Howwe: Navigating the Tough Road from Services to SaaS
Ulf Arnetz is the co-founder and chairman of Howwe, a SaaS product that helps enterprises to accelerate strategy execution and financial results.
In 2019, after running a successful services company for several years, Ulf made the decision to transition it into a SaaS business model.
He and his team had been working on a SaaS product for a while. They believed there as a huge growth opportunity and felt ready to make the switch to SaaS.
But the path to becoming a fully-fledged SaaS business was far more easy.
Their annual revenue dropped considerably, going from $5 million to just around $2 million. While Ulf had prepared for a short-term drop in earnings, this turned out to be more substantially than he had expected.
Selling their SaaS product to CEOs was also another big challenge. Although they eventually found a solution, they also realized that they were often losing deals because they hadn't figured out how to deal with other key execs who were resistant to using the product.
And probably one of their biggest challenges was grappling with a jaw-dropping 60% churn rate. Their SaaS product just wasn't up to par and triggered widespread employee dissatisfaction.
Despite those struggles, Ulf and his team persisted and eventually found product/market fit.
In this episode you'll learn:
- How Ulf handled a $3M drop in revenue and later bounced back to over $5M, with 96% of that coming from SaaS subscriptions.
- How Ulf and his team figured out how to sell their SaaS product to CEOs while tackling objections from other execs who were resistant to the product.
- How Ulf tackled the daunting 60% churn rate and ultimately reduced it to 0%, not losing any customers over a three-year span.
- How Howwe has helped some customers to get a 20X return on investment (ROI) and the key ways Ulf measures and proves this value.
- Why Ulf is optimistic about Microsoft entering this market with a competing product and his advice for other founders worried about big competitors.
I hope you enjoy it.
TranscriptClick to view transcript
This is a machine-generated transcript.[00:00:00] Omer Khan: Welcome to another episode of the SaaS podcast. I'm your host, Omer Khan, and this is a show where I interview proven founders and industry experts who share their stories, strategies, and insights to help you build, launch, and grow your SaaS business. In this episode, I took to Ulf Arnetz, the co-founder and chairman of Howwe, a SaaS product that helps enterprises to accelerate strategy, execution, and financial results.
In 2019, after running a successful services company for several years, oof made the decision to transition into a SaaS business model. He and his team had been working on a SaaS product for a while. They believe that there was a huge growth opportunity and felt ready to make the switch to SaaS. But the path to becoming a fully-fledged SaaS business was far from easy.
Their annual revenue dropped considerably, going from 5 million to around 2 million, while Ulf prepared for a short-term drop in earnings, this turned out to be substantially more than he had expected. Selling their SaaS product to CEOs was also another big challenge. Although they eventually found a solution, they also realized that they were often losing deals because they hadn't figured out how to deal with other key executives who were resistant to using their product.
And probably one of their biggest challenges was grappling with a jaw-dropping 60% churn rate. This SaaS product just wasn't up to par and triggered widespread employee dissatisfaction. Despite those challenges, Ulf and his team persisted and eventually found product market fit. In this episode, you'll learn how Olf handled a 3 million drop in revenue and later bounced back to over 5 million with 96% of that coming from SaaS subscriptions.
How Ulf and his team figured out how to sell their SaaS product to CEOs while tackling objections from other execs who are resistant to the product. We also talk about how Ulf tackled the daunting 60% churn rate and ultimately reduced it to 0%, not losing any customers over a three-year span. We also discuss how, how he has helped some customers to get a 20% return on investment, and more importantly, the key ways Ulf measures and proves this value.
And finally, we talk about why Ulf is optimistic about Microsoft entering this market with a competing product and his advice for other founders worried about big competitors. So I hope you enjoy. Ulf, welcome to the show.[00:02:31] Ulf Arnetz: Thank You Omer. [00:02:32] Omer Khan: Do you have a favorite quote, something that inspires or motivates you that you can share with us? [00:02:37] Ulf Arnetz: Of course. What I always have, have said is that don't build the company to become rich. Build the company that does actually good and the money would follow. [00:02:48] Omer Khan: Nice quote. I like that. So tell us about Howwe. What does the product do? Who's it for? I. And what's the main problem you're helping to solve? [00:02:57] Ulf Arnetz: I have to explain a little bit how it works in a mid-size and large company.
