Klarna Founder: From $0 to $46 Billion: Sebastian Siemiatkowski

[0] He had a discussion with me, we're sleeping in the street, dead scared, like, be careful with who you're listening to.

[1] Have they really contributed to success?

[2] Have they really built success?

[3] Or have they simply been in a company that was successful?

[4] Afterwards, I've heard from journalists that, like, a ton of emails were coming from banks because they simply, you know, they're threatened by our existence.

[5] And so the kind of articles and the writing about us shifted from their hair to screw customers over to do bad things.

[6] And that was tough.

[7] I went home, I had dinner with my wife, and we talked about it, and I was like, no, this time around I should probably help him.

[8] I decided, and I tried to call him, and he didn't answer, and I emailed, he didn't answer, and morning my mother called and said he was dead.

[9] Sebastian Shemiakowski, he's the CEO and founder of Europe's most highly valued fintech privately held company.

[10] His company is worth $45 billion.

[11] dollars.

[12] Sebastian isn't a guy that comes from a stable household or a silver spoon.

[13] It's very much the opposite.

[14] The stories you're going to hear about his home life, his family, his father might just bring you to tears, because that's the effect they had on me. He came from incredibly, incredibly humble beginnings, and he's built a company in an industry where he was not qualified, where he didn't have technical expertise, where he couldn't code that has completely revolutionized an industry.

[15] He is humble, he is honest, and he's willing to tell you the truth.

[16] And that's why it's such a pleasure to sit here with him today and uncover what it takes and who it took to build such a revolutionary pioneering business.

[17] So without further ado, I'm Stephen Bartlett, and this is the diary of a CEO.

[18] I hope nobody's listening.

[19] But if you are, then please keep this to yourself.

[20] Sebastian, one of the things that I've come to learn from speaking to a wide array of guests on this podcast, from sports athletes to, you know, really successful CEOs is how often our childhood and our early years shape our adult foundations.

[21] And whenever I meet someone like you that's achieved really remarkable things in any, you know, in whatever discipline they're in, my first question always becomes, what was it that made them remarkably unique in the early years?

[22] What was the experience, the cauldron that shaped them into who they are today?

[23] Right.

[24] It's got to find you asked that because like I don't necessarily feel that I was remarkable unique in my early days.

[25] A friend of mine, their son, turned out to be blind, but he has perfect pitch.

[26] And he's now eight years old, and he's sitting and playing the piano and singing.

[27] And that is to me a remarkable.

[28] And I was thinking about that.

[29] I was like, that was me when I was a kid.

[30] Look, I mean, my parents were from Poland.

[31] They moved to Sweden about a year before I was born.

[32] I was born in the northern part of Sweden they were basically immigrants because they didn't see a future in the communist Poland which was the case at that point of time and so they came to Sweden but obviously as it was back down was very hard to integrate into Swedish society English wasn't as profound as it is today and there was a lot of language barriers at that point of time it was also like a lot of I would say skepticism about people with Polish name and Polish backgrounds was hard to get a job if you had a foreign sounding name there was a lot of these biases so my parents struggled quite a lot to integrate my mother was an early retiree and my father kind of jumped from job to job was unemployed for quite long period of time drove a cab from all two years did a lot of different things right and so I think that like I do think that there's something to the fact that as an immigrant kid with parents that's still like intellectually had academic backgrounds and had studied at universities and stuff like that and never basically were able to live up fully to their potential I do think that that kind of creates some kind of like you feel like that's unfair and you're going to like try to fix that somehow and I was growing up among Swedish friends who just had better economical standards than we had and I was obviously longing for what they had you know I remember that with my mom like there were weeks when you know we were eating pancakes every day and I thought that was great but now I realized it was because there was nothing left that was the only thing we had like flour and milk and so forth so like so I think that like I do think that that kind of setting and there's obviously some research that suggests that in Silicon Valley more than 50 % of the companies are you know started by immigrant backgrounds I do think that that kind of setting of you know having a lot of the intellectual capacity and all these things and the kind of prerequisites potentially to do something different and at the same point of time this kind of drive of like you kind of almost feel like it's unfair you know life isn't necessarily fair but like you feel like this is not fair we should have like been able to have something different than this and maybe also to some degree you I don't know to what degree that's on an emotional level I don't think on a rational level but an emotional level also like your parents really sacrifice their lives like I think it's it's hard for people that are not immigrants to understand the consequences of not having the friends from school, not having the understanding of how society works, which school is better, which is worse, how do you interact with government, how does the system works, all these things like that total lack of understanding of a specific society that it means to shifts like my parents did in their late 20s, early 30s, and how difficult that means for your own ability to, kind of, you know, do something with your life.

[33] I think that that's something that's underestimated.

[34] So you have the kind of emotional thing that you want to, you know, you feel that they did a massive sacrifice in some due regards for your behalf, right?

[35] Yeah.

[36] And that feels like a tremendous privilege.

[37] Yeah.

[38] I wanted to ask you, because I can relate a lot to that.

[39] I'm an immigrant myself.

[40] I came from, born in, you know, Africa in Botswana, and my parents came over here.

[41] My mom can't read or write.

[42] Fantastic country, by it.

[43] Yeah, yeah, beautiful, beautiful place.

[44] But I moved to the southwest of the UK where I was in an all -white school of 1 ,500 white kids and it was me. And we were also like the poorest people in a middle class area.

[45] So you have, I felt different all the time.

[46] And did you feel that way?

[47] Yeah, absolutely.

[48] Very much so.

[49] I mean, even the fact that we were Catholics, now I'm not a very religious person today necessarily, but we were Catholics and my, you know, my parents, we went to to church every Sunday and stuff like that.

[50] In a very non -religious society like Sweden, that was in itself very odd.

[51] And I remember people saying, you know, Jesus wasn't, you know, the son of God and stuff like that.

[52] Which at that point of time, now, today I wouldn't necessarily say.

[53] But coming to that, at that point in time, it was like, you know, somebody was like, you know, saying things like that.

[54] And then also the, like, the view of Poland that part of time was that there was this country behind the iron curtain that was spewing out, you know, toxic waste into the Baltic.

[55] And so there was a lot of like, you know, Polish and jokes about Polish people and stuff like that.

[56] So, I mean, all of this, like, I took heart.

[57] I wouldn't say I was bullied.

[58] That would be, in my opinion, to take it too far because people, I know people that have been bullied for real and I don't think I was.

[59] But there was like that, you know, the sense of being different, of not necessarily, you know, both not having the same prerequisites, but also getting some, like, kind of a lot, like sometimes getting quite hard time over these things, right?

[60] And when you were a kid, because I know I did, I developed a very naive thesis as to how I would escape this scenario.

[61] Oh, what was that?

[62] Money.

[63] Yeah.

[64] And success.

[65] Yeah.

[66] Because it was the pain in my house.

[67] or the lack of.

[68] So I thought, well, that will fix it.

[69] Did you develop your own thesis of how to?

[70] No, yes, very similar to yours, right?

[71] Because also what happened in my life was that my parents divorced when I was about eight years old, right?

[72] And so, and they had a lot of conflicts, right, on different topics.

[73] And I think to your point, like as a child, an interpretation of the reason for that conflicts was the lack of money.

[74] Because that was what they were talking about all the time.

[75] You were hearing that.

[76] Now, I do today probably have a slightly different view of whether that was the only explanation for their inability to be a couple and be together.

[77] But at that point of time, I agree with you.

[78] That was like, one of my interpretations was like, yes, it would be nice to have monetary success in life and that would solve some of these problems, for sure.

[79] For sure.

[80] I do agree with that.

[81] But I also, at least in my life, there was in addition to that something else, which I cannot really explain, which was that I was always intrigued and thought it was interesting to kind of do business.

[82] Like, it's very nerdy, and I can't explain it.

[83] Like, I remember reading, like, Riches Branson's book when I was, like, 13 years old.

[84] Like, and I think it was, like, super interesting.

[85] Or the founder of IKEA, Inver Camprad, it was a big thing in Sweden, obviously, because it's a Swedish.

[86] So, like, I remember reading up on these stories.

[87] And I also remember, like, trying to start businesses very early.

[88] So I had, like, I did a lot of different things in, like, trying to start.

[89] It was everything from, like, gathering some of my friends.

[90] And we would go to the apartments where we were living, the kind of the story buildings.

[91] there was this bus stop where all the people were coming, and we would go there and, like, offer us to carry, you know, groceries and stuff like that in return from my, like, all that kind of stuff.

[92] Just finding different ways of, like, you know, trying to do things.

[93] Is there, there's something really intriguing about that in my mind because, as you've highlighted, immigrants tend to be more entrepreneurial generally, and in the situation you're brought up in, and I reflect on my own situation, because of the circumstance, I had made this connection that if I was to have anything or become anything, it would be a direct consequence of my own actions.

[94] And then I think maybe entrepreneurship appealed to me because it was, I knew I wasn't going to do great in the conventional route, but then it was this really nice route to potentially huge success.

