Albin Stööp (Zalster) on quitting your job, (missed) opportunities, & product revenue
At the Next Web Conference, we met up with Albin Stööp. He is the co-founder and CEO of Zalster, a Facebook Ads automation platform based in Sweden. Prior to Zalster, Albin managed Marketing & Product at a daily deal site for 5 years. Zalster was started by Albin, along with two colleagues from the daily deal site; Nathanael and Antonios. Apart from that, Albin loves bathing sauna, a great cup of coffee and of course — reading Startup Curated.
What does Zalster do?
“We’ve developed a Facebook Ads automation platform, along with a Slackbot. We give advertisers the opportunity to automate, optimize and manage their Facebook ads. By doing so, we’re solving the problem of marketers being dependent on their gut feeling of what works and what doesn’t. Through this automation, done via algorithms, advertisers save a lot of time and they can execute 24/7.”
What motivated you to start building this tool?
“I started using Facebook in 2008, and have been an intense user ever since. Between 2011 and 2015, before starting Zalster, I worked at an e-commerce company where we had a massive budget, which led to a huge opportunity getting past some of the problems we ran in to — one of them being optimization of ads and doing that 24/7. We wanted to take optimizations to the next level. My colleagues and I could only work from 9 to 5 during the week, while these ads continued running. The solution we created turned into Zalster. We chose Facebook and not Google, because that was already much more mature in partnerships. Facebook didn’t have that at the time. Plus, they were still acquiring high-growth platforms like Instagram and Whatsapp.
So, with my two co-founders, who also worked at the same e-commerce company, we decided to quit and found Zalster, to solve the problems we experienced every day at our previous job. Zalster is my first company so I wasn’t an entrepreneur before this.”
What motivated you to choose the entrepreneurial path?
“We took a leap of faith. That’s the power of being three people, it’s easier to start and take the decision. We were in it together; the worst-case scenario would be that we had to find another job, which isn’t such a big risk if you think about it.
We had a good network since before, so we knew we could get clients from the get go. But it took a while before we could sell the product, because our initial development process took one and a half year. That’s why we acted more like an agency in the beginning — we kept consulting, and in the meanwhile we developed the product. That agency work led to revenue, but it’s fake revenue, right? Because it came from those consultancy hours and we didn’t take a salary. We had done a small funding round of 30K EUR, the only round we did, before doing a seed round a year and a half later. But, because we did some revenue already the terms were in our favor. And although it’s been three years since we started Zalster, we — the founders — still don’t take proper salaries.”
What’s growth like?
“We’re now trying to grow organically. We’re growing in a healthy pace with seventeen employees now, while a year ago we were just with six. We had a bit of a ramping-up phase, in which we also had some hard lessons. For example, how important it is to have a proper interview process before actually hiring someone.”
“Being at a company for five years is super comfortable, so it was a barrier to actually just jump ship.”
So, what have you implemented from these learnings?
“Now, our hiring process consist of three interview rounds: The first round, in which we just have a chat with the candidate to see it it’s a personal fit, is with me. In the second round, depending on the role though, we give the candidate a case to work on. We then on the third interview introduce the candidate to a couple of employees — to see if it’s a suitable person for the culture of Zalster. That’s also a way for the candidate to feel if he or she would fit at Zalster. That’s something we didn’t do properly before when we were expanding rapidly.
Another lesson learned through hiring new people, is that you shouldn’t be too desperate to find talent. Now, we have a good pool of candidates that are really interesting. We are interested in employing some of those people, but not now — maybe we’ll take them on in the near future. Having that network is saving a lot of time, it takes away that urgency. That is also why we leave the job openings on our site, to see if interesting people apply, and keep them in our network.”
In that switch from being an employee to founding your own company, were there any barriers you had to break to do this?
