Innovation and Entrepreneurship

Speaker 1 0:00

Ever tried opening an umbrella in a rainstorm , then you'll get why Sense Storm Umbrellas became a hit . So next up , we have a chat with Philip Hess , who is the co-founder of Sense and the first ever winner of the Philips Innovation Award . In this episode , we'll cover how an innovative storm umbrella took the world by storm . We'll talk about Rockefeller habits as a framework for growth and how to become a market leader with no more than 10 employees .

Speaker 1 0:27

My name is Lars Kramer and you're listening to Start to Scale , the podcast where we explore the scale of journeys of remarkable founders . This is a special edition to celebrate the 20th anniversary of the Philips Innovation Award , so let's talk about Philip . He co-founded Sense in 2005 with two fellow students and together they created the original Storm umbrella that , pun intended took the world by storm . Later on , philip joined a sleep startup , somnox , and he coached Scalab founders to implement the Rockefeller habits . With his latest venture , rotterdam Factoring , he is on a mission to become the largest factoring company in the Netherlands , with no more than 10 people on staff . Welcome , philip , it's great to have you here . Thank you , thanks for having me . Cool , we're recording this on the ninth floor of an old Shell building in Rotterdam . Have you been here before ?

Speaker 2 1:12

I've been here before when it was actually Shell . Oh , so that was a while ago . That was a while ago .

Speaker 1 1:16

Okay , that shows a bit . Philip , you've created both products for stormy weather and sleepless nights . If you had to pick one unexpected life problem to solve next , what would it be ? Ooh , this is your first question . Come on man .

Speaker 2 1:37

Well , I remember , in the early stages of Sense , we were joking around for like new , uh , innovative consumer products and , uh , one thing that came to mind was , um , what's it called ? A ? Um , fire alarm with the snooze button nice , so you know when your house catches fire and you're sleeping , you can still push the snooze button nice .

Speaker 1 2:02

Did you get a patent for that ? Not yet , okay , okay . So anybody's listening . Get the paint . It's nice to have this conversation . Thanks to fia for connecting us , to deep dive into your story , your entrepreneurial journey , with the highs and the lows . But before we go into that story , let's start with four statements that you can answer with true or false . Number Number one Storm umbrella is an official word in the Dutch dictionary . Thanks to us . True , rotterdam needs Delft more than the other way around .

Speaker 2 2:36

True , definitely true . Nice , all the Delfties listening .

Speaker 1 2:42

A business with a strong product can dominate a market even with a small team and limited resources .

Speaker 2 2:49

Yes .

Speaker 1 2:50

And the final one I turned gray before I turned 40 . Partly true .

Speaker 2 2:56

Partly true . Okay , okay , okay .

Speaker 3 2:58

So we joked a bit about our gray hairs before .

Speaker 1 3:02

What time did you get gray ?

Speaker 2 3:05

I was talking about this with my wife the other day and I told her that before I met her I didn't have any gray hair , and now I do have gray hair . We've been together for 11 years , so you know it's probably a coincidence .

Speaker 1 3:15

Okay , okay , let's hope the wife's not listening here . Anyway , let's first dive into the story of Sense , because I think that's the story that many people know . Um , that you created , right , um , I have one , and since one , nearly every major design award worldwide was named one of the best inventions of the year by time magazine . So those are , you know , big achievements . Maybe take us back to that time . How did you end up coming up with the idea of creating a storm umbrella ?

Speaker 2 3:41

yeah , well , it actually started , uh , with a master thesis thesis of one of my co-founders . All three of us studied industrial design engineering in Delft and on the side , I also studied business administration in Rotterdam . So I really like this combination of Delft and Rotterdam . But yeah , he had one week with three broken umbrellas . That was right at the time when he had to pick a subject for his master thesis . And then he was like you know what ? You know people , we can go to the moon and back , but there's no decent umbrella in this world yet . So I'm going to develop the ultimate umbrella , and I remember that he told me that .

Speaker 2 4:18

And back at that on that day I was basically just laughing at him . I was like , man , you know , like a master's thesis that's probably going to take you around nine months and you're not going to waste nine months of your life working on an umbrella , you know , Come on . Well , I'm actually looking back . I'm glad he did . But so when he started his master's thesis , I was also quite interested in it from a more commercial point of view , because I was already studying business administration on the side . So I was interested in hey , what can we do with this and how can you best market this ? So at one point we started writing a business plan , and not really with the idea to start a business . But you know , there came a moment in time where you know he'd finished his graduation , we finished the business plan and then was like okay , guys , what are we going to do ?

Speaker 2 5:13

all right we're gonna start a company and we had no idea what we're getting into and looking back , I think that's a that's a good thing , but uh why is it a good thing ?

Speaker 1 5:23

because you don't know what you're signing up for exactly .

Speaker 2 5:25

Yeah , yeah I think you're . You're too um , what's that called ? Unexperienced to really understand that the journey that you're embarking on , yeah and uh too inexperienced to really see all the hurdles that will come at you , and uh , we just went for it and uh , I think it was only three years later that I actually realized oh you know , this also could have gone wrong , right like I , I there was not a moment in time that I thought about that scenario right , you're just going for it .