[95] And it was all kind of centered on what I did.

[96] It was going to be me. And I think, you know, from hearing about this scenario you were in with your parents and your upbringing and being an immigrant, entrepreneurship was something that maybe you could control.

[97] No, but I think you write in the sense that, like, I think definitely in that environment growing up in that setting, you know that, like, there's nobody who's going to help you.

[98] Like, there's nothing, you're not going to get anything from anyone, right?

[99] It's just going to be, either you do it or it doesn't happen.

[100] Those are the two options.

[101] Like, it doesn't happen or you do it yourself.

[102] Like, those are the options.

[103] I think if I look at my own kids, there's a lot of things that happens in their lives that fit into a third category.

[104] It happens because that a mom helped out and, you know, whatever.

[105] There's a lot of other things that happens.

[106] But here it was like, you know, if I want to have an adventure, if I want to go and see the other part of the city, I bike there.

[107] I have to go there myself.

[108] Nobody's going to drive me. Like, you know, there's like, and I do think that there's some lack of like healthiness to that as well, right?

[109] Whereas like it kind of educates you and I haven't thought about it.

[110] But now as you're saying, it actually kind of thought about it, that it does help you.

[111] But I would also say on the immigrants side of what you said, like they are more commonly among entrepreneurs.

[112] But I also think that like when I look at like, you know, when we have problems in neighborhoods with a lot of, immigrants and so forth.

[113] I think that to me it's almost like, I wish that society would realize that like there's going to be a lot of frustration, a lot of people with like, you know, energy, they want something different.

[114] They want something change.

[115] They don't want things to be the way they are.

[116] That's kind of where you're coming from.

[117] And then it's just society's ability to try to showcase that that energy can be used to become Slat and Ibrahimovich.

[118] It can be used to become, you know, a music artist.

[119] It can be used to become an entrepreneur.

[120] it's that energy or if we fail to offer those opportunities or showcase that those alternatives they may come out as burning cars and doing other things that are less you know less productive right yeah so i think it's really that you know to me today i was just like wish that society would really see it as like how do we help showcase and show that there are these great options for that like build up energy of wanting something to be different right and for that you need sort of great empathy and to understand that people are different shapes and sizes.

[121] And that kind of brings me nicely to the education system and your personal experience with the education system.

[122] And do you think it, did you serve you well or did it fail you?

[123] Well, I think it did one thing that to your point, which you were describing as well in your own history, is that I, I, one thing that I do worry for today compared to me was that I was in a school with mixed.

[124] I would still say 70, 80 % were Swedish, 20 % of that point in time had different immigrant backgrounds.

[125] If they would be only immigrants in that, I would not have anything to compare to, right?

[126] So I do think that the school system at that point of time was less segregated than it is currently, at least in Sweden.

[127] I'm not that familiar with the UK current situation, but I think that was a case.

[128] So in that case, now, where the teachers that are amazing and like, you know, there was a mix, like some were good, some were bad, right?

[129] So, and I remember, like, you know, I was one of the kids who had very easy at school.

[130] I learned to read quickly and so forth, right?

[131] And I believe to some degree, then I became slightly bored because the Swedish school system at that point of time was very much set up as like everyone equals.

[132] So if you were like a head in math or in head in reading or whatever, I literally still remember from like, you know, second grade, which is eight years old in Sweden when you're eight years old.

[133] You know, we were having like reading, which meant that everyone was reading from a book.

[134] And like some kids, unfortunately for them, Like, they were still struggling really, right?

[135] And I had already read the whole book.

[136] So I was quite bored sitting there listening to the story that I already read.

[137] And then I started disturbing the lesson because that was kind of so.

[138] So I became a person that was quite problematic for the teacher.

[139] Because I was just like, I was so understimulated.

[140] And that I think is a little bit sad that I hope that schooling has become better in like, you know, actually, you know, understanding that all pupils are different and need different support and, you know, can get a different challenge because you all need to have like a continuous challenge.

[141] And those, that lesson there you learn about that need for challenge, you're now the headmaster of a school that has thousands and thousands of employees in it.

[142] Yeah.

[143] And that point about making sure that the people that attend your institution are also challenged must must still sort of be important to you, right?

[144] Absolutely.

[145] I think it's like actually, you know, and in a way, especially in Swedish society, which I, you know, the Swedish culture is very much just saying that al -A -Skamiad, which might be.

[146] means that everyone should join, like everyone should be part of this.

[147] And that's a fantastic ambition and vision for a society that, like, no man left behind is kind of a different translation of it, or no women left behind.

[148] But, and for a while, that was creating a conflict because Klanah, as a company, we have very high aspirations.

[149] We want to do something very different.

[150] We want to, you know, really, as I say, sometimes play in Champions League.

[151] And then, you know, the problem is that's not true for everyone in the work world.

[152] Some people are fine.

[153] We're playing Kids League and so forth, right?

[154] So it took us some time to dare to say that Clana is not for everyone.

[155] That Clana is actually a company that wants to attract people that want to make a real impact, make a real difference, that want to learn, they want to be challenged.

[156] and that took some time and it might sound odd but for us at least in the Swedish cultural context it took some time to get to that where we started saying you know what?

[157] Klona isn't for everyone.

[158] Not everyone is going to enjoy this environment because not everyone is willing like a lot of people will say it's amazing to climb Mount Everest did you climb on Everest?

[159] Did you climb on Everest?

[160] That's fantastic.

[161] That's one thing but it's a very different thing that like how many people are really willing to like freeze their fingers off train for four years like all the things that you need to do to climb that mountain And then, like, the number of people that, like, check the box and say, I want to do that becomes massively smaller, right?

[162] And so I think the same applies for companies.

[163] Like, a lot of people will say, I want to work for a successful growth company doing things that's really cool, like climbing minors.

[164] But then the question is, like, are you willing to do all these things?

[165] Like, that that means that you need to do in order to be able to accomplish that, right?

[166] And so, so, yeah, to your point, like, I think the challenge today, I always tell that people, like, when they, you know, when I interview them, or I was just like, just be, like, be aware, like, this is, you're going to be very challenges.

[167] This is not going to be a place where, like, it's just going to go easy.

[168] You're going to have, you're going to be very, very challenge here.

[169] What's the perfect balance there of challenge between being too challenged that they, you know, they end up in the, I don't know, burnt out something?

[170] Right.

[171] Yeah.

[172] Or under challenge that they lose motivation like you did as a kid reading the book.

[173] No, it's super difficult, right?

[174] And I think that's why it has to, it has to be about encouraging them.

[175] and seeing, like, each individual by individual where they are, right?

[176] So think about a great personal trainer, right?

[177] When you go to the gym, you know, how do they find the balance of, you know, how much to push you and when to kind of hold off a little bit, let you, you know, breathe and so forth, right?

[178] Actually, you know, it's kind of interesting because my kids have this swim teacher, her name is Petra.

[179] And I can sometimes just sit and watch her in when she's training.

[180] my kids swimming because she has that perfect balance.

[181] I've never seen a teacher that finds that perfect balance as well as she does.

[182] So she pushes my kids exactly to the point where they're like dead scared, like they're almost like they're almost there where they're like going to want to, they want to give up and get out of that, but they're doing it.

[183] And then they're proud of what they accomplished.

[184] And that to me, to your point, like that's almost like a piece of magic that a teacher has.

[185] Like the best teachers can spot that in their pupils, can spot that.

[186] and really find that perfect balance, right?

[187] But it's very difficult.

[188] And it's obviously difficult in a company with 4 ,000 people.

[189] Like, how do you try to put mechanism in place to ensure that you find that balance, right?

[190] And that you really allow people to get to that perfect spot where they develop heavily, but at the same point of time doesn't move, you know, ahead and just bang the heads of the wall and feel give up or, you know.

[191] To your point then as well about it took you a long amount of time to realize that you wanted to just.

[192] say to the world and to anyone that was considering joining your company, we're not for everyone.

[193] The pandemic happened and what I saw was leaders were kind of forced in this wave of virtue signaling to say, everyone can work from home forever.

[194] If you didn't say that, now you're a bit of an asshole company.

[195] And as I reflect on that and as it went through, I started to reject that narrative because I think that the culture of the company should be determined by the mission.

[196] And also, the other thing was, I actually think that companies, as said, should have really clear communication at all stages about who we are, how we work and what our culture is, and allowing it to be kind of, you decide.

[197] I actually think it's, it's, for me, super weak as leadership, but I also think it will have an adverse effect on the ability for the company to achieve its mission, but also the company culture, people knowing, like, what's expected of them.

[198] But now it seems to have become really, like, politically acceptable to just say, our employees will do whatever they want.

[199] How do you feel about all of that?

[200] It's a very complex topic.

[201] But I think, look, I think that the, look, I give you an example, right, is that previously, which you might find odd, Klanah was not really following kind of agile work tactics.

[202] And then a few years into Klanah's development, we realized that some aspects of agile, like daily stand -ups, weekly retros, working as small teams on specific topics.

