 Hello everyone and good morning. It's such a pleasure to be back on a flush stage for another year. I'm Eleanor I'm deputy editor of sifted and I'm here with Johanna co-founder of a very exciting company Finnish company relics and We're here to talk about your very long journey to where you are today Would love to just kick off Johanna talk me a little bit through the journey of the company How has the business model evolved to today and what was your biggest pivot? Yeah, so relics is actually based on research We were all the three co-founders researchers to begin with Then we felt that research is a very slow way to change the world So we decided to take some of the ideas we had and see if we can actually Make them work in the real world and one of those ideas was automated store replenishment, so Doing forecasting of demand and then making sure that the goods arrive at the right time in the right quantity to stores automatically and This is the idea we started with and originally we thought that we just developed this Black box intelligence Put it on to the back end systems and optimize things You wouldn't even need a UI or anything and that's when we pivoted in a major way Because when we had the chance to look at these back-end systems, we realized that they were really stupid There was nothing to optimize So we had to make the decision to either go into consulting or then build the whole thing Forecast engine the supply chain optimization ourselves and Kind of deliver mission critical software to retailers and then we were like well How hard can it be and now we've spent almost 20 years doing that So tell me a little bit. We're talking about retail, but what kind of like, you know industries What kind of retail are we talking about to paint a picture a little bit? Yeah, nowadays we actually covered the whole kind of consumer goods supply chains So retail wholesale and distribution centers and manufacturers But we focus mostly on kind of large volumes fast moving consumer goods like food and beverage that sort of thing Because that really is the optimal playground for optimizing things if you have large volumes and are able to impact them The business case is just huge and a personal favorite is grocery because you have food product and can really have a massive impact on spoilage, which is kind of a business problem But also a huge sustainability problem completely completely. So I think another really Interesting part of your journey is that you were bootstrapped for so long, right? It's just building a great business flying under the radar And I think that there's been a lot more spotlight shed on bootstrapped companies in Europe recently, too What were some of the benefits of being a bootstrapped company? What was so great about that? Yeah, so basically we bootstrapped for 10 years So that's a fairly long time The thinking behind this was that in the early years we felt that It would probably be more You know, we would spend the same amount of time and energy speaking with the investors as we would need to Speak with clients to collect those couple of hundred grand And we felt that we would learn so much more being out on the field So and it worked out then we did go for investment when we decided to Go into the US markets. So we knew that that would require More money that we could have cash flow for otherwise But the benefit obviously is that especially in the early years you have this freedom of operation So if you need to change things quickly, you can do it without asking anyone So basically three co-founders getting together and be like that doesn't work. Let's drop it Let's move on with this thing And of course then when negotiating funding you're in a Completely different place when you have a track record of profitable growth for 10 years So that also gives you leverage going forward The downside of course is that you have to be super scrappy. So for many years The majority of all prospecting and selling happened through us co-founders and especially our CEO Miko so basically we did have the leanest meanest sales and marketing machine because it cost next to nothing But that was a kind of key requirements of being able to pull this off So still today. I think many Out there see us as the new kid in town because they did not hear about those for the first 10 years Interesting, I would love to delve into that a little bit more to like was it actually a little bit of a challenge Not having that brand out there and how did you overcome that? You know when you're going in and meeting a potential new customer How did you really convince them that you you were the partner that they needed? Yeah, it was a bit of a challenge. So in the like really early days We had these two logos that we tried to put on a PowerPoint slide to look like Plentiful, so I think we just needed to be very clever about removing risk from our clients and We had a few different tools that we actually still use today So kind of business case calculation based on their exact store item level data from several years and be able to In detail show what the implications are going to be so that kind of increase Security before you actually go into the implementation and then we had a lot of tools like Money back guarantees on on on the pilots being successful and that sort of thing And then of course the whole sauce model was new back then so that you wouldn't have to take a leap of faith and They you know five years up front and then be like I hope this works So I think there were a lot of good stuff that we had to do that's still quite useful today That's super powerful So you alluded to it a little bit before when you weren't talking about your journey that when you decided to go to the US You thought okay, we actually need a little bit more firepower behind us And so we're gonna bring in outside investors talk me through how you found the right investor How did you do do diligence on investors? Yeah, now we actually have three different investors on board But the first one of us of course in one sense the biggest steps and the criteria have shifted a bit along the journey But the first one we thought that because we were entering the US We felt that a good investor would help us build credibility in the US So we wanted a US company, but with European presence for you know making things practical We also wanted someone who really knows software and sauce So that they kind of understand the business dynamics without having to explain that to them And we also wanted someone who had a track record of holding on to investments for longer times when it made sense Because we didn't want to be forced into an exit event just because there were some fun deadlines So those were some of the things we were looking at Interesting and how did you have any thoughts about you know growing obviously when you bring on an outside investor that can impact your mission And the amount of control you have over your company How did you kind of balance or how are you still balancing the needs of the investor versus how your vision for how you want to