Speaker 1 6:00

And then an interesting combination three people with a background in industrial engineering and then one who's gone out of business . So to that point of rotterdam and delft . You said rotterdamers need delft more than the other way around so so do you see it like that as well in your ? In that setup you need that industrial engineering component to actually create the product itself , but then without business , yeah well , it was actually funny .

Speaker 2 6:22

When I was studying both in delft and rotterdam , I noticed that people in delft , they have a lot of good ideas but they didn't really know how to commercialize it . And on the other way around , in rotterdam , there were a lot of people that wanted to commercialize ideas , but they didn't have any ideas , you know .

Speaker 1 6:37

So getting those two together , I think that was a very smart move right so , and you did this , but I think 20 years later now , it's still a challenge . I think we're getting better at it . There's a Founder Co-Founder event , I think . It's run by ES Delft , so they bring in Rotterdam founders etc . But still it's 10 kilometers in between , but it feels like it's the other side of the world . What do you think are the biggest differences between students coming from Delft versus the ones from Rotterdam ? And then , more importantly , you know what effort should they make to get together ?

Speaker 2 7:11

Well , I think it's crucial to realize the added value of the other person . I think you know I may be a bit too harsh on this now , but I think a lot of people in Delft see the people in Rotterdam lacking substance , while people in Rotterdam just think , okay , in Delft there's only nerds . And once you really understand the added value where another person can really complete you or add something that you don't have , then you can make big steps together .

Speaker 2 7:45

But that also requires everybody to basically uh , lower down their egos yeah and uh , yeah , and , and really , like I said , see the added value , yeah , and then you can create great things together yeah , okay , and start doing it together .

Speaker 1 7:59

Yeah , maybe have a beer or another drink together , get to know each other . Um , maybe , to continue a little bit on the sense story , um , can you walk us through some of the highs , because you were going very international . You sold in 50 countries . You had massive media attention back in the days . Yeah , um , you quickly sold 10 000 . So how did that success feel ? And and what has been your biggest learning moment in that journey ?

Speaker 2 8:23

yeah , yeah , good question . So , um , when we had our market introduction before that , we had no idea how many umbrellas to manufacture , right ? So we figured , okay , well , 10,000 units , that should be enough , and we'd really prepared our launch . So I actually contacted a lot of different media outlets to get media attention and so when we launched we got like a huge amount of media attention . It also helped that on that day it actually rained .

Speaker 1 8:56

This you cannot schedule .

Speaker 2 8:57

No , no , no , true , you got to be lucky a little bit , I agree to that , but so we prepared everything and then , um , what was good about it is that everybody's familiar with the problem of umbrellas going inside out , you know so . And in addition , um , what ? What also helped us is that we , as like three cute students , uh , develop this thing , so , uh . So a lot of media outlets wanted us to be successful . So they really , yeah , like everybody picked it up and , uh , we offered the media free umbrellas if they were going to test it , and uh , video that and uh , and air it on tv . So this first like week and a half , it's just crazy like how many , how many media attention we got , like not only in the netherlands but also outside of the netherlands .

Speaker 2 9:49

So this first batch of 10 000 units sold out after nine days nine days , so so when that happened , actually we were like oh yeah , and , and like one second later we were like , oh shit , you know , because , uh , we didn't have any stock anymore and we couldn't deliver anymore , so , uh , so then , um , what then happened ? Like I think a few days later , like the first , uh warranty issues appeared oh all right yeah umbrellas that that broke down in the storm and , uh , because everybody was testing it , of course to the the max .

Speaker 2 10:24

And the funny thing is , before we had this first batch of 10,000 units made friends of ours , more experienced entrepreneurs already warned us you shouldn't manufacture a first batch of 10,000 units . What if they contain teething problems ?

Speaker 1 10:40

In Dutch kinder Wow teething problems kinderziektes . Yeah , yeah yeah , kinderziektes .

Speaker 2 10:52

Um , so what if they contain teething problems ? And we were like , nah , that won't happen to us . You know that only happens to like bad designers , and we really thought this through and we tested it extensively , so that's definitely not going to happen . Well , yeah eventually like uh , I think like 85% of that first batch of 10,000 units was crappy .

Speaker 1 11:13

Eight Wow 85% .

Speaker 3 11:15

Yeah , yeah , yeah .

Speaker 2 11:15

So we got all those umbrellas back and then we're like , oh shit , okay . So then we sent Gerwin one of the founders , the engineer who came up with the idea . We sent him to China because that's where we did our production .

Speaker 1 11:28

Yeah .

Speaker 2 11:29

And he could only come back after he solved the problem .

Speaker 1 11:32

Okay , wow , so he was there for a few months . Send you a co-founder to China , only to come back . Yeah , yeah , yeah .

