With Entrepreneurial Insights/Cleverism we want to help people interested in starting and growing their own companies. A good way to learn that is to listen to leading entrepreneurs and get their Entrepreneurial Insights.

In this episode Nikita Fahrenholz and Claude Ritter, co-founders of Delivery Hero will share their key learnings from the last 3.5 years of being entrepreneurs, so you can make better decisions. They raised a whopping $270m, so they know how to start, finance, and grow a company. Share this video or embed it on your website, so more people learn to become a better entrepreneur.

Martin: Today we are in the office of Delivery Hero in Berlin and two of the four co-founders of Delivery Hero are sitting next to me. Nikita and Claude who are you and what do you?

Nikita: Okay, my name is Nikita; I’m a co-founder of Delivery Hero. I’m responsible for global sales, customer care and internationalization.

Claude: Hi my name is Claude and I’m responsible for product and tech, so product strategy, technology, mobile application and so on and so forth.

Martin: What is your background or what did you do before you started this company?

Claude: So before we started, I was living in China, Shanghai.

Martin: Okay.

Claude: Four-five years running another start-up, like mostly online dating sites.

Nikita: I was consulting with McKinsey and Company, so was working on international projects.

Martin: Okay, so I understand Claude you had some kind of entrepreneurial background then already?

Claude: Yeah.

Martin: And Nikita you came from a management consulting area. Nikita what made you change your career track from being an employee to becoming an entrepreneur?

Nikita: So there is no kind of fancy story to it, I was never kind of this eight-year-old already entrepreneur kind of guy. I was rather kind of pursuing a career in I don’t know banking or consultancy but then just doing the courses in my studies and doing a couple of internships and then also kind of my work experience with McKinsey kind of showed me that this might be the place for me. So I reached out basically and talked to people and wanted to figure out basically what I could do…

Martin: Yeah.

Nikita: In a more self-sustaining environment.

Martin: Yes, I understand. I mean consultancy is quite hard work.

Nikita: Well that’s not particularly different to entrepreneurship I would say, but…

Martin: Okay and can you please shortly describe what typical, I mean there is not a pure typical day in life but what a typical working day would look like in both of your functions?

Claude: Want me to start?

Nikita: Yeah.

Claude: Well it kind of changed obviously over the past four years, I mean when you start and co-found a company, your day looks like, in my case like drawing mock-ups of website, actually doing HTML CSS code, setting up the server, doing job interviews, trying to lower rent with some landlord and so you basically do everything.

But then you know over the course of the evolution of the company, obviously your responsibilities change and you have to learn kind of to leverage yourself a bit and get out of too many sort of detailed topics, that was quite hard actually for me. But so now my day looks like it’s mostly meetings which is actually the job in my case, so you basically just point people in a direction and from time to time you catch up and see whether they’re still going in the right direction. And hiring, like team building.

Martin: Okay.

Claude: Yeah, the routine here for me is now is 9-9, basically.

Martin: Yeah.

Claude: So much for long hours in consulting and we are in year 4, so it was more at the beginning.

Martin: Sure.

Nikita: Yeah, for me I guess same story. I mean in the beginning you kind of do everything really including sleeping in the office.

Claude: Yeah.

Nikita: So hours are crazy. I mean I was COO, so I was basically building up the first customer care and first ticket system, wrote kind of the specs for it and all that stuff. Tried to figure out what internet is about you know. It’s a very kind of broad in that sense. Now I have run 200 people in my functions, so obviously there’s a lot of meetings, kind of hiring, managing.

Martin: Yeah.

Nikita: Managing the teams, managing the reports and then there’s always kind of – there’s a lot of cases where you need to kind of fly somewhere and you want to buy a company you know..

Martin: Yeah

Nikita: And then it’s kind of – it changes basically 180 degrees for a couple days. I used to travel quite a lot, so I would say like 40% of my time last year has been actually aboard in all kind of country teams working with the CEO’s there. Making sure that they kind of – yes scale up their operations, make the right decisions, many have a bit more kind of broader and bigger picture and they’re kind of decision taking. We did it quite some time actually together also, so yeah, so there’s really no typical day. It’s usually pretty hectic hours, longer than a consultant to be honest..

