Leadership

Building a New Kind of Software Company

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Editor’s Note: For years, IDC has ranked QlikTech the world’s fastest-growing BI software vendor, and the company has won many awards for its product, QlikView, and its innovation and disruptive technology. Even more interesting than its fast market traction is the fact that it brands itself as “a new kind of software company” and consistently wins awards for being a great place to work. Sandhill.com spoke with QlikTech CEO, Lars Bjork, about the company’s origins and growth journey. In this article he shares the decisions and mindset that led to success and the lessons learned along the way.

I’ve been with QlikTech for almost 11 years from when it was a very, very small company in Sweden, not even knowing what business space we wanted to cover. We did $2 million in revenue in 2000 and had 11 customers. This year we’re on track to do over $300 million in revenue and we have close to 20,000 customers in 105 countries.

We’re one of the fastest growing software companies on earth of our size. In the last 10 years the company has grown a hundred times in revenue. I attribute our success partly to having made a few very smart decisions early on and to the way we manage the company.

Focus

The first important decision was to choose a focus area. We decided back in 2000 to focus on the business analytics or business intelligence space – although it wasn’t called that back then – rather than going into adjacent spaces and being unfocused.

From the beginning we focused on making QlikView an intuitive experience from the users’ perspective. One of the most common challenges people faced back then – and still today – is knowing there is information in a legacy system but there’s not an intuitive way to pull it out the of the system to digest and analyze it. People spend way too much time searching for data rather than doing something with it. We recognized that people shouldn’t have to do that – a tool can do it better. But at the time, there was nobody in the market that addressed this from the user’s perspective.

Marc Benioff did the same thing and revolutionized the Salesforce.com space. It’s not rocket science; it’s very simple to use software. What he did is make it very accessible and very easy to use.

Being focused means not trying to do everything in the beginning. For instance, we didn’t try to enter all the market segments or geographies in the beginning. We stayed solely in a few and did well in those so we could get some traction.

Silicon Valley or not?

In 2003, we decided we had to go global. And that meant we also needed to leave Sweden and move the headquarters to the United States, which we did in 2005. Why? The U.S. software market is the biggest and most competitive market. I think that if you’re not competing in this market, you won’t think big enough. I smile when people in Sweden say they have lots of competition. But people don’t even know what competition is unless they go to the U.S. There is fierce competition here, but there’s also great opportunity. We wanted to be where a lot of things happen.

But we also opted not to be in Silicon Valley because we wanted to be a little bit disruptive. We are disruptive from our software perspective, but we also wanted to go to market in a bit of a disruptive way. So we didn’t want to be where everyone else was. Today we have presence in Silicon Valley with an office in San Mateo because there’s a market there as well.

Go-to-market strategy

I say we’re a new kind of software company for two reasons. Our software enables our customers to be different in the way they interact with information. But it’s also because we sell our software differently.

A lot of software companies when selling into enterprises still talk about nuts and bolts and technology. That’s not interesting to anyone anymore. Who cares? If I call it business intelligence, I don’t think the customer cares a bit because that doesn’t mean anything to them. What means something to the customer is how the software changes the way users can interact with information. It’s what is commonly referred to today as the consumerization trend. In the enterprise space so far, there is only a very limited amount of software that addresses how we consume information from the consumer’s point of view.

At QlikTech, we don’t believe in going out and selling software, and we don’t show up at a corporation’s doorstep and sell them everything they need from now until eternity. We don’t even encourage our customers to buy everything they want up front. What we do first is understand how a customer wants to buy software; then we accommodate that buying process. Then we let them buy a piece and make that successful; then they will continue to buy when they need more.

That’s another reason why Salesforce.com is successful, too. Yes, they’re in the cloud and riding that wave, but that’s not what is compelling. The compelling factor with both QlikView and Salesforce.com is that there is such a low threshold to start using the software.

I believe that trying to get a customer to buy every potential use case up front is a fundamental selling mistake that the big-stack players in the software industry are making today. It prohibits the customer from a realistic timeline to gain value and in most cases it’s too complicated to implement…

In contrast our customers can even download our product free for personal use and can be up in running with product in a matter of hours.

Management style – democratization

We run QlikTech from an approach of democratization in information-spreading and in decision-making. I describe QlikTech as a global company, headquartered in the United States, with a Swedish soul. That “soul” that influences our corporate culture is that we believe in empowering people and involving people. In fact, when people join our company, they go to Qlik Academy in Sweden for a week to learn our culture. They also learn how to use the product and how to sell it; we believe that everyone is in sales.