“I sold my house to be able to afford it — that’s a big step. My fiancé and I moved to a rental apartment instead. So that was a barrier. Being at a company for five years is super comfortable, so it was a barrier to actually just jump ship. I loved the job, so that was tough. But, as a coincidence, my boss also quit when we quit. For us that meant that we could take him on as a chairman for Zalster, and keep him in our network. So, in hindsight, jumping ship all at the same time worked out well.”
At what point did you realize that this decision was a success? And what defines success in your book?
“I don’t like the word success. I think it’s super personal to decide when something is successful. I feel successful when my work is challenging me, and when I still consider it an adventure that we’re on… It’s still a struggle, because everything is still so unknown, our costs are increasing with our employees, and marketing, and so on. But that is exactly what makes me very excited to go to work every day. So, that is what success means to me; having a job that challenges me.”
What are the challenges that you’re currently facing?
“We struggle with challenges like ‘how to expand the market’, and knowing how to take the next step. We could miss out on an opportunity if we don’t know where to look for it. So we need to find such opportunities and that’s a challenge now.
Product-wise, I feel that we’re really on point, so nothing with the product feels unstable right now. It’s more about the commercial challenges.”
“Pricing is kind of a broad subject, but it is something that we have in common with a lot of other startups.”
What does a productive day look like to you?
“In my position, it is my goal to streamline as much as possible in the organization. When employing someone, that is because their work is needed. And maybe if we were to streamline something, to patch it together in a different way, we perhaps wouldn’t have to hire someone or take unnecessary costs. It’s my goal to figure that out. Therefore, a productive day to me would be when I’m able to identify all those things that we could to do make everything go round in a better way. It could be one small thing that would save us money, but it is my job to find that small thing.
Another productive feeling for me, is having a lot of sales meetings and meetings with clients. Or sitting down with our Chief Product Officer to just work with him.”
What’s the biggest hiccup you encountered?
“There are a lot of hiccups that we’ve encountered over the past years. The first thing that comes to mind is pricing. We thought that we had a good way of pricing our product(s), but no one is complaining at our pricing today. That makes me think that we’re too cheap, because nobody is complaining. So, I just imagine how much money we have potentially lost in not having a proper pricing of our product. Pricing is kind of a broad subject, but it is something that we have in common with a lot of other startups. Before we set the price, I read a lot of articles on how you have to dare to set a proper price, so that encouraged me, but I think we lost a lot of money despite that. That’s an ongoing pain point for us.
Another thing I struggle with is (not) having a proper way of working with one-to-one’s with employees, or the onboarding of new employees. We’ve done that too much in an old-school kind of way. I would really recommend Radical Candor by Kim Scott to everyone, because that has changed the way I look at employees, having productive meetings and basically human relations in general.”
What kind of advice would you give your younger self?
“Quit your job earlier! I think we lost a lot of opportunity when it comes to the market we’re in: We started Zalster in 2015, but we had a prototype in 2011. So we were starting Zalster in 2011, but it was too premature. If I could give myself a memo, it would thus be to quit earlier. I feel that we missed out on an interesting growth phase by a couple of years.
Another thing I would tell myself is to not wait too long when launching a product. A year and a half — like we took to develop a first version — is too long. If we had more confidence in the product in that early stage, we could also have acquired leads earlier.”
“Getting funding is not a compliment”
What do you look forward to solving in the future?
“A struggle for us as founders, is that we’re not taking a proper salary. We’re living on credit cards. That’s a great struggle for all of us. But then again, that’s also motivating you to make profit and stabilize the company.”
What do future founders need to know?
“Product-wise, don’t look at your competitors: that will keep you behind at all times. Decide upon what you want to solve, and do it your way. Don’t look at what competitors do, or at their pricing: just solve what you want to solve. Also, read that book (Radical Candor) as soon as you can! Anyone working in a team should read it.
Also, don’t be blinded by the idea that making a financial round is some kind of success. Getting funding is not a compliment; make sure you earn money because that is when you start providing value.”