After soaring to become the highest-valued private startup in Europe, Klarna is garnering a lot of attention — and rightly so. Northzone’s Hans Otterling took the opportunity to have a Fika with Klarna’s CEO & Founder, Sebastian Siemiatkowski. Together, they discuss how the company became a $46B business in less than 15 years, why customers consistently rave about their user experience, and why work-life balance is key to having a meaningful impact across the board.
From the beginning, Klarna’s innovative yet beautifully simple business model recognised two major pain points: the need for customers to have more freedom when paying for their purchases, and the need for retailers to have a smooth desktop and mobile payment solution. By relentlessly focusing on both the product and the user experience, Klarna quickly established itself as a category leader that is beloved by its customers, consistently outranking other, more established brands.
As a CEO & Founder, Sebastian’s drive and customer-first approach reminds us of Steve Jobs – in Hans own words. His openness in sharing his entrepreneurial journey makes him a role model for European entrepreneurs, ranking him alongside leaders from Zendesk, iZettle, Spotify and Datadog. Follow our conversation below to hear Sebastian’s best insights on building a company, prioritising the customer, and balancing work and life..
Hans Otterling: Sebastian, looking back at your 15-year journey from founding Klarna to reaching an impressive $46B valuation, what lessons and pointers can you share with the new generation of entrepreneurs building companies from scratch?
Sebastian Siemiatkowski: I could give you headlines, but it’s impossible to succinctly summarise complex problems. As an entrepreneur, you need to dive deep into each headline.
My first piece of advice is to create a great group dynamic. Ask yourself how you can build a complementary team who has passion, drive, and who shares your goals. If you want to be a good leader, you need to learn about people’s behaviour. I recommend reading The Five Dysfunctions of a Team by Patrick Lencioni to explore this topic further. I’ve learned so much from it.
Secondly, you should create a mission that is crystal clear to everyone when they show up at work. You don’t just want people to know what they’re doing, but also why they’re doing it. Different people may interpret the mission differently, and that’s OK. Everyone has different motives and you need to embrace this. The book I recommend here is The Toyota Way by Jeffrey K. Liker.
Finally, understand that sometimes, you need to be decisive, and other times, you need to let things go.
It has always struck me how customers are your top priority, before any other part of the business. Where does this commitment and passion come from?
I feel strongly that if you truly believe in something, it carries you through high and low times. As an entrepreneur, you need to separate the noise and trends from what really matters for your business. With Klarna, we’ve had our fair share of highs and lows, and what has kept the boat going is this focus on customers. I’m sure some entrepreneurs have failed in the past with this mindset, but I don’t think it’s the norm. If you’re passionate, dedicated, and obsessed with being right for your customers, you’ll win.
There’s a word in Swedish that I’ve never managed to fully translate: “eldsjäl.” Literally, it means “fire soul” and I think it describes this drive really well. If you can’t stop thinking about it, it has to be the right motive. Daniel Ek even uses “eldsjäl” as his Twitter handle — I can understand why. “Entrepreneur” doesn’t really define what we do; it’s much more than that. You don’t need to be passionate about the business, but you need to channel that passion into something. I think it’s a mix of dedication and fire soul, and with this mindset, you can tackle whatever comes your way with clarity and commitment.
Hans Otterling (above) Partner, Northzone
Your leadership style is another unique attribute to Klarna’s success. You’ve openly shared your need to find time to relax to build a mature business. Why is finding a work-life balance so important to you?
I don’t believe that you can be an entrepreneur by working 30 hours a week — it’s just impossible. My views on this have been misinterpreted in the past, but I stand by them. In order to be a good decision maker, I need to sleep, exercise, and spend time with my family, who are an important part of my fulfillment. I believe in taking time off in the summer to wind down, and this doesn’t take away from how passionate I am about my company and mission., I have other things in life I enjoy like spending time with my wife and kids, who are an important part of my fulfillment. I’m really attached to the Swedish holidays, to some extent I’ll say European vacation style, that consist of taking a couple of weeks off to wind down over the summer. I don’t quite understand the US on this, I think they’re pretending with bank holidays but in the long term I don’t think it’s a sustainable work life balance.
Thank you, Sebastian, for sharing your thoughts and experience with us. We can all learn from your drive and dedication, and I’m sure many budding entrepreneurs will look to follow in your footsteps.