S4E14 – How MorningScore Transforms SEO with Gamification With Karsten Madsen

How did MorningScore transform SEO with gamification?

In this episode of the “Grow Your B2B SaaS” podcast, host Joran interviews Karsten Madsen, the founder and CEO of Morningscore. This episode delves into Karsten’s entrepreneurial journey, the challenges he faced, and the strategies he used to grow his SaaS company. Morningscore is a gamified SEO tool designed to help small companies improve their visibility on Google.

Karsten’s Backstory

Karsten reveals his background, including co-founding his first company while still in high school. This venture led to the creation of Morning Train, a digital agency specializing in digital marketing, web design, and development. His entrepreneurial drive was fueled by a desire to prove himself, particularly due to self-esteem issues he experienced during his formative years.

Initial Advice and Stress Management

Karsten underscores the importance of managing stress and maintaining realistic expectations with a first company. He notes that stress management is a skill that develops over time. He also highlights the need to be selective about whose advice you follow, emphasizing that the founder often knows their business best.

Funding and Initial Growth

Karsten discusses Morningscore’s funding journey, which involved government grants, angel funding, and loans totaling €1 million. He shares that the company is currently seeking additional funds and has reached an Annual Recurring Revenue (ARR) of $800K, with most revenue coming from SaaS services.

The Beta Phase and the Big Mistake

Karsten reflects on a significant challenge: rushing the monetization of Morningscore’s beta version. Despite having 4,000 active beta users, only 30 chose to pay at launch, nearly jeopardizing the business. He advises ensuring the product is fully ready before monetizing as a major lesson learned.

Sales-Led vs. Product-Led Growth

Karsten recounts a pivotal moment when the company switched from a product-led to a sales-led growth strategy, which turned out to be a mistake. He emphasizes the importance of sticking to effective strategies and resisting external pressures to change tactics if the product isn’t ready for such a shift.

The Importance of Grinding

Karsten stresses the value of the initial “grind” in growing a SaaS business. He and his team used scrappy, hustle-driven methods to acquire their first users, including leveraging social media groups, LinkedIn connections, and personal networks. This gritty approach was crucial in the early stages of Morningscore.

Strategic Partnerships and Affiliates

Forming strategic partnerships and leveraging affiliates has been a key growth strategy for Morningscore. Karsten explains how collaborations, such as with hosting companies like Team Blue, have been vital to their growth. He advises starting with affiliate partnerships, which can evolve into more strategic alliances.

Remote Work and Office Dynamics

Karsten discusses the dynamics of managing a distributed team. While most of the team is based in Denmark, Karsten works remotely from Amsterdam. He emphasizes the importance of effective communication tools like Slack and regular in-person meetings to maintain team cohesion and productivity.

The Role of Meditation and Stress Management

Karsten shares how meditation has helped him manage the stresses of entrepreneurship. Although initially skeptical, he finds that meditating twice a day has significantly improved his stress management and decision-making abilities.

Avoiding Bad Advice

A key piece of advice from Karsten is to be very selective about the advice you take. He warns against heeding advice from those who lack specific experience in your industry and pricing segment. This approach has helped him avoid costly mistakes and stay focused on his goals.

Leveraging New Technologies

Karsten briefly touches on Morningscore’s plans to integrate AI and machine learning to enhance their SEO tool. However, he criticizes the overuse of chatbots and emphasizes the importance of meaningful, innovative applications of AI.

Focus and Avoiding Distractions

A recurring theme in the episode is the importance of focus. Karsten advises SaaS founders to avoid spreading themselves too thin by trying to do too many things at once. Concentrating on a few key growth channels and executing them well can lead to more sustainable and effective growth.

Building a Strong Company Culture

Karsten believes in giving employees the freedom to act as their own bosses within the company. He emphasizes the importance of a supportive company culture where team members feel empowered to take initiative and contribute to the company’s success.

Conclusion and Final Thoughts

In closing, Karsten reiterates the importance of enjoying the entrepreneurial journey, embracing discomfort, and learning from every challenge. He encourages founders to stay true to their vision, be cautious about whose advice they take, and focus on building something meaningful and impactful.

This episode is filled with valuable insights and practical advice for SaaS founders at various stages of their journey. Karsten’s candid reflections and actionable tips make it a must-listen for anyone looking to grow their B2B SaaS business.

Key Timecodes

• (0:45) – Introduction of Karsten Madsen
• (1:25) – Company funding and structure
• (2:36) – Overview of Morningscore
• (2:57) – Early entrepreneurship journey
• (8:16) – Challenges and rock bottom moments
• (9:57) – Learning from mistakes
• (12:27) – Biggest company challenges
• (15:08) – Successful strategies and growth tactics
• (17:57) – Role of partnerships in growth
• (20:24) – Company culture and remote work
• (23:39) – Personal enjoyment and team dynamics
• (24:04) – Regrets and enjoying the journey
• (25:16) – Leveraging new technologies
• (26:40) – Future plans and market strategy
• (30:39) – Advice for SaaS founders

Transcription

[00:00:00.160] – Karsten

There is no quick fix in terms of just being able to handle stress. You just have to go through the trials. So that’s why I would advise anyone, don’t have crazy high ambitions with your first company or with the first thing you’re going to do. Because your threshold for what you can handle and what you can solve is also lower. I think there’s a saying with stress, for example, that you can grow with stress. So if you manage stress in a healthy way, you can slowly expand your level of stress, like how much you can handle it. Be careful where you take advice from. Remember that you are the smartest person about your business because you’re doing it every day. And just be very careful who you take advice from. Actually, it sounds arrogant, but one of my biggest mistakes have been taking on too much advice. Honestly.

