Magnus Hillestad, Sanity — Founder Story

Threshold Ventures
Dec 3, 2020 · 11 min read

I love to see people having a good time and achieving something. I love to see things working. I love to see people develop as we build a business culture.

If someone’s working on a book about what it’s like to get bitten by the technology bug, Magnus Kongsli Hillestad deserves a special entry. He got bit — hard.

Hillestad was working in private equity when his side interest in technology convinced him to quit his job in Oslo, Norway, and hole up in his attic, learning as much as he could about programming and building neural networks.

Friends thought it somewhat strange to leave the security of a high-paying job on a hunch that this “technology thing” was going to pan out.

But Hillestad stuck with it and his decision to go it alone paid off. He eventually joined up with a small team whose agency had built a radical new content management system (CMS) in relation to their work on a new website for OMA, the architecture firm co-founded by the Dutch designer Rem Koolhaas.

A year later, the team took another big step — this time across the Atlantic to the San Francisco Bay Area to better tap into Silicon Valley’s network to grow the business.

Since then, Hillestad has been helping Sanity.io navigate the ins and outs of the CMS marketplace with a product that’s helping customers transform how they deliver content by approaching content as data, so it flows seamlessly across APIs to power any experience. And he’s taking in the California experience — everything from learning about the joys of fish tacos to tooling up Highway 1 on weekends to discover a proverbial hole in the wall that’s kept him coming back for more.

Q: So how does someone who started off working in private equity and consulting wind up as a technology entrepreneur? Were you interested in technology growing up in Oslo?

Partly, but only to play games and do stuff on computers. It came out of the work I was doing professionally, where you need to look at long-term trends. Before you buy a company, you want to assess how it’s going to look several years into the future. I was on a team working with an oil services company and the mechanical technology they used forced me to look at all the technology trends taking shape at the time, especially artificial intelligence. I found it all very interesting.

Q: So, this was something of a personal journey of discovery?

Yes. I was in Norway at the time and I asked an engineer if he could explain to me what a neural network was. He said it was like a black box but didn’t really want to get into the details. I don’t know whether he felt it was beneath him or he wasn’t in the mood, but he couldn’t really explain it. I went home that night, opened up my computer and learned about neural networks and the computer language Python, and just started to play around. That was how I was spending my nights and it was a lot of fun with one thing leading to another, where I assembled a computer myself and did all these “boy dreamish” things.

Q: That’s very different from private equity. What was going through your mind at the time?

I felt that there was something really big happening in the world with technology trends, but that I was very far away from it all. At the same time, I also began to think about doing something for myself. It was a combination; I really wanted to dig into technology, and I thought that I’d like to create something for myself.

Q: Did you then quit your job?

Yes. I stayed in my attic and learned what I could about programming and how to build neural networks. But then a friend said that I’d be a great match for some people he knew who were building something pretty cool. At the time, I wasn’t looking for match-making, but I agreed to meet them.

Q: This would be Even Westvang, Oyvind Rostad, and Simen Svale Skogsrud, who would go on to become your co-founders at Sanity.io?

Right. They had been working on a content management platform product inside their own agency. We talked and they asked me to join them. My first reaction was to say no. I didn’t want to adopt someone else’s baby. I wanted to do my own thing, but after spending more time with them I saw the huge potential in what they were doing. I was also blown away by the caliber of the people, and I matched with their culture. And with my business background, I knew I could help.

Q: What was the first order of business?

The first thing we did was to shut down the agency and move every employee over to the software company. We also took on a million-dollar funding and invested all our resources into building the product. We had some customers and that gave us some income, and we stayed very lean as we worked on attracting more users. After six months, a representative from one of the largest restaurant chains in the world called us and said, `We like what you do.’ And then after a couple of meetings, we had a new customer.

Q: Can we talk for a moment about Norway and entrepreneurship? Obviously, the country has many very talented engineers and there’s a lot of government support for startups. But how does the local culture view entrepreneurship?

It’s not the same as in the US, but yes, there are a lot of entrepreneurs because of the good governmental system we have. You won’t end up on the street if the startup doesn’t work out, and that makes it easier to take risks. On the other hand, Norway historically has not had the biggest startup scene. It’s not just because it’s a smaller country but we don’t have a big tech sector. Also, the oil industry, which is significant in Norway, has historically been scooping up a lot of the engineers in the country, so you don’t see the tech spinoffs, and we just haven’t historically had a lot of those very high-growth startups in Norway in the same way as the US.

Q: When you told friends you were leaving to do a startup, how did they react to the news?

A lot of them thought it was a crazy thing to do. I had been well compensated where I was working.

Q: I bet. In Silicon Valley, there’s almost a badge of honor associated with people who risk everything — even when they fail. How does the business culture in Norway treat that kind of risk taking?

I don’t think there’s a huge difference as far as the cultural aspects go. It’s more about the expectations. Building stone by stone is perhaps more popular in Norway, but I think the country’s getting there in terms of fostering this type of mentality. I would also say that Norway still has a long, long way to go in terms of encouraging people to think big. Remember, the US is a country that has more than 300 million people and views itself as the leading technology market in the world, as opposed to something like five million people in Norway.

Q: Which is why you moved the company to San Francisco?

Yes, because we’re a bottom-up, product-led company and we focus on building a community. Sanity.io isn’t one of those “only user signups, zero revenue” startups. We’re definitely building a business. And to really make it big given what we’re doing, we wanted to get a groundswell of community response to our product-driven approach. This is a time of paradigm changes in how the web is being built, and when you look at it, most of the leading companies are based out of San Francisco. That’s the reality.