Martin: Yeah.

Nikita: Because you kind of carry this company and you know all week, yeah I mean if you have an email we can just do it then.

Martin: Yeah.

Nikita: If you need to fly somewhere, just do it, there is no kind of Monday to Friday in that sense.

Martin: Okay. So let’s switch to the next topic which is the business model, what is your current business model looking like?

Claude: So in a very basic sense we send orders to restaurants, restaurants fulfil orders and we charge a commission fee for sending the order to the restaurant. So in that sense, it’s the marketplace, our revenue comes largely from commission fee which is like a performance-based model for restaurants. And then there’s obviously some other revenues generated through kind of other activities but that’s the bulk of the revenue.

Martin: So my assumption would be that they are 3 major model drivers, like for example, one is the acquisition of partners, or restaurants, second one would be some kind of marketing efficiency and the third one would be making sure that the platform is running smoothly, right. And how are you managing these 3 kinds of variables to improve your performance?

Claude: I leave the restaurants out for now, I mean from a platform and technical point of view, it’s obviously stability is a very important part of our business, also reliability because you know if you’re hungry and you order food, you tend to be not in the best mood ever, we call this the state hungry. So hungry customers and then if something doesn’t work, it’s a problem and you really need to make sure that you have good process in place because at the end of the day, technology, somethings sometimes just don’t work. I mean that’s just – and even Google sometimes stops working and you know, so there’s no 100% reliability, but obviously you spend a lot of time on your resources on making sure that things works smoothly.

So that is you know, you just focus on those kinds of topics and then they are not really fancy, you can develop new fancy features, or you could make sure that your transmission rate to restaurants is top one-percent better you know.

Martin: Yeah.

Claude: So that’s important and then on, you want to talk about the restaurant side real quickly?

Nikita: No, that kind of comes hand in hand with marketing, you know.

Claude: Yeah, so marketing efficiency is the thing like I think that we as a group, actually are really good at and we also pioneered a couple of things like when we started doing TV in Germany, at the beginning it didn’t work out really well because our first TV spot went online and our whole website went down and…

Nikita: It actually went pretty well.

Claude: It actually went pretty well.

Martin: Too much traffic.

Claude: Too much traffic, but yeah, we fixed that and before that, a lot of people told us that this TV is not going to work for this model and so on, no one did that before and it actually worked out great, so it helped us scale the company and re-employ the same model in other countries and that works great.

And then everything else you know at the end of the day is kind of statistics and numbers, it’s marketing sounds like “oh creative” but in fact especially performance marketing is all about statistics and numbers and performance marketing we were lucky to hire one guy that was and is like one of the top guys in performance marketing, SEM particularly. And so I think we are quite good at this, obviously there are other people doing a good job as well.

Martin: Okay, thanks. Do you want to go to the restaurants or that was just a general for…?

Nikita: So, the supply side of the platform side is kind of the restaurant side is a bit separated from these topics, because you obviously have some sort of CPA relationship there as well, so you need to kind of you know put as many restaurants on the platform as possible and as quickly as possible, especially when you are kind of racing for market shares and obviously there’s a lot of innovation from operational point of view where you need to be smart and what applies kind of to customer acquisition, to product development, etc. and also restaurant acquisition I guess. It’s all a big statistics games, it’s like you know building internet companies is basically about numbers.

Martin: Yeah.

Nikita: Understanding the numbers and I think what we are really good at is to focus on kind of finding out and focusing on the main kind of units that drives this business model.

Martin: Yeah.

Nikita: And really iterate on them, I mean TV was kind of a test amongst a lot of tests that we did and we had huge failures to be honest, with off-hand things that we tried to you know but in the end kind of you need to test, test, test, kind of figure out what will drive your model and then also to the right attribution to. Understanding how much you could spend for TV and then also for display ads to kind of get the total value and kind of put that also into perspective of your customer.

Martin: Yeah.

Nikita: Yeah, it’s quite exciting actually; it’s a bit like a game.

Martin: Okay, did your model iterate overtime or did you make a larger pivot?