[00:00:45.690] – Joran

In today’s episode, my guest is Karsten Madsen. Karsten is the founder and CEO of Morningspore, a tool which makes SEO fun as they help you to improve your SEO using gamification and deep insights. Before Morningscore, Karsten co founded a company when he was still in high school, which led to his second company called Morning Train, a digital agency where they focus on digital marketing, web design and web development. Two fun facts about Karsten. You might still see him sometimes wearing a spacesuit. And he lives in Amsterdam, whereas the company is located in Denmark. Welcome to the show, Karsten.

[00:01:16.180] – Karsten

Hey, Aaron. Nice to be here. Thanks for having me.

[00:01:18.830] – Joran

Nice. Let’s dive into you and the company. So I’m going to fire off some questions at you and then we’ll get to know you a little bit more.

[00:01:25.170] – Karsten

Sure.

[00:01:25.730] – Joran

When did you start a mobile? And is it bootstrapped?

[00:01:29.240] – Karsten

Funded, angel funded. We were lucky to get some government grants, basically free money and a bit of loans. Some loans as well. So I would say total €1 million in funding.

[00:01:39.460] – Joran

Yeah. And government grants. Is it them from Denmark or the Netherlands?

[00:01:42.580] – Karsten

A European Union. But it was distributed from Denmark.

[00:01:46.360] – Joran

At the moment, you’re actually raising, right?

[00:01:48.580] – Karsten

Yes, we’re raising right now. What is your current ARR 800K? Now I’m talking dollars, because that’s what I know best. But eight hundred k dollars.

[00:01:56.300] – Joran

And is there any separation between, like, service and product revenue?

[00:02:00.060] – Karsten

Actually, I think 1% is non service, but the rest is service. So it’s almost all service.

[00:02:05.450] – Joran

All SaaS?

[00:02:06.060] – Karsten

Yeah, yeah, it’s pure SaaS play.

[00:02:08.250] – Joran

And how many employees do you Kaiskirti have?

[00:02:11.070] – Karsten

We have ten.

[00:02:12.110] – Joran

The company is in Denmark, right? You’re in the Netherlands. Is it remote or are they all in Denmark?

[00:02:17.260] – Karsten

Yeah. They’re actually at an office in Denmark, and I’m remote, and we have one more guy in Slovenia. So we’re two guys, remote, and the rest is in office. We like to be at the office, but if people need to work from home, they can also work from home. It’s not like that, but. And that might sound a bit funny that I’m sitting here and I say, we love the office. I also go to Denmark all the time. I have to go back and forth.

[00:02:36.700] – Joran

Quite a lot in one or two sentences. In your homework, what does bonus core do?

[00:02:40.920] – Karsten

We are a gamified SEO tool that helps you grow on Google, making it easy.

[00:02:45.700] – Joran

Yeah, nice. And I tried out the tool. I actually used it. And it’s really nice how you guys do it, what you gave me.

[00:02:51.720] – Karsten

Oh, yeah. And you’re good at SEO. I know that. You even gave me some tricks at one point.

[00:02:55.460] – Joran

And is this your first startup?

[00:02:57.240] – Karsten

No, it’s the second.

[00:02:58.480] – Joran

Yeah.

[00:02:58.920] – Karsten

Yeah. I’ve done a lot of weird things in between the others. My most fun startup is actually a crypto mining company. I was renting a priest house, and in the basement we set up a crypto mining company, but I don’t think we have time to talk about that. But it was very fun.

[00:03:11.850] – Joran

I guess one question there, like, how did it end? It?

[00:03:14.370] – Karsten

Oh, it burned. It ended up in smoke, as they say. But this time it was literal smoke.

[00:03:18.810] – Joran

You started your first company from in high school or right after high school?

[00:03:22.670] – Karsten

Yeah, in high school. We started it. I think it was in high school. Yeah. Yeah, last year.

[00:03:27.020] – Joran

Does it mean you always wanted to be an entrepreneur?

[00:03:29.080] – Karsten

Yeah, I never had a job, so I guess the answer is yes.

[00:03:33.360] – Joran

Interesting. And do you have an end goal to find with Morningscore?

[00:03:36.750] – Karsten

Yeah, we want to help a million customers do this. A million companies. Small companies should grow big on Google. That’s my end goal. Most people think, oh, an exit or money or whatever. For me, it’s all about having honor to the privilege, let’s say, to build something amazing and get it in front of a lot of people. That’s my passion. I mean, in Denmark, we are quite known, and I would say a lot of people come to me and they tell me that the way we build the software inspires other entrepreneurs to also build great software, great user interfaces and so on. And that’s something that makes me incredibly proud and happy that I can help inspire others to build great software and just help people grow. I’m not looking for an exit, let’s say.