We actually focused on democratization back in 2004 when we created our culture and management style – long before we focused on the consumerization trend. We had observed other Swedish companies, such as IKEA, that were managed the same way.

I was also influenced by the book, “Good to Great,” by Jim Collins. He explains the importance of pulling from within your own ranks when you need a new executive instead of trying to find the high flyer from the street. He advises leader to always put their team in front of them and that their job as a leader is only one: to make their team successful. If they shine, it will shine on the leader as well. That’s the Swedish company culture, too, and very different from the culture in a lot of American companies.

It’s very obvious to me that you can’t run a modern company from a chain-and-command hierarchy, and you can’t tell people what to do or how to do it. You just tell them what you’re going to do and what direction you’re going. Then they will figure out how to do that.

Using democratization as the way that we manage the company, the way we interact with people, and the way we want people to engage with us ties into how we would like customers to use our tool. QlikView is not just useful for standing next to a machine on a production floor and checking how the last batch was produced or a policeman using our product on his iPhone to check information on a speeding motorist. We view our space as much more than of analytics and business information. Our approach of empowering users ensures they have a product that works from their perspective. We help them turn the raw material of data into information they can use. It’s the same thing that Google does with search. For instance, there’s a fishermen’s village in Peru. The fishermen use our product to predict where to go into the ocean to fish.

Three tips for CEO success

My advice for CEOs who want to change their corporate culture and management style to one of empowering people who work at their company is threefold. First, you should be very open and honest – as open as you can be. Don’t put on a veneer – tell it like it is. You also have to be personal.

My second piece of advice is to hire and surround yourself with the best, most talented people. People often say to me, “What a successful company you’ve built.” I correct them and say, “No, what a successful company we have built.” I have capabilities, of course, but it takes a lot of different skills sets to make a company successful.

Then you need to invite those talented people into the discussion. Make very clear to them where your company is headed and that they’re a part of the team making that happen. Explain where and how they can contribute. This is something you have to live and model; you can’t say one thing and do something else. That’s part of being honest. The CEO should be far more a facilitator and moderator than the explicit expert on every subject. Successful CEOs are role models and evangelists. It isn’t their job to make every decision.

Hiring the most talented, brightest people is crucial to success, even in an environment now strongly influenced by consumerization. You need to stay close and have open eyes and ears to tap into what potential customers want. But if you want to be a market leader and disrupter, you have to go beyond just listening to customers or consumers. It’s almost impossible for anyone who is using technology to think outside the boundaries.

Twenty years ago, people didn’t stand up and say they wanted smartphones. They couldn’t even imagine what a mobile phone was. Now that it’s here, it drives behavior. Apple is a good example. They decided: the trend is likely going for touch screen and is likely to be a consumerized way of consuming information. Then they decided how to do that; and then they took it to the next level. You need to listen to existing and potential customers, but their input won’t explain everything. Your company will need to come up with ideas.

Vision

Among the building blocks I’ve accumulated over the years is a big lesson learned: it’s important to think big.

I’m not saying that we saw the market in the beginning as eventually being as big as it has become. But we really had to push thinking big because we had a board at the time that didn’t believe that this could be bigger than Sweden.

If you think you have something that’s unique and you can make a good assessment that there is potentially a very large market, then think big – but without going haywire and losing yourself. If you think small, it will be self-fulfilling.

Lars Bjork is CEO of QlikTech. He joined QlikTech in 2000 as CFO and assumed the role of CEO in October, 2007. QlikTech is a leader in Business Discovery — user-driven Business Intelligence. QlikTech’s powerful Business Discovery solution bridges the gap between traditional business intelligence solutions and standalone office productivity applications.

Comments

By Chuck DeVita

Lars, This is a great article. You are espousing the concepts that I emphasize with our clients and with my students (who are professionals building companies) in the courses I teach at Stanford. I would love to have you as a speaker in my course on “Cloud Computing:Selling & Marketing SaaS to the Enterprise” this fall. Several dates are available. Let me know if you are interested and I will provide details. Thank you. Chuck DeVita

By Jeff Ogden

Great article, Lars. Having been the top rep in Business Objects, I also met with Microstrategy recently. You are making them very nervous. Your company is a very marketing savvy one. Congratulations! Jeff Ogden Find New Customers http://www.findnewcustomers.com

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