I think otherwise it'll be quite boring to follow this pod. So in a mid-size or big company, you have something called operational or day-to-day that is very much what each department is working with. That is with what the employees are working with. That's typical what you're paid for, and that's typical what you're doing day after day.
The statistical is something that the board or the CEO has decided as very, very important, maybe most important for the company. And the problem with strategic is that it's coming on top of what managers or employees already are doing in order to improve. The company tomorrow, today. So as an example, if we look into the operational, you have financial applications for the cfo, you have maybe a CRM application for the head of sales and the sales department, the marketing department, it's very common that it is using Jira.
And it's also very common that. The head of HR is using an application which is business critical, and it's also common based on increased demand of cross-functional integration that more and more companies are use, are using workflow or OKR type of applications in order to share data. And those type of applications is not helping the CEO and the board.
To make strategic improvements and strategic improvements are normally generating much more revenue and profit than just trying to improve the operational. For example, a strategic improvement could be that we have to do more margin acquisitions, we have to increase profit dramatically, or we have to go become much more.
Sustainable faster in order to improve the reputation and the valuation of our company. It normally includes on a high level, several close, functional, very important initiatives, which could be new services or new products or new regions or markets. So in order to summarize this, it's important to understand the day-to-day type of business where we have got so many applications, the last 20 years versus the fatigue where you normally have a CEO talking on a kickoff or using slides, PowerPoint slides, or maybe using Excel in order to follow up.
Something where it's actually don't exist. So many applications today to help the CEO to accelerate. Whatever needs to happen for this company, what they are focusing on is most important for the next coming 12 months, for example. So our product means that it creates a digital application where the CEO could prioritize and also decide what we as a company must focus on and how we even if we're in different departments, how we could work together in a better way in order to accelerate.
For example, increased profit or the, those new markets. So the business case is normally a shortened timeline. From that, the CEO decides what's most important. Until this is aligned, all managers and employees understand what they should focus on, on how they could help the company. To become better, and then also how fast all different managers and employees could start to do more correct activities that supports the initiatives that, in that support, this increased revenue and profit according to the strategy.[00:06:58] Omer Khan: Got it. Okay. So I'll try to summarize it in terms of my understanding. Within mid-size enterprise organizations, you have line of businesses or, or you know, functional leaders, sales, finance, whatever. They've got their own apps, whether that's a CRM or, or whatever. And that helps 'em operationally run their areas.
But typically a CEO, when they're trying to develop a new strategy or roll out a new strategy, Are doing that more in a manual way, and there's no way to sort of easily connect the dots and help with that, that execution of that strategy. So Howwe is almost kind of like this umbrella app that sits across the organization and helps to, helps the CEO to implement that strategy alongside what all these different d you know, kind of leaders are doing in their respective areas.
Is that a, is that kind of the right way to think about it?[00:07:52] Ulf Arnetz: That's, that's correct. And. And if I could give you a couple of examples just to get a better understanding. Yeah. So let's say that the strategy is done for, because when the strategy is done, it's typical financial goals. It's some of timeline until those goals should be reached, and it's normally a small change or adjustment of the company's position When that is done.
Then those goals are not understandable and actionable for all different people in the organization. So that, for example, you can't wake up in the morning and think, okay, this, this day I'm going to take market shares from our competitors. So a digital application very much helps the CEO to make those goals actionable and also to that all managers and employees.
Understand what's in it for me and what's the, how that the product could help me with in order to do also fatigue activities, not just the day-to-day activities.[00:08:55] Omer Khan: Okay. Got it. I think it's, it might be worthwhile making one distinction here because as you were describing that, I started to think, well, you know, a CEO might have like some kind of app that they use for roadmaps and OKRs.
And things like that. Can you just, and if for somebody who's maybe kind of thinking in a similar way, can you just explain how, how he's different to those types of apps?[00:09:23] Ulf Arnetz: Yes. I give you a couple of example. First, you could always, you know, build and adjust something that it, it works like, like our application.