[00:04:17.610] – Joran

Yeah. And this might already gives me the answer to the next question. What keeps you motivated?

[00:04:22.280] – Karsten

Yeah, I just gave it to you. I love building great products and inspiring people. Not that I find myself crazy inspiring, but I just part of crafting something amazing with the team. I love it.

[00:04:33.220] – Joran

You’re definitely inspiring others. I think the first time I met you was at the SaaS awards in Amsterdam and convinced you to wear the spacesuit.

[00:04:41.080] – Karsten

You’re the one. Yeah, you told me to do it. That was a great idea.

[00:04:43.760] – Joran

And in that evening, you definitely inspired others to think outside of the box and to do fun stuff as well. Okay, this was a bit of fire round, so let’s dive deeper into the story of morning score. So let’s start with the beginning. Like, how did you came up with the idea of morning score?

[00:05:00.070] – Karsten

Yeah, I actually, I was really bad at school. Not really bad, but I was never passionate about that. I was bad at sport. I was bad at everything. So I had a very low self esteem growing up, and I thought I would just do business just to get by because probably no one wanted to hire me. So that’s probably why I never had a job as well, because I didn’t think I was qualified. And, yeah, I just figured out I could learn SEO, and that’s the first thing that I remember I was finally good at. We started ranking really high for the agency that I built, and we got big clients that way, and that’s actually the beginning of the success of that. So for me, SEO was a love story. Without it, I wouldn’t have been here, or at least it would have taken way longer. And that joy of growing myself and the company, I really wanted to find a way to spread that to others because there’s so many out there who want to do SEO, but they’re afraid of it. They think they’re not good enough for it. And actually, it’s really simple.

[00:05:51.840] – Karsten

You just need someone to guide you. And I think we built a tool to at least do part of that guidance.

[00:05:57.150] – Joran

Yeah, yeah, yeah. And so the idea came from the agency, right?

[00:06:00.980] – Karsten

Yeah. But I think my deep motivation was myself. But it’s true that the concrete thing that really, that finally made me do it was that we had those clients who really didn’t understand what we were doing for them and the growth we were creating for them, but, yeah, yeah.

[00:06:14.770] – Joran

And then did you, at the beginning, already know it was going to be such a success because you already had maybe clientele you can tap into or.

[00:06:22.740] – Karsten

No, I actually didn’t know at all. I had big dreams. And I think a lot of people around me at the time would say I was delusional. Oh. Everyone told me this was not going to work. I have so many people coming to me today to say, I’m so surprised you guys made it. We thought you wouldn’t. Story of my life. It was the same with my first company. Everyone also told me this was never going to work.

[00:06:43.250] – Joran

And what was then the main reason? Because you already had big competitors out there.

[00:06:46.780] – Karsten

Yeah, I think for Morningscore it was really the competitive scenario that how could we do that? Yeah.

[00:06:52.760] – Joran

And do you think then, because you mentioned at the beginning you want to guide clients on their journey, you want to game it for. Is that part of the success where you take them by the hand but then in a digital way guide them towards success? Is that part of the success story of motorscore?

[00:07:08.770] – Karsten

I think the user interface and how we make it, at least try to make it simple and easy, that’s certainly part of the success. And then I would say the other part of the success is how we approach our customers. The fact that when you chat with us, we actually help you with your SEO, we give you tips, we check out your website, we analyze your website. We do a lot for our customers that normal customer service don’t and a normal chat doesn’t. We certainly have no AI chat bots installed and that’s on purpose. We want to be humans talking to humans. So I would say the product and the gamification, of course, and then our culture of really helping customers and being like, just, you know, like friends with our customers. And I think those two things together have created a niche for us in the market that’s actually slowly showing to be quite big or the potential is huge. Huge, let’s say.

[00:07:57.880] – Joran

Yeah, yeah. Because with any interaction, you want to provide value towards the clients. Let’s go into your story. So I guess like every entrepreneur you have, multiple businesses right now already hits rock bottom at one point. Can you share a moment of yourself to be there financially, personally? And how did you get out of that situation?

[00:08:16.210] – Karsten

I’ve hit so many, if you ask my wife, I’m hitting a rock bottom every six months. It’s startup life, right? So you’re gonna have challenges all the time. Time with morning score. I’ve had many, but I guess the biggest rock bottom was early on, we had built a beta around the product, so we had 4000 people using it for free. And it actually was really going well. People were hyped. They were telling us every day how they loved using it and we had this really huge growth going on. I think, honestly, I think we had the fastest growing SEO tool ever at that point because there was just so many people coming to it because it was free, of course, but still we had thousand people coming in on a weekly basis. At one point it was like at the end, just before we closed the beta and we should just have kept that going, but we were running out of money. So the biggest mistake I made was I looked at our Runway, how much money we had left in the bank and I said, look, we need to get this shit out there because otherwise we’re not going to make money.