[203] some aspects of these that are very productive and really help productivity, help achieve our goals and so forth.

[204] So then what we did is we said, like, okay, now all teams within Klanah should do daily stand -ups, should do weekly retros.

[205] And I think currently when we look at it, our data, about 50 % of teams are following this, right?

[206] So then the question is, like, how do you then approach that?

[207] Because you feel yourself very convinced that, for example, the idea of daily standups is helping to be productive.

[208] But if you enforce that, if you simply go and say, everyone has to do this, period, like check the box.

[209] The problem is like you can do daily standups in very productive ways where you're engaged, the whole team is engaged, you're discussing, what can we do, how can we move faster, et cetera, et cetera.

[210] Or you can do daily standups only to check the boxes.

[211] There are different ways.

[212] And that applies to almost all such rules and concepts within, companies.

[213] So I think that, like, what I'm still, and I still, I don't feel that I entirely figure this out, but there's a balance in an organization around like, when are we prescriptive and mandating things?

[214] And when are we suggesting and highlighting?

[215] Because in the end, the reason I believe in daily standards of so much is because of my own experience of that.

[216] But there was also something that I seeked up myself.

[217] There was a willingness to, I was interested in trying to find out better ways to working.

[218] I learned about this.

[219] I saw it in practice being done in a good way.

[220] And then my conclusion was that this was that.

[221] So if you think about my learning process, my personal learning process in that situation, it was driven by my interest, my passion, and then I accomplished.

[222] That's a very different thing to if my board suddenly would have dialed me up one day and said, everyone has to do daily standups, period, because it would not have given me the opportunity to learn and reflect on it.

[223] So a lot when I think about learning within an organization, think about like the karate masters and the Japanese, they kind of like, remember all these like karate kid and everything, like how they learn in those environments.

[224] It is like, obviously at the beginning there has to be an interest by the individual self to try to learn.

[225] But then the master doesn't always tell you like exactly what to do.

[226] They like, they provoke you to try to learn yourselves, right?

[227] There's an excellent example from the Toyota Way on that topic where like some of the like masters of Toyota way within Toyota would like take a lot of their senior managers and they would draw.

[228] a circle on the factory floor within a Toyota factory, and then the managers would have to stand there and observe the manufacturing of the cars.

[229] And then by the end of the day, you know, the totally silent teacher would come and say, okay, so tell me, what have you observed?

[230] And then the senior managers within the circle have been standing the whole day, I had to say, well, we saw this, we saw that.

[231] And then he would look at them, the senior, you know, senior kind of Shenzhen, like, he would be like, no, another day.

[232] You know, so they have to do another day.

[233] And I think, like, provoke them because I think that's the, and it's very, learning is such a difficult thing, right?

[234] Because you don't, as much as we think that learning is sitting in the room and listening to somebody, that is, you know, a very inefficient way of learning.

[235] We learn by doing, by doing things ourselves, right?

[236] That's really, that's the truth.

[237] And I think that COVID is such a good example of that because we had a lot of experiences that we've never had before.

[238] And they taught us a lot about our life, our prayer.

[239] priorities.

[240] A lot of people talk about that today because we were forced to do things differently, not because we read about COVID and we read about, you know, how things can be different because suddenly we had to experience it.

[241] And when you experience, that's when you truly, that can impact your behaviors, can change your ways.

[242] So the kind of, it's a very difficult balancing these companies consistently from a culture perspective.

[243] Like, how do I, how do I encourage and kind of push people to go and find out, like, you know, try to experience that and learn for it, but not trying to enforce it too much.

[244] And that's a balance.

[245] game, right?

[246] You cannot be entirely without rules, to your point, because, like, if you join a soccer team, like, there are some rules.

[247] Like, you come into exercise every morning.

[248] If you just don't come to exercise, when, like, okay, look, you know, maybe you have a different philosophy about how you're going to become a great soccer player, but, like, I just don't believe in your philosophy.

[249] Like, it's not going to work.

[250] So, like, if you want to go and believe that you never have to exercise to become a great soccer player, you do that, but you can't do it on my team, like great.

[251] So there is obviously some selection criteria where you have to decide within our ecosystem, within our company, these are the rules that will apply and because we just feel that they're so fundamental and so important.

[252] But once you be on that level, then it's more like, how do I intrigue you?

[253] How do I challenge you to develop that insight for yourself so that you really come to embrace those ways of working and really make them your own and really expedite them?

[254] I think, and I haven't solved all of this to be very, you know, honestly, I think we have lots to learn still with Klauna, but I think that just is a very interesting.

[255] was a long answer.

[256] No, it was amazing.

[257] It's really, really thought -provoking.

[258] And I was, I was thinking, yeah, I don't think a lot of people would have given that answer, but I feel it's the right one for so many reasons, especially as it relates to the process of learning.

[259] I think the things that I was most successful at all facets of my life were things that started with interest.

[260] Yeah.

[261] And the things that I had an allergic reaction to in terms of topics and school were the things that there wasn't that fundamental curiosity.

[262] So I was kicked out of school.

[263] But in, if you look at business and psychology, like I would have gone to more lessons.

[264] Yeah.

[265] I was 30 % attendance in these other subject.

[266] And that's so true.

[267] So it provides a different way to, I think.

[268] And I would say one more thing on your specific work from home thing, which is also another thing to take into consideration is that what ends up happening, and this is not a problem when you're 10, 20 people on the startup.

[269] But when you start becoming 4 ,000 people, what ends up happening is you have, obviously, unfortunately, that's the only way to describe it, layers of management, and then you have the people actually doing it.

[270] And that's just how most organizations are structured.

[271] But what ends up happening is, okay, how are we going to do, with this work from home?

[272] What are the rules that are going to be set?

[273] And there is a tendency for people to go and say, management team, the top people have to tell us what the rules are.

[274] And if you write those rules, the problem is like, look at Klanah.

[275] We're active in like 40 offices across, you know, 20 countries.

[276] Each one, which will be in a different phase of COVID or not and stuff like that, right?

[277] So try to write a rule that is applicable for each team.

[278] And then you're going to have individuals.

[279] Maybe some individuals have immune diseases and are extremely worry about, you know, moving into that environment or more careful than others.

[280] Maybe you're going to have, like, you know, some people that have religious concerns somehow tied to this.

[281] You know, you're going to have a flora because you have so many people.

[282] We have so many different individuals with different perspectives.

[283] So what you then sometimes need to do, in my opinion, is you need to say, look, you will decide for yourselves.

[284] And what then ends up happening is that, in my opinion, what happens us is that the people actually doing the work, they usually find that quite attractive, that they can take that decision.

[285] So the managers of those people, they may find it's more difficult because to them it's nicer that the top management team has written a policy and they can say like, this is the rules.

[286] But why?

[287] Why these rules?

[288] Because it was said so, right?

[289] And so then they can hide behind that, right?

[290] And if you don't allow them to hide behind that, they will actually have to motivate why are we going to do like this.

[291] We've decided in this team that we're going to work in office, so we're going to do this.

[292] And that forces them to do that, which is good for them.

[293] They need to do that.

[294] They need to provoke that.

[295] But there's always a risk when you write two strict rules on the top, is that they're being used, and then there's just management said so.

[296] And that is just so bad for the culture and everything.

[297] You want to provoke an environment where people feel like the rules are there.

[298] They were well -intent.

[299] They had a good purpose, but they also need to be challenged.

[300] If they, on a specific individual, on a specific situation, do not apply.

[301] There needs to be a mechanism where those rules comes back and say, what if we're in this?

[302] And in the end, rules can never be an excuse for not thinking for yourself.

[303] right that that never happens and they always have to be there's going to be exceptions in a large company there has to be exceptions because those are healthy signs of the fact that people are thinking for themselves and judging by themselves and not just hiding behind the rules that i always reflect on the um that that made me reflect then on the example of the someone told me certain country i think it might be germany where pilots were having a huge amount of crashes and it was because the the culture was you don't challenge the pilot so even when the co -pilot knew there was south korea i think it was south kore yeah yeah i think It was, yeah, the planes were crashing, but because the co -pilot didn't feel like a good challenge.

[304] Yeah.

[305] I think that's sort of an analogous to what you were saying there.

[306] I have to go back and hear about the start of Klanak.

[307] Because, you know, one of the things that really intrigued me and made me feel a lot of respect towards you was that you're not technical as a co -founder.

[308] Unfortunately, no. So you built this mega tech company, but you're not technical.

[309] And I know I tried when I was 18.

[310] That was my first failure.

[311] But I found that really just horrifying and respectful.

[312] Yeah.

[313] So tell me, so how did it start and where did you find the courage?

[314] Sure.

[315] No, so look, as I said previously, like, it's kind of ironic.

[316] I always had tons of business ideas.

[317] And I even remember, like, when I was like probably 13 or something, in Sweden was the first time we had private radios, private radio stations.

[318] And I thought the one in my home city of Uppsala sucked.

[319] So I kind of wrote the business plan for them, how they should change the shows and they and actually called them and tried to convince them to change.