build the business as well Yeah, I think we've taken in investors that have kind of a shared vision of where we are going So I haven't felt that the investors would have been forcing us in any Particular direction they have been very open to our vision. I think they have brought with them More focus on for example the financials Something that would have been a natural path anyway as the kind of scale and complexity grows But they've also been able to you know put forward some tough questions in board meetings For example, and that's actually been quite helpful So even if you kind of disagree with the argument then you have to explicitly argument why and that brings clarity and that's super important Can you tell me a little bit about some of those difficult questions? What are some of the areas that you found that they really got dug into that were helpful for you? Yeah, so it's I think most of the questions have been related to potential expansion areas so of course over the great years we've expanded our offering and then kind of Debates on what should we go in this direction or in that direction and is there sufficient market here? Is that more lucrative what are our differentiators in the different opportunities? So that kind of discussion is actually super valuable So how have you thought about geographic expansion from your earliest days? Obviously you started here in Finland, but then how did it work from there? Yeah, so The first international expansion is my baby. I'm Swedish speaking So I didn't see a lot of internationalization happening in the company So I picked up the phone and started cold calling the Swedes and then when I got that going I moved on to Norway and Denmark and so on and at the same time we then went for the big European markets like the UK and Germany and so on now. We have pretty good coverage of Europe The US is a major market for us and then in the last let's say three years We've also Expanded into Latin America and Asia Pacific and actually Asia Pacific is really growing Super nicely today That's very cool I think another kind of question on a lot of founders minds right now with a more difficult fundraising environment is How can they build a capital efficient business and how can they eventually build a profitable business? How have you guys thought about those two things? Profitability and capital efficiency. Yeah for the first 10 years We basically didn't have any choice. We had to be profitable And I think that fosters a good culture of understanding both, you know cost and profit drivers And being quite careful about how you spend money And I think that's been super helpful. So just Understanding what happens if things change and we really got to kind of prove that point when the pandemic started because We quickly created a scenario a kind of doom and gloom scenario. This is if everything goes like Massive wrong. Yeah what do we have to do to survive this and We took action really quickly. So already in like April May when this whole thing just started to kind of evolve We took action to reduce costs with the aim of if we don't sell anything This year and some of our, you know clients go bust. We would still make it and To be able to have that control is super important. So we basically turned from Doing a loss to becoming profitable in the first year of the pandemic and now we've switched back to investing again Because we feel comfortable doing that. Well, of course with the current macroeconomics We still have like a few different scenarios in our pockets and have that kind of Constant vigilance that if if this is what we're starting to see then we'll have to take specific action Definitely. Definitely. What other advice would you give to founders other than, you know, really making those scenarios talking those out with the board And with the other leaders in the business, what advice would you give for founders around how to build that sustainable business and move towards profitability? Yeah, it's I hate giving advice because that's where my research background comes in I have one data point. I have a relaxed data point and I would not want to extrapolate that, you know This thing that worked for us would work for others. So maybe my advice is that when you take advice Try to think about the context where that comes from some of it It's going to be applicable and other stuff not so much and that's you need to have that judgment other people will not Tell you which advice is good and which isn't yeah, I think that really applies to your journey to as a business You know, it's not the traditional Journey of a tech startup or a company that we hear in the news like on sifted, right? And so it's refreshing to be able to hear your data point, right? Yeah, it's I once spoke with some students and gave a short presentation about Relax and then the questions first question is did you not think of anything cooler? Than this when you started your business and I was like, I'm sorry. I'm a geek. I really enjoy supply chains. I Love that. I guess the other kind of side of the sustainable growth coin because we're here today to talk about that Sustainable growth journey is your relationship with your customers as well, right is how well you adapt to them How will you listen to them? Right? That sets you on the path for sustainable growth How have you worked together with your with your customers to give them the best experience? Yeah, so I think there's two components to this one is kind of customer satisfaction which you measure through surveys and asking them and so on but the other key thing is delivering value and In many cases, that's actually even more important so they make a sizable investment with some expectation about the benefits and Actually surprisingly often we push the clients to measure those benefits Sometimes they can be a bit like well everything works. It's fine and then we go in but yeah You actually need to measure you need to measure your inventory levels. You need to measure your Product availability and measure all these things And you're gonna get them out of the system. I'm gonna show you so we really want them to have focus on that value because that's Ultimately why we are doing what we do and that's all ultimately why they bought what they bought So then it's kind of a joint responsibility to make sure that it actually happens There's another like interesting part of your business too that we touched on a little bit at the beginning Which is the sustainability angle, right and how the work and the software that you create is Doing such a big contribution to that How have you seen the attitude of these big corporates that you work with change towards sustainability? And how have their needs changed when it comes to that? Yeah, I think we've benefited a lot from Not pushing it as a sustainability thing, but as something that kind of has immediate business impact So that's one thing I like about our kind of domain is that efficiency goes hand-in-hand with better Commercial results so profitability, but also with sustainability There's basically