[00:09:11.490] – Karsten

So basically start charging money for it so we could extend our Runway. But what I should have done, because I knew the product wasn’t finished, it was still full of box and it was not nearly good enough to actually be worth money, I would honestly say that. So what I should have done, I should have gone to my investor and said, hey, can we get a bit more money so we can at least spend another three to six months to just keep this amazing hype going that we had and just finish the product. It was a no brainer. Everyone would have said yes, but I still sometimes have a bit of an autistic brain and I’m like, I promised this, so I have to do this. So in my mind I didn’t even think about that option. It sounds stupid today, but it really was like that. So honestly, we almost killed the business after that. We slowly came back and we had some strong moments after that. But that was a very big learning that I will never.

[00:09:57.870] – Joran

Yeah. And what exactly did you guys do? Did you put like a free trial?

[00:10:01.920] – Karsten

Yeah. And then you had to pay. Of course, we told all our beta users, now it’s time to pay. And out of 4000 beta users, 30 decided to pay.

[00:10:10.910] – Joran

Okay. And I guess from those, at one point, thousand free users, new users per week, that number started declining because they also saw pricing.

[00:10:19.800] – Karsten

Yeah, that was like down to 100 or something.

[00:10:22.770] – Joran

Was this your most challenging period as well as in making that decision and then finding out that it wasn’t?

[00:10:29.360] – Karsten

It felt very challenging at the time. But I think there’s a saying with stress, for example, that you can grow with stress. So if you manage stress in a healthy way, you can slowly expand your level of stress, like how much you can handle. And honestly, the last six months I’ve also gone through a lot of challenges that are actually, when you think about it, at least the amount of different challenges I had to overcome was bigger. But I wasn’t stressed. I didn’t have trouble sleeping. I wasn’t even worried because I’m so used to it by now. And that’s why I mentioned my wife earlier, because she’s scared sometimes. And I’m just like, I’m chill because I’ve been doing it so many times. I know it’s always going to work out. As long as you keep to it and you keep fighting, you’re always going to find a solution. And truth be told, I have managed to find, together with the team, of course, solutions for all of our problems in the last six months. And now we’re doing better than ever. We have a lot of challenges upcoming. That’s life. That’s one thing I’ve gotten really good at, is just like dealing with challenges.

[00:11:23.510] – Joran

Yeah. And if you. Because there’s other people who probably don’t deal with it, like yourself, as in at one point you get good at it, but I guess, is there anything you learned? What is helping you to deal with these challenges? Like any advice you can give others?

[00:11:37.690] – Karsten

Something new I started doing is meditating twice a day. And I’m a farmer, son. I’m not really a kind of hippie person. I laugh a bit about it myself, but it really does work. So that’s a very practical thing I do. But honestly, no, there’s no quick fix in terms of just being able to handle stress. You just have to go through the trials. So that’s why I would advise anyone. Don’t have crazy high ambitions with your first company or with your first thing you’re going to do. Because your threshold for what you can handle and what you can solve is also lower. So as you slowly increase your ambition, you will also, at the same time, increase your capacity to handle challenges and so on.

[00:12:14.130] – Joran

Yeah. Just had them face on. And then at one point, you get used to it.

[00:12:18.090] – Karsten

Yeah, I would say, yeah.

[00:12:19.660] – Joran

And is this moment you just described, like your rock bottom moment? Was it also the biggest company challenge you guys have or a different moment? Okay.

[00:12:27.780] – Karsten

Only it felt like that at the time. But we had bigger challenges. Yeah, we had a lot of other challenges.

[00:12:33.670] – Joran

Is there one moment in particular you can highlight and then also, like, how you got out of that one?

[00:12:39.590] – Karsten

Yes. 2022. I had to let half the team go. We were 15 people at the time. We thought we were going to be a venture capital case and we weren’t ready. Honestly, we had pursued the wrong growth strategy. We were starting to do sales lead, so we hired a lot of salespeople instead of being marketing led and product led. So that was a mistake. It was very expensive growth and it was showing in our core metrics. So numbers like LTV, cock, and all these associated metrics were really bad at the time. So even as the funding market was crazy hyped, it was such a fun time to be in. I never forget that time. It was crazy. Even as the market was so crazy, we were clearly just running a too inflated business that didn’t grow at the same time fast enough. So I learned a lot from that. And I think that was the biggest low for the company to have to fire half the team and talk to my current angel investor and the rest of the team and scrap money together and then just get the funding to survive. We were doing pretty okay at the time.

[00:13:44.200] – Karsten

We were always going to find a way, but let’s say I need it. Some funding, some loans and at least some money so I could make sure that we didn’t have to fire even more people. Because I was, like, left with a critical mass of what I considered necessary to run the business I wanted to run.

[00:13:59.480] – Joran

Yeah. And what initiated for you to go towards sales led, like, instead of. Because BLG was working for you.

