the largest player in Europe in refurbished iPhones. And we are now kind of like doubling down on our competitive advantages here. So building further on efficiency and then one day definitely going outside Europe once we're ready. There's still a lot of work here before that. Yeah. And you said that you, you know, consumer, consumer focus and constantly asking your consumers what they need. And we know that the different attitudes towards the climate crisis in Europe versus other markets. First of all, in the markets you're currently in, there has been so much more awareness in the last six years since you were founded. How have you managed that in your business? And how have you sort of scaled to meet that demand? So there definitely has been a big change. Although like before I answer the question, I have to say like it hasn't been fast enough. So like e-waste, electronic waste is the fastest growing waste stream in the world. And it's expected to remain so for the next 10 years. So there's 60 million like metric tons of electronic waste in 2023. And it's expected to grow to 75 million by 2030. And that's like equivalent to us throwing away like 1,000 laptops every second. And it's just too much. And if you think about it like 66% of Europeans do not resell or recycle their old smartphones. Like majority of us keep our phones in the drawers. And when you think about like that combination, like we need to move much faster. On the positive note, like this market is growing super quickly. Like it has 4xed over the last seven years. At the same time, we have 400xed in size. It's growing really quickly. And 40% of Europeans are now buying more like more used goods versus five years ago. So we're not on the right track. But working on making that faster. Wow, yeah. Those are depressing stats. I am curious to ask you in your consumer research, are you finding that people are more driven by their climate concerns or economic concerns when they're coming to refurb items? Well, people like to say that they care more about the environmental concerns. And that's definitely true for younger, like younger and younger segments that we see across the markets. But in general, like well, maybe not surprisingly to me, but like the environmental drivers are not like in the top three basically anywhere. So it's about price quality ratio in the big picture. Like people are not willing to pay premium for a refurbished iPhone versus a new product. And how about sort of in the last couple of years as inflation has gone up and up and up and the cost of living crisis has affected your sales? Yeah, so now the difference between what has happened now since last year. So last year, beginning of the year, like no big difference. Like this market has been out growing the new device market for the last seven years, like growing forex. But last year, from mid last year, when the inflation started to rise and interest rates started to grow, like we could, we started to see the biggest shift from new, like people shifting from buying new devices to buying refurbished. And that's something that has continued this year even faster. Yeah, okay, that doesn't surprise me. The gap is now bigger than ever. So your market is just growing and growing and growing essentially, yeah? Yeah, for sure. What about changing legislation? And I'm interested in when you've been growing so fast, whether that was even a consideration when you were starting out? And then how much more time you have to spend on that as you've grown in these markets? Yeah, so like, let me start with that like legislation, like we didn't actually, even to be honest, we didn't even really think about it when we started the company that you would have to like have public affairs and you could actually like try to impact legislation in the beginning. But once we started growing, once we started to follow, like started being bigger across Europe and started to follow the right to reaper legislation and other things like this, we noticed that actually no one in these industries is really working on it. So it's all basically lobbied and affected by news like new smartphone and new electronics manufacturers. So even though EU wants to push for a circular economy, they didn't have anyone like advocating for the refurbished industry. It basically, it's because this industry grew from scratch in a couple of years and no one was able to grow quickly enough to get the size that you would you could even invest there. And as we started to be one of the first ones, we found it's super important that we that we start the work and that we start putting the work for the industry and with the industry. There are some bigger problems there, like that for example in the past past years, I think as you mentioned in the beginning, like the average European users like are using their smartphones only for 2.8 years and the lifespans have been have been getting shorter from like 10 to 15 years ago and and the electronics have been getting less repairable, like harder to repair. And basically there are things like software pairing for the for the smartphones. So like manufacturers are bearing, for example, batteries like to the actual to the smartphones. So if you change even two new batteries apart or two new screens apart with an iPhone, they will not have all the functional elements anymore. So the software is blocking that even for new parts. And this is happening with new with other manufacturers as well. And this is a really big issue like like imagine like if you had for your car imagine like if you had a Toyota car and and you could only only change your like Toyota car tires in a Toyota sorry your car tires in a Toyota shop and you would have to pay like 2000 euros for that. Like otherwise they wouldn't work like that would be just silly. And this is like if we don't do something about it like that's where this market is heading. So we've been working on this and and actually have been getting the first wins. So this is this is moving to the right direction. And for example, the battery part that's like looking to be banned by EU and and now now there's a right to re burn repair legislation on a Boeing and and and it's moving to the same direction. So and obviously as a larger company, you have a little bit of advantage there with with lobbying and with with legislation. But would you advise founders who have sort of much earlier stage in the room to be trying to engage earlier on in that journey? Yeah, I think it's I think it's hard. It really depends on the industry. So like for us, it's very critical that we also push for things like beyond just for Swapy. Like for us, we think we think about the whole refurbished electronics and use electronics industry. It's it's as it's the fastest growing waste stream in the world. It affects so many consumers. For us, it's been a kind of like a no brainer to work on it. Maybe for smaller companies, I would advise them to like join some unions and like, you know, work with others. For us, we have been needed there to drive the work with a couple of other companies. And besides like, you know, representing the whole industry industry. And lastly, with the last minute, I want to just ask you the classic question of what would your biggest piece of advice be for founders in this room? I'm particularly fascinated by managing company culture through the great that you've seen. But I don't know whether you want to touch on that or whether it's more more on this product side. But yeah. Yeah, good question. So what comes to managing the company culture? I would advise everyone to everyone to have like incentives for the for the leaders, like not just on hard KPIs and role like hard performance on the roles, but also the people side. So everything about like your culture. Basically, for example, for us, it's about growth mindset impact, having an inclusive culture. And that gives you really good results long term. That's a really good tool to manage growth and ENPS at the same time so that you don't trade of either one. Last piece of advice would just be to like, yeah, follow your like, yeah, like really like a follow your mission. And really think about what's the mark that you want to leave to this world. Be willing to change your business idea if that doesn't match your own ambitions there, like in what you what you actually want to leave behind. Or or if it doesn't match what the consumers really, really want and try to be present and enjoy the ride. Amazing even changed 13 times. Thanks so much. Thanks for your time. Thanks a lot.