258: Why Nailing Your ICP Is Critical for Growth - with Niclas Lilja

Matt Wolach: 0:10

So many businesses that come to me for help. When we start to dive in and look at what's really going on, I learned that they actually don't truly know their customer. They haven't figured out their ICP, their ideal customer profile, and they don't understand how to work with them, how to target them how to sell to them, Niclas Lilja, he's he came in and I really liked what he had to say, because he talked about his own product union, which is great. It does subscription management, billing, invoicing, that sort of stuff to plug it right hand. But it's also really interesting that he focused intently on making sure that they're ICP was dialed in. And in fact, they have six different factors. And even if somebody is five out of six, they won't take them as a prospect, because they know it's going to take longer to sell, it's going to take more effort once they get started. And they probably won't even like the product, and they'll tell everybody, it's terrible. That's not a good result. So he goes into detail about what they did to identify the ICP and how they made sure that they stuck to it, I think it's really important for you to see and he even has made drastic changes in his life, to focus on this ICP, like moving from Sweden to us and not even just him. His entire family. He moved from Sweden to the US. So really cool stuff here. I think you should take a look ICP. Get it.

Intro/ Outro: 1:24

Welcome to Scale Your SaaS, the podcast that gives you proven techniques and formulas for boosting your revenue and achieving your dream exit brought to you by a guy who's done just that multiple times. Here's your host, Matt Wolach,

Matt Wolach: 1:40

and welcome to Scale Your SaaS really glad to have you here. Thank you very much for coming. Make sure you're subscribed to the show. That way, you're gonna get all of the best tips, tricks, formulas and methods for scaling your SAS, you're listening to experts who have done it before. So you can take it and apply the same thing yourself. And I am really, really looking forward today. I've got Nicholas Lily on the on the line here like Nicholas, how you doing?

Niclas Lilja: 2:05

Great. Great to be here. I'm so yeah, I was just, we were just talking pre show. And this guy is awesome. I really enjoy what he's got to say. And he's just a good guy. I'm just really looking forward to today. So Nicholas, let me make sure everybody knows who you are. So we can get everything ready for today. So Nicholas, he's the founder and CEO of Younium, and he has extensive experience from the IT and SaaS industry has more than 15 years of successfully managing companies in scale. He founded Younium in 2017, because of the demand in the market for a robust cloud app that can handle advanced B2B Customer subscriptions and manage the financials behind them. And that's what union does, it streamlines subscription management, invoicing, billing, financial reporting, data insights, it enables growing businesses to have full control of their subscriptions, and more easily implement scalable processes. Harnessing more accurate metrics, super cool stuff, what they're doing, Nicholas once again, thanks for coming on the show. Thank you What introduction? Sounds like we're gonna talk a lot of interesting things for the source community.

Matt Wolach: 3:15

Oh, definitely. Interesting. Definitely important stuff. Before we get into all that, though, I want to know what's been going up with you lately. And you know, what's coming up for you in the in the near future?

Niclas Lilja: 3:26

Yeah. So I would say recently, what has really dominated my life has been relocating to the US as part of strengthening our North American business. So I got to Philadelphia around Thanksgiving. So it's been a couple of months. Welcome, humble. Getting to a new country and understanding, okay, so you have a lot of things in place where you're born, where you're raised, you know, where your parents helped you and all that. And all sudden, you have to sort of re structure everything. So makes you really humble. I realized that,

Matt Wolach: 4:09

I totally get it. I totally know what you're talking about. So my family and I, we lived in France this past summer. And we just decided, well, first of all, in Arizona, where I live normally it's very hot in the summer. And so we're like, Let's spend our summers somewhere else. And so we rented a house in France and just regular stuff that you would think is basic. We were lost on we went to the grocery store. And at the grocery store, you have to put a coin in to get a shopping cart, and you put the coin in. And so we went up. We didn't know that because there's just a tiny little slot on the shopping cart. We went over to get the shopping cart out. And it wasn't coming out of the stack of shopping carts were like what is going on. So we just walked in without a shopping cart. was the only people shopping I was like how did they get the shopping and we eventually figured out you put a little coin in and then you get the shop hoping to ride out. And at the end, when you return the car, you get your little coin back. Little tiny things like that are just small enough that it makes it uncomfortable, right?

Niclas Lilja: 5:11

Yeah. And I think you sort of when all the small things are something you have to sort of explore and discover and figure it out. You get really, really tired. Right? I've never slept so good. Evening, like in December. So yeah, I guess as I said, like, it makes you humble. And, you know, also perhaps good that you sort of have to rethink and rewire some things as well. So it's a chance to sort of think new, so that that's, yeah, that's been a major part. So now I sort of transitioning a bit from that and more into like, Okay, what to do now what to do next, then, you know, just getting up and going, of course, having some fun with my family as well.