But if you look into companies today, they have a book, they have workflow applications, and so, And when the CEO has to change something or adjust based on the, a disruption that something happens on the market or internally, which means that the plan, the CEO decided until the organization change, it's normally takes quarters, sometimes years, but if you have a digital application or our application, for example, it takes maximum two weeks until from that the CEO have.
Adjusted the plan until all managers and employees knows what they should focus on a little bit more and what they should focus on a little bit less. So if you take the other applications which are out there, which is very much the generation before us they don't include what we call business support.
Business support means that if you are a manager within HR or a manager within it, or a manager within sales you could go to our application to library and there you could get, okay, what's the goals I should focus on? What's the key activities I should focus on first? And we have added ai, first, automated intelligence, and now ai, which helps the organization to improve in the same direction.
I think with other tools, you could become better per department, but. It's no way for the company to make sure that everyone is improving in the same direction. So take, you, take AI for example, that you know, every person, every role could use AI in order to improve. But how do we make sure that everyone is improving in the same direction?
So we are not just improving in different directions. So our product is more helping the CEO with the focus. So people know, what should we focus on right now? What should, should we focus on maybe the next quarter or next year? Because it's quite, when you get further down an organization, it's very common that everything is important.
You have too much data, you have too much different type of processes and too many applications. So what, what an organization needs is actually. A more simple way to do the strategy execution. It have become too complex based on last-generation type of tool tools.[00:11:52] Omer Khan: Got it. Give us a sense of the size of the business. Where are you in terms of revenue? Any other metrics, size of team, employees, customers. [00:12:01] Ulf Arnetz: I always start my companies in Sweden because really good test market and so. In that, in that market, we will make 5.1 million dollars this year in ARR, I moved to US for one and a half year ago in order to start up our partner business here and expand in US and internationally.
I can't tell you how big we are in US yet based on some financial transactions I'm in right now.[00:12:31] Omer Khan: Okay, great. And, and how big is the team? [00:12:33] Ulf Arnetz: The team is 30 people. We're of about 60% is within development. [00:12:39] Omer Khan: I think, you know, for context, we spent quite a bit of time kind of. Explaining what, Howwe is and why a product like that is necessary.
And I think it's a good case study for what happens when you build a product, which is basically a new category. There's a whole bunch of challenges around. Helping people to understand what that is. Education, obviously, you know, going to talk to a CEO and having that conversation is one thing, but then coming onto a podcast and trying to tell a whole bunch of other SaaS founders, what you're doing is another, you know, set of challenges in terms of description.
So you call this the, the product category, enterprise execution software. What's, what's the opportunity there? Like, is that, is that a term that you coined? Is that something that's come from. You know, the analyst firms like Gartner, like where does that come from?[00:13:34] Ulf Arnetz: You are absolutely so right when you say that you are first within something new, it is very difficult.
And, and this is my third time, I'm starting with a, a product within an area that didn't exist before, but this is, you have an area called strategy execution before. The difference here is that this is a business application for companies. When the strategy execution is business critical and business critical means that this is more to compare with the CRM application for the sales and marketing department.
And if you're talking about size, when the CEO is buying our product, he needs to buy it also for all managers and all employees. So all installations we have so far is normally 10 times larger than that customer is paying. The CRM system because the organization for the CEO is of course, the whole company instead of just one department.[00:14:32] Omer Khan: So the business was founded in 2012, is that right? [00:14:38] Ulf Arnetz: 2012. Yeah. [00:14:39] Omer Khan: Where did the idea come from? [00:14:42] Ulf Arnetz: The idea came, actually I was thinking about it several years. I've seen so many strategies. And the strategy is normally 50% about the situation. Today's situation, a lot of facts normally very interesting.
And then it's about 30% about what we should change to and what we as a company has to become. And then it's normally 0% about how, and then it's the KPIs, which KPIs do we need to improve? Or, or strategic initiatives in order to increase revenue and profit according to this two years plan or three years plan, or whatever it is.
