Many startup founders dream of an exit, but few have concrete experience of what the journey toward an acquisition is actually like. Jussi Seppälä, an alumnus of Yritystehdas’s Hautomo program, shares his experiences and practical tips on a startup’s journey from idea to exit. Seppälä took his startup, Fikuro, from idea to exit in four years.
Jussi Seppälä’s dream of founding a startup took shape during a long vacation under the Spanish sun. Upon returning from his vacation, he called Vesa Vesterinen to say, “Let’s get this started,” and quit his job. The duo’s company, Fikuro, got its start with a few requests from customers for quote calculations. Gradually, the product—which had initially focused on quote generation—was expanded to include sales orders, invoicing, and eventually a full-fledged ERP system.
Development work was carried out by listening closely to customers. Seppälä believes that developing the company largely involves reconciling an understanding of the customer—gained by listening—with his own perspective.
“You have to work very closely with customers to understand what they really need—not just what they want, but what their actual need is.”
Seppälä’s advice is this: listen to your customer base as much as possible, because that’s where those insights come from.
“We, too, initially thought we knew how things were. In hindsight, we’ve learned that the sooner you realize you’re wrong, the faster things move forward. So talk to your customers and the market.”
This is one reason why Seppälä wouldn’t rush to hire a salesperson for a new startup team.
"A startup shouldn’t start by hiring a salesperson to sell what you’ve just set out to do—especially when you haven’t necessarily achieved product-market fit yet. The founders need to handle the sales themselves at first so they can get direct, honest feedback from customers—not feedback filtered through a salesperson.”
Jussi Seppälä admits that he personally can’t think of anything worse than cold calling. Yet, as a startup founder, he did it and closed deals. He developed his own style of calling, where he didn’t push the sale but instead asked, “You’re an expert in this field—could I interview you for a bit?” This allowed Seppälä to gather data directly from customers that was crucial for product development.
If Jussi Seppälä were to start his startup from scratch today, there’s one thing he would definitely do differently: he wouldn’t start coding or undertaking any major projects until he had somehow confirmed the direction worth pursuing.
Seppälä has seen how, in far too many startups, people code for months or even a year before showing the product to a customer. That’s a waste of resources.
“Test as quickly as possible. Create wireframes that let you show customers what you’re working on in a way they’ll understand.”
Seppälä also advises thinking carefully about whether you want to stand out by adding features. Seppälä’s lesson is that you can do the opposite: “You can stand out by paring things down. I don’t have this, or that, or the other thing, but I do have this one little thing—and it’s damn good. It’s better to integrate with other systems rather than trying to do everything yourself. Find that one thing you’re best at—and focus on it,” Seppälä advises.
Read our blog to find out why a startup should fall in love with the customer’s problem, rather than the solution.
Once a customer need has been identified and the product direction validated, many startups face the challenge of staying focused on that chosen direction. Startups are often made up of inspired people, and when searching for product-market fit, it’s only natural for ideas to emerge and for things to be tested.
Once a direction has been chosen, Seppälä says you should have the courage to stick with it long enough.
“You can’t keep jumping off course all the time.”
Seppälä admits that they, too, made a mistake when they started doing things for customers that were outside their core business. “Whenever you shift your attention somewhere else, it takes you away from your main focus. If you put all your energy into that main focus, then things will move forward smoothly.”
The danger of straying off course is particularly high when you’re looking for product-market fit, money is tight, and a client offers a five-figure sum for the work. The work would provide temporary relief for the cash flow, but in the long run, this could steer the company in the wrong direction.
“You really have to think about whether to take on extra outside work just because the money is there, or to keep a cool head and carry on as before. This is very often a really difficult decision if money is tight and you have to tell a client, ‘We’re not going to do this after all.’”
An exit was already in the dreams of Jussi Seppälä and Fikuro’s other co-founder, Vesa Vesterinen, when they founded the startup. However, the first offers for the company came much sooner than the duo had expected. In Fikuro’s case, when the first acquisition offers hit the table, the company didn’t have many customers. Seppälä and Vesterinen realized that, rather than customers, the buyer was interested in the technology and expertise the company possessed.
“A buyer can buy revenue or customers. But they can also buy a technical solution, technology, or employees. Understanding what the buyer is actually buying also helps in negotiations.”
Since an exit had been the entrepreneurs’ dream from the very beginning, they had approached everything systematically and kept thorough records from the start.
“When the first inquiries come in, it’s a huge advantage if you can say, ‘Here are the customer interviews, here’s the validation, and here’s the operating model. It shows the buyer your professionalism and makes the due diligence process run more smoothly,” says Jussi Seppälä.
Seppälä has noticed that too many entrepreneurs focus on negotiations and neglect their day-to-day operations when purchase offers are on the table.
“The buyer wants to see that the business is running and growing normally. The best way to secure an exit is to just close the deals and keep the business running the whole time.”
Jussi Seppälä, who had already built a long career before founding his startup, emphasizes the importance of outside perspectives on a startup’s journey. Even if you and your team have the expertise, outsiders bring a fresh perspective: “They can look at things from the outside a bit more objectively and ask, ‘Why are you going down that path? After all, this isn’t your core business at all.”
Fikuro didn’t stay at Yritystehdas’s Hautomo for very long before corporate acquisitions took the team to Visma. At Yritystehdas, Seppälä particularly appreciated the support of his head coach, Marko Sorri, who had served as an advisor to the company even before joining Hautomo.
Seppälä also liked Yritystehdas’s new and comfortable facilities. “I also really liked that there were other people around at Hautomo who were in similar situations. I could talk to them about the same things. You don’t always find someone to talk to about these things when you want to. In the Hautomo environment, I was able to do that. There were lots of people to talk to, which is a really big deal.”
Now Jussi Seppälä has a new startup on his hands, where he’s applying the lessons he learned from his first startup journey. “When I turned 50, I decided that I’d only do what I enjoy and things that inspire me. Usually, that means learning a little something new along the way and putting yourself out there.”
Want to accelerate your startup’s journey? Yritystehdas helps startups grow—check out Hautomo!
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This blog post is based on an episode of Yritystehdas’s “Starting a Startup” podcast, in which Yritystehdas’s Mika Fisk interviewed Jussi Seppälä, founder of the startup Fikuro. Listen to the full podcast episode.