Matt Wolach: 6:00

I love that. I love it. Well, tell me, how did you come up with the idea for you and your mom want to hear about that story?

Niclas Lilja: 6:06

Yeah. I think there's actually two parts to that. I think one was the fact that I was very actively looking. So I'd been with another company for around like, 11 years, 12 years, something like that. And I, it was sort of a trainee program, I felt like in the end, because I did a lot of different things, I learned a lot. But at some point, they sort of, you know, I didn't learn as much. And I felt a bit like I was the grumpy old man who just said, Oh, done that, try that, that doesn't work. And I felt like, I really don't want to be this person. So so I figured that, I better start something. But then you need an ID, right. So I think I was quite, you know, actively looking for that. And it took me quite some time as well. But then at the same company, actually, I was because we transition from, you know, selling software back in the days, you know, like, perpetual licenses and installations and all that. And so done the whole transformation into cloud system, and, you know, setting on a subscription basis and all that. But we're quite late on actually taking care of subscription data. So during implantation of a system for that, and just figure like a, this seems to be like, I mean, it's a very acute problem, it's definitely there. But I didn't really feel comfortable that all, like ask the subscription businesses or born on the cloud, or born with the subscriptions are born, you know, like, perfect. And I felt that was, when I looked around for the existence systems, that was sort of the feeling I got, like, Okay, this is if you're perfect. And I've had, like, I've never seen perfect, you know, it's anything. So, you know, you have all the legacy, you have all the variations and all that. So, so I just figured, like, maybe, you know, maybe this is what I've been looking for. And it also felt like, you know, a domain that I understood fairly well. So, yeah, that was sort of like, okay, those two things got together, and they felt like, Okay, I don't have to do a lot of research. Quite well knew what I wanted what I saw in front of me. So I contacted a few former colleagues, and we got together and talked about it, and basically decided to get going, I think, maybe I'm missing out on a few details here. But that's, like how I remember it. That it was like, quite a long period. So looking for an ID, or 10, quite quick, sort of executing, once the ID was there.

Matt Wolach: 9:08

What What were some of those things that, you know, businesses, you said they weren't so perfect on their, on their subscriptions, on their billing? What were some of those things that made you say, Whoa, these, these have got to be fixed, there's got to be a better way.

Niclas Lilja: 9:25

But, you know, it was like, you go to a website, and you see all the perfect price plans, right for software, and source services. And it looks really neat and great. But in reality, you had also the previous 100 iterations of those plans that were you know, both good and bad. And probably there's a reason why you had previous 100 iterations and now you have the 101st. Right, because they weren't good enough. So you have all these variations, and sort of take care of that, I think was one thing was like, very good at sort of, you know, If everything goes right, but what happens if something goes wrong? Like you don't deliver like you should to the customer, and they should get something in return? How do you deal with that, and sort of not only the, the straightforward case, but also how to deal with as I sorted reality with which wasn't that perfect. Also, like, just a lot of details, maybe, you know, you have your own software, you have your own IPR, but maybe it also breeds selling something, how to deal with that. Maybe it's not only, you know, a click on a button, and everything's working, right. Maybe you need some professional services, how to work with that. And you know, it was like, a bit exaggerated, but it felt a bit like, go to website, click on a button, enter your credit card, get going. And I mean, that's so so true, and so perfect. Especially like around the BTC. And past BT small b, but if you get into like more advanced b2b, that's not how it is. For sure, terms are being negotiated. Things change, you know, contracts can be quite complicated. So round those things. Like payments is like, yeah, Pay Pal. It could be great. But I, at least my perspective, where I was done, I wasn't used to like companies using PayPal, you know, like, perhaps they may do an invoice. So how do we do that? You know, so a lot of things I that was very hands on.

Matt Wolach: 11:54

Okay. I love it. What? So, a lot of times I see early stage companies, and even later stage companies struggling with their metrics. So something like UNIAN, or even other subscription tools? Is it? Is it easier for business leaders to be able to get their metrics and understand what those metrics mean, using a tool like that?

Niclas Lilja: 12:20

I mean, I wouldn't say like, you know, if you put, you know, shut down, shut out, or whatever the thing is, is, of course, but I mean, I think you, I would say you need some sort of system, because this gets pretty complicated quite fast. And I think, like, just having the correct data is, what many are suffering from? I have the soil when I met an investor back in 2017. And he told me, Wow, you know, when I meet companies for the first time, and they talk about their Arr, or their Mr. or something, I always think that you have no idea what it is. And I felt like, that's a really bad start or relationship, right? The trust is not there. But I could also see to some extent why he was saying that, because, you know, if you just do it on a spreadsheet, I mean, you don't really have that audit trail. I mean, it's easy to get things wrong, you know, there are things around that. And so I definitely think like having subscription is important to get those data right and consistent over time.

