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Blog | Jan 4
Spinnova, a new material company, which recently opened its first commercial facility with plans for a second one and already works with brands like Adidas, The North Face, and the H&M Group.
Swappie, the leading smartphone refurbishing company in Europe, founded in 2016, which has reached a revenue of 200 million, employs 800 individuals and operates in 15 markets.
Onego Bio, a 1.5-year-old VTT spin-off producing egg whites without chickens, set to expand production and enter the US market in 2024.
Our Paavo Räisänen sat down with Onego Bio’s CEO & Co-Founder, Maija Itkonen, Spinnova’s Product Management Specialist, Aaro Koski, and Swappie’s COO, Emma Lehikoinen, at a breakfast event we organized together with the Finnish Startup Community, to discuss the road to commercial scale – and here’s what we learned:
In the early stages of building a startup, especially when the search for the perfect business idea and product-market fit is underway, there is often a lot of communication between the customer and the company. However, as the startup matures and teams begin to specialize, it’s not uncommon for companies to lose touch with their customer base. For instance, we frequently hear from startups how their product and sales teams are disconnected from each other. In reality, what this often means is that one of those teams is disconnected from the client. It’s important to prioritize your customers and stay on their pulse from day one, using these insights to constantly guide the direction of the company’s growth.
“In the early days of Swappie, for example, the founders would go to the streets and talk with potential customers to understand their pain points and the type of solutions that’ll bring value to them. Essentially, they carried out a DIY consumer survey that is an easy first step for any startup. Today, these findings, validated through further research, are still utilized in Swappie’s strategy, while customer-focus remains a core value of the company,” says Emma.
All startups, particularly fast growing ones, go through many different phases and not everyone fits every stage. Some people might be passionate about building things from scratch and flourish in the early stages when it’s all about innovation and exploration. On the other hand, someone else might thrive in the phase of setting up processes and execution.
“So, be mindful that skillful team members who were the perfect fit for the early stages of the company might move on to their next venture as your startup moves into its next phase,” says Aaro.
Spinnova's factory in Jyväskylä, Finland ©Spinnova
The team your company needs to scale also depends on the kind of expansion you’re aiming to make. Are you bringing the same product to a new market or expanding to a completely new product category? This will decide if you need to replicate several new teams rather than just, for example, the sales and marketing teams for a new market.
When it comes to deep tech solutions, we often find the developers of the technology on one end and the customer interface all the way on the other end. Especially as an organization grows, it’s vital for everyone to understand for whom and why you’re building the solution, and collectively work towards that goal. This means, for example, defining what’s optimal for you to build and how long you can take to get there. Then committing to the most viable version of the product and focusing on commercializing it in one area and in one market. The goal here is not to kill innovation but to avoid getting stuck in the explorative innovation phase.
Aaro reflects, “At one point, the Spinnova team was so focused on fine-tuning the tech that not everyone in the organization was sure which customer needs were being addressed. This made us refocus on the value we were creating for the customer: in Spinnova’s case, tech is the way to produce the product and the product is what delivers the value, which is the environmental benefits of the material.”
Spinnova's sustainable textile fibre ©Spinnova
When it comes to building a great product, it’s not possible to tick the product-market-fit box and then start developing tech, marketing, sales, design, etc., separately. Having the right product today doesn’t mean you’ll have it tomorrow. Therefore, it’s important to continuously assess, interpret and reflect on who and how you are serving – which goes back to the first learning about staying in touch with the customer and their needs.
Reaching commercial scale requires a lot of balancing. When things are going well at the start, startups can be tempted by a false sense of confidence, leading them to take on too much at once and, at times, compromising their core business. For instance, you might start expanding into a new market without fully realizing how big of a process it might actually be. In fact, a more niche focus (i.e. one business model, more limited product portfolio) can actually help you expand. Expanding and scaling is already difficult as it is – so don’t make the process more complicated by adding on elements that make you lose focus.
“This can be a tricky nut to crack, especially with startups expected to protrude strong confidence, and potential for fast growth and big impact,” adds Maija.
At Swappie, for instance, there’s a dedicated team to focus on expansion, allowing the rest of the company to focus on the core business within the existing markets. The key is to always ask yourself why – why is it important to make this decision, build this product, or continue down this path? When you’re working on commercialization, remember to ensure your team can balance driving expansion and serving existing customers to sustain the growth trajectory.
Maki.vc invests in brand-driven and deep tech companies with potential for commercial scale (you can read more about our approach to brand-driven and deep tech startups here, and here!). That’s why we work on commercialization closely with our portfolio companies from day one whether it’s circular protein by Volare, eCommerce platform from Twice, or EverDye’s more sustainable way to color textile.
So, we’re always happy to hear ideas cooking in stealth – email@example.com is where you reach us!