And when I saw this, I saw that after that it didn't exist in application in order to accelerate the strategy execution. So the only thing which existed when we started this company and that is very much the same today, is that people are using nothing. They're working analog or PowerPoint or Excel, for example.
They're not using one OKR application from the CEO or the way down to all employees, and they're not able to measure the acceleration from each employee and manager up to and connect that up to improve revenue and profit. So it's about two or 3% of our CEOs that are using an execution application brand. The strategy execution is business critical.[00:16:07] Omer Khan: Okay. So when you, when you started the company in 2012, it started out as a services business and you launched the first version of the SaaS product about seven years later, around 2019. So just give us an overview of the services business, how large did that business get?
And then what drove the transition from services to a product business for you?[00:16:41] Ulf Arnetz: Right. Just to correct that, it started as a result as a service company. So, and the difference versus consulting is that we did the same thing just better and better for each customer. Where and. It's interesting because we were calling sales saying that we were selling increased revenue profit, and we have a way to measure how the activities in the organization could be connected to improved revenues because you don't want to wait maybe one or two years until you see if this is working.
And we went from zero to 5 million, 5.1 million which is very much what we are doing in, in Sweden this year already 2015. And we did a lot of profit. And then we when we started the company, we of course knew that we were going to be a product company, but we understood that we can't develop this product without working very, very close with CEOs and customers.
So 2015, we decided to, to change from RaaS, result as a service where we paid very high amount of money if the results are better than this pre-made business case to typical SaaS license company that the prices are for managers and for employees, and then you have a discount based on volume. So our revenue went from 5.1 to about 2 million dollars.
And then from that we had, you know, gone up and gone up. Our churn, in the beginning, was about 60%.[00:18:06] Omer Khan: Wow. [00:18:06] Ulf Arnetz: The problem was how to sell to CEO. That was the first problem. And then when we became very good on doing that. Then the next problem one was how do we make sure that managers and employees likes the product as well?
So it have been very much to become better and better within sales, and also to become better and better in, into how to make sure that managers and employees likes our product. How so much that it would like to keep it, that the product gives something so, The churn is actually was 0%. We didn't lose a customer for between 2019 and 2021.[00:18:46] Omer Khan: Wow.
So let, let's talk about that first part, how to sell to CEOs. So you, you obviously spent many years working with CEOs and getting results for them before you even had the product. When you, when you finally shipped the product, how did you go about getting your, your first 10 customers? Was that going back to CEOs that you'd already worked with or were you basically prospecting and finding new customers?[00:19:20] Ulf Arnetz: It's a good question. It's a little bit funny because we decided earlier, I had experience from that also in the US and my co-founder also had that experience that selling to CEOs is not impossible. So we were calling to CEOs in, during that, in the beginning it was about 80, 85% of all CEOs who said yes to meeting within two weeks. [00:19:43] Omer Khan: Wow. Who, who was making those phone calls? Was it you or did you already have somebody on a sales team? [00:19:47] Ulf Arnetz: No, it was us. Everyone was doing those. Everyone within sales was doing this type of course. And then after a while we have packaged it so well, so other people could do it as well. [00:19:58] Omer Khan: Why do you think, I mean, of anybody listening to this saying, Hey, if I could call my, my ICP, my ideal customer profile and call them on the phone and get a 80, 85% success rate with getting a meeting from, from those calls, I, that would be a dream business for me.
So why do you think you were having. That kind of success, like what's the lesson we can learn from this?[00:20:31] Ulf Arnetz: First of all, it's, it's very important how you start that call because of course people don't want to be, get a call, you know, on their, maybe in their cell or telephone or mobile. It's about how you start, but it's also very much how well prepared you are and that, that it's relevant that.
Every person, regardless if you're CEO or not, is of course grateful for if the information, the discussion is something that really helps the ceo. It's something which is around what that ma CEO is measured on. So I think it's relevant that we were very well prepared and also how you talk.[00:21:11] Omer Khan: And so you were just calling, you were just cold calling CEOs, and how are you getting past? There must have been gatekeepers. I mean, I imagine CEOs aren't just sitting around waiting for your phone call. [00:21:24] Ulf Arnetz: No, that's true. We actually using the Norman, the, the, seller telephone, and I should also say that this is not working for the largest companies in. Where we started in Sweden, like Eric, so and so, it works for Kia, it works for the biggest banks and so on.