Matt Wolach: 13:38

Yeah, yeah.

Niclas Lilja: 13:39

And, you know, it's like, there are so many I mean, like subscription data, I mean, one is, of course, just getting sort of the data in like the data entry data collection. Right. So I mean, that could be quite a lot of things that could be, you know, like, what's the service period? What's the quantity? What's the pricing not only for the, you know, what the client asked for now, but what are the tiers going forward? So there could be a lot could be like the billing frequencies, right? It could be how to recognize revenue, how to deal with taxes, etc, etc. So a lot of data just doing that. But then, also the time aspect, right? If you have a customer for 10 years, it's very unlikely that it will stay static over the 10 years, you probably either you're very, very successful in taking a very big market, or you're doing something wrong, right? You should probably evolve your pricing over time. So it's like scaling, like the data is sort of going into dementia. It's a time and sort of scaling and customers and just a lot of data so I really think you need to have that in in order. Otherwise, you will never trust your metrics. And I think it's putting more or less an unfair burden on your finance department or you know, that poor controller sitting somewhere with that one spreadsheet. That better be right. And better never, you know, have anything, any I've ever seen it or anything. So, yeah.

Matt Wolach: 15:21

Make sense it. So with your own product union, I know you've, you've done a lot of work to get it to where it is now, what were some of the best moves that you made along the way that really helped your growth? Nicholas? Yeah,

Niclas Lilja: 15:33

I think we did a few things. One thing, you know, was around the ideal customer profile, I don't know if we talked about it that way. But but we were really quick on narrowing down our target market. So I mean, you know, we could potentially, you know, in the long run, serve any asset of service kind of business, right. But we have chosen not to do that right now. So we are super, super focused on b2b. And not only, like any b2b, but really advanced b2b, like, when you have multiple line items, or, you know, you have negotiated terms or, you know, third party software that you recently, you know, things that makes it a bit more complex. So, we're doing that. So, that really narrows down the target market a lot. Right? No, know, to the extent where it feels like, maybe this is not good, maybe this is too small, maybe, you know, is this really viable? How are we gonna, you know, get funding for this, you know, so I think that has been a really good thing, because we know, you know, we have like six or seven criterias. And we know that, if they are all checked, this will be good, you know, we will, you know, we will have a happy customer, they will be successful, they will stay for a long time, they, you know, it will be great. Whereas, you know, if it's like three out of six, or four out of six, or even higher of five or six, you know, it could go right, it could, but there's always that risk of, you know, something not being perfect. So, so I really like it, and has also, I think, help how we develop our service, and you know, where we do our investments, you know, and where we don't, right? Like everything we do, I think is of benefit to all our customers, because they are very similar. I really like that.

Matt Wolach: 17:39

Yeah, yeah, I totally agree with that. And it's something that I train my clients on is make sure you nail your ICP, your ideal customer profile early. Because you're right, even if one or two of the factors that you look at for that aren't right, that could cause the entire relationship to sour, it could mean that they're not going to get the best value out of the system that they probably should be getting. And if that's the case, then they go off and tell others that it's not a good system, when in fact, they just weren't right for it. And so it's super important to nail that. I'm glad you guys did that.

Niclas Lilja: 18:13

And probably you spent too much time in sales, right? Probably you didn't get the price you should have gotten, because, you know, everything wasn't perfect. You know, so it's like starts already there. And then it just sort of deteriorates. I think sounds I think you spend too much time. On the wrong clients. I would agree. Yeah. So that was one thing, I think like another was, you know, like, when it came to developing our service, we were very focused on speed, and, you know, getting out and talk to people really fast. So we really tried to build for, you know, the customer that we were expecting to have, like in one year, not, you know, in Utopia in 10 years, when we would have it or companies but but really stay sober in that sense. And, and, you know, build for what was reasonable right now? I think otherwise, we could easily have spent like, another year or two, just, you know, getting that first version up and running. And also, I think direct sales was good for us. I think actually, like when I started to think about this, you know, I really want that whole like product lead growth and you know, everything just works by itself. So you know, it's

Matt Wolach: 19:38

the dream, not always achievable.

Niclas Lilja: 19:42

No, and you know, it's like, and I also felt like, it's gonna feel like a complete guessing game. If we try out if we try that from the beginning, right, because we won't have any direct feedback. So I think we spent a lot of life doing A lot of classic, you know, sales the way you shouldn't do in the modern world. But just calling, talking, asking, I think we learned a lot during that as well. And then sort of mixing it up as we go. But I think that was really good as well. So a few things.

