To $1B transactions globally from a mid-sized mountain town in Poland
Do you have to be located in Silicon Valley to build a global company that after a few years on the market hires 110 employees and handles 1 billion dollars worth of transactions on its platform? And I mean a real business with solid foundations — grown organically with very limited support from angel investors.
What if I told you, that you could achieve all of this in a mid-sized town in the South of Poland, a location that you probably have never heard about?
Versum, a platform for efficient management of hairdressing and beauty salons, and SPAs was created in Bielsko-Biala. Today Versum is used in 54 countries, including the UK, USA, Canada, Spain, and Australia. With 1.8M monthly reservations and the annual reservations value of 1 billion dollars, Versum is a great example of how to actually scale a global company, from an international location and without millions in funding.
It began in 2011 when my co-founder, Paweł Kantyka and I were both in college. One afternoon, my girlfriend (now wife) set off for a salon in Cracow, Poland, eager to get her long-anticipated haircut. As she arrived, she quickly learned that her hairdresser had double-booked, which meant she was turned away. Like many other beauty businesses, a paper notebook and phone were used to write down reservations. In other words, it was easy for miscommunication to take place, to say the least. Seeing how upset my girlfriend was, and knowing she wasn’t the only one who experienced this, Pawel and I spotted an opportunity.
Here’s what we have learned during our journey.
Start small but smart
We started small — just me and my co-founder. For us, having two at the helm was an ideal solution. I always say that my co-founder is my boss; he says that I am his. He handles tech and I handle sales and marketing. We have different personalities and center each other. Having a co-founder you can trust is important. Even more important is to start with a buddy who complements you. Even though in our case it often means that we don’t agree with each other when we get our viewpoints out in the open. But it doesn’t hurt. It helps us make better decisions.
Lesson Learned: Don’t look for a clone of yourself in your co-founder. You need better ideas, not copycats.
Go to the market quickly
From the very beginning, we knew that we would have to move fast if we wanted to disrupt and create a top-notch product. We showed the first version of the platform to friends of friends in the beauty industry and implemented their feedback.
There wasn’t anything exactly like Versum on our market — an all-in-one system that handles beauty bookings helps manage staff, carries out automatic marketing activities, monitors resources, product inventory and serves as an intelligent customer knowledge base.
Shortly after we started, we got a booth at a major industry conference, even though we didn’t feel 100% ready. I still remember how it felt to show our product to the owner of the country’s largest beauty salon. I was explaining to her our features in detail, except for the analytics side of the platform. Why? At the exact same time, Pawel was hiding behind the booth, still working on polishing the code. Finally, he texted me that it was ready, so I reloaded and showcased the statistics. Was it stressful? Yes, but don’t be harsh on me — I was a rookie college student then. Was it worth it? Absolutely. She decided to ditch her old DOS-based software (anyone still remembers it?) and implemented Versum. Since then, she is not only our client but an important mentor as well. Also, an incredibly demanding and challenging partner — in a good sense of the word. Such clients might be intimidating at first when you are starting a company, but don’t shy away from them. Embrace them because they will show you the ropes in the industry and force you to grow — and quickly.
Lesson Learned: Say yes to the most challenging clients from the very beginning.
Focus on clients
I signed the first 150 customers myself. While my co-founder was coding and building the platform, I would wake up every day at 4 am, catch the first train to Warsaw, Poland’s capital city with booming beauty industry, meet with 5 to 8 potential clients, then take the last train back and go to sleep at midnight. The next day, I would go to the office and set up meetings. The next morning, I would wake up at 4 am to catch the 5 am train. I’m sure you see the pattern. It was not easy, but we believed in what we were doing. And, since we were introducing something absolutely new to the market, the face-to-face contact was crucial. Thankfully, now our sales processes are automated which has transformed the way we operate in a huge way. Automating different tasks and streamlining workflows, when done right, improve cost efficacy, productivity and makes it possible to scale up — the clue to going global. In other words, today we are able to target and care for thousands of clients from all over the world while still located at our office in the South of Poland.