[320] At 13.

[321] Yeah, totally like, I can imagine.

[322] Imagine they were like laughing their guts of like this 13 years old and calling us like, you should do this programming instead.

[323] You should have a show about this.

[324] I bet they gutted now.

[325] Yeah, yeah, yeah.

[326] Exactly.

[327] So for whatever reason, I always had this like inclination to wanting to do something.

[328] And then I did two years at Stockholm School of Economics, which is one of the like top schools in Sweden around, if you're, you know, want to study it in the economical direction.

[329] Everyone, at that point, this is 2000.

[330] Everyone wanted to work at Goldman Sachs, Morgan Stanley, McKinsey.

[331] That was really the vibe.

[332] It's actually interesting because they had this survey where they said, like, at that point of time, when they asked students, 7 % wanted to start their own company.

[333] Today, it's 70%.

[334] It just gives you, like, how much of a shift there's been during that period of time.

[335] But anyways, and then in 2002, because I went directly from college to university, I was like, okay, I just got to do something else.

[336] I mean, all my friends had, like, backpacked and stuff like that.

[337] So ended up me and actually what became my co -founder and Nicholas.

[338] We went backpacking, which at that all the time, because we always wanted to do something that was a little bit different.

[339] We ended up going around the world without flying, which was a lot of fun.

[340] So if you want to go to YouTube, you'll find the videos when we were like from this trip.

[341] Oh, really?

[342] You say a YouTuber.

[343] Yeah, because we had this idea that we were.

[344] This was just at the beginning of all these like, you know, Big Brother and all these like, you know, doc documentaries and stuff.

[345] So we thought that we were going to like, we recorded the whole thing and we did less.

[346] We thought we were going to like air this as a TV show.

[347] That was a very funny game.

[348] I need to ask you one question about that.

[349] How did you get to Australia without flying?

[350] Yeah, so you had to, we took a cargo ship from Singapore to Brisbane to Brisbane.

[351] Spain.

[352] Okay.

[353] And then we had a cargo ship from Sydney over New Zealand up to Mexico.

[354] So that's how we did.

[355] And then we actually took the QE2, Q &A Elizabeth 12th, between New York and Southampton.

[356] So, so that was kind of we did that.

[357] Those were expensive parts of the trip.

[358] I mean, we did it on an extremely low budget.

[359] I think on the average we spent like $10 a day.

[360] Like we spent, you know, we're sleeping in the streets.

[361] I actually slept on Piccadilla Circus on the street when we were in London that night and we were passing through London.

[362] And then I went, to Hyde Park when the sun had risen and slept because you don't sleep really well and pick at the circus at 4 a .m., I'll tell you.

[363] So, like, you can imagine how, you know, the vibe there at that point of time.

[364] But anyways, so we came back, and then I missed to start my semester.

[365] And so instead, I was like on the second sabbatical year that I hadn't expected.

[366] And it was 2003, and I was looking for a job in my home city of Uppsala, and I couldn't get a job.

[367] I was actually on welfare for a time because I just couldn't get any job.

[368] It was a low economy, it was very hard.

[369] Eventually ended up working at this account receivables factoring firm, which was like the last place in the world I ever thought, as a sales guy.

[370] And I was like, okay, but now I'm here, I'm going to do the most out of this.

[371] So I started calling and trying to sell these services.

[372] And then I, it was very difficult to sell such services to companies because they're all like, yeah, you can save me 400 pounds a year, but I don't really care because we work with this other company for 15 years and they're great and whatever.

[373] But then I started talking to entrepreneurs.

[374] And these entrepreneurs were starting small e -commerce companies.

[375] because some of them had figured out at that point of time, you could buy Google AdWords super cheap because no one was buying them.

[376] And then you can get some traffic and you can sell some stuff.

[377] And like it was all kinds of stuff, right?

[378] So you started talking to them, and they were really keen.

[379] Oh, I can say 400 pounds a month a year?

[380] That's awesome.

[381] I'm going to worry with you.

[382] So then I started like thinking about payment services.

[383] And I was asking them, what are your problems?

[384] What are the things that you would like to be solved?

[385] So that was kind of where the idea came from.

[386] But then a year had passed and I want to go back to school.

[387] So I came back to the Stockholm School Economics to start my third year.

[388] I left my job.

[389] and but there was an incubator at the school and it was very early at this point of time now everyone has an incubator but every one of the time it wasn't that common so I went to the CEO of the incubator and I said hey you know I have this idea as kind of payments offering buy now pay latest services it would look like this and you know whatever and she was like this is awesome you have to do this and when she said so I was a little bit like now I can't just like give up on this you know so I was kind of looking around and then I stumbled into one old friend of my Victor who I knew a little bit because I was sitting in the cafeteria of the school and I was telling some friends like, I want to do this company, he's going to do this and everyone was like, yeah, good luck to you, man. Kind of like patronizing?

[390] Yes, patronizing and like, that kind of like fake support.

[391] You do that and I'm going to go to Morgan Stanley and make, oh my God, that's like, that was like kind of the perception.

[392] So let's go ahead.

[393] But Victor then was the only one that was like, wow, that's awesome.

[394] I'm with you if you do it, right?

[395] So I was like, okay, that's cool.

[396] Let's do it together.

[397] We didn't know each other that well.

[398] And I had Nicholas, who was an old friend of mine who I did the trip around the world with.

[399] So we kind of joined forces.

[400] But it was still like a huge decision to us, like starting a company at that point of time felt like, wow, crazy.

[401] Are we giving up on careers?

[402] What's going to happen?

[403] You know?

[404] So it was only when we came to the conclusion we were like, okay, you know what?

[405] Let's not think about this as a lifelong decision.

[406] Let's think about this as a six months decision.

[407] I often tell this to people today.

[408] Like we say, like, we're going to do this for six months.

[409] But if we do it for six months, we're going to do like all of our energy, all of our time is going to be this for the next six months.

[410] So we even had like a rule.

[411] We had to eat breakfast in the office.

[412] We had to be there.

[413] We were counting the hours, whoever else was there.

[414] So it's fair.

[415] So we were like, we were living in the office for the first six months.

[416] And we were just like, focus on that and nothing else.

[417] And, but it was when we decided it was going to be a six months and then we're going to evaluate.

[418] Then we kind of was easier to take a decision because you're like, yeah, six months, whatever.

[419] That's fine.

[420] So we got off.

[421] And then what we did, we realized that we couldn't code, to your point, right?

[422] We couldn't code.

[423] We needed a system, right?

[424] So we're like, how are we going to solve that?

[425] are we going to raise money, try to pay some engineers and hire them, what are we going to do?

[426] And eventually we ended up, the incubator were in, they had this like Christmas drinks thing where they invited some business angels and they invited the companies that were in the incubator to pitch.

[427] And so Nicholas, my co -founder, did like a 30 -second pitch.

[428] And after that, a woman called Jane Valerud kind of approached us and she was like, you know, she almost like pushed me up to a corner.

[429] She's like, this is awesome.

[430] Tell me what you're going to do.

[431] She was like, she just heard that pitch and she was like, I like this business idea.

[432] And she told us, look, I have these engineers.

[433] And they're like the best engineers.

[434] They're amazing.

[435] Because she had actually done one of the few really successful exits during Dotcom area where they had sold a company for 150 million pounds.

[436] And so she had money from that and she had the engineering team from that.

[437] So she said, I'm going to connect you with those guys.

[438] And so we sat down with those engineering guys and they were much more senior now.

[439] So then we're like in their 40s and, you know, we were 20s.

[440] And there, unfortunately, a misunderstanding arose, where our understanding was that these five engineers or four engineers, they really were, they were going to join us full -time and work on this and continue developing the company with us, right?

[441] Their understanding was they were going to give us some source code, some code, and a system that works, and then they're off and doing something else.

[442] And so, but, you know, as it is, and I now tired to tell other founders this today, like, Like, if you found friends and you want to start a company together, don't only talk about all the amazing stuff you're going to do and everything you're going to accomplish.

[443] Also sit down and ask, like, how many hours per week are you going to spend on this versus because you love exercising and you love, you know, hang out with your friends and so forth?

[444] Just so, like, not that, you know, you can do it on 30 hours a week or you can do it on 80, but just so you're aligns.

[445] It can't be too big disalignment.

[446] It can be one person doing 30, another one doing 80.

[447] Make it super concrete exactly what expectations you have on each other.

[448] Because otherwise there's just such a big risk of misalignment and conflict.

[449] Resentment comes quickly, doesn't it?

[450] Right.

[451] So then what we did, so we brought those engineers on board, and they started coding, and they were excellent.

[452] They were amazing engineers.

[453] So they started coding the system in December.

[454] In April, four months later, we launched with the first customer.

[455] So it was four months, and they put together a lot of the fundamentals that actually still, you know, today are part of what Clon offers as a service.

[456] So there was a great.

[457] But then, you know, after that, they were like, good luck.

[458] duck, guys.