[00:14:06.230] – Karsten

Yeah, it was working wonderfully. No, we weren’t growing. Investors always want faster growth. We were growing like 10% month to month at one point, but, oh, no, it should be 15%. So they were like, let’s look at. And I kept saying to the board, look, the product isn’t ready. We need to focus on investing in a product. And at that time, it was the crazy days. Everyone was greedy. In 2021 and 2022, it was just all about growing fast. And to be fair, I was the CEO of the company at the time, so I take full responsibility. But I was persuaded to go more in a sales led direction, even though I have no experience in sales. So, yeah, that was a big mistake, in my opinion.

[00:14:40.660] – Joran

Yeah, so we. And did the product change a lot? Did you drop, for example, they get.

[00:14:45.490] – Karsten

Started, the free trial, the self service part of the product was exactly the same. We just tried to expand it with more sales on top.

[00:14:54.140] – Joran

When we talk about the positive effects or the positive things you did to grow where you are right now, are there certain things you said, hey, if we haven’t done XYZ, we wouldn’t be here, because we now talk about all mistakes, but let’s talk about the good things.

[00:15:08.700] – Karsten

We’ve done so many amazing things. I think that the first simple thing we did was be very scrappy and hustly. So now, I mentioned 4000 beta users. How did we get those? We went on every Facebook group there is related to our business or entrepreneurship or whatever, and we started posting in there. We started interacting with people. I connected with all the people I could on LinkedIn. I wrote everyone in my network. I called. A lot of people I knew, contacted different associations that say, hey, could you promote this free deal to your members since it’s free? Many of them wanted to do it because it was a free beta. They thought it was cool to, to share. Me and my marketing employee at the time, we just went all in. We just went everywhere. And honestly, that’s how we got to the fourth hour, which is grind. And I don’t see that many other startups be as grinding as we were in the beginning. In my opinion. That’s what you need to do, and.

[00:16:03.430] – Joran

That’S especially for the beginning period. Right?

[00:16:05.560] – Karsten

Yeah.

[00:16:05.750] – Joran

What has been your go to market strategy after? Probably SEO.

[00:16:09.890] – Karsten

Yeah, yeah. So SEO was a most important go to marketing strategy after that initial. And I honestly wish we had not stopped doing the grind because then we started doing more ads and we became a little bit too fancy and sophisticated and we should just have kept grinding because when you look at it, it’s actually a very good business case to just keep grinding a bit longer. So actually what I’m still doing is I go on Reddit and Facebook groups and so on, and sometimes I join the debates and talk about my company and so on, and that actually still delivers customers to us at a very cheap. Even paying for my salary and everything, it’s very cheap. Of course, I have so many other things to do, but I just think it’s important to keep spreading the message in a very grinding way. And I wish I could hire an employee to do that, but it’s these things where it’s really hard, if you’re not the founder, it’s really hard to find someone who will do that for you.

[00:16:58.790] – Joran

Yeah. And I think in your case it’s also going to give you insights. Right. If you actually join the conversation, as you mentioned, you probably maybe get some insights.

[00:17:06.200] – Karsten

Yeah, exactly. And people want to interact with the founder more than maybe the intern or. I don’t know.

[00:17:13.230] – Joran

Yeah, yeah, yeah. Nice. So the only thing I guess, which is going to take you to keep grinding is time instead of spending money to ads. It’s a good thing. You still doing right now?

[00:17:23.340] – Karsten

Yeah, I do a bit. Not a lot, like half an hour a week. It’s not more than that. But if we’re back to how we grew, I would say SEO for sure, and then partnerships. So affiliate partnerships, speaking of Redditors, which we’re also using, and affiliate partnerships has been one of our top three. And the last thing that we actually has this has, over time become our most important growth channel, is strategic partnerships. So I differentiate between affiliate partnerships, which is more like online referrals, where people refer your product and they get paid a commission, where strategic partnerships could be something like us partnering with Team Blue, which is one of the biggest hosting companies in Europe, and having them promote our product in a bigger collaboration because they see the benefit is something different and that is becoming our most important collaboration. But that actually came out of the affiliate. So I would always advise anyone, and I’m not just trying to push Reddit here, but I would advise anyone to start with the affiliate. And then you can always move on to more strategic partnerships because they can also come out of the affiliate.

[00:18:33.090] – Karsten

So those are the channels that we are currently investing in. And we do also a little bit of Google Ads and so on, but it’s not a big deal for us.

[00:18:41.580] – Joran

It’s more that you almost have to do it rather than you really invest.

[00:18:45.340] – Karsten

Yeah, actually Google Ads is mostly to gain insights because Google Ads is the only way we can really track which keywords delivers customers, which you can’t really do it that easily with SEO. So for us it’s mostly just to experiment and figure out which keywords are working and keep knowing which keywords are working. So we have that constant data. But if you look at our budget, we spent like €2000 a month on Google Ads. Like nothing compared to the other activities.

[00:19:08.880] – Joran

Yeah, yeah. And one follow up question, what you said regarding affiliates going into strategic partnerships, has it then for you guys that you figured out, like, what is working with affiliates which turned into bigger strategic partnerships, or how did it, like, how did.

[00:19:22.990] – Karsten

Yeah, yeah. Like the revenue share has been a thing where we’ve experimented first with the affiliates, so that’s something we could take on, but also just finding the affiliates. Some of the affiliates we ended up finding were actually connected to the enterprise or actually were enterprise Team Blue, I think, actually started as an affiliate. There was some kind of talk at the same time, but I think it came through that somehow.