But some companies that are really, really large, that, that's impossible. But because you can't find the number to the CEO. But otherwise it's just a person. And, if this person have no problem with listening, if it's actually a discussion, not the monologue where we are trying to sell our product, but it's a discussion where we have done.
A great research, which hopefully is very relevant and unique and gives something to this person.[00:22:05] Omer Khan: And so once you got that meeting, tell me what the, the sales cycle typically look like. So you. You get in front of the CEO, how many meetings did you typically have to have before you got to a point line?
And how long did it take to close the deals?[00:22:25] Ulf Arnetz: In the beginning, it was more like six months, and then we got it down to three months. The hit rate was very high from meeting one, to meeting two, to meeting three. But in the very, very end it was a quite low hit rate until a year ago because of different reasons.
I think it's about three months, I would say nowadays.[00:22:45] Omer Khan: Well, why did you say it was a low hit rate until recently? I mean, it sounds like you were doing a lot of, a lot of things right. And you know, the CEO seemed very receptive. So what was the issue there? [00:22:59] Ulf Arnetz: No, the problem is and that's actually written three books.
My first book was about CEO and it was about strategic IP, a CEO, you know is able to talk with the CFO, right? They talk the same language, but when it comes to the CIO, they don't even understand each other. Based on that, I was doing this type of sales in that company as well. I met a lot of CEOs and one third they understood and did something.
One thought understood, but didn't do anything and one thought didn't understand and didn't do anything. So that's typical when you start in a new trend that. In the very end, it comes very much up to that. Some CEOs are more just want to have the title instead of actually taking responsibility for what's best for the company, increased revenue and profit and so on.
I mean, it's ridiculous today that the CEOs driving this change management digitalization for the whole company, right. But is the only person working analog, and you said before, they're not working analog, but they don't have a business-critical application for what they are measured on. So for me, they're actually working analog.[00:24:11] Omer Khan: Okay. So you, you said, Hey, first of all, we had to figure out how to sell to CEOs and we, we've just talked about that. And then you said the second problem we had was the 60% churn rate. What was going on there? Why? Why was that so high? [00:24:29] Ulf Arnetz: It was so high based on that the product in the beginning was done or the, in the tools, I would say tool set was done very much for a CEO, increased revenue and profit.
It didn't give anything to the managers and employees. So it was very much, it was not that we didn't understand that we need to make everyone happy. It's more like we couldn't afford to devel, you know, we needed more developers, more money in order to be able to also develop that part. Today we have an application, which is, you know, churn is, is very low and it's 96% of our, our revenues coming from license revenues. So we have, we have passed those type of problems. But I think that type of problems we have had is actually something we plan for because you can't build this product without going through some sort of very practical feedback from the customer.[00:25:25] Omer Khan: Tell me a little bit more about like, what were some of the objections or resistance that you were getting from some of the other C-level executives in terms of, you know, coming on board with the idea of using a product, like Howwe. [00:25:43] Ulf Arnetz: In the beginning it was more from the employees and nowadays the employees are always happy, their employee satisfaction scores going up.
But what is nowadays the problem is that, one or two persons within the executive team is normally against this type of application. And the reason for that is that if a person has an executive is in the executive team, you have two responsibilities. One is to take care of your P and L or your region or whatever you, you are in charge of.
The other 50% being in executive team is actually to help the CEO. What's most important for the company and regardless of app application, these have always been a problem in most ex execution teams. With this type of product, you change the power a little bit to what's most important for the whole company according to what the board have decided, more than just being focused on one person's P and L or one person's region and so on.
So it's, it's, it's not just the employees that needs to work together. And focused. It's actually also the executives that needs to work better together, better cross-functional and so on.[00:27:01] Omer Khan: So when you were facing those types of issues, what did you do to, to overcome them? [00:27:05] Ulf Arnetz: When we started to sell to very large companies we we got new challenges and, and improve increased politics.