[459] See you later.

[460] And we were like, no, no, that's not what we agreed.

[461] And then we looked into the contract.

[462] And we had given up 37 % of the company to them for the technology.

[463] And then we had given 10 % to Jane as a business agent, but she gave us 60 ,000 pounds, right?

[464] And so each one of us then had equal.

[465] So we had 17 % each.

[466] And so that was kind of the setup of that.

[467] And then we had basically given away now all these percentages to these engineers.

[468] And they just left us.

[469] And so that became a quite tough conflict, obviously.

[470] But legally speaking, they had followed the contract.

[471] So there was nothing for us to go into contracts and say, you know, whatever.

[472] Because the contract was, we just hadn't talked about this.

[473] And we were under different assumptions of what they meant.

[474] The contract was just there.

[475] Like, we didn't think about, you know, this consequence.

[476] So they ended up leaving us.

[477] And it was kind of funny because in that room at one point of time, in the boardroom, one person said, well, you know what, just so you know, Sebastian, you have to calm down on this.

[478] topic, Klona is never going to be the size of a company where it's going to need four great engineers like this.

[479] It's got a funny.

[480] I almost laugh at it.

[481] It's got a funny now as I think back about it.

[482] Did you ever resolve that?

[483] Sorry?

[484] Did you ever buy them out?

[485] No. So what ended up happening is, to some degree, I think, just because they didn't understand the potential of what they had built together with us, they also sold much too early.

[486] So as a consequence, I mean, they sold at a very early day where maybe the company was $10 million worth or something.

[487] Oh, God.

[488] That's awful.

[489] Yeah.

[490] Well, it's not awful in the sense, because to me it feels a bit fair.

[491] Because they got the upside of what they did.

[492] If they would have participated longer and so forth, they would have seen a very different upside.

[493] And they would have built a company with us.

[494] But this was a challenge for us as a consequence to your point, because at least what it allowed us to do is very quickly get a system live and get something going.

[495] But then, as they left, I needed to figure out, OK, I need to hire engineers.

[496] And I have no clue how to code and how do I evaluate a good engineer for a bad engineer.

[497] I have no clue.

[498] You're like, architecture?

[499] What is that?

[500] You know, like, there was like zero knowledge, right?

[501] So you, and that is one of the biggest challenge, I think, for a lot of people.

[502] Like managing people that do the same thing that you know yourself is one thing.

[503] Trying to manage somebody that does something that you have no clue how to do is very, very different.

[504] How did you, I was in the same place.

[505] I was, I knew needed to build a website, not technical, went on Google, just started looking at their own websites.

[506] Right.

[507] Using that as a, yeah, this, this is cool.

[508] This animation looks good.

[509] I will hire.

[510] Right.

[511] So how did you solve that problem of not knowing what good looks like?

[512] Well, first of foremost, I think, unfortunately, you know, in what ended up happening in our situation was that one of the guys from this engineering team stayed on because they were still shareholders for a pit of time, right?

[513] So he stayed on as an advisor.

[514] And we started hiring some engineers and some which were better, some which were worse, you know, as you will always have a mix.

[515] And we also got a CTO eventually who came in.

[516] And he as a CDO was an amazing programming, a developer, but he wasn't necessarily the CTO that would hire the right talent, build it.

[517] He wasn't business -oriented.

[518] He was very much technically interested and wanted to build really beautiful code basis and stuff like that, which some engineers tend to have more of that tendencies.

[519] And what was the frustration to me is that for a long period of time, and this was a challenge in Sweden and Stockholm at that point of time, The advisors that we had around us, none of them had built a $45 billion company like we are today.

[520] None of them had that experience.

[521] But they were senior in our opinion compared to myself.

[522] They had done great corporate big jobs.

[523] We had like advisors and board members that had corporate backgrounds and been in big institutions and so forth.

[524] And so they were giving us a lot of advice on topics like, is this the system that you're building?

[525] Is this fast enough?

[526] should you be able to build it faster, slower, like the progress and things.

[527] And so when they were giving us that advice, it was bad advice.

[528] But we were too young and too an experience to be able to recognize that.

[529] And so unfortunately, it took us some time.

[530] And it created a lot of frustration because I was always sitting there.

[531] It's like, does it really need to take this long time to build something?

[532] Like, and is it really unfair of me to expect that the engineers are like a little bit interested in the product they're building as well and the business side of it?

[533] Or are they only always going to be interested in the coding itself?

[534] and the technical challenge.

[535] Like, shouldn't I be able to engage with them on the product side as well?

[536] Like, and a lot of times we were like, they were like, oh, we want to build this product.

[537] You need to give us more clear specifications.

[538] And I was like, but if I write those specifications, what's left to do?

[539] Like, that's part of the creative process to sit together and create these.

[540] So, you know, you get stuck in a lot of these things.

[541] And then eventually, I remember I was very frustrated because at one day, when Sequoia invested, and that was why Sequoia was so important to us, because in 2009, we got Sequoia to invest in the company, Michael Morris joined our board.

[542] And one of the ambitions we had with that was to get some kind of contact point to somebody that had actually seen large tech companies grow, had seen real success of a tech company and start understanding their mindset.

[543] And at that point of time, I unfortunately concluded that it was not going to work with our CTO because he didn't have that right mindset for it.

[544] And he was interested in something very different.

[545] He was a great guy in many ways, but he wasn't the person that would be able to allow us to build our engineering organization and bring us to become a true tech company and be really technology driven and I remember going into the board eventually and saying like and at that point of time the representative of the engineers that build the original system who was on my board he had been telling me over and over again I was like I'm really worried should really be the slow and he was like yeah you know it's different this and this and that and then eventually I came to him one day and said look now I've taken a decision unfortunately I have to change CTO and he was like good decision and I was like I almost want to to smack him in your face.

[546] I was like, for four years, you were telling me that this is okay.

[547] And now I'm doing this change and you're saying, good decision.

[548] Like, that's not, like, you should have said, you're wrong.

[549] That would be respecting him more, right?

[550] So there was, in that setting we were coming up for, there was a, it really nowadays, I appreciate much more like how I have to really look through a person and ask myself, is this a believer person?

[551] Is there somebody I should really take advice from?

[552] And I think a lot of entrepreneurs that will listen to this and start up people, like be careful with who you're listening to.

[553] have they really contributed to success?

[554] Have they really built success?

[555] Or have they simply been in a company that was successful?

[556] Those are very different aspects, right?

[557] So being very careful about who you get advice from.

[558] But that's kind of how we solved.

[559] So it was just like we had to learn, have a test.

[560] And then the last piece of very practical advice that we did, which was one of the best things I ever did, was because I was so mixed up, like engineering, whatever, what does it mean?

[561] And then I said to my CTO, a very practical thing.

[562] I was like, hey, can you show me how you fix a bug?

[563] And so we sat down together by his screen and he basically took one bug that we had and he started searching in the code and then he wrote the fix and then he wrote a test case for the fix.

[564] And just sitting and watching him do that made a huge difference for my understanding of like, you know, how long to...

[565] So I think as much as sometimes you may feel like whatever you're managing that you don't understand, you may feel like, oh my God, so difficult.

[566] and they're talking about all these technical terms and so forth, sit down next to them, spend half a day, spend a day, just look at when they're doing it, a designer, or whatever it is, something that you don't know how to do yourself, just sit next to them, see them do it.

[567] And that already will at least put you at a different level of understanding of, you know, the job and so forth.

[568] So there are practical ways in which you can try to gap that, you know, bridge that gap.

[569] So important, because again, it comes back to communication and I had the exact same thing.

[570] And I think in my first tech business, I wish I'd done exactly that.

[571] I wish I'd taken the time to go and build empathy towards the role of my, my CTO and understand what his job was and I guess how I could make it easier, but also to, I really also should have had a objective outsider come in and do an assessment on how he was working, how I was working and everything in between.

[572] I think entrepreneurs don't do that.

[573] They, they, I think because they don't know what they don't know.

[574] Exactly.

[575] You don't know that, so that's the biggest person business.

[576] It's not only entrepreneurs, it's great managers and leaders and people as well.

[577] I think, to your point, the really tricky thing is to know what good looks like.

[578] Yeah.

[579] What does good look like, right?

[580] Oh, God, yeah.

[581] That's different.

[582] Like, when you judge some work, like, what would great look work look like?

[583] And it's when you've established that understanding, whether it's in communications, marketing, you know, whatever.

[584] You know what good looks like, then your job becomes so much easier.

[585] Yeah.

[586] But the only way to find that out, obviously, to your point, is introducing external people, talking to people, comparing, you know.

[587] We also did that actually with my CEO at that point in a time, which was, one of the things we actually did that led me to conclude that I had to let him go was that I said because I was having a lot of dialogue like should this takes this long time and so forth.

