Martin and Kair are both ex-Pipedrivers, cat lovers and big fans of customer service that doesn't suck. Besides going to the same high school and university, sharing multiple apartments and projects in the past, they also share the same core values and a peculiar sense of humor. That combined with the experience at Pipedrive, Martin as the Head of Global Customer Support and Kair as the Director of Product Marketing, led them to start Klaus together.
Martin: Klaus is a cat.
Kair: Klaus indeed is a cat. The cat who’s on our logo. Among other things, Klaus is a quality assurance tool for support teams. It enables customer support teams to give feedback to agents and through this feedback improve the quality of their customer service.
Kair: We went to the same high school. We went to the same university. We lived together. We worked in the same place. Even our girlfriends are childhood friends. And we’d already started a company together.
It’s called Jobkitten – a job applicant tracking software. It actually still exists – some people even use it. But as that was our first step into the SaaS world, we didn't really know what we were doing. The tool itself worked but we couldn’t figure out how to grow it.
Martin: There was actually another business project before Jobkitten. We sold beer together at the beer festival Õllesummer in 2010. The challenge was to sell a product that everybody else was selling, but we came up with a strategy that worked really well. We even had a customer loyalty program, something like you had to whisper “hey it's me again” and then you would get a discount.
Why I think this story is relevant, is that Kair and I have been thinking about all sorts of business ideas since high school and have attempted multiple. Jobkitten was the first step into SaaS.
We were both working at Pipedrive then. The idea for Klaus came from a real problem I kept running into as the head of support. I then realized that others are also running into it and there are no tools out there that are solving that issue. Most decent sized organizations have this process but they just do it in spreadsheets.
“The idea for Klaus came from a real problem I kept running into as the head of support.”
Kair: Yeah. When I first saw how it was done manually it was a very familiar story because as the director of product marketing I’d been analyzing how Pipedrive’s business model works and how to improve it. Pipedrive also got many customers who were using very elaborate spreadsheets and they were dying to find some kind of a solution.
So when I saw the same thing happening in another field, I immediately understood the need and believed we could solve that problem.
Martin: This was back in 2016 and we still had full-time jobs back then. For a while, not much happened. It took a while to build the first prototype etc. The real development started only last May. That’s when we raised our pre-seed round, scrapped the prototype and started building what is a real commercial product today.
Martin: We have a real product that actually works and world-class customers using it, including Automattic, PandaDoc, SoundCloud and Figma.
Kair: What we internally track as the most important metric is how many conversation reviews are done with the tool. By the end of August, we had over 400 000 conversation reviews done, within those nine months after launch.
Kair: A lot of people say that you need to do things at the beginning that don't scale. You just need to hack yourself some customers. This was exactly how we got our first big client Automattic, the maker of WordPress.com.
“You just need to hack yourself some customers.”
Martin: So there is this big customer support community called Support Driven that has a Slack group and they also organize events. I went to one of their events to speak as Head of Support at Pipedrive. On one of the slides out of thirty I mentioned this product idea that I have, that was the idea of Klaus.
When I got off the stage there were a few people coming up to me saying they’d use the product. Both of them turned into our customers – one of them was Automattic. Having them as our first big customer really helped us. An interesting plot twist there is that the person that came up to me at the event, Valentina, she’s now our Head of Product.
Kair: There are three main channels where we get customers. The first one is the support community Support Driven – we've been very active there. Also, we’ve been participating in their conferences, speaking at their events, sponsoring them and so on. That helped us get the initial visibility and still does help us a lot.
There's a bunch of very famous companies there, those types of companies that really care about customer service. So it's basically for us just like a bullseye.
The second channel is our integration partners. Klaus works together with help desk software. So one of the ways our customers find us is that they use one of those help desk products, let’s say Zendesk. And when they've set up operations and achieved a certain level of efficiency, they start looking at how they can do it better. And what they do is they turn to Zendesk, either they ask from their account executive or they go to the marketplace and search for a tool.
We have very good relationships with all our integration partners and we are very visible in their marketplaces.
The third channel is content marketing which we do a lot of. We have in-depth knowledge when it comes to how to do support and how to actually run the quality assurance process, so we are putting this know-how into articles. Pushing out this content brings us a lot of visibility.
One of the truths that apply to all SaaS businesses is that if you have a good product then the best way to grow is to have as many people using the product as possible. People are the best way to achieve visibility. Pipedrive also got most of their customers through word of mouth and we now see the same motor is starting to work for us as well.
Kair: There are two very fundamental reasons why I wanted to start a company with Kõiva. The first one is that we have very similar values.
If you don't have that level of alignment, a common level of understanding, then it's very hard to get anywhere. Because there will be, and already have been with Klaus, a lot of different obstacles and discussion points where if we weren't on the same page, it would be very difficult to move forward.
And the second thing that makes us a great team is definitely the sense of humor.
Martin: So yes, fundamentally we’re very similar but we’re also very different. I think the biggest difference is that I’m a bit more optimistic and Kair more skeptical.
Kair: I would call it more analytical instead of skeptical. I’d say Martin is a little bit more consistent and not so analytical. I am a little bit less consistent but more analytical. So if you put those things together you end up with something that moves forward but also moves in the right direction.