And what we did then was to really sit down and see what we could do about it, and we came out with something called assessment a new product from us, which came out in Q1 20 20 22, and that took our sales hit rate from 6% to 17%. It's a test, which is done with the CEO, where the CEO understands himself or herself that I can't continue to work as I have done the last 10 years.
So it creates pool instead of having us talking about all the advantages with a digital application, and we do exactly the same after the CEO have decided and is positive. We do that with each executive as well. And what happened when they do this assessment test is done, that they understand that we can't continue as before because then the results will be as before when it comes to strategy execution, we have to change.
And what had happened then is not just that that had helped us in sales, it have also helped us to lower the churn. The churn is almost zero again based on that, you get this power from the CEO and from each executive. So they are working together and they understand why this is so important.[00:28:34] Omer Khan: You mentioned earlier that hey, you know, initially the resistance was from the employees, but these days employee satisfaction is, is very high.
How do you, how do you measure that? Is that something built into the product?[00:28:49] Ulf Arnetz: Yes, we measure that and that's, that's very important. If you have 60% churn as we had for while many years ago, but still, then you want to measure that. But, but the thing is that if you are using. The last vo, you know, a little bit older applications within o p workflow or whatever you're using, or even excel that some people are using.
If you are going into a meeting every week, so you are the employee or your team leader, or you're the CEO and you have a meeting every week where you are actually taking commitments or activities, and there was reporting the next week, which activities you have done. That is very, very boring, but that's needed if you would like to be a more proactive company and accelerate what's most important.
So the difference nowadays is that our product includes support for not only how to do this, meetings not only for for me as an employee how I could become better in personal goals or goals for my department, which key activities. Should I focus on? It also includes that you could see what financial impact does my team or myself have on this.
So instead of just reporting activities, you could actually see how much the financial impact is. And what happens then is that the self-confidence within this team is improving because very many people are going to a mid-size or large company, not really understanding how am I measured? Am I doing a good job or a bad job and so on.
And to create the situation where it's a little bit more focused and you decrease time that is not needed. It's a little bit less stress and you know, if you're good doing a good job or not a good job, helping the company to improve according to the strategy, that is something that is very positive.[00:30:43] Omer Khan: I think I read somewhere that with, with Howwe, you had customers. You know, some customers experiencing like a 20x. Return on investment within the first year. And it kind of got me wondering how, how do you measure that, right? Because there seems to be like an attribution challenge there. Like we had a great year.
How much of it was because we had, Howwe, how much of it was because other factors? So just tell me a little bit about that. Like what kind of results have you been getting with clients? If there's anything else to add to that, what I just mentioned. And then secondly, how do you, how do you go about measuring that?[00:31:23] Ulf Arnetz: It's a very common negative comment. We get that, you know, this is too be too good to be true. We should change what we are saying on our burden and so on. But the truth is that the return on investment is between eight and about 24. You said 25, but around there already the first 12 month. The reason for that is that it takes just.
Month from the CEO have decided something until the whole organization is, you know, onboard. So it's a true top down, bottom up that people also buy into, not it's, it's not just told what to do, they understand why and they understand how they could contribute. So then you have normally about 10, 10 month to week after week focus on what's most important when it comes, not just to this day-to-day type of activities, but also to do activities that are needed in what we call the strategic to do that.
Week after, wait today, not just postpone that. So that's why the business case becomes so high already the first 12 months if you compare with other applications, you normally have to adjust them technically so they fit to the customer's environment, which takes calendar time. And you normally don't have this business support or I don't know anyone else that have this business support.
How do you get executives, managers, team leaders? And employees to understand what's in it for me, how could I contribute? That's only within our product. And then the resistance decrease. And that's why the organization could start to focus faster and also create the acceleration faster. And to answer your other question about how is this measurable you, remember I said before that when we called CEOs and we started to help them with increased revenue and profit?