Lesson Learned: You’d better fall in love with automation. It’s a never-ending story.
Don’t rush to get outside funding
We started fast, fueled by passion, loans and family funds that we later paid back. But, even with limited funding, we grew very quickly — from two people in the first year, five employees in the second, and 110 in 2018. Our platform was deployed in 650 beauty salons in the first year, in 4 thousand in the second year. As of today, 34 thousand beauty specialists are using Versum. No wonder the market has noticed! My phone never stopped ringing with investors who would call and ask if we would consider working with them. I kept declining, but I also made a list of them. It contained 17 names — very prominent ones. When we finally started looking for some seed capital, I opened my notebook and called everyone back. Only three declined.
Today, we are fortunate to work with great angel investors with Hedgehog Fund. With background in companies such as Dell, Pepsi-Co and Samsung, they have also collaborated with TCV, one of the world’s leading VCs with $10B invested in tech companies like Spotify, Airbnb, Legal Zoom, and Zillow.
Lesson Learned: Ready to scale? Rise capital!
There’s no fear in funding when you really need it
We are not money burners, which is why we didn’t want to move up the funding path too quickly and end up with too many commitments too early. So, when we finally decided to consider some outside capital, we did it with a clear purpose in mind. We had a lot of organic international clients but wanted to scale faster at the global level. As a SaaS company, we are aware of the “time to return” issue and the fact that any marketing investment takes some time to yield revenue. We knew the timing was right. The missing ingredient was the right investor. Someone with similar values, similar vision for growth, right connections, and experience, plus, an intuitive sense of what we strive for. This list might seem long but can you imagine having someone on your board who does not get what you do? We couldn’t. Choosing an investor is like finding a life partner. You need to get to know them — and under different circumstances. When you celebrate, when you fight, and when you troubleshoot. These things will happen when you grow your business. The meeting of the minds is crucial. But also choose an investor who will know when to tell you to get your act together.
Lesson Learned: “Date” your investor before you decide to tie the knot.
The culture, stupid!
Those seemingly small cultural differences in the way we think all add up to big issues. In order to be successful, you need to really understand your clients. Yes, they all have the same goal, like running a successful beauty business, but they get there different ways. For example, we quickly found out that the UK goes after organizing their salons better; the US after maximizing profit; South Africa after HR; and Australia wants more passive income. Don’t be fooled. It takes much more to lead in different international market needs than to know a foreign language or travel to someplace even for a few months at a time. You need someone who lives and breathes this culture. We hire Brazilians, Mexicans, Americans, and Brits — such a melting pot here in Bielsko-Biala. This is our base. From there, automate wisely.
Lesson Learned: Good people are everywhere.
Don’t try to clone the Valley
You can’t clone the Valley, but you can use the assets that your location is offering. In our case, there are too many of them to even try to list every single one. I will just mention two. First, Poland is well-known among the global tech giants for our highly-skilled software engineers. Versum happens to hire a number of them. Second, our cost of running a company is not even close to the expenses of operating in Silicon Valley. But if we ever schedule a meeting in California, we can easily hop on a plane and get there in the blink of an eye. A win-win.
Lesson Learned: It’s all about location. Yours is good enough.
Build a house
Some people compare running a start-up to an exhausting sport. For me, it is more like building a house. At the end of the day, your job is to create a solid business. You need to lay foundations; you need to invest time and hard work. You will discover problems, ones that you never expected to happen.
At Versum, we can use this metaphor literally. When we first started, we couldn’t afford a proper office. So, instead, we rented an absolute fixer-upper of an office. The first project was to renovate the working space. Now, we are taking up almost an entire office building.
Lesson Learned: The strength of a building (and a start-up) lies in its foundation.
I wish I could tell you, that if you follow these lessons above, you’d simply build a great global company. But the reality is, it will be more complicated. Sure, implementing them will help, but each journey is a completely different story. The most important thing is to set your goals and start. And never ever let anyone convince you, that your location could be a disqualifying drawback. Work around it and use it to your advantage. Here at Versum, we know it is possible.
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