Claude: We didn’t pivot, but iterated I would say.

Nikita: In terms of basic business model, no, it was pretty clear. It’s a commission based marketplace model. We obviously introduced a couple of new revenue streams over the course of the time which where only possible because of size and kind of relationship with restaurants.

Martin: Yeah.

Nikita: But the main business model was and is commission based.

Martin: Okay.

Claude: Which actually I think, I know we are not in the advice section yet, which is actually a good thing like if you build the company it’s very good to have a clear business model.

Martin: Yeah.

Claude: That is easy to understand, because you need to rally people around like the right things and if you’re in this exploratory mode, which is fine I guess if you’re like well-funded and have investors that are cool with you being in that mode.

Martin: Yeah.

Claude: But in general especially in Germany where people are – they want to see their execution focused and it helps to have like a simple business model, like at least on the outside because that’s where people get it and kind of go from there.

Martin: And how did you find this business idea?

Claude: I guess that’s the credit to Markus Fuhrmann, he invested in the company call Mjam, which is now our Austrian Business. We acquired this company like that, he invested in this company I don’t know exactly when, maybe 2008, 2009, something like. He basically met Angelo, the founder of Mjam, and gave him all his money at that point and I don’t how much.

Nikita: That was a wise decision.

Claude: 10K or 15K or something like that and because he believed in the business and then sort of like a year or two later he realized that it is actually working.

Martin: Okay.

Claude: And he approached a couple of people to try to raise money, you know to get it started in terms as an initial kind of company, and then he reached out to me and Nikita, we didn’t know each other at that time but he knew both of us and then yeah, he basically pushed it and raised the initial couple 100K to actually get it going.

Martin: Okay, so my next question would be, when you see this kind of business idea and some other person has some kind of traction, how do you further test your assumptions so you can really make it a good go decision?

Claude: What Nikita said, I mean ultimately it comes down to unit economics and how much can you spend, like have much can you sensibly spend, it’s like you don’t want to pay like a hundred Euros to acquire a customer that will be profitable never. You need to understand how much do I make with a customer, how often does the customer come back, and therefore how much can I spend for the customer, right. And the thing is that in the first couple of months you do not have those numbers, like you just – I mean you have assumptions obviously, because you have a business plan.

Martin: Yeah.

Claude: And we have markets, so we got some insight from Austrian business but ultimately it’s our assumption, so you really want it work. Like I said, you just pick a number, pick a budget, make sure you have all the tracking in place that you need.

Martin: Yeah.

Claude: And then run with it and…

Nikita: Funnily it’s quite correct actually, it can reach your best perspective everywhere, we are quite on-the-spot in terms of kind of main numbers. Which is a bit scary, because it feels like a self fulfilling prophecy, if you would have taken kind of double the size maybe it would have been better, I’m just kidding.

But yeah, I guess I mean – I guess it all comes down to throwing out things and make them online, as bad as they might be, not waiting for the perfect kind of whatever product and then just collect the data, you know collect the data and I send the data and make it work from there.

Martin: So you build a minimum viable product and then just try to…

Nikita: It’s more than a teaser…

Claude: I wouldn’t say viable though.

Martin: Okay.

Claude: No, actually we went – we put it online very quickly, it would not work on a PC browser mostly because I had a Mac.

Martin: Okay.

Martin: But yeah, I mean you know I didn’t have online payment and all these kind of things, because you know it took a while but…

Nikita: It was damn ugly.

Claude: And it was quite ugly.

Nikita: But the point was that we got so much shit on you know on a couple blogs, etc.

Martin: Okay.

Nikita: Where people were like, “what the fuck is this” and these guys don’t know anything.

Claude: It’s the ugliest logo I have ever seen, which it was, to be honest.

Nikita: It wasn’t – yeah it was damn ugly, I understand that but first it was quite funny, like it gave us quite some traction and you know the product became better and better and better and now I would say we have the best product globally in terms of online food.

Martin: And what do you think were the major challenges except for designing beautiful website for acquiring the first 1 billion customers and how did you take on these kind of challenges?