Speaker 2 11:38

And then , but still , we continued to get media attention and a lot of orders came in , but we couldn't deliver . So then we decided that we were going to sell these gift vouchers for a free umbrella , and that actually allowed us to continue to sell umbrellas like 50-year-old umbrellas and people were simply willing to wait three , four months to get their new umbrella . And that was crazy . That was never done in our industry , because we launched in November and then Christmas season was coming up which is , like , sales-wise , a good period for our type of product .

Speaker 2 12:13

So that's how we managed that , but that was a roller coaster of emotions .

Speaker 1 12:18

But that's such a smart tactic , selling vouchers , I mean yeah selling vouchers for something because you can still sell . Yeah , you can hand them in later .

Speaker 2 12:27

Yeah , otherwise we wouldn't have survived it , right ?

Speaker 1 12:30

Because it continued our cash flow yeah and we really needed that at that point in time makes sense . How were you funded back then ?

Speaker 2 12:37

we had two , uh , informal investors and , uh , actually , with one of them , I'm still I'm still in touch , okay and um , and they added a lot , of , a lot of value . So , uh , again , if you're looking at the , the dimensions of a team , like , one of them had a lot of experience when it comes to manufacturing products in China , okay , so that helped us a lot on that part . And the other one was super experienced when it comes to marketing and marketing products . So that combination was perfect for us .

Speaker 1 13:07

Nice .

Speaker 2 13:08

Yeah , that's great , and I also sort of like have this rule of thumb that when you're looking for investors , you should actually be wanting to pay the investor 500 euros per hour because he adds so much value . If you're not willing to pay your investor that type of money , then he probably doesn't add more value than just money . That's a very interesting insight .

Speaker 1 13:30

So I hear people thinking now about their investors like wait , am I willing to pay this person 500 ?

Speaker 1 13:35

euros per hour and it makes a lot of sense , um , having the right . It's , it's a partnership , right . It's not just bringing the money , no , it's actually bringing in much more than just the money and I think , uh , fortunately , a lot of founders see that now more and more so that they don't go for , you know , the highest valuation , but actually the , the founder that bring the investor , that brings in the right knowledge network with the money because that'll really accelerate your business .

Speaker 1 13:58

Yeah and the fact that you're still in touch with them , uh , to date . Yeah , it's a , it's a good sign somebody is there for the long run . Um , we're going to go into the next part of your face before we go there , maybe .

Lessons in Entrepreneurial Growth and Transition

Speaker 1 14:11

Uh , since this , this is a philips innovation award special uh podcast . Um , I'm also curious . This is 20 years ago . Um , do you remember what it's like to participate in a competition like philips innovation award 20 years ago , the first edition ?

Speaker 2 14:26

yeah , it was cool . Uh , I noticed is that the organization was already quite solid and I was surprised by that , because it was organized by a lot of students , by a lot of young people , so I was surprised at that and they really had good budgets , good speakers , good jury , so , yeah , that's what I remember and in a way , it also validated our product , uh , obviously , uh , by saying , okay , you know , philips innovation award , uh approved , yeah , uh . So that it helped us in multiple ways nice , nice .

Speaker 1 15:01

Um , I think there's some questions from the phillips team . Uh , coming in later for the question section so uh um , let's move forward a little bit . In around 2017 , I think . You left sense . Then you joined somnox , the sleep robot company . Uh , actually was one of our podcast guests before . Uh , what led you to this switch going from sense to somnox ?

Speaker 2 15:22

um , well , I'd already uh , I had a back in those days , um , my role at sense diminished , so we were in a phase where we basically hired professional management to run the business through the next phase . So I had more time , basically , and I remember a friend of mine , also an entrepreneur , contacted me saying you know , what these guys at Sumnogs . They're really great guys and they're working on something special .

Speaker 2 15:53

This could be something for you then I was like my first reaction was like , nah , you know , I've already been through this phase as an entrepreneur . It's not interesting for me , yeah , uh . And then , like three days later , another uh , friend of mine , also entrepreneur , said the same thing and I was like , okay , okay , I got to talk to these guys . And I think a few days later , julian , one of the co-founders , approached me and I'm always driven by challenges in my entrepreneurship and I really saw the challenge in this business , you know , because it's a super unique , special product that really solves sleep in a different way that's ever been done , and I think I had some relevant experience from the innovative consumer product space . And then I was like , okay , I like the guys , it's a great challenge , let's go , let's go and then what was your biggest learning in that organization ?

Speaker 1 16:55

because you've learned some lessons , I think , in sense , and then you go in to apply that into a new organization . What's the biggest thing you learned in Subnox ?

Speaker 2 17:04

well what I liked and this may sound like a really grandfather type of thing , but those guys were like 15 years younger than me and they were really like the brilliant minds from the University of Technology , and so I learned a lot in that field , where every problem seems to have a solution . That's like some online tool , especially Julian one of the founders . He's great at that so I learned a lot of practical things , uh on that part . So that was . It was really a cool experience to run a business with uh , with an sort of like a next generation you know yeah and that was .

