Chasing the American dream – and dealing with the reality!
Zendesk founder Mikkel Svane's tells the inside story of moving the business to the US and why his first hire Stateside was a square peg in a round hole
In third and final excerpt from Zendesk co-founder Mikkel Svane’s new book Startupland, the Danish entrepreneur tells how and why he followed his American Dream and crossed the Atlantic.
And he shares the haphazard recruitment of his first employees and why it’s not all about checking the boxes on a CV to get the right person.
For those who want to read more, Startups.co.uk readers can buy a copy of the book with a 30% discount here using the code VBK10.
With a few million in the account and entrepreneur-turned-VC Devdutt Yellurkar, partner and key advocate at our investor Charles River Ventures (CRV) on our board, we slowly began to set up shop in Boston. Alex and Morten weren’t terribly excited about settling in Boston. Alex stressed that he would rather go to New York. Squabbles ensued.
“Don’t worry; in six months’ time we’ll be off to somewhere else,” I told them.
And I believed that.
I had talked with my wife Mie about the concept of a move to the United States, at least in theory, and now that it was a reality, she was on board immediately. She had travelled extensively and was very much up for the adventure.
The American Dream
I had shared my American dream with her when we originally met. Back then, I didn’t know how much I could predict our future. I knew I was very inspired by San Francisco and Silicon Valley, and I somehow felt a tie to the United States.
My dad grew up in Bronxville, New York, during World War II, where my grandfather represented the interests of Greenland, which came under US protection after the Nazis invaded Denmark.
Somewhat unconsciously, I’ve always traced the footsteps of my family that came before me. My grandfather was the first man to travel around the world on a motorcycle, back in 1912, and I’ve always kept a photo hanging in my kitchen of him and his friend and travel partner, Svend Heiberg, arriving in New York City on their Harley Davidson (without the sidecar; that fell off in Turkey after they were chased by highwaymen and crashed in a cactus field).
The first time I went to New York I visited all the places where my dad had grown up and my grandfather had worked. When a lottery drafted me into the military in the late eighties, I served in Greenland and had an opportunity to not only see the house where my dad was born in Nuuk but also visit some of the places he had visited when he did his service in the North Atlantic.
Today we have small pieces of furniture and pictures that I know have followed my grandfather and father on their many journeys across the Atlantic – in some cases closely followed by Nazi submarines – and I wonder how much of that journey has formed my own yearning for travelling and adventure.
Though my adventure is so different; today there’s a direct SAS flight between San Francisco and Copenhagen, which makes travelling much easier and more convenient. And it definitely beats having your entire family sitting ready in life vests on the deck of the ship, just waiting for a torpedo to hit.
So when I finally asked Mie about moving to America for real, she simply replied, “Yeah, let’s do it. We’ll figure it out.” But that’s not to say that the move would be easy. Mie, who is deaf, didn’t read lips in English.
She had a son from a prior relationship, and moving him far away from his father would be complicated. He was then almost seven, and we had two daughters, ages three and two. None of the kids spoke English. And we would be leaving a pretty good set-up: we had a great apartment in central Copenhagen with both a great school and day care around the corner.
Now we would be starting from scratch. I don’t think I really shared this with Mie, but I was terrified about moving our budding family and afraid of all the unknowns to which I would subject them. Living an entrepreneurial life doesn’t necessarily always match your desire for your children to grow up in a safe cocoon.
Building the home team
We didn’t return to Jamaica Plain, but instead set up our new office in Boston’s LeatherDistrict, squeezed in between Chinatown and the Financial District. It was one of the only parts of the very groomed Boston that we felt had the gritty and chaotic city vibe that we liked.
The company was thriving in its new environment. Zendesk got more and more popular by the day. And we were not keeping up with the demand. We started to hire people in Boston, and we soon created a different kind of family.
Rick Rigoli – a marvellous mashup of the lead in television’s Columbo and Robert De Niro – came on initially just as a contractor, to help us establish the business in the United States. As he said, we “needed a lot of help”. Rick was a former colleague of Devdutt and was serendipitously between jobs when CRV invested.