Nikita: Well that’s a big question; I mean you can start from product type.

Claude: I mean there is a lot – I mean in terms of challenges, like if you build a business, there is a lot of people look at the company like for example, whenever I talk to my father about what we’re doing right, he is like yeah, are you doing internet businesses again? But the thing is, there is there is no such thing like internet business and people just don’t understand that everything is an internet business and what we’re doing has maybe 30% do with internet and 70% with offline business. We have a big call centre, we have a lot of people working on keeping and making restaurants happy, we have big customer care force and so on.

So if you look at kind of what our business is doing, you know sure we run a website and that might look easy, right.

Martin: Yeah.

Claude: And you could say sure it’s a challenge building a product but in the end of the day if you can’t build a product that works for something like this, you have nothing.

Martin: Yeah.

Claude: You’re in the wrong place, so I think ultimately it comes down to challenges, it’s more about making sure your processes work and making sure you can handle like customer care in-bound for a million customers.

Martin: Yeah.

Claude: Now because that is actually very tricky, it sounds like you have a call centre and you just hire someone. You go through lots of iterations, outsource, in source, mix, so it’s a lot of these kind of.

Nikita: Do it yourself whole weekend.

Claude: Yeah.

Nikita: Everyone.

Claude: So and I think the challenges just keeping up with growth in all areas and you know making sure you apply kind of not too much overhead but also not too little kind of resources, just always kind of keeping up with the growth.

Nikita: Yeah, its I think main pain-points is to managing the balance right, I mean because you’re in this weird position where you never have enough money as a start-up right, but you also need to show a lot of numbers, so basically everything goes into marketing, that means everything else is going to break because you haven’t spent enough on you know customer care, actually the real business, the real processes behind the kind of a pretty looking website.

So you have to run for these numbers to get the funds, at the same time you need to have kind of this big vision of how it should be if you would have that kind of funds, where you need to kind of have the right structures in place, kind of have the right CRM models and processes and managers. So kind of managing this race.

Claude: It’s like having this long-term vision and having people believe in it, while executing sometimes very from short term goal basis.

Nikita: Yeah.

Claude: And then people question you know, you know you have good developers, developers want to build a cool products.

Martin: Right.

Claude: And then you go like just slap this on and deploy it and the guy goes like, yeah but this is shit and you go like, yeah just do it, but yesterday you told me that we have a big vision enough. So you say, just forget that for a second, you know just do that now and we go back to big vision tomorrow and that is difficult.

Nikita: And it’s funny because like I think this is a typical European German VC thing right, I mean there’s just very little cases where you know start-ups get a lot of funds from start and can really kind of build awesome things from the beginning right, where they have this freedom. In the US this is quite normal right and if you know I had a big discussion a couple weeks ago with an investor and the point was that you know in US you can kind of get a lot of money from start and then you can have all the kind of airBnB, kind of start-ups where they take all those fancy pictures which looks all awesome and you build nice communities ,you know that is cool and I really liked it but the problems the Germans VC area, tickets usually are quite small and you really have to raise fund for that and you really have to prove the case and for that matter, yeah you need to make that compromise, a bit…

Nikita: I hope actually that German VC’s and international VC’s coming to Germany will kind of get into this mode where they really invest into people.

Martin: Yeah.

Nikita: And into products right and into visions and you know because I think this is where our innovation comes from, if you don’t have to just make sales but also b creative.

Martin: And in terms of corporate strategy, what do you think, what is your competitive advantage over other kind of online food retailers or even offline retailers, who delivers?

Nikita: The site itself right if you go on to page – I sometimes get a feedback where people say, “yeah it looks like the same as to other sites,” which is also not particularly right. I get that point and then you go on the list and then you pick your food and you order. I think the competitive advantage comes from the fact that customers are happy, and that has a lot to do with how we manage kind of the whole experience, how we make sure that our failure rate is below I don’t know, 0.00 whatever 1% in peak times, you know that the quality of restaurants is very high and so forth, yeah good customer service. And you know, just kind of the experience of ordering food is really an emotional kind of thing and if you’re happy and it’s seamless, you’ll come back and that’s a competitive advantage.