Speaker 1 17:43

That was awesome yeah learning something from the next generation yeah tools but that made me , made me sound very old . Yeah , yeah , well , okay , you're a bit younger than I am , so and I still feel very young . Um , and I think also around that time in was it 2018 sense itself proved not to be so storm resistant , or at least that's how the press wrote about it and went bankrupt .

Speaker 1 18:08

Can you maybe because this is also an important lesson for other entrepreneurs what was the root cause of that happening ? And , in hindsight , is there anything you should do differently or you would have done differently ?

Speaker 2 18:19

Yeah , well , yeah , good question . I think there's a lot of different views on what happened . Like I just mentioned that , we entered a new growth phase and we hired professional managers to basically run that business .

Speaker 1 18:35

Yeah .

Speaker 2 18:37

And that didn't really go as planned . Okay , so I feel that they took too much risk and they did not really have an entrepreneurial background and a few things about that . Like , I think , if you want to want somebody else to run your company , I think it's crucial that they have entrepreneurial background , instead of being a manager at a large corporation , because that's totally different . You know , uh , you want to have that entrepreneurial experience , and another thing , uh , that is that that I that's still difficult to grasp is , you know , when you have somebody else run your company , they're going to do it in a different way than you would do it , and that can be difficult . So I think that the main pitfall there is to say , hey , these guys are doing it in a different way , that's not what I planned for and I'm going to fire them and do it myself again . But you know that that's a pitfall . And still , as a shareholder , it's quite difficult when to make the decision like , okay , this is not going to work and I still don't have an answer to that .

Speaker 2 19:46

So that might be something . I'm curious what listeners would say about that . But yeah , I think that's a different dynamics from when you decide to have your company run by somebody else or other people , yeah , so there's an interesting lesson in there .

Speaker 1 20:04

One find people who have entrepreneurial backgrounds . But then secondly , if you disagree with how they do , figure out how you're going to respond to it . But now , with in hindsight , is there anything you would have done differently which you have stepped in ?

Speaker 2 20:18

and yeah , which is the pitfall ? Yeah I would probably take over sooner again . Yeah , we don't know what would have happened then .

Speaker 1 20:25

No , of course so let's for the story , assume it would have been a great success then yeah exactly .

Speaker 2 20:31

Thanks , man , I needed that . You're very welcome .

Speaker 1 20:35

Hey , it's interesting . So after Somnox , you started advising other companies with the Rockefeller Habits , which I think is a really interesting concept by Vern Harnish and , by the way , vern Harnish is on the Board of Recommendation of UpRotterdam so he's been with us and he's advised us on how do you build a Scalab ecosystem . So for Scalab founders Really grateful for that he wrote the book Scaling Up . Maybe for the people that don't know Rockefeller habits , can you maybe describe in layman's terms what it is and what they do ?

Speaker 2 21:07

Yeah , the Rockefeller habits or the Scaling Up methodology is basically a growth methodology . You could see it as a operating system you know , just like you have for your phone , but then like an operating system for fast-growing companies , and it does a lot of things . But the main takeaways are that you'll get way more focus , structure , discipline , which you need to continue the high growth of your company but still remain in control . So what we usually do or what I used to do with the company .

Speaker 2 21:46

So I think I've guided roughly 80 , 85 skill apps with revenues between $ million to 300

Strategies for Building a Successful Company

Speaker 2 21:53

million . And that was also a very useful experience for myself .

Speaker 3 21:57

Yeah , nice you get to see . Yeah , I learned something myself , so that's really cool ?

Speaker 2 22:00

Yeah , exactly , and so when we work with such companies , we usually start with a few months . That's focused on strategy and really defining where do you want to be long-term , so , 10 years from now ? And once you know that , you can basically start planning backwards and also decide where you want to be in three years , where you want to be in one year and then where you want to be in three months . So that's more like the strategy part . And then , uh , the next phase is more focused about , uh , like , execution . So you know , so we define these long-term goals and you know how are we going to ensure that we're going to be working on those long-term goals On a daily basis , while knowing that you know every day you have to put out fires and you know there's urgent stuff that basically prevent you from working on those long term goals .

Speaker 2 22:58

So that's execution , and the last part is more about people . So if we've defined our long term goals , if we know how to execute them and how we're going to work on them every day , you know what type of people do we need for that and what are basically the rules of engagement . Know what type of people do we need for that and what are basically the rules of engagement for those type of people yeah , okay strategy making sure the execution work and then organizing the people yeah , part of it um , and there's 10 rules , right , or at least in the book there's 10 , yeah , yeah , is there one habit that you think stands out ?

Speaker 1 23:30

um no no , they're all equally important wow maybe the maybe the most interesting one , the one that's , if you talk to these uh 80 companies , that they uh .

Speaker 2 23:45

Well , I like the one that says um , I like the employee . Feedback is crucial and should be as well documented as your financial statements .

Speaker 1 23:58

Oh , that's an interesting insight . How do you learn from your employees ? Yeah , exactly , oh , that's really nice .