[00:19:44.640] – Reditus Ad

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[00:20:05.760] – Joran

If we talk about your growth or talk about the company, are you using any kind of processes, frameworks internally, which helps you to get to this point? So if we talk about Eos or tracks here, like any kinds of the frameworks, is it all then, like what you guys is good, you do it.

[00:20:24.840] – Karsten

I don’t like frameworks. I know many of them. I also read many books on all kinds of frameworks and so on. But my main philosophy is a freedom of the individual. Become your own boss inside the company. I’m always looking for people who can, yeah, be their own boss in a way. And of course we collaborate with tools like Slack and Jira and other tools for project management. But for me that’s just a tool. And then you could say, oh, you need to follow the right methodologies and so on. There was a time when we spent a lot of energy making sure we would count. When you do development, you do something that’s called story points. So you measure the time it takes to develop a feature or function or whatever, and we spend a lot of energy coming up with a perfect system for that and so on. But then at the end of the day, it didn’t increase productivity by much. Maybe it even decreased productivity. I believe if you’re a small team below 20 people, you don’t need any frameworks, in my opinion. But again, I don’t tell you to run your business like I do, but at Morning Square, we don’t do frameworks.

[00:21:26.310] – Joran

Love it. And I guess if we talk about, I guess the company, because you’re based in Amsterdam, majority of the company is based in Denmark. You mentioned at the beginning you’re traveling back and forth. Most people are in the office. How do you make that work?

[00:21:39.150] – Karsten

So we are a lot on slack. So actually what happens when I come to the headquarters in Denmark is that I find myself getting messages from the other team members on Slacken. Hey, can you check this for me? Can you do this? And I’m just like, dude, I’m here now, why don’t you just come and talk to me? So I think we’re very good at communicating through those messages and through that. So that’s really part of how we do things. So honestly, I don’t feel a big difference being in the office, but what I really use the office for is those bigger discussions. Like for example, I just came from Denmark, right? And what we were discussing is the funding and some new learnings we’ve had with the team and my CTO told me some important parts about how we’re going to have to find the right next employees and so on. And we really debated that in terms of the funding. Okay, if we’re going to get this money, how are we going to spend that money? That really deep discussion where we just keep on ping ponging with each other, it works way better in a room together.

[00:22:36.250] – Karsten

So I spend two times a month, I try to be in Denmark a couple of days, and that’s where we really do this ping pong. And I find it’s enough. I don’t need more. And I would say another benefit of me being here is that this is just because of my personality, but I’m the kind of person who gets easily distracted and stressed in an office environment. I actually focus way better at home or home, but wherever I am, where I’m alone. So if I was in an office, I would probably get my own little room or whatever, because I’m not very good at being distracted all the time. So actually coming here to Amsterdam has actually helped me focus and see things more clearly because I can see it a bit from the outside, if that makes sense. I mean, there are a lot of drawbacks too, of course. Sometimes I wish I could be there more with the team. And actually the biggest drawback is for my enjoyment. Like day to day. I sometimes wish I was with the team when we hit some big milestones. It’s a bit sad that sometimes I have to celebrate with them online.

[00:23:29.120] – Karsten

So that’s actually the biggest drawback is my personal enjoyment. And that’s also going to change because we’re soon going to hire people here in the Netherlands as well. So we’re going to have two offices, basically.

[00:23:39.010] – Joran

So you are going to go back to an office, but then in.

[00:23:41.990] – Karsten

Yeah, I’m actually an anti remote advocate working remote. I’m the biggest hypocrite in the world. Yeah.

[00:23:48.330] – Joran

If I understand correctly, when you go to Denmark, you plan all the meetings and your focus time is when you’re in Amsterdam. So it’s quite nice that you really can focus on certain things. When you’re in Amsterdam and you want to have meetings, you don’t face to face in the office.

[00:24:03.050] – Karsten

Yeah, exactly.

[00:24:04.340] – Joran

When we talk about your founder journey, are there any things you regret you didn’t do?

[00:24:10.930] – Karsten

I once calculated, like a projection of how big could we have been today if we just kept the beta going for another six months. I don’t want to think about that again. No, don’t make that calculation. That’s obviously a big regret. But apart from that, especially lately, I try to think about, just enjoy the journey. I’ve always been good at that, but it’s something I really focus on now because I actually heard a lot of stories from people who have sold their businesses, some friends of mine as well. And they’re actually in a. They’re in a crisis now because they sold their businesses for enough money that they don’t have to ever work again. And now they’re just like, they’re trying to find meaning in their life and they want that next rush, but they can’t find it. And at the same time, they’ve gotten so comfortable now with all that money that they don’t really. They’re a bit too lazy to get back in the game, back in the arena. So now they’re stuck. I don’t really want to do that. And I think that’s why even when sometimes things are tough, I’m like, yeah, but this is it.

[00:25:02.140] – Karsten

This is the grind. That’s what I want to do.