[588] So one thing eventually said it was you know what we do we booked meetings with five other CTOs in five large Swedish companies so among them were like Erickson the more traditional ones but it was also like a gambling company that was doing fantastic there was a gaming company dice you know stuff like that and we went and had meetings with them and in those meetings I started raising my concerns and stuff like that and I was listening to the other company CTO's answering to the same discussions comparing it to the answer of my CTO and in that conversation I really saw the difference in how they were attacking these problems and what their philosophy is and the level of optimism in which they approach problems.

[589] Yes, for sure.

[590] Because that's for me has been the biggest differentiated between the really exceptional CTOs I've worked with in San Francisco when I was there versus bad ones is they have a everything as possible that attitude, right?

[591] Yeah.

[592] And those people are an absolute joy to work with.

[593] Speed and optimism in a CTO is just makes your life.

[594] For sure.

[595] And again, I just want to highlight here that, like, my CTO wasn't bad.

[596] He wasn't bad.

[597] He was totally fine and okay, but he wasn't the right person to build a $45 billion company.

[598] Yeah, right?

[599] That was just like, those are two different things, right?

[600] There's not many of those.

[601] No, no, no, exactly, right?

[602] So he wasn't exceptional and he didn't have the right mentality to do what we're doing now.

[603] Pain.

[604] Yeah.

[605] Part of the reason I start this podcast was because why it's called the driver's CEO is I wanted to show, I wanted to really give a fair impression of the other side of entrepreneurship.

[606] It's been super glamourized.

[607] It's probably why, you know, that stat you shared where it went from 7 to 70%.

[608] That's probably why it's now seen as a very sort of glamorous thing.

[609] And I wanted to create a bit of a platform to share some of the harder parts of business.

[610] And listen, you've built a company worth $45 billion.

[611] Like, I know that it was painful.

[612] so talk to me about the pain and the unexpected pain that might have put you off starting this had you known it had you been had you not been naive enough to realize how painful it is at times well i think that like my a lot of my pain i would feel equals when i see athletes you know trying to throw or trying to jump and then failing and the frustration that you see in them when they cannot achieve what they want to accomplish.

[613] I feel that's a lot of the pain that I've experienced.

[614] So a lot of my frustration and pain has been associated with like, oh, you know, I know we can do this.

[615] I know we have the opportunity to do this.

[616] And we're just not getting there.

[617] We're not getting there.

[618] It's not getting through.

[619] It's not happening the way it could be.

[620] I think that's a big piece of a pain for me. Is that lack of like, ah, so frustrating to feel like you're so close.

[621] Something could be there, but it's not that.

[622] I think that's one part.

[623] I mean, another part is obviously, you know, when things go wrong and you're frustrated because, you know, you wanted something to be better and it didn't work out and stuff like that.

[624] So you're very, like, you're challenged by those situations.

[625] In terms of stress, how do you feel that and how have you dealt with that?

[626] I am not that stressed, to be honest.

[627] I don't know why.

[628] It's almost like to some degree.

[629] almost more stressed when things are good?

[630] No, because like, when we have some crisis or something happens, right?

[631] Like, you know, we had an incident with some breach of data, for example, a few months ago, right?

[632] In those situations, as much as it's painful that something's happened and I'm sad about potential consequences for individuals that we might have made some errors, I feel like it all becomes like execution mode.

[633] We bring everyone into room.

[634] it's just like, what do we do?

[635] What do we do now?

[636] And I kind of in a way enjoy that work.

[637] It's very concrete.

[638] It's very like, you know, focused.

[639] And you're like, there's nothing else.

[640] You have to do only this now.

[641] Let's see what can we do about this problem?

[642] How are we going to fix it?

[643] Who's doing what?

[644] You know, so forth.

[645] In those situations, I don't feel that stressed, actually.

[646] I can even feel an adrenaline in that situation.

[647] As much as it's painful to me to see the consequences, like, if you're adrenaline and like, let's get this to work, let's do this now.

[648] Let's, you know, let's take on this challenge that has suddenly arise.

[649] It's funny, the best leaders, and I'm sure you'll find this even in your company, all seem to speak to that.

[650] They all seem to be really emotionless in those the absolute chaos moments.

[651] Right.

[652] And it becomes a methodical process of how to solve the problem versus...

[653] And I do think, again, as much as, you know, I don't want to...

[654] Obviously, I feel a lot of pain from the perspective of like, if we've done a mistake or done something wrong as a company, it might have had implications for our customers or whatever, that's very painful.

[655] But at the same point of time, those incidents of the situations when you've gone through something that was very chaotic or very challenging are the moments that have created the strongest relationships within the companies have shown, you know, has shown some amazing talents stepping up to, like, it's a little bit like you go on a vacation, it's just sunny, you don't really remember it, but if you had like a, you know, a thunderstorm, you'll talk about it for, for years, right?

[656] So like, there's something to that.

[657] So I think my stress may actually more come from sometimes when I feel like we're all kind of happy, we all feel that's going well, like, it cannot be true, there must be something that's wrong.

[658] And I think Alex sitting over there will kind of smile now, I guess I think you'll recognize this.

[659] So I think that's where I can actually more get stressed from, like, are we doing fast enough?

[660] Is this good enough?

[661] That's really interesting.

[662] It also relates to your point about needing to be challenged.

[663] You talked about in school when you'd read the book and you got bored.

[664] And it's funny because I was writing my book, and I finished writing my book recently, and it was published.

[665] And one of the paragraphs in it talks about how I used to believe that my life was the pursuit of trying to get to stability.

[666] Yeah.

[667] But in fact, when you look at when people arrive at a point of stability, everything is fine.

[668] Yeah.

[669] When they've won the gold medal, then they descend into chaos.

[670] Yeah.

[671] Then they get depression.

[672] And they get, they lose their sense of purpose.

[673] And then they get irritable.

[674] So I flipped it and thought, you know, my life is actually the, the pursuit of staying in chaos because chaos is my stability.

[675] And if I ever get to stability, completed goals, nothing to strive for, then I descend into chaos.

[676] And it sounds exactly like what you've described there.

[677] What aspiring and working for things is so motivating, important.

[678] I think to some degree, as much as Klauna had a lot of success in Europe, there's a kind of funny story around this topic, because, you know, we were doing really well in Europe and developing our services, but there wasn't necessarily that much fierce competition from one perspective, right?

[679] And then, as we were moving into the US market, there's this company in Australia called Afterpay, run by Nick.

[680] And they're competing head -on with us, right?

[681] And they were doing really well.

[682] This is back in, like, 2018.

[683] And I was like, ah, this is so annoying.

[684] Like, they're coming in here.

[685] They're taking our market share.

[686] They're doing our product.

[687] They're copying us.

[688] You know, all this frustration building up.

[689] And the funny thing is, I happen at that point in time to be visiting with Mahmood, who runs Boohoo, right?

[690] Oh, good friend of mine.

[691] Yeah.

[692] So I'm sitting down with Mahmood, and I'm, like, complaining to him.

[693] And I'm like, look, Mahmood, it's a little bit like, you know, you know the Olympics, when there's this guy who's been like, This is his fourth Olympic.

[694] And everyone knows, like, now finally he's going to get the goal matter because he's been training.

[695] And then this young guy comes from nowhere.

[696] And like, that's so unfair.

[697] This is my fourth Olympic.

[698] And this guy comes in.

[699] And Mahmood looks at me and he's just like, Sebastian, shut up.

[700] Stop whining.

[701] Stop whining.

[702] And like, this is going to make you so much better.

[703] You have been not having proper competition.

[704] You now have proper competition.

[705] And it is so true.

[706] Klauna in the last three years.

[707] thanks to the competition with Afterpay in the US has become such a much better company.

[708] It has helped us so much to improve, to get focused.

[709] And it was just so funny when he was just like, stop whining me. And I can't, you know, he will speak his Manchester.

[710] I can't do that.

[711] I won't be able to try to replicate how you express this.

[712] But I thought it was really funny.

[713] Well, that's Mahmood.

[714] I remember the first time I met him.

[715] I was in his office four days that week.

[716] And he insulted me several times.

[717] But in the most loving way, like, you remember him smashing his pen on the desk and telling me how stupid I was because of a decision I was going to make and I've been like good family friends with the whole family for a very very long time just on that point then what was the toughest moment in your clan journey a moment you think that was that was the worst fucking day I think maybe one of the toughest was that similar to there's been some media scrutiny of us in the UK we had a similar experience in in Sweden but a few years earlier which was in around 2012 and 13 and like it started off with this like media inquiry about what we were doing because we were you know first just like oh it's an amazing successful company and then once people were like oh we actually doing credit and what does that mean and stuff like that and so there started to be in quite a lot of like and it actually started with a mistake that we had done internally it was an operational mistake we've done a stupid thing and and that had resulted into a lot of customer complaints and stuff which was our own fault but that was the beginning of it and and i think through that process when the papers started writing about us in a negative way um i kind of jumped in and it's kind of funny because I was actually at that point in time it had comments fields on the articles so I would go into the comments field and write my responses in real time and then other consumers and readers would answer and I would answer them and even the newspaper started writing about like look Sebastian CEO is on our forum discussing the topics so I was very engaged I was sitting like working 24 hour and I was thinking about like how do we give because quickly the media went out of control and there was a lot of bias and you know inaccurate reporting and not just like a lot of things.