Speaker 2 24:04

You know , to prevent that , as an entrepreneur , you're only in your ivory tower and not listening enough With your reality distortion fields , yeah , exactly .

Speaker 1 24:13

Okay , really nice , and we'll put the link to , I think , the book of Werner Harnisch in the show notes . Maybe he'll sell an extra book that's always good for him but maybe also a link to the 10 rules . So for any entrepreneurs , I think that are thinking of getting into this , I think that list of the 10 Rockefeller habits already gives a good indication . Cool , so you spend a lot of time with other companies and then now you can apply it yourself again . I mean , you've been teaching all these entrepreneurs to build their companies and you're now building a factoring company and when we had the prep call , you said you want to be a market leader with less than 10 employees .

Speaker 2 24:51

How does that work ? Yeah , prep call , you said you want to be a market leader with less than 10 employees . How does that work ? Yeah , that's again I'm . I'm driven by challenges and that's , for me , the challenge in this , uh , in this company , and um . So so I got into this industry because in my previous company at somnock , we were customer of a factoring company and I just noticed that all these players in this industry basically play the same field yeah , and factoring , so not everybody might know what factoring really is .

Speaker 1 25:12

Yeah yeah .

Speaker 2 25:13

So factoring is a form of financing which is particularly interesting for fast-growing companies , where your invoices are basically being pre-financed within a day . So usually , as an as an entrepreneur , you send out an invoice and you need to wait like 30 or 60 days before it's paid . Yeah , and a factoring company basically says you know what ? Uh , give me that you sell that invoice to me . Yeah , I will give you the money tomorrow .

Speaker 2 25:40

Yeah , um , and you're paying a margin on that right a bit of a premium , okay , yeah , exactly , yeah , okay and and it's in particular interesting for fast-growing companies , because , um , if you're growing your company , then basically the financing from factoring grows with you , instead of when you get a loan from a bank . And if you grow really , fast like , three weeks later you need to go back to the bank to get another one .

Speaker 1 26:01

Yeah , you know that doesn't really work , so it's a great tactic to help you improve your cash flow yeah , exactly because you get the money in the bank .

Speaker 3 26:07

You can go forward again , okay , yeah okay cool , so anyway , so you're building that company yeah , yeah , so , so , uh .

Speaker 2 26:13

so I got in touch with it , uh , through , uh , through somnox , yeah , and I figured , hey , everybody's basically playing the same game in this industry and there's a lot of things that should be , yeah , could be smarter , and uh , and then , as an entrepreneur , like the ultimate thing is what you do is you start a business , you know , know , to basically prove it and validate your idea , and that's actually what happened . So I'm really excited about what we're doing , because we're really doing something different in this

Strategic Decision-Making in Building Company

Speaker 2 26:43

industry . So our proposition I don't know if it goes a bit too far , too technical for now , but we basically engage into what we call silent factoring , or undisclosed factoring , where it's for the debtor , so who receives the invoice ?

Speaker 2 26:56

it's not , uh , evident , it's not clear that the invoice has been pre-financed okay and uh and commercially that works really well so how does it work in practice ?

Speaker 1 27:04

then I let's say I sell something I send an invoice to , or I normally would sell an invoice to my customer . Let's say they purchase 10 000 umbrellas for me and I'll be waiting for their money . So normally I would send it with my logo and everything , and now you take over what happens uh , no .

Speaker 2 27:21

So in our , in the traditional model , you're required to put like a session text on the invoice saying , hey , this invoice has been financed by a factoring company you can only pay to the factoring company . So then your debtor knows that you're pre-financing your invoices , but traditionally factoring doesn't really have a good reputation . From back in the days it used to be like the latest place you'd go to get financed .

Speaker 1 27:45

Bit of a cowboy area .

Speaker 2 27:46

Yeah , before filing for bankruptcy .

Speaker 1 27:48

I'm exaggerating a bit .

Speaker 2 27:59

But it's still in the back of the hats of a lot of like older , like like 50 plus generation . So , uh , so in our , in our model , you can simply still like , send the invoice and , uh , it does have a bank account , that's owned by us , but that is named after you , so okay so your customer doesn't realize that he's actually paying to a factoring company and that the invoice has been financed at all .

Speaker 1 28:14

Right , so it feels like they're building the relationship with the company itself . Yeah , exactly .

Speaker 2 28:18

And we don't do debtor management .

Speaker 1 28:20

So , suppose your customer doesn't pay in time , that's still sort of like your problem and we're not going to contact your customer about that , but at some point you will right Because you , we can always do that , yeah , yeah , contact your customer right about that , right , but at some point you will right because you , we can always do that , yeah , you know , suppose you're my customer and you'd go bankrupt , then we would probably inform your customers about that but when everything goes well , yeah , nice business uh an important business , I think , for fast-growing companies to scale .

Speaker 1 28:46

But and then you said you want to be market leader with only 10 employees , so why ? Why not have 100 employees and grow bigger ?