[00:25:03.880] – Joran

Interesting. And when we look at morning score, how do you guys now leverage new technologies like AI, machine learning, etcetera? Like, what do you guys are using new technology wise and how?

[00:25:16.570] – Karsten

Yeah, so one thing that was very important for us was not just to add another chatbot to our system. Like we’ve seen a lot of other SAS doing shots fired. But seriously, come on, guys, I’m so tired of that. For us, it’s important to do it. Something that’s actually a little bit innovative. I know this is a bit arrogant to say, but that’s my opinion. And I think what we were doing now is we’re looking at getting our keywords in our system to be more intelligent based on AI. And we’re also starting to look into how our missions can be more intelligent based on this AI. But actually, so far, the cost of AI has been a bit too big for us. And chat, GPG or OpenAI, they just lower. They released a new model with drastically lower pricing. And that’s very interesting for us because that means we can finally, because we have so much data and for us, the cost can quickly get out of hand. But now with this new model, we’re actually really excited to see what that can bring. Yeah. Once we release some proper AI into our tool, we want to do it right.

[00:26:15.870] – Karsten

And I think it’s coming within a year.

[00:26:17.510] – Joran

Nice. Nice. And we’re going to find out what it is, but it’s not going to.

[00:26:20.760] – Karsten

Be chatbot no, it’s not going to be a chat.

[00:26:24.210] – Joran

Nice, because I think, like a lot of companies changed their go to market. Like lately, you went through the process before, right, where you were, sales led, product led. Are there any things you’re currently changing or doing differently or you have planned for 2024 which is going to help you guys grow further?

[00:26:40.230] – Karsten

Good question. But actually sticking to what we already do well is our new mantra. Do few things. This has been our mantra since 2023. And so focusing on the partners and the SEO, don’t do too many new things because every new thing you’re going to do, you’ll have to divide your energy between more things. And I’ve just learned because I’m also the kind of person who like, oh, I want to do everything, and then you see the result and it’s not good. So I’ve really learned to just do a few things well. And that’s what I’m really excited about keeping on doing.

[00:27:12.770] – Joran

Nice. So you mentioned before you went from sales like to product led growth. Right. Taking advice from somebody else. It’s often a thing you have to avoid as taking advice from people who are maybe not in your industry or don’t have all the knowledge you have. As a SaaS founder, did you came across any of those kind of issues in your journey?

[00:27:31.610] – Karsten

Yeah, I’m a big victim of taking on too much advice from people who actually don’t know what I’m doing or have industry expertise. That’s actually cost me millions. That was in kroner. It’s cost me hundreds of thousands of years. And so I actually have a new rule. If you haven’t done what I have done in the industry, I’m in. So I’m in the martech industry. If we’re talking SaaS specifically, and also if you haven’t sold a product at the price range where I’m selling it at, so around $50 a month. If you haven’t done that, then I can’t use your advice because it’s so specific. Let’s just look at the price for a second. If I’m selling at a dollar 50 a month, that dictates which marketing channels I can use, how I should sell the product, if I should invite salespeople on board or not. It’s just everything around the whole sales journey, the customer journey, everything is tied to the pricing point, because if you have a very big price point, then you can also justify a completely different customer journey and channels and all that jazz. So, yeah, since I’ve had that rule for about a year now.

[00:28:37.210] – Karsten

And since I’ve stuck to that rule, I have avoided a lot of bad advice and I would urge anyone to do the same. Like, just be careful where you take advice from. Remember that you are the smartest person about your business because you’re doing it every day. And just be very careful who you take advice from. Actually, it sounds arrogant, but one of my biggest mistakes have been taking on too much advice.

[00:28:58.670] – Joran

Honestly, I think it’s a good quality to have. Who should you take advice from? Because everybody, like means it well and they want to give advice, but it’s not always the best advice. You can take like 100% agree. And does it count for everybody for you? There’s a lot of consultants out there. Agencies have people who want to sell you things or want to help you. This is your golden rule for anything you do.

[00:29:19.990] – Karsten

Yeah, maybe, but not always like that. But I don’t know. There’s a lot of people who want to sell you all kinds of ideas and advice, of course, and that’s fair. And sometimes you should listen to what they have to say. But yeah, mainly I find even actually the most dangerous advice is the free advice. Because then you’re like, oh, it’s for free. And especially if it’s someone who’s 1010 times richest than you or ten times more successful than you and they give you advice for free, you’re like, oh, I should listen, oh, I should really take this in because this guy is giving it for free and they don’t even ask anything in return, so it must be from a valid place. Yeah, but still, if they don’t know your industry and they don’t know your pricing point or what you’re doing, don’t take the advice. That’s my go to.

[00:30:00.480] – Joran

Makes a lot of sense. We are going to ask for your advice. And I guess for people now listening exactly which industry Carson is in, you will know exactly which pricing segment he’s in. So if he’s not in yours, then maybe you don’t even want to listen to this.

[00:30:12.210] – Karsten

Oh, but I always want to talk to people. It’s not like I’m not like, and they’re always welcome to this my company or tell me I’m stupid. I’m not like that. I love to be. It’s just I’m not necessarily going to use their advice. They’re welcome to give it.