Q: Why did you decide to split the company and move part of your operations from Oslo to San Francisco?

When it comes to high-growth businesses, Silicon Valley is a better environment. There are several things here that you don’t have in Oslo, and it comes down to access to people. That’s not to say that we don’t have good product people in Norway. We have great designers, awesome engineers and product people over there who are very good. But when it comes to high growth, product-led business models, there’s just not a lot of experience and culture in Norway.

Q: In coming to this side of the Atlantic, what has that move allowed you to do?

The ecosystem here means that you can get the right kind of people, you can get the right kind of advisors, and you can get the right kind of capital. On that last point, I should add that there’s a lot of capital in Norway. That’s not the problem. But experience and the expectation and advice of those who come with the capital over here is what’s amazing — and that’s why we’re such a good match with Threshold Ventures. The company sees what we are and what we want to do. And they’re familiar with backing businesses like ours.

Q: You guys think about content as a separate, dynamic element in digital experiences. You’ve previously talked about the paradigm shift going on in terms of how the web and other content experiences are developing. What does that mean in practice?

Sure. Content is really the lifeblood of a digital business. And when you start to make a business digital, it all comes down to putting the right kind of content in front of the right people — customers or stakeholders — in the right way. It goes to the core of how you drive revenue. But you need to have software that enables you to move quickly to distribute that content in the right way, whether it’s a web page, a web app — whatever it may be.

When we’re talking about how every company is becoming a software company, one very specific characteristic of a software company is that it has to iterate very fast.

Q: It has to iterate, as in try new things and adapt?

That’s the name of the game in the digital business. And when you have to do that, you have to have a content platform that lets you change quickly, enabling you to meet your customers in the right way. We believe the best way to do that is to treat content as data and let the developers build and customize tools that product managers or content managers use. They’re not developers. They’re not touching the code. But they get a customized tool that simplifies their work and makes it seamless. So, you maximize content velocity.

Q: What do you see as the biggest pain point for developers when they’re working with CMS?

It’s the fact that you cannot easily iterate and change. And you’re stuck with a bunch of workflows that are sub-optimal for the content editor. That’s the biggest problem. The biggest problem for the business owner is that every time you want to do something, it takes a lot of time to iterate.

Q: As an entrepreneur — especially one coming to a new country — what’s been the most challenging thing for you to master or overcome as you made this transition over the last year?

It’s less country-specific, but I think the biggest challenge comes down to building the team. We’re extremely focused on doing that the right way, and that means making sure that people can work well together. You need to build a good culture where everyone feels safe and enjoys what they do. They need to feel that they are having an impact and that we’re all achieving something.

Finding that balance in a startup with huge ambitions, while at the same time having balanced lives, is a great challenge and something I want Sanity.io to do really well.

Q: Building a corporate culture with people from different countries must demand a lot from you. Do you find being CEO a chore or fun?

I love it. At first, I was very reluctant. When we agreed to work together, I said that I’d come on and become a co-founder, but I wouldn’t be the CEO. I don’t like being the center of things and I think a CEO often gets too much focus. But I also understand that it’s my role to be the captain. Every organization needs someone to spend time thinking about priorities and direction, and to help a great team deliver great output. I try to be that.

Q: What’s your favorite part of the job?

I love to see people having a good time and achieving something. I love to see things working. I love to see people develop as we build a business culture. Some people might say that we’re putting maybe a little bit too much emphasis on the culture. But I don’t think you can do too much on culture. It’s very easy to underestimate how much it impacts the productivity of a team and even the whole value of a brand.

Q: You’ve been living in the US full-time for about a year. Have you found any good places that serve Fårikål? I hope my pronunciation was halfway understandable.

Not yet. But you can buy all the ingredients, and I actually served it to some of my American friends last weekend. Meanwhile, the food out here is just fantastic. In Norway, we have really good fish, but until coming here I never fully appreciated fish tacos. Now I’ve learned to make my own beer battered fish. My two kids — I’ve got a four-year-old and a six-year-old — they love my fish tacos.

Q: Outside of the food, any other differences that you’ve found which stand out?

There’s a tiny hole in the wall restaurant up Highway 1 in Marin County called the Marshall Store. They sell oysters and stuff like that. And sometimes over the weekend I’ll take my family there for lunch. We’re Europeans and don’t particularly like driving. In fact, we try to avoid it. But in this case, I’ll make time to drive one and a half hours just to get up there because it’s such an amazing place. It’s such a genuine experience, and I guess I have become accustomed to using the car more.

Many Europeans say the American culture is a bit fake or superficial in some ways. But I’ve found something different. I’ve never lived anywhere else in the US, so I can’t speak about other places, but it goes to the open way people approach you — it’s a given here in the Bay Area. For me, as a Norwegian entrepreneur, that openness and willingness to help is special. There’s this idea of giving without expecting anything back. There’s no quid pro quo where it’s, `OK, I’ll do this for you, but then I expect you will do something for me.’ No, it’s just like, `Sure. I’ll help you.’

What happens is that you can talk to someone who’s built a successful company and they’ll gladly explain to you how they went about making it happen. Or you can talk to someone at a startup and get their insights into the challenges that they faced. For some reason, they are willing to spend their precious time with this random Norwegian guy who is exploring how to build a company. They seriously don’t expect anything back. I try to be respectful of people’s time, but talking to them and airing ideas has been such a big help. That’s one of the things that I’ve come to love about this place. That has been so inspiring and so genuine.

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