Speaker 2 28:52

well , um , I'm , I'm really like the kpi of um labor efficiency . So the labor efficiency ratio , which is basically your revenue divided by the amount of fte , yeah and uh . What I typically see in a lot of different industry is that a market leader has a market leader's kpi of um . Uh labor efficiency ratio is way higher than , for instance , the number two . Usually it's like two or three times better . So that's where you make the uh , the difference . Uh , but that already starts with strategic choices , like you know . So in your business , you first want to decide where do I add the most value of all the my services ?

Speaker 1 29:37

Yeah .

Speaker 2 29:38

And then you decide to focus on adding that value and have other people do the , do the other parts . Right Outsourcing , yeah , so so in our case , for instance , we don't do like this debtor management . So if your customer doesn't pay the invoice , you're going to chase your customer instead of me doing it , so a lot of my competitors they have like 10 .

Speaker 3 29:59

FTE for debtor management .

Speaker 2 30:03

Then a lot of my competitors have they built their own platform to do this digitally . We're using an existing platform with a , with a few tweaks , right , and so I don't need 10 developers , right , so that saves me a lot of fte , and so that's . Those are more like strategic uh issues , uh , and then I think and an important one is , um , that you want to be cautious and conscious about what customers to onboard and whatnot so what I typically see is that you know companies are built by either like commercial founders or technical founders and commercial founders .

Speaker 2 30:45

they simply have difficulties saying no to potential customers .

Speaker 1 30:49

Opportunistic .

Speaker 2 30:49

Yeah , exactly . So you want to sort of like grab everything you can . Well , you know , it's way better to choose your customer carefully .

Speaker 2 30:59

Yeah , Because some customers don't really belong to your company you know , and on average , an average company has like 30% of their clients will lead to negative results Because you're either earning not enough or it takes you too much time , and I don't even want to get those on board in the first place . So we're super specific on which customers we want on board and which we don't want to onboard . So right now I only have 14 customers .

Speaker 1 31:35

Yeah , and then you say no if there's a customer that comes and doesn't fit .

Speaker 2 31:39

Yeah , exactly , you refer them to somebody else when it's small . Yeah , then we refer them to competitors Nice .

Speaker 1 31:45

Yeah , I think that's a great strategy and for all the commercial people out there . In the long run , this will get you a better output and better growth yeah exactly it's typically the pitfall of commercial entrepreneurs .

Speaker 2 31:57

And then , uh , then the pitfall of technical entrepreneurs is usually that they cannot say , uh , this cannot be done ah feature yeah , exactly .

Speaker 3 32:05

So what do you do ?

Speaker 2 32:06

yeah yeah , yeah , you feature it . So what you what happens is that you end up with a lot of different variations of your product that are not scalable , but you spend a lot of time developing that specific product , which is unscalable . Yeah , that's a shame .

Speaker 1 32:23

Great learnings out there for founders that are building their company now , and maybe there's now two founders listening one commercial , one technical guy that together , oh shit . We should say no to that customer . We should be focusing on the features . And then the most important lesson I think that you mentioned is on that . I call it employee productivity , or at least kind of the ratio that you mentioned , understanding how much value you can create with one employee . We had this conversation before that . The number one company in the world doing this is one that you wouldn't really recognize .

Speaker 1 32:53

You know which one it is I don't know only fans only fans , as the highest productivity per employee because , it is a simple organization and indeed they work a lot with partners to fulfill some of their things that's hilarious on that note , we'll go to a very quick break and then we'll be back you're listening to the podcast of up rotterdam .

Speaker 3 33:18

We help startups scale and grow their business by offering access to talent , access to international markets and access to capital . Curious how we can make the network work for you ? Go to uprotterdamcom . This podcast was made possible by the city of rotterdam welcome back .

Speaker 1 33:36

Uh , philip , we have touched on so many things rotterdam , delft , uh , you know , building 10 000 products and figuring out that they're not all right , uh , rockefeller habits , uh , growing companies , uh , productivity metrics . I think we covered , covered , many , many things . What is the one thing you do to stay sane as an entrepreneur ? Do you have a weird hobby or something nobody knows ?

Speaker 2 34:00

No , actually not . No no , no . Well , I do think , in a way , my kids keep me sane . So I have three young kids and when it's like rush hour at home , like between five and eight , there's no way that I can open my laptop , and I think that's a good thing . Kids are a kind of meditation in a way , sort of yeah .

Speaker 1 34:22

I have two . I might be a bit older now , but anyways , let's not get into that . The next topic is listeners' questions . We always ask for a few people to send in their questions , um , and it's , I think it's interesting . The first one is from eric rutten .

Speaker 2 34:39

Uh , I think you know him right yeah , yeah , he's on my uh board of advice at rather than factoring , and he's the former ceo of the knap bank there you go .

Speaker 1 34:48

Yeah , that's a great guy to have on your uh .

Speaker 2 34:50

Oh , definitely yeah yeah , and he also adds a lot of value and I'm also talking to a lot of , like , institutional investors and he provides a lot of credibility with his background .

Speaker 3 35:02

Ah , that makes sense and that helps me a lot .