[718] Some were accurate and some was fair, but a lot of it was also like out there.

[719] And then obviously the banks, because we are a big threat to the establishment banks.

[720] So even, you know, afterwards I've heard from journalists that like a ton of emails were coming from banks saying like, oh, you know, they're bad, they're this, they're that or whatever because they simply, you know, they're threatened by our existence.

[721] And so, so there was that going on.

[722] But I remember what was the hardest thing to me to point is that that situation itself was fine but at some point of time the um the kind of articles and the writing about us shifted from their bad they've done these mistakes to they have bad intent they're here to screw customers over to do bad things right and that was tough that was really tough because I know that wasn't true and I know that we have good intentions and we're trying to do that we have done mistakes and we can fix things but being judged and questioned on your intentions of what you do.

[723] Yes, that hurt a lot.

[724] And I took that very hard, and I took that hard.

[725] So that was very, very challenging to cope with.

[726] When those things happen, what kind of partner did you become to your romantic partner?

[727] Your wife, you've got a wife.

[728] Yeah.

[729] She knows that I'm, like, extremely passionate about Klauna and the company, and I think that she's, she knows that, like, a lot of my thought process will be here all the time, right?

[730] So I think that, but, you know, I'm very lucky in the sense that Nina, is an amazing person herself.

[731] She's done amazing things.

[732] And now she's running a startup with 30 people.

[733] So that helps because she has her own, like, things.

[734] And actually, we can come together at dinner table and we can, you know, we can talk about the challenges and the things that we face.

[735] And we can exchange thoughts about that.

[736] So we have three kids as well, right?

[737] I have a four -year -old and a six -year -old and a seven -year -old.

[738] So I actually As much as I live my life I try to work really hard And then come home, turn off the phone Be very present with the kids And then they go to sleep And then I get to work some more And then me and my wife has a very like Which is I think maybe most Families with kids are age But you have a very strict You always thought that wasn't going to happen You're going to stay spontaneous and all that You end up having an extremely strict calendar Where it's like Wednesday is dinner night Me and Nina have dinner together Tuesday we're working like nights and so forth It's extremely strict calendars to make that work.

[739] You grew up from a very humble beginnings with an immigrant family, as you've said.

[740] And because of the success of Klarna, that's now made you very wealthy.

[741] And it's something wealth beyond probably you've ever imagined.

[742] I don't know how ambitious you are.

[743] But what role does that play now in your life in terms of your relationship with money?

[744] It was the thing that, as you say, you thought might have been liberation from a lot of pain and heartache.

[745] And what role does the financial side of it success come?

[746] in your life.

[747] I think it's an interesting topic.

[748] And, you know, I've been asked sometimes, like, the classic question, like, does money make you happy, right?

[749] And, you know, I understand why some people try to say, no, it doesn't.

[750] Because to some degree, like, you're the same person, even if you have a different income level and wealth and you used to have.

[751] So you're the same person.

[752] You still get angry of things and sad at things.

[753] You know, still things happens.

[754] You lose a relative or something happens in your life.

[755] You know, you go up and down.

[756] So from one perspective, I can understand what people.

[757] But I've stopped saying that because I actually think that it's slightly out of touch.

[758] I mean, there are elements in my life.

[759] I don't have to worry about.

[760] I mean, I can still remember the feeling of like, you know, I used to go into 7 -Eleven and I would be like, oh, I would just love to have orange juice, but I can't afford it.

[761] Or I would just love to have sneakers.

[762] Or I would just like, like, and I remember the day coming in into 7 -Eleven, like, it doesn't matter.

[763] I can buy whatever I like in this store.

[764] It will have no impact.

[765] And that is a difference.

[766] And I just, you know, I think it's a little bit like out of touch to say that that doesn't impact you.

[767] I don't have to worry.

[768] I never worry about finances.

[769] Like, it's all taken care of, right?

[770] And that obviously creates a different life.

[771] It gives you a different thing.

[772] Then I'm not a big, like, I don't like have 10 cars or anything like that.

[773] I'm not a big interested in cars.

[774] Like I'm not necessarily the person.

[775] I have a couple of things like I have, for example, my, I'm very, very proud that I bought a Steinway piano that is self -playing.

[776] Oh, perfect.

[777] So you actually have this, like, app, like Spotify, you can go in and select.

[778] Perfect.

[779] And you can sit there, do the video.

[780] Yeah, exactly.

[781] Pretend that I have learned to play piano as well.

[782] So, like, I have some, like, luxuries that I've really afforded myself that I think.

[783] I mean, we have in a beautiful house and things like that.

[784] But, you know, but I still think that, like, the key thing is I don't worry about it.

[785] And I know that most people, and I remember myself, worrying about it, right?

[786] worrying about next month end of, you know, end of these things.

[787] And that is a difference in life, obviously, right?

[788] So that has changed.

[789] I read something which was quite difficult to read, actually, which was about your father and his response to your success.

[790] Yeah.

[791] Not being particularly proud necessarily of your success.

[792] Yeah.

[793] But that also comes back to alcoholics.

[794] Like because so what ended up happening in my life, right, is that my grandpa unfortunately drank himself to death.

[795] then when I was growing up, my father was very conservative and I never saw alcohol in our house.

[796] He barely had a bad glass of wine.

[797] And unfortunately, that started changing in my like teens.

[798] So I started discovering bottles of vodka at home and so forth.

[799] And then over time, there were instances where I would come home and that would be quite drunk and act in a very irrational way.

[800] And he became more aggressive and so forth.

[801] And this was at a point of time where I was still out partying and drinking and so forth.

[802] And it was interesting because at that point of time, and that just tells you about, you know, the problems of alcohol addiction, I never reflected that maybe I have a problem as well.

[803] All right, that was like out of, of course not.

[804] Like, there was my father who had an issue, right?

[805] But he unfortunately found himself in a spiral in his life where, and I think it's almost like people find himself in a positive spiral, a negative spiral.

[806] The positive spiral is like, you know what, I can actually affect my own life and now I'm going to try it a little bit.

[807] Ooh, things got better.

[808] You know what?

[809] I can maybe do even more.

[810] I can do even more.

[811] And then some people are on that positive spiral.

[812] What other people find themselves in a negative spiral was like, I have found myself in this.

[813] It's not my fault.

[814] It's everything else's fault.

[815] And then, you know, things get even worse and then look.

[816] And they just found us in a very negative spiral.

[817] And obviously, I'm simplifying.

[818] People are different than all these situations.

[819] but there's something in that.

[820] And that found itself in that spiral where it was everyone else.

[821] And alcohol tends to extrapolate that and make it even stronger that you basically blame everything else and you don't take the responsibility.

[822] That's the beginning of the 12 steps of the anonymous alcoholis is actually to take responsibility for your own actions.

[823] And so, unfortunately, and it went as far as, you know, he lost his job, he lost his apartment.

[824] and I found myself in a very tricky situation because at the same point of time my economical situation was improving heavily and I was trying to figure out what do I do now because he could call me and he would ask for money and I would be like, well of course I want to help my father and so I would help him and then if I did that I didn't hear from him for a couple of days and then he would call me super drunk or text me something very nasty and so it was very difficult because and then I started seeing counselors and understanding that like maybe actually in the situation I needed to put like limits and ask him to not to say look I'm not going to do this unless you do this and stuff like that which was kind of the right way to deal with it but very very obviously tricky and unfortunately in my situation it didn't work so at the end there was a situation where you know he was about to lose his apartment and he had a discussion with me and I was very ambiguous.

[825] Should I help him?

[826] Should I help him or not?

[827] And then it was an evening in the office and suddenly I see my phone's phone number.

[828] He's calling me on the phone.

[829] And I was like, I don't know yet what the right answer is.

[830] Should I help him or not?

[831] What should I do?

[832] It's difficult.

[833] So I was like, I'm going to call him later.

[834] So I didn't answer the phone.

[835] I went home at dinner with my wife and we talked about it.

[836] And I was like, no, this time around I should probably help him.

[837] I decided.

[838] And I tried to call him and he didn't answer.

[839] I emailed, it didn't answer, and I was like, okay, fine, maybe you just, you know, whatever.

[840] And then in the morning, my mother called and said he was dead.

[841] Right.

[842] So it was a, so that was like a very, very obviously dramatic moment in my life and very difficult, like, you know, from that perspective.

[843] So he was so smart.

[844] He was so thoughtful.

[845] He had gone to the places we had worked, he had tried to do things better and so forth.

[846] But he had been in normal places where if, you know, I remember him working for the municipality, for example, and he created some Excel systems that would rationalize everybody's work, and nobody wanted to rationalize their work, because that meant that they would have less to do, and maybe somebody would lost their jobs.

[847] So he's doing all these things, and nobody was showing gratitude to his attempts of trying to fix things and things.