Kair: I think the most important thing that I learned was that you really need to understand who is the best person to decide something. A lot of the problems that companies experience start from a place where somebody who is not best equipped to make a decision makes a decision.
“A lot of the problems that companies experience starts from a place where somebody who is not best equipped to make a decision makes a decision.”
Especially when there are a lot of people in the company. When you end up in a situation where the wrong people are making very important decisions, things might go really wrong or at least slow down, or hinder you from achieving that potential that the company would otherwise have.
I very much agree with the Idea Meritocracy by Ray Dalio, one of my favorite authors. The idea that everyone in the company can pitch in with ideas. He also has this concept of credibility which means that the person with the most experience and most credibility should make the decision.
Martin: This Idea Meritocracy is one of our most important shared values. We also have defined our company values, it was, in fact, one of the very first things that we did.
But to answer your question, I think I attribute a lot that I'm in this situation right now to Pipedrive. Because that's what got me into SaaS and made me understand that it's possible to build something global. It definitely broadened the horizons and gave countless lessons that we learned from these times.
If I were to pick the most important thing, then I’d say building a company around values, which Pipedrive has done. And not marketing agency invented values but real values that resonate very closely with the founders.
Kair: Another thing that Pipedrive was really good at was hiring. And I think Martin and I both learned a lot from their hiring process. Today our team of 15 actually consists of mostly people we’ve already worked together with. So with them, we already knew before that they’re gonna fit with the values.
Martin: I think out of these 15 people only two were people ‘off the street’ and with them we tried to base things on the values that we had written down. But honestly, you also need to consider that if you're a startup and everything is still completely unknown, plus you have nothing really in terms of a team or a product then your choices are limited. If you only get a few candidates then you also need to roll the dice a little bit. We have been very lucky with that.
A great example here is our third co-founder Egon Sale who was crazy enough to join us when we had nothing – besides the idea. He came in and built the first prototype all by himself. Without him, we wouldn’t be giving this interview today.
Kair: For me, it's definitely the first customer.
Someone once said that you should always go out with the MVP of your product as early as you can. And if you're not embarrassed when it goes live then you probably did it too late.
We were definitely embarrassed for a very long time after that prototype went out. But still, we found a customer that was willing to pay for it. This was the turning point when it actually became real. That there is somebody out there who is willing to pay a large amount of money for what we’d built.
Martin: I wouldn't go out with such a raw prototype for the second time. We felt embarrassed in the beginning when it went live but we also felt embarrassed 9 months later. You probably shouldn’t. Your product needs to work and ours really didn't in the beginning.
“We felt embarrassed in the beginning when the prototype went live but we also felt embarrassed 9 months later. You probably shouldn’t.”
Kair: One of the golden nuggets that people are going to get out of this interview is that your product actually needs to work.
Martin: I know exactly what was the highlight for me. Getting the first customer was great and exciting but at that time it was still kind of a hobby project. Then we raised the first round of investment from Icebreaker and started building the commercial version of Klaus in May and headed into this long tunnel of product development where we were building and not getting any feedback on it.
When we launched in December which is a notoriously bad month in SaaS because of Christmas holidays, it was impossible to know whether we weren't getting any customers because the product was shit or just because it's December.
But then we had two very big customers sign up and start paying on the same day in January, after like total silence – that was the moment when everything got drastically better. Before that, it was just frankly very depressing because we had come a long way without any results.
Martin: We just raised some funding so now we need to do some hiring. And we have some interesting product ideas which I would not immediately reveal because we haven't fully decided on which ones we will pursue right away. But what’s definitely going to happen is that we will hire for some key roles. So it's going to head in the same direction, hopefully at a more rapid pace.
Kair: I try to avoid Martin as much as possible.
Kair: But it doesn’t really work as building a company takes up most of our time.
But the free time that I have I try to get some physical activity wherever I can. In whatever format, either kite surfing or going to the gym. That keeps me going. And I also try to read a bit.
Martin: Something that we didn't have in common before but we do now is that we both read quite a lot and similar things as well. The audio books for me have been a big revelation. I never read much in the past, but at some point, I realized it's not the fact that I'm an idiot, maybe that as well, but it was the format of a paper book. Since I discovered audio books about five years ago thanks to Martin Henk, I have read more books in the past five years than in my entire previous life. So that's a big part of my free time.
“I never read much in the past but at some point, I realized it’s not the fact that I’m an idiot, maybe that as well, but it was the format of a paper book.”
Kair: The same goes for me. Three out of four books I read are audio books. It's a super good way how to combine physical activity and reading.
Martin: I also really like old cars. I guess that also qualifies as a hobby because it's something that just swallows resources and time taking care of the few old cars I have.
Kair: I would want to be a cat shark. I don't know if it's something that you can have a career in or learn to be. I would spend my life thinking if I'm more cat or more a shark. It's actually very similar to my current life.
But to be honest, I wouldn’t consider not being a founder. It’s not a realistic option.
Martin: The same goes for me. I guess Pipedrive is to blame – it has such a great culture that it's unlikely to find another company with a culture and environment that are substantially better. So going to work at another great company would be just horizontal movement. Founding my own company seemed like the only way to achieve something on a completely different level.