never a trade-off between these so you improve all of them at the same time And that makes it easy to kind of One client is more focused on profitability. Well, great We're gonna deliver some sustainability anyway and the other one has actually some targets for sustainability And then they are gonna be keen on measuring that impact But this is kind of a win-win-win situation. So that makes things a lot easier I think it's only in the kind of recent years that companies have started to put forward actual targets for sustainability But sustainability is such a broad field that it's it's Most companies are still kind of grappling with how do we even get data on these things? How do we understand what to focus on in this kind of complex mess of things? Totally and how did that evolve for for you and for relics in your journey in terms of talking about Sustainability was that something you really focused on at the beginning or was it more like okay? Here is how we can help you optimize and then the sustainability narrative kind of came leader. How did that evolve? Yes, I would say very much so because the business Implications of food waste are huge So if you let products kind of flew through a long complex supply chain To only you know in the store be thrown away It's like throwing money into the garbage bin and that's kind of an easy Win to understand that if you can reduce this by let's say 40% It's gonna fall right into the bottom line, right? So I'd say our focus was a much more on the bottom line. Yeah, and now The sustainability angle is is growing quite significantly that makes a lot of sense You talked a little bit about the challenges around measurement for big corporates as well What are some other challenges when it comes to you know implementing a sustainability agenda that you see facing these companies? Yeah, I think there's In our area, it's simple because there aren't trade-offs But in most other areas there are trade-offs, so it can be about cost, but they can also just be about How many things can be implement at the same time and I'm actually a bit worried that that the macroeconomic development that we see at this point Will push companies to focus more on survival and you know maintaining profitability and then Sustainability might take you know the backseat for a while. So it's really kind of a competition of priority and attention and Available resources that is quite tricky, but I guess if there are services like yours right that marry those two Okay, we're gonna help you with the bottom line, but we also have this Sustainability angle then that's potentially you know a tailwind for services like tech like that right because it's again Super easy to explain internally and say this will actually help us right. Yes very much. So yeah totally So when we were catching up before this thing We also talked about your journey and you said that you had been in the business for 17 years Plus four and a half years of research, right? And I would love to know maybe a couple of things but first How would you how is your relationship with your co-founders evolved during that time and have you kind of like changed roles? Between the three of you How does that work? Yeah, so I think it's quite unusual to have the co-founders all stick along This long time and all have like really kind of operational roles So being very much involved in the day-to-day business. I think we got Well, I kind of knew what I was getting into. I knew these people. I had worked with them It's not like we were best of friends, but we had actually worked together and that's Good because then you understand what it's like to work with these people I had huge respect for both of them from the get-go really smart people really driven Really focused on delivering high quality But what has kind of kept us together for so long? I think is kind of a set of shared values We didn't get into this to make you know a heap of money Yeah, we went into this because we want to improve things and that's the kind of biggest reward when you can see That implemented this thing at this client and now things are going better and we can measure it And it makes total sense. So I think that's kind of what strives us that we want the same things and That also means that I think the typical way of a founding team Solving is that you have different views on on the level of ambition or you know How focused you are on making money or long-term short-term and that sort of thing We have kind of naturally been very aligned on those things And do you actually sit down and talk about that stuff like once a year? Do you get together and be like, okay? Here's how we're feeling or we're still super excited about the business What's our view for ourselves? Do you do that? Yeah, people sometimes assume that we actually spend time together We spend very little time together because everyone's just super busy. Okay, so I think we mostly spent time together in like leadership team meetings or other settings where there are other people as well Right. I think there's quite a lot of inherent trust that you know Things are working unless you say that they aren't right exactly So kind of we assume that everything's okay And then we kind of also assume that people will speak up if it isn't so that saves a lot of time So Mika actually once told me that if there's something you want you have to spell it out because I Don't have time and I actually don't know how to do it I can't read between the lines and I think that's actually good advice for anyone Yeah, so you can be independent But if you need to you can just raise your hand and speak up. Yeah Then I guess maybe one of my final questions to you would be how do you keep yourself motivated through this journey? You know you said that you and your co-founders were super aligned over your commitment to the business and your shared values And so how do you keep showing up every day? Excited as excited as you were backstage and to build this business Yeah, I'm still super Interested in optimizing processes. Yeah, so I can't you know visit the cafeteria without having a look at you know Oh, if that person would just be doing this instead of that It would just flow so much better. So I had the perfect platform of actually Driving more efficiency, but then of course as the company grows I feel that I have the Responsibility and the opportunity to impact people's work life. So like things like congratulating every new real ex dad that goes on parental leave and all these things that I feel are kind of super important Yeah for us to evolve as a society I have my own microcosm that I can try to nudge people in good ways I love that. Well, there's a food truck near my house in London. That is very inefficient So next time you come to London, please come and help them I feel like I learned so much from this conversation from your journey bootstrapping to how you picture investor to How you stay friendly with your co-founders even after so much time. Thank you so much for your time Johanna, I really appreciate it. Thank you, Eleanor. Yeah