Then we, we need to find a way to, to prove that because they can't wait one or two years to see if, if that is really happening. So we have a way in our product, which is very unique, so we could connect the activities, so the activities done of all the employees in the team, and think about a mid-size large company with many employees and many teams, and that the activity improvement.
Is comparable with the gray line, which is how well did we do in this before we start to use the product, or last year or two years ago? So you have something to compete with. That acceleration is measurable in that way, that it has an impact on the process or the, that something happens that people don't just fill in, you know, something and it looks good until deadline when everything is delayed.
So in our application, you can really see week after week. Or day after day, that those activities are leading to the improvements we want to do as a company. And that is also connected to measurable, improved revenue and profit most important goals. It could be market shares as well. So it's measurable all the way.
So when we do this with the customer, it's impossible for the CEO to say six months later or 12 months later, that maybe this improvement came from, that we changed the prices, or that the market changed. Because already when you start, you know, just before Christmas or just before the summer vacation, the whole organization have already done a map that if we are focusing on these activities, activities, and we increased activities, That should have this financial impact, not just for my department, which you also could see in our product, but also for for the whole company, which the CEO and the executive team, you see.
So this is measurable, per day or per week.[00:35:06] Omer Khan: What are you, what are you seeing kind of competitively? Are you seeing new players entering this space? Are you like, it seems to be one of those things that, you know, like I said, like enterprise execution software, I, I'd never heard of it. I had to, you know, go and do my own homework to, you know, to educate myself.
But it seems to me that this is the kind of application that every CEO should be using. So like why, why aren't, why aren't we seeing a lot more. Talk and a lot more kind of companies kind of entering this space right now?[00:35:50] Ulf Arnetz: Good question. You know, our number one competitors is actually the CEO in, in himself because based on the behavior, typically they are not used to using application.
They're used to delegate. They normally delegate too fast. So today you have two types of strategy executions. One is where the CEO's delegating too fast and it becomes a massive consulting project with change management. Digitalization normally going on for three or four years, and the other one is very much complementary with what our product is doing that you, you prioritize what's most important, what should we be successful with first, and what could be delayed to start with in one year from now, two years from now.
So you have to focus the whole organization and the area that is actually changing right now as we speak rapidly. So according to analysts, it's two or 3% of our CEOs using digital application today, but it's, it's supposed to be one of the fastest-growing markets. And the reason for that is that post covid everything changed.
You know, everything becomes more and more digital. So as a CEO, you started to feel more and more outside when you're not using a digital application. Secondly is that the disruption, you know, war, different interest inflation. It's a lot of change going on in the market today versus just five or six years ago which means that the CEO needs to adjust and make sure that the, the whole organization adjusts much, much faster than before.
And the third is, that Microsoft bought a company called Ally.Io and they are going to enter this market. So they will be the first established vendor, very much offering similar type of application to CEOs.[00:37:44] Omer Khan: You're gonna have a little bit more competition shortly. [00:37:47] Ulf Arnetz: Yeah. And definitely tell you, I have been, my previous two competitors have been very, very successful in, in the US and in in the world.
And when that competition comes, that's the best thing that could happen. So it's, it's that would for sure help us. So if you ask me if I'm worried for something, I'm not worried for com competition. I'm worried for that. No, I'm actually wrong. And the analyst are wrong as well. It, it will continue that CEOs will continue to work without the digital application.
They will continue to use PowerPoint and Excel or nothing. That's something I'm worried for.[00:38:21] Omer Khan: Why is that a good thing? Just, just explain that because I think many, many early-stage SaaS founders, when they start to see some bigger players entering the market, they think. Oh man, I've, I've got problems now.
So why, why do you look at it a completely different way?[00:38:37] Ulf Arnetz: The type of entrepreneur I am, everyone is different, but I have always started an application company or software, which doesn't exist in the market. So you're really scared that you're actually, you have made the wrong guess. So for me, for example, now when, when the analyst is saying what they are saying and, and Microsoft is entering this market, that makes me very, very happy.
And what happened then when, when they're coming into the market is that we will lose more these in percentage, but the number of these possibilities will increase not a hundred percent. They will start to increase with 300, maybe 600% per year for many years. Then it could be a risk to stay as, as a small, maybe the best vendor in this space.
