19 syys Digital Foodie Ltd.
Digital Foodie Ltd. was founded in 2009 by four Finnish entrepreneurs. The Foodie.fm online grocery platform is used around the world at more than 1300 retail locations in Finland, Scandinavia, Baltics, Russia and in North America. Digital Foodie is venture-backed by the US based e-commerce growth fund Black Dragon Capital, and is now part of the fund’s EnterWorks Holding group portfolio. The company employs grocery industry experts and technology specialists in two different continents and five locations working closely with individual grocers as well as large retail chains to help them enter the growing opportunity of online retailing. The Digital Foodie platform has won awards for the best user experience in 2015, best online store of the year in 2013 and comet of the year in 2012. The platform’s exceptional recommendation technology is praised by IGD Retail Analyses.
We interviewed the company CEO and co-founder, Kalle Koutajoki, to find out how it all started and to hear his views on entrepreneurship.
How did you come up with the idea of Foodie platform in the first place?
We had a couple of competing ideas that we toyed around with; one of mine was a game based on augmented reality, a little bit like Pokémon Go. The initial idea for a new kind of grocery shopping application came from another one of our founders, Samuli. The idea was inspired by a music recommendation service called Last FM and its taste-based music channels. The four of us that ended up founding Digital Foodie had previously all worked together so we had a strong group that already knew each other and worked well as a team.
How did you develop your key partnerships? How did you make your first sale?
We decided to pitch our idea directly to the market leaders in Finland and ended up with multiple pilot agreements. From the very beginning our ideologies clicked very well with S Group. We soon dropped other pilots and did a successful project with them. This lead to a close strategic partnership that has been expanding ever since. In the beginning we didn’t know that much about the grocery retail but we did know a lot about software and consumer services. Our and S Group’s expertise complement each other very well.
How did you get funded or what creative strategies did you use to execute on minimal cash flow?
Initial seed funding always requires some creativity. Not much salary was paid to anyone during the first year. At the beginning, we did mobile development subcontracting until we got the first MVP (minimum viable product) together for the pilot and the seed investment. We also leveraged Tekes, which is a great resource in Finland. We put in some seed money of our own as well. At the same time, we kept pitching our business idea to investors. Eventually we took part in a Vigo acceleration program and did a full seed financing round with Veraventure, Tekes, Veturi Growth Partners, our board member angels, and ourselves.
What have been the biggest milestones of Digital Foodie so far?
The first one was naturally our partnership with S Group where it all started, followed by the seed investment. The next one was turning Digital Foodie into a ‘real’ company with multiple customers. Another great moment was when our product, that had started as a shopping list assistant, evolved into a full eCommerce platform. We were able to provide actual online shopping experiences with full blown fulfillment (picking and delivery) features. The latest milestone is our Black Dragon/EnterWorks partnership which really opened the gate for us to the North American market. Finding industry-leading entrepreneurs in the States that believe in us is something that makes me very proud of the team, even though I feel that the story is just beginning.
What habits or mindsets do you think helped make you successful?
Well we’re still working our way to the top and there’s a lot to do, but there are a couple of things that can help you go a long way, especially when dealing with a growth company. Most importantly: you have to know how to manage chaos. When growing, there will always be chaos. You have to be okay with the fact that it’s an ongoing state, not something that will pass. Secondly, it’s all about people. You need to find the right people to make it all work. Hire and fire fast if needed. And last but not least, you should be very humble, but not afraid of anything. And I mean nothing: one day you might be washing dishes at the office and the next, meeting the CEO of a 10B+ company.
Other than deciding to work for yourself, what was the single most important decision you made that contributed to your success?
Well, certainly the biggest decision was taking the leap of faith and turning our idea into a company. Once you take that step, resign or jump from one company to another and get started, you don’t really have options. When you submit the incorporation papers, you’re in it. You just have to learn how to swim.
What were some of the biggest lessons that have impacted the way that you work?
The biggest lesson for me has been learning the importance of trust. It’s everything. This goes for customers, partners, employees, all people you’re dealing with. Trying to grow in uncertainty simply doesn’t work; you have to be able to count 110% on the people around you. Another important thing I’ve had to learn is making decisions. Also the ones you don’t like.
If you could time travel back to day one of your startup and give yourself one advice, what would it be?
When finding the right people, if you’re even a little bit uncertain, don’t do it. Trust your instincts – as cliché as it might sound, it’s a good guideline. Also realize that your instincts and the way you work creates the soul for the company – you are the company and its culture. Take a moment to think about that, and about what kind of culture you want to create. If you don’t trust your instincts, your company doesn’t really have a soul.
Can you name some of the pros and cons of being an entrepreneur?
The con is clear – you’re ‘at work’ all the time. I’ve done deals and important decisions in the shower, on the beach while being out with friends, you name it. The pro is the same: you can work whenever, while in the shower or on the the beach, you get the drill. There are no rules. There are good guidelines but there are no rules. I find there’s a rebel quality in being an entrepreneur, that’s why I and many other people love it.
Which is more rewarding: making a startup a success, or being able to continue keeping it successful?
For me it’s definitely the keeping part. It’s always one thing to do something, and another to keep doing it and getting better at it. That’s way more difficult. Continuing to find new motivation after success or fail and pushing forward is the challenge and the magic. You have to constantly keep evolving and making the right decisions.
What would you tell someone dreaming of their own company?
First, bounce back your business idea with a few people whose opinion you value to get validation on how badly your idea sucks. There are always people who are willing to shoot all ideas down, but really if no one likes your idea then it probably does suck. Also, figure out who you need around you because you can’t do it by yourself. There’s no way. To sum it up: if you’re smart, and you find people who love your idea and want to do it with you, go for it – you’ll most likely create an awesome company.
Thank you for the interview!