Speaker 2 35:04

And he's also very much involved in the company . Like I think I have contact , I'm in contact with him like twice , three times a week oh , okay , that's awesome actually , and his question is also around that .

Speaker 1 35:17

So , um , he says you have surrounded yourself with a number of trusted advisors , but how do you know when to follow your own course and when to take the advice of your advisors ? And what is decisive ? Decisive in making that choice ?

Speaker 2 35:33

oh , that's a great question , yeah , so I think the , the trick here is to listen really carefully , uh , to what your advisors are telling you , um , also understand their background . So basically understand , like , uh , the , the , the glasses or the lens through uh , where through they see the world , and uh , and at the same time , also allowing yourself to feel , to , to , to follow your own feelings and your own gut , uh , but continue to be open for feedback . So it is a great question . I think . In general , I can be stubborn or , I would put it , convinced of my own opinion , but if somebody has great arguments then I'll definitely listen to that , but always make the conscious decision yourself .

Speaker 1 36:35

But one thing you mentioned there is the lens through which people look , and that's , I think , why it's interesting to have different types of advisors on your board , right , because they would have a different lens .

Speaker 2 36:43

Yeah , yeah , so , for instance , with Eric sometimes I feel like okay , I understand why you're saying this , because your background is a bank . You had a lot of people in your team . I'm with a small team . I deliberately choose to do it differently . Right or hey , I kind of feel that you're under , maybe underestimating , the operational impact of what you're saying now .

Speaker 1 37:04

Okay yeah . Now I feel we need to do this in a different way , but at least it makes you think , because it's these insights , and then you know , even if it's an advice you don't take , you take it with you or at least that's my experience with advisors . Yeah , and it's some where it's in the back of your head and then later on it comes back again .

Speaker 2 37:21

Yeah well , what I , what he also learned me or taught me , is that , uh , if you want to sort of like , I think for an entrepreneur , you're always like selling your company . I'm not , yeah , I company , I'm not meaning like selling shares , but in a way you sell your company to potential customers to potential funders .

Speaker 2 37:41

So , in a way , you're always selling . But what he taught me is that there's different ways of selling it , because to a customer , you're selling it different than to an investor . Yeah , and then there's also a difference between equity investors . To a customer , you're selling it different than from an investor . And then there's also a difference between equity investors or debt investors , where in a debt investor , you want to focus more on the robustness of the company , while equity investors are more in it for the long run and want to see this hockey curve in your projections .

Speaker 2 38:09

Yeah exactly , so that's what he taught me .

Speaker 1 38:13

Well , that's great to have somebody from a big bank on your advisory board .

Speaker 3 38:16

Thanks .

Speaker 1 38:16

Eric , for your quick response and for asking this question . The next question is from Lieke Huizinga , and Lieke is at the team , the media communication team of the Philips Innovation Awards 2025 . So watch that name , Lieke Huizinga . Her question is how did winning the first Philippe Finnegan Innovation Award influence your career and success of your product ? Were any doors opened that would have otherwise remained closed ?

Speaker 2 38:42

That is a good question . Well , what I said earlier in a way , it validated our idea , our company , so that really helped us . Um , I do have to admit , though , that in that period of time , we won so many awards and I'm not trying to brag here that it's really difficult to pinpoint . Okay , what , uh , did the phillips innovation ? Award specifically mean to us in that period it was just a crazy , crazy period where , in like two and a half years , we won every major design award in the world and looking back like yeah , it's , it's incredible , yeah , and then many doors open .

Speaker 1 39:21

Um , maybe that's also a strategy right to to sign up for multiple awards . I can say , uh , I'm a bit biased but I'm involved in in several startup awards . Um , and I think when Lieke asked this question , I do see that the network of partners around the Philips Innovation Award is strong . So it depends a little bit on the type of business that you have , but I think that is what I've seen , both with the mentors coming in with the sponsors coming in , bringing in the right introductions . So I'd highly recommend Lieke . Thank you for that question . I hope to see you very soon again . The next question is from Govert Visser . I think you also know him really well .

Speaker 2 39:56

Yeah , he was one of the first investors in my first company . So he's known me for almost 20 years , a long time .

Speaker 1 40:03

First he sends his warm regards and then he says my question for Filip , who I hold in very high regard , would be what advice would you give your younger self just starting out with his first business ? What would you want him to know ?

Speaker 2 40:18

Oh , that's a good question and , yeah , it doesn't surprise me that he's saying this .

Entrepreneurial Advice and Stories

Speaker 2 40:25

So I think one is pick your business model carefully , and a second one would be don't try to reinvent the wheel . And what I mean by that , by that last one , is don't try to reinvent the wheel . I think every entrepreneur thinks that he has a very special company , but then again , every company goes through the same phases of growth and in every phase every company or any entrepreneur runs into the same issues and every issue has already been solved .

Speaker 1 41:00

Yeah .

Speaker 2 41:01

So I think it's good to surround yourself by entrepreneurial people that really know about these phases and that understand what are normal problems , what are abnormal problems and , uh , because you're going to run into the same shit , excuse my French- yeah , Uh that any other entrepreneurs also run into . Yeah , yeah .