[848] Similarities to what I'm doing, I could see him having those things, but because of his background, because of his situation, and to some degree probably because of his addiction, he just found himself in this negative spiral rather than the positive spiral that I found myself in.

[849] And it just made him, you know, more and more depressed.

[850] And that made him also very difficult for him to relate to me. Because, like, in one way, I must believe and hope that at some point of time he was proud and, you know, happy about how things have evolved in my life.

[851] But at the same point of time, it was very clear that he felt frustrated by the fact that what he had gotten and how his life had turned out compared to mine.

[852] As crazy it might seem that your father would relate in those terms, but I think unfortunately that was part of the case.

[853] So, you know, it's very tricky and difficult.

[854] But I'm very happy at least that I stopped drinking and I'm a sober alcoholic since nine years now.

[855] Oh, amazing.

[856] Well done.

[857] My last question then.

[858] That was incredibly, you know, incredibly moving for so many reasons.

[859] And I think it's really also inspiring that you have that sense of sort of empathy to be able to look back at you on your father and understand that a lot of his circumstances came from his own pain.

[860] and that was a generational cycle.

[861] Yes.

[862] One that you have the power to stop, to say, and also to kind of, it sounds like you've kind of forgiven him for...

[863] Yeah, I have, because look, I think, you know, I don't think people still fully understand alcoholism.

[864] In my opinion, it is a disease.

[865] He was sick.

[866] He had an, you know, he had an addiction.

[867] Yes, was he, does that mean that he couldn't cure himself?

[868] No, he could cure himself.

[869] If he would have found himself on a positive spiral, he might have been able to cure him.

[870] himself.

[871] That doesn't mean he wasn't sick.

[872] The father that I had the last years was not my true father.

[873] Those are not the memories that I have from my youth when he would bring me into the forest outside Uppsala and we would go on long walks together and we would fantasize about being space explorers or he would introduce me to amazing science fiction literature or what are these things.

[874] Like there are different memories of my father that was my true father.

[875] That was a sick man. And that's just unfortunately like how things develop, right?

[876] I know you're a father.

[877] Three beautiful kids.

[878] What matters to you in terms of the principles in which you hope to raise them?

[879] And obviously now, as we talked about at the start of this podcast, much of the, I guess the circumstances that created you were because you went without and you didn't have things handed to you and you formed that connection that if I'm going to be, then it's going to be a direct result of my actions.

[880] So what's your thinking and what do you want to impart on them?

[881] I mean, it's a topic I tend to talk a lot with my wife, and that's very difficult.

[882] I mean, it's a mix, right?

[883] Because first and foremost, like, obviously my kids are not going to have the same upbringing that I had.

[884] Like, there is a massive difference.

[885] Like, you know, look at our vacations, look at our summer house, look at all the things.

[886] There's no way I'm going to be able to ever, like, recreate any of that.

[887] But that's, you know, that's part of it.

[888] But I do think also, like, when it comes to being spoiled, like, to some, to be entirely fair, like, and I love my mother, she's amazing.

[889] But she did spoil me. She had a very hard time to say no. And if we were in the grocery store and there was some candy, and I would be like, I want candy, she tended to give me the candy.

[890] So I'm a pretty spoiled person by my upbringing, even though we didn't have that much financial means.

[891] Now, she wouldn't buy the candy if there was no money left.

[892] But if there was money left, she tended to buy it, and then there was no money left for something else.

[893] Right.

[894] So like, she had my, my, my, especially my mom had very hard time putting nose to me. And she would say yes to basically everything, as long as she could basically, right?

[895] So you can't spoil somebody without having financial means to some degree, right?

[896] Now, so that's one thing.

[897] But there is something where I've, you know, and it was funny because now it's like my son was invited to like a, you know, a birthday party with some of his friends, like six years old, right?

[898] And you're standing and talking to the parents.

[899] And we have this amazing school.

[900] It's not a private school, but it's not kind of though like upper class private schools.

[901] It's actually a really nice school with a good mix of people from all types of society and stuff.

[902] But very ambitious teachers and a good school.

[903] And we're starting there and the other parents are a little bit complaining about like, you know, oh, this could be better and this could be better.

[904] And it's not like I didn't agree with them that some things were couldn't be improved in our school as well as there always can be.

[905] But then I told them to, I didn't like stop them a little bit and said, you know what?

[906] To be honest, like for myself, if I think about the schools that I went to in the environment I brought up into, I sometimes wonder whether I want my kids to continue going to this very good school or whether maybe when they're like 12 or 13, I'm going to try to find the worst school in Sweden and put them in there for three years just to create a little bit of resistance to get something like a different perspective on like be an environment where it's very difficult.

[907] And like I was like, because I really want them to get the resistance.

[908] I want them to get to know themselves and get to know that they can actually fend for themselves.

[909] that they can solve these problems for themselves.

[910] I don't want them to be without resistance.

[911] And I feel like all of our parenting today is about like remove all resistance.

[912] And I'm like, no, no, I want some resistance.

[913] And the funny thing is I'm telling this to the other parents.

[914] And they're all looking at me like, is he stupid?

[915] Is he wacko?

[916] Like, what's wrong with him?

[917] Like, you know, it's like, no, no, no, I want some resistance, right?

[918] And I remember that just to round off.

[919] Look, when we did that round the wild trip, we had very little money on that trip.

[920] and at some point of time we arrived from Singapore to Brisbane and we were going down to Sydney and we were actually supposed to take the cargo ship the next day to go to US already so we were only going to stay one day in Australia but we missed the boat we had an unfortunate event and we came too late and the cargoship was not going to wait for two passengers I promise so they just left and we went to the firm that helped us find these cargoship trips and they said sorry next boat is in a month and we're like okay but we don't have any budget no money and now we're like stuck in Australia for a month obviously quite a nice place to be stuck honestly but but still like and I remember walking down the street I think it was Elizabeth Street or something in in Sydney and I remember that like I have no job I have no money I have nowhere to stay I have only my backpack and you're like and we're going to stay for a month let's try to start a life and we had to find a place to live that was affordable and we had to find a job and we actually started working as furniture movers for a company called city move everyone who worked, they call it shitty move because they have this or not, but it was like, yeah, and we were in.

[921] But the point is that, like, it taught me I can fend for myself.

[922] I'll survive.

[923] And, like, it's only dependent on me. And that resistance created a sense of, like, you know, I can do this and so forth, right?

[924] And that's what I hope to give my children somehow.

[925] But how do you do that if you pass them your wealth?

[926] Well, I'm not sure I'm going to pass them the wealth.

[927] So I actually have officially said in some interviews in Sweden that I am, and my wife and me are still not entirely aligned on this topic.

[928] But I have actually said, I'm not going to give them anything.

[929] And I tell them in that.

[930] And it was even funny because, you know, in Sweden I'm quite well known.

[931] So even the fact that I said so on public TV, then my kids heard from their friends like, Dad, you said on TV that you're not going to give us anything.

[932] That's unfair.

[933] We were like, I don't like stuff.

[934] No, but I've been telling you consistently.

[935] Like when you're 18 years old, you're on your own.

[936] And then my wife always going to, we may buy an apartment for them, right?

[937] And I was like, I'm not sure.

[938] Let's see.

[939] like I just there is to your point like I mean I don't I don't want to like and in Sweden also it's a little bit provocative for somebody with money to say I'm not going to give anything because I don't I'm not saying I don't be in welfare I think sometimes you need to support people in difficult situations and so forth so I said look I'm not talking about people in general I'm only talking about my kids but for my own kids I'm not convinced that giving them all of this is going to make them happier and I meet a lot of people from family wealth that have inherited wealth that are extremely unhappy.

[940] with the pressure and the expectations that comes with that.

[941] So as much as, and again, I'm not saying that money doesn't make you happy, we've all talked about it, but like there are some aspects of it that are very difficult.

[942] And I think that like in general, building a person's own self -confidence and belief in their own abilities to actually have a positive impact on their lives, I still still think that that is the key, you know, path to happiness.

[943] I agree.

[944] Listen, Sebastian, thank you so much for your time and your honesty and your humility.

[945] and you're a massive inspiration to me for so many reasons.

[946] Thank you.

[947] Not at least for your business success, but I really do come back to that point about you building such a great tech company without technical expertise.

[948] I hear it all day, every day from entrepreneurs.

[949] I felt it myself.

[950] I think I've told myself that there's certain industries I can't build in because of that, because I lack fundamental expertise there.

[951] And I think you kind of bucked that trend and prove to me and entrepreneurs listening that you can if you have the drive and determination and that's underlying self -belief to get there.

[952] What you've done is just absolutely phenomenal.

[953] You're an unbelievably pleasant human being as well.

[954] And you're very, sort of very, very honest.

[955] And I think that's a gift that I'm glad you shared with us.

[956] Thank you.

[957] But yeah, thank you so much for your time.

[958] And I can't wait to continue to watch your journey.

[959] It's been a pleasure.

[960] It's going to be exciting.

[961] Thank you.

[962] Thank you so much.