There was so much to do, and Rick was a giant help – we couldn’t have done any of it without him. Basically, as soon as we got Rick signed on I handed him my chequebook as well as a manila folder with receipts, invoices, and bank statements in Danish.
Rick had to translate them. He did all of the accounting and payroll on cloud-based systems, even though that wasn’t the obvious mainstream choice yet. He was bent on setting up QuickBooks Online and building everything in a proper, beautifully simple way. That was a lot of work, but just a small part of what Rick did.
We had to get a grip on a big-picture strategy as well. We needed to determine the revenue model and the metrics behind it and decide on the right growth plans. Rick talked to investors, auditors, and lawyers about things I knew nothing about, and he started to take a big burden off of my shoulders.
The software was a relatively simple help desk ticket tracking system, and people were buying it using credit cards. It was so easy to do. You didn’t need permissions from higher-ups to buy it, and you didn’t have to wait months to get it.
Rick, who came from the world of traditional enterprise software, had never seen this volume of transactions. There were thousands of sales and transactions every month, whereas he was used to being able to count the number of deals on one hand with old-school enterprise software.
The charges were all small amounts, and Rick had to make sure they would show up in the bank account and properly on our P&L. (He did.)
Picking your first employees
We had to hire people to help with customer support locally. The first of these was Matthew Latkiewicz, a young hipster who was working as a web designer and blogging about wine in his free time.
Matthew had previously owned a café, but he’d never had a real corporate job before, and he didn’t have much of a tech background. (He had majored in philosophy at a liberal arts school in western Massachusetts.) He found us on a job board, and we wanted to interview him because – well, because he applied.
At that point Zendesk had nine people, if we truly counted every single body; Matthew thought this was an impressive number. He showed up formally dressed for what he must have anticipated to be a formal interview – he probably wore a tie clip or some other hipster-at-work ensemble.
His perception of us was deflated when he met with Alex in an otherwise empty work/live space, which we called our office, and they had what was less of an interview and more of an unprofessional chat.
When Alex offered Matthew something to drink, Alex discovered that we had only Vitaminwater in the fridge and was horrified. He went on a rant about how “everything in America is made of sugar!”
Matthew stayed in the meeting even though Alex also told him that he wasn’t right for the web role. When Alex suggested he meet Michael Hansen, who was looking to hire people in customer support, Matthew agreed to stick around.
“I need a job; sure, I’ll talk to him,” said Matthew.
Alex must have seen something special in Matthew, and Michael had his own unique way of sizing up potential hires – some of them rather unconventional.
When it came to talking salary, we were all pretty clueless. Michael asked Matthew how much he wanted to make. Matthew was currently making $42,000. What did he want from Zendesk?
“Anywhere from $50,000 to $60,000,” he said. We gave Matthew an offer letter for $60,000 to be a customer support advocate, which meant he would engage with trial customers and help customers onboard. Matthew was thrilled.
“This is amazing. I love this company. This internet thing is so awesome! The tech world is so cool,” he said.
And we were thrilled too. Though he never would have fitted the kind of “check the box” list we probably should have had, he was exactly what we needed. He was a hard worker and a creative thinker, and he reflected our voice and brand.
We have found that the first few hires are the most important ones you will ever make. They may not all stick around, but those who do not only will set the initial path for the company but will also help establish the initial voice and style of the company. They will become the platform for the company culture.
All employees in Zendesk are granted employee options. This was not something that we as founders knew a lot about before moving to the United States, but we quickly embraced it, and we were proud to invite all employees to take part in the upside of the company’s future.
Your annual option pool is relatively constant year over year, but each year, as your hiring increases, you have to distribute those options to more and more people. Getting into a start-up early can therefore be a very good idea. And it makes sense to get your early employees well invested in the company’s future. It aligns your destinies.
You can get your hands on a copy of Mikkel Svane’s Startupland and get 30% off by using the code VBK10 here.