Speaker 1 41:21

And why do you find these other entrepreneurs ?

Speaker 2 41:24

Uh like by participating in , uh in like Phillips innovation award or uh , startup events , uh things like that or find investors , but really try to look for entrepreneurial experience yeah and you spend time in YesDelft as well , right ?

Speaker 1 41:38

One of those communities . So there's a couple of communities here . You might know the concept of masterminds , where you share your challenge and then you keep each other stick to that challenge for a year . There's one called TechSocials , I think that was set up between YesDelft , aca and another one oops , f42 Workspace , which really brings founders together , to that point right . Learning from each other and others have done the same or come to Upstream Festival , which is a really great festival .

Speaker 2 42:09

I'm wearing a sweater today so that was the first one , so don't try to reinvent the wheel yeah , and the other one is pick your business model carefully because , um , I see a huge difference between , like my business model in my first two companies compared to my current business model .

Speaker 2 42:24

Like I think , uh , building a company or building a consumer brand , that's like one of the hardest things there is , you know so I started with with sense and like the next step at somnox is even harder because the the product is so like technically complicated not only hardware but also software and , uh , you know you're running into stuff like production , keeping stock . Uh , you know , needing working capital but also building a brand , media attention , marketing budgets , especially on a consumer level .

Speaker 2 43:00

That is tough you know , and these guys have been doing this for for for eight years , so I mean respect for that . Yeah , like you got to give it to him . And now my business model . So in those previous two companies , it was always like , okay , it's first of the month again , how in the world are we going to achieve the targets this month ? Yeah , you know , yeah , so in in my current company with rather than factoring , it's a recurring revenue uh , long-term contracts with clients and a bit more predictability .

Speaker 1 43:28

yeah , yeah , I love it , but maybe that ties into what you said at the beginning . Maybe it's good that you don't know what you're signing up for , because if the world would not have , solvenogs would not have Sense , it would be not such a nice place , right .

Speaker 1 43:41

True , true Maybe let's keep inspiring those entrepreneurs to come up with those wild e-mail consumer ideas . But just know that the road ahead might the head might be bumpy , true , but in the end there's uh , there's a great , great result . Um , philip , it's been such a pleasure talking to you and and going through your journey . I mean , sense was obviously the starting point for a conversation , but it's really nice to hear what you've done with some logs , what you're now doing with rotten factoring and , and in between , with all the entrepreneurs , uh , with the rockefeller habits . So thank you for sharing your story here with us today . We talked about many things that will be in the show notes . So all the links that we talked about will be in the show notes . Go figure them out and find them out there . And , as always , we close off with a song that you have selected . So would you like to explain which song and why ?

Speaker 2 44:26

Yeah , so it's a Dutch song . It's called Volle Kracht by Opgeacht by uh , and what I like about the song is that it there's a lot of parallels when it comes to entrepreneurship . So , uh , you know he talks about his journey , like his lyrical journey , uh , which is uh comparable to an entrepreneurial journey , where you know he really wants to to , to go for his goal . He doesn't want to be distracted by anybody and he's like , yeah , you got to do it yourself , like nobody's going to give it to you and you got to just work your butt off . But in the end , you know success will come .

Speaker 1 45:02

So that's why I chose this song Perfect , great fit for the entrepreneurial journey .

Navigating the Entrepreneurial Journey

Speaker 1 45:07

Thank you for listening .

Speaker 6 45:43

Until next time , keep it up , thank you . But my tears are still an announcement and I don't even give questions . A short explanation , no reaction . I spend my time with it . I'd rather sail my own raft on this wide sea , write a little . We know people watch the sun's day . Births seem to be a case of no . We do it anyway , no matter how we go , feel it in your water or see how the stars stand . Incomplete , we step on the water . A fluid . Part 2 would be too easy . I take myself with me .

Speaker 5 46:30

We'll see you next time I'm out I take the Stay out of my water . Now come hangling . We know those pirates . We bring them to the sea Shit on the market in our own little world , just like Noah in his ark .

Speaker 6 47:17

I take myself with me sail my own fleet On this wide sea . I take myself with me prepare my own lot I'm not going to be bored . I take myself with me sail my own fleet On this wide sea . I take myself with me prepare my my own fleet . Suddenly , by the sea .

Speaker 4 47:38

I take myself with me , I prepare my own food , I have my own idea , no matter how late it is , trade is where it is , where it revolves , on a Batavia ship , far East Company , driven by the mist , with more water than fish inside , armed with licks . The Asseldorp hat is the place of the licksict , the place of delict . The splinter has mixed a new track . We do a little more than bullshit . The party is big With a bullseye as a goal , like Barney the Fick . Yeah , I'm with you with that wind power , 12 storms on arrival and it's storming on until tomorrow's dawn . And on the roof of my vlog , dry in a dock , I'm preparing myself for the night . The cut ears are for gog . I open my Outro Music .