Too long. After a while, you need to be really the number one like Salesforce or someone. But in the beginning, when, when, when the market is picking up it becomes more common that you should have a digital application. It's just a win-win for us, even if we lose in percentage, more these than we do today.[00:39:43] Omer Khan: Yeah, because the pie starts to grow bigger. [00:39:46] Ulf Arnetz: Yes. And you're starting to have, my last company, for example, was one of these global Fast 500, which means that we were one of 500 fastest growing companies in the world. And you can't really reach that if it's not those, a very strong trend increasing rapidly so to say in the market. [00:40:06] Omer Khan: Great. Okay. We should wrap up. Let's get onto the lightning round. I've got seven quick-fire questions for you. Just try to answer 'em as quickly as you can.
Okay. What's the best piece of business advice you've ever received?[00:40:21] Ulf Arnetz: It is actually to trust, your, your business idea and stay to the strategy. [00:40:30] Omer Khan: What book would you recommend to our audience and why? [00:40:33] Ulf Arnetz: I read a lot of our management books, but I would say that it's actually Good to Great by Jim Collins, and then also the book of Why from Simon Sinek. Those, those are the books that have made the, biggest impressment, impressment on on so far. [00:40:52] Omer Khan: Right. What's one attribute or characteristic in your mind of a successful founder? [00:41:00] Ulf Arnetz: It is to, be able to take your idea. So it becomes understandable for more people within the organization and also to be strong enough to trust those people that they could actually become better than you within whatever their responsibilities, but also combine that so you're so tough.
So you keep your product or your company focused according to the strategy.[00:41:27] Omer Khan: What's your favorite personal productivity tool or habit? [00:41:31] Ulf Arnetz: It's actually the computer. [00:41:33] Omer Khan: What do you mean? [00:41:34] Ulf Arnetz: I mean, that sounds a little bit boring maybe, but I, I, I I used the computer so much. I like it. [00:41:39] Omer Khan: That's your productivity tool, right?
What's a new or crazy business idea you'd love to pursue if you had the time?[00:41:45] Ulf Arnetz: I was, do something within charity. So it's, I I don't think that is, It's more based on what I would like to do in the next round, so to say. [00:41:56] Omer Khan: What's an interesting or fun fact about you that most people don't know? [00:42:01] Ulf Arnetz: I've been one of the, not one of the best, but is played in the, the second highest league in hockey in Sweden. So that's something I'm proud of. [00:42:12] Omer Khan: Nice. And finally, what's one of your most important passions outside of your work? [00:42:16] Ulf Arnetz: It's absolutely the family skiing and sports. [00:42:20] Omer Khan: Wonderful. Well, thank you for joining me. It's been a pleasure kind of going through, walking through the, the history of the, the business and some of the ups and downs and, and lessons that you've learned along the way. If people want to find out more about Howwe, they can go to Howwe, which is h-o-w-w-e.io and if folks wanna get in touch with you, what's the best place?
How can they do that? Where do you hang out?[00:42:49] Ulf Arnetz: It's Ulf, U-L-F, Arnetz, A-R-N-E-T-Z, at Howwe, h-o-w-w-e[dot]ie. Yeah, IO, sorry. And Howwe stands for “how we” as a company could do better. [00:43:06] Omer Khan: Ah, okay. That makes more sense howwe.io. Wonderful. Yes. Okay. Well, thank you so much for joining me. Thanks again for taking the time to share your story and some of the lessons that you've learned along the way with our audience.
And I wish you and the team the best of success.[00:43:26] Ulf Arnetz: Thank you Omer. Thank you for good pods. I actually listened to some, quite, quite many of your pods. I like them. [00:43:32] Omer Khan: That's awesome. [00:43:33] Ulf Arnetz: Very good. [00:43:33] Omer Khan: Thank you so much. All the best. Cheers.
- “Good to Great: Why Some Companies Make the Leap and Others Don't” by Jim Collins
- “Start with Why: How Great Leaders Inspire Everyone to Take Action” by Simon Sinek