Matt Wolach: 20:24

Good, good. I love that. And now you've moved to the US, you relocated from Sweden, and you have a focus to make sure that the US market grows, I think that's really important. And I want to kind of understand some of your thinking behind it. But a lot of my clients in Europe say that they want to be able to penetrate the US market, obviously, the US is 50% of the world's software buying power and b2b. And so it's really important to do that. How have you found? I mean, obviously, you're still very early there, but what caused you to make that decision? And how has it gone so far?

Niclas Lilja: 21:02

I would like to say that we're still quite early on. So I shouldn't draw too many conclusions. But I think like, the reasoning is that I mean, we talked about the very narrow ICP, right? So in order to still have, like, you know, plan for growth, the way we wanted, and how to do that was then by geographic expansion, so it was sort of in the cards from more or less the get go. So it's been something that we've, you know, targeted. So that was one thing, but I also think that, you know, one component with which maybe it's not that rational, but I think, you know, like competing with, you know, the best. It's also something that will I think you will learn from and will make you stronger. And I think we'll get more of that. And I also think like, there are a lot of companies, you will see into that. But I think that has business and interest in both Europe and US, right. And I think we do a fairly critical solution for these kind of companies. And I think for us to have, you know, people on the ground on both the US and in Europe makes a whole lot of sense. I think it will also give us access to that segment of clients as well. So those were a few things. And also, I mean, I guess he you see that as well. But sometimes we talk so much about the differences between you know, cultures, countries, etc, etc. But I feel like in, in the SAS community, I think the similar similarities are so so much bigger than the differences. If I'm talking to someone running a sauce business, in Bulgaria, or in Sweden, or in the US, I mean, they pretty much listen to the same podcasts, they, you know, they read the same books, they, you know, influenced by more or less the same things, they use more or less the same systems. So it's I think, you know, I think it makes a whole lot of sense. For those reasons,

Matt Wolach: 23:23

that makes sense. As we wrap up here, what advice would you have for other software founders who are just getting started and want to achieve some success, like you've done?

Niclas Lilja: 23:36

I think I mean, try the ID early on people you trust. And I, I've gone with this, like, if everyone likes the ID don't do it. If everyone doesn't like it, don't do it. But if you sort of find a good balance there that some doubt it and some think it's good. That's where I think, you know, there is something because if everyone likes it, probably everyone's doing it. That's my reasoning in that sense. And just iterate the ID you know, and I don't think you have to produce a lot before iterating the ID I think that is a very nice part of the journey, right? Because you have no restrictions you can just write on the ID so take the time for that but also just think about if you're ready because it's probably gonna be longer journey than you initially thought. Right? So that could be yourself but it could also be like your family or you know, do you really want to do it and for how long you know, what is what are you ready for us? I think those are quite important and, and also, I think, you know, we were talking a bit like this before, like, everyone wants the product lead to growth. Everyone wants, you know, not everyone will be there, but there will be a lot of great companies anyways. So don't get sort of tricked into doing everything that you read about how things should be, but really do what makes sense. And you know, if you can get some feedback from customers or potential customers or friends, I think that's what should guide

Matt Wolach: 25:46

I love it. Super great advice. I hope everybody you. takes that to heart. Nicholas, this has been awesome. How can everybody learn more about you and Younium?

Niclas Lilja: 25:55

Younium, I mean, we've got our website union.com. We typically attend a lot of the SaaS community events around Europe and the US. We are quite active on LinkedIn as well. So please follow us there and see what's happening. Me personally, I think LinkedIn is where I'm most easily accessible as well. So you know, if there's anything, reach out to me there.

Matt Wolach: 26:28

Okay, perfect. We'll put all that in the show notes, as well as in the description if you're watching on YouTube. But Niclas has been awesome. Thank you very much for coming in and sharing all your wisdom.

Niclas Lilja: 26:37

Thank you. Thank you so much.

Matt Wolach: 26:40

Absolutely, and everybody else out there. Thank you for being here. Again, make sure you're subscribed to the show, hit that subscribe button. If you're watching on YouTube, hit the little bell as well. That way you'll be notified of any new shows that come up. You don't want to miss out on any of the awesome innovators and leaders like Nicklaus coming up. So definitely do that. Also, we're looking for reviews. If you think this is helpful. If you think we're giving you good stuff, please review us. That helps us out. Really appreciate it. Thank you very much. Take care. We'll see you next time.

Intro/ Outro: 27:10

Thanks for listening to Scale Your SaaS. For more help on finding great leads and closing more deals. Go to Mattwolach.com