It has a lot to do with innovation, a lot with technology, a lot actually things you wouldn’t see when you just look at the page.

Martin: So this would just mean just making the customer happy with that customer service and increase the customer lifetime value, and by that just making money.

Nikita: I mean yes.

Claude: More happy customers, more money.

Martin: That’s the way to do it.

Claude: And then that’s also I think in terms of the strategy for the group, I think we have a very simple kind of internal strategy that we follow that is non-public, it’s just like four lines, has to do also with acquisitions and we just follow this strategy, we don’t you know obviously you look left and right sometimes and you look at competition but we don’t bother too much because that’s a bit you know don’t want to sound weird but like the end of the day, we’re the experts in the market. Our competitors are probably as well but so what? I don’t need to look at them, we know the market and we know our business, therefore we do what we think is best and I think that kind of served us well.

Nikita: Yeah I guess kind of this – we were quite focused on what we want to do, we didn’t also iterate a lot into different verticals for example, we kept the product simple in a sense that you can order food and this is kind of the main thing, in our books.

Claude: Yeah.

Nikita: And this main thing we make as awesome as possible and you know, there’s a lot of work behind actually behind this kind of simple process and which makes the difference in it.

Claude: Ideally it becomes way simpler than it is now, we’re really working on other things that required a lot of technology actually, interestingly to make it simpler.

Martin: Yeah.

Claude: That should be way easier soon.

Martin: Very good.

Claude: Trying.

Martin: Next topic would be the market, so how it’s working and what would be your future focus, especially in terms of maybe you can give us in terms of segmentation, the size, the growth and profitability and the difference the countries has developed and what would be your focus for the future?

Nikita: I mean this whole market is super big, yeah I mean it’s globally 80 to 100 billion Euro are turned over a year for pizza and sushi. So it’s just a big space itself, the point is, its majorly offline, so like 70 to almost 90% of people still order over the phone and that obviously depends on the country. So I guess the general trend will be that more and more people will kind of order online, that’s one.

Secondly and this is pretty scary I must say, if I look at major trends in like same-day delivery, more and more convenience aspect consumers to kind of – you know we operate with 200,000 drivers globally to feed this massive market. We’re a big franchise.

Nikita: Yeah, so there is mega transfer kind of personalization and convenience and all that stuff will lead to products that we might not kind of see now, but it could be that you know you just have this kind of watch and you type in I’m hungry and something gets delivered within 20 minutes and it’s the most superb quality ever and there will be no interface on a desktop or whatever.

So what I’m trying to say is the general trend is convenience for whatever it is and people will more and more request time for their family and you know leisure time and less for like making things like food and you know and obviously this is kind of where we will position ourselves.

Martin: Okay, this will also mean, like you say there are two trends like say people are getting more lazy and want convenience at such times.

Claude: I wouldn’t say people get more lazy, but it’s like look people move to cities, so there is a lot of people like urbanization, people moved to Urban areas.

Martin: Yeah.

Claude: Their lives that you know everyone runs around with a mobile, everyone is always on, everyone is kind of, I am not saying it’s a good thing, but and everyone on is always like it’s a bit in the stress mode and just the fact that you just don’t work until five and then you go shopping and then you go home and then you cook and then at 6:30 everyone eats and this is not happening, more and more is not happening anymore and a lot of people want stuff on demand. Be it food, be it driving around, be it the taxi, being whatever and so this not having stuff and having things available on demand, trend will just continue and then you know we just sit on a couple of megatrends. But it’s still like a lot of people don’t have a smartphone or like a decent smartphone yet ant, we have one country on our portfolio where we do 92% of our orders through the app, like we can turn the website off, and that’s what will happen here as well. In Germany we’re around 40 to 45% already which is quite a lot.

Martin: Okay.

Claude: And that will happen here as well, you know there’s those things and obviously mobile supports this flexible lifestyle and there is just those things where delivery here as a business having this big fleet of drivers and so on is kind of you know in the eye of the storm if you want, because there’s a lot of things happening that support this model, did we think about this 4 years ago? No.

Martin: Okay, we are entrepreneurial insights, we always try to help young entrepreneurs and first time entrepreneurs and getting some advice from experienced entrepreneurs and as you have raised a whopping 70 to 80 million in funds, I would just like to get an insight from you what the top three advice would be from your side to new entrepreneurs?

Nikita: In terms of fundraising or just…

Martin: Yeah.

Nikita: Fundraising or just general?

Martin: If you like, you can also do both, like how to manage the relationships with VC’s for example.

Nikita: Okay, it’s very agnostic, so you know it changes obviously over the course of the company stage I would say. If you’re, so I’ll take the seed stage and then you can continue and then I’ll come in.

So seed stage is really about, I guess first round would be family, friends right, and with family, friends, I would say, what you would like to have, I guess it depends on the business model. But what you want is something online quickly, that shows business data. The funds you raised from the start is kind of you know people around you that know you, that trust you, maybe one or two angels that you got in contact with and that kind of invest into the team, but the point is you need to be very quick in terms of showing numbers, because then you can go out to on you know type of seek funds angels actually and that I must say it happens a lot through networks. So it makes sense to know people or at least to know how to approach them and when to approach them.

Martin: Yeah.

Nikita: It helps to read the blogs out there and just knowing, and going to different fairs even being very active kind of and it’s a lot of stress because you know thousands of people want to raise funds and it’s really hard, I cannot sugar coat it. And then now there is crowdfunding, etc, so that makes it seem easier, but then series A stage comes really down to is, is this team able and is the business model proven its scalable? Yeah, I mean what investors looking in these kind of stages is minimum of 8 to 10X returns if we are speaking about fast point, B to C start up business model.

So it’s all about marketing size, it’s all about kind of showing a good trend which is going up in terms of kind of orders and proving the case. I think what people should from the start do is understand the unit economics. This actually makes sense, is this inherently profitable, if I had kind of the funds and you know the size would it be profitable?

Martin: Yeah.

Nikita: So what is my CPA? What is my user acquisition cost? What are my main channels? What is actually search volume for connected keywords in that segment and so forth? You then obviously calculate the returns that you make and then you have to prove that. And obviously if you’re smart, you will get well connected angels on board pretty quickly because if they like you and think this is a viable business model, they will connect you to other funds/people and then you will get kind of this one chance to present and like for us, I guess what also helped us a lot was we were super – in a sense we were super aggressive in our forecasting, so…

Martin: Okay.

Nikita: A bit arrogant I would say, because we were having brave assumptions which were all true actually, we had to revise the business case upwards like I think 3 times firstly, but we were also very transparent, what didn’t work well and that creates trust with investors because they know we will take the right decision no matter if we like the person, if the person is not the right person for the team. So yes.

Claude: I mean early on what is important, is that you don’t talk to people once you need money I think, not just here but we also work with a couple of startups and trying to raise money for other start-ups that were not involved in but just like past advisors or just helping out and often it’s the best things are those where people connect early with someone, just ask for feedback and keep in the loop and the case what’s happening last month you know and don’t ask people for coffee too much because people go for coffee a zillion times a week. So just like you know don’t ask for anything, just like keep people in the loop a bit.

Martin: Okay.

Claude: One example now, where a very high profile person now involved in a company a year after I first approached that person, just because now he think it’s starting to be interesting for him and was kept up to date. So I think that helps, in most cases nothing will come out of it but at least you have a new connection and that might help you later and then yeah what Nikita said, that ultimately it’s team and market, if you have a good team in a shit market, it’s not going to happen.

Martin: Yeah.

Claude: So if you have a great market and a shit team, it’s not going to happen.

Nikita: But it was still better happened in the first place.

Claude: Yeah, but yeah but then if you have a good team, then you pivot into something else but you know product that’s the important, and to a tech guy that doesn’t matter that much, it will not make or break your company, at least it will be like a B to C type of thing we are doing, developing a search engine that might be different.

Nikita: Yeah.

Claude: But yeah so and if you have a good team, you know there’s a lot of people who, it’s easier for them to believe that you can make it happen. If there’s like three and we had really good combination, because he was like X McKinsey, number driven, operations and a lot of experience in these kinds of areas. Markus is a brilliant business developer, team builder, connector, he knows everyone, he is really bad at operations.

Nikita: We can say this, because we told him already.

Claude: He is brilliant, like fund raising and he just connects everyone and he is the smartest person I know and then me I’m more like tech, product, big marketing and I think just like we had a good mix of people and if you have a complementary routine, it really helps you, because you just don’t go onto each other nerves too much like if he takes a decision on in an area that I know he’s good at, I’m not going to bother him.

Martin: Yeah.

Claude: And the other way around, because otherwise it won’t be scale. Because if you’re three founders and every decision you have to take together, it’s like if you are alone.

Nikita: It’s just not going to happen.

Claude: Yeah, you need to run, everyone needs to and for investors it comes back to this.

Nikita: And then later stage, I mean speaking about funds going beyond like raising beyond like 20 million and 50 and whatever 100, does this kind of. So there is I would say a big black hole, yeah in between like between VC’s and private equity sort of, or hedge funds sort of funds, because VCs are expecting a higher return, you know like they want to have little 10x and then obviously they cannot go endless in terms of a valuation and the money that they give, which at some point is just not possible anymore.

Martin: Yes.

Nikita: I actually believed that we can make it 10X case even based on our valuation of it but you know, you get into this kind of a bit of a problem there because there are not a lot of funds which can provide these kinds of tickets and then on the other side, it’s like private equities and hedge funds and so on. These guys don’t expect 10X returns, they maybe expect 2X returns, but for them this is a new asset class which is an interesting kind of phenomenon that we can see now and you know, private equity going into internet business, but again they’re still expecting same criteria as they would expect from a can of…

Claude: Gold mine.

Nikita: I don’t know sausage factory in Hungary right, so you know big business basically, so and then you have to manage this thing, it’s not easy.

Claude: That’s what I meant before, it’s like this is a very different conversation. It’s like people across the table they all wear suits and they look like bankers.

Nikita: They are bankers.

Claude: Yes they are, and just a very different conversation and you know like at the beginning your slides have like team, market ,product and then it moves more like why we are the most awesome product and so on and then it moves into parts for financing.

Nikita: Yeah.

Claude: Like our index right now, there’s nothing, there is no product.

Nikita: Financially

Claude: They are like okay you can do it, like you guys can do it, show me the numbers and so the slide deck right now is actually an excel sheet.

Nikita: Yeah.

Claude: So it’s quite interesting like how that changes it and it’s also really important, like we have one guy in our company, multiple but one in particular who is an ex-investment banker and I think it really helps our company because he speaks this lingo.

Martin: Yeah.

Claude: And he connects with those guys and I think it will be good advice for company that at some point need to raise a lot of money to have one or two people on board to help with these kinds of things, because the founder you know in most cases the founder is not an investment banker or you know and you need someone to run this or help you run this.

Nikita: Yes, I guess the expectation or the profile that is needed for this kind of company now is completely different to the profile that is needed when you’re building a start-up. I think what we did well, we kind of you know, we kind of developed with the speed of the company, because it’s super difficult to manage this kind of 5 guys team to kind of manage 200 on a global scale.

Martin: Yeah.

Nikita: But I guess people need to be aware of that and you need to be again very honest with yourself and with your team, well I have this strong belief you know don’t let ego stand in the way of decision-making.

Martin: Yeah.

Nikita: So be very factual, and then take the right decisions based on the absolute truth that you can find. It’s kind of the thing I picked up from a hedge fund guy called Ray Dalio, it’s amazing, he wrote a book it’s called Principles and it revolves around this kind of, what is actually the right decision, what is the ultimate truth in the room.

Martin: Yeah.

Nikita: And if the ultimate truth is that it is no more good to manage kind of 300 people product team, which we don’t have but just saying, if it’s that then you should go. And I should be able to tell him, without him punching me in the face, which that could happen, but that’s okay.

Martin: Good, but thank you very much for your time.

Claude: Sorry for un-structuring your structured interview

Martin: No, this was very well done.

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