[00:30:24.170] – Joran

No. And that’s it. Because I’m going to ask you now two questions which might not be relevant for everybody listening. So that’s why? I was just making this note because what kind of advice would you give somebody who’s just starting out? So other SaaS founder and trying to grow to ten k monthly recurring revenue.

[00:30:39.750] – Karsten

Yeah, so I would say don’t take too much advice, be careful, right? And grind. Know that this is if you’re too fancy to get dirty, then don’t do this. Because in the beginning, you need to just get out there and tell everyone that what you’re doing and really grind it. In most cases, that’s the case. If you’re doing some kind of deep tech, maybe that doesn’t apply to you. But for those of us who are out here to cash customers, we need to just grind one. Maybe tip. If it feels uncomfortable, then it’s good. If there is pain involved, then it’s good. If it doesn’t feel uncomfortable or painful, then you’re doing something wrong. It has to feel a little bit like that. So an example could be some of the LinkedIn posts that I put up that I felt like shit, everyone’s going to laugh at this, and I felt uncomfortable putting it up. There was also my most successful ones that drove the most customers because for whatever reason, that really resonated with people. Another example is I hate sales. But you just got to suck it up and do that as part of, especially in the beginning as a founder.

[00:31:40.540] – Karsten

So if that feels uncomfortable to you, good. That means you should be doing more of it. And one thing I thought a lot about lately is that all of us entrepreneurs can easily read a book. We’ve all read many of the same books. So knowledge is actually, even if it takes a long time to read a book, it’s not painful. Everyone can do it. But what is the one thing that most people have a hard time doing? It’s being brave and enduring pain. So actually, now I have this new mindset that I’m like, if something is painful, then I’m happy, because it’s like, it means that I’m. This is actually the real growth hack, right? If it’s painful, it’s a growth hack for me, because I know that not many other people will be doing this. If that makes sense, I’m going to.

[00:32:20.510] – Joran

Make a note of this of it. It makes a lot of sense because in the end, like, people are going to go for the comfortable routes many of the time. So only the ones who go for the painful route will see other results than the comfortable route of dive past ten K Mrr. What kind of advice would you give another SaaS founder who passed ten K MRR and growing all the way to 10 million ARR.

[00:32:41.890] – Karsten

Yeah. So since I’ve never grown to 10 million ARR, I wouldn’t pretend to know we’re just south of 1 million. So when you get past ten k, maybe you need to hire along the way. Obviously hiring is a whole story of itself. It’s really hard to do, so really be careful there. But in terms of pure growth, how are you going to grow your way there from ten k to, let’s say, 1 million? That’s a journey I think I can talk about. Just don’t do too many things because that’s one of the things that slowed our growth was when we were doing ads on five different platforms. SEO a little bit over here and a little bit over there. We did conferences and big things. If you looked at the different marketing tactics you could employ, and of course we did sales on top, so we did everything at the same time. And that really costs a lot of money. And it slowed the growth from ten k to 1 million because it’s still not time. You’re not going to deplete your market because what big companies often face is that, for example, Google Ads, they’re like, yeah, it’s fine to spend money on Google Ads, but there’s only so much market.

[00:33:45.460] – Karsten

So I’m going to use other channels as well. From ten k to 1 million, you’re not going to run out of market, so just focus. That would be my take on it. I think that’s the just to get there as cheap and as fast as possible is to choose a few good channels. That would be my take on it.

[00:34:00.410] – Joran

Nice. Thank you. Let me try to summarize this. In this episode we talked about, Carson is on his way helping 1 million companies with SEO. As someone who’s bad at everything, as he mentioned himself, he wants to build something amazing. Started off an agency, which is a great way to get started. Had a lot of challenges along the way and you actually get used to big challenges. When he said, enjoy the journey. If something is painful, it is actually good. If something is uncomfortable, it’s actually good, especially at the beginning. So keep that in mind. If you do have challenges, meditation can help even a farmer’s son. If your Betta is going well, maybe not cut it off too soon. So make sure you keep that growth and then figure out how you can go from there. For growth, affiliates has been which could also divert into strategic partnerships where they came in as an affiliate, have people become their own boss in the company, and as a CEO, you can be remote, take advice from people who have experience in your industry and pricing segment. So if Carson is not one of them, then you might not want to take advice from him.

[00:35:01.870] – Joran

So this is the summary, I think, which we covered today. Thanks again for coming on Carson. If you want to get in contact with you. So if they are in the right industry pricing segment, where can they do on LinkedIn?

[00:35:11.840] – Karsten

Is pretty good to find me on LinkedIn. That’s. Yeah, I’m there. Cool.

[00:35:15.420] – Joran

We’re going to add a link to your LinkedIn profile in the show notes for people listening. We’re going to add again a poll to this episode, so please respond to that so we know what you liked of this episode. And if you haven’t done so, leave us a review so we can grow the podcast even further. And again, thanks for coming on Karstin.

[00:35:32.420] – Karsten

Yeah, it was fun being here. Thanks, Aaron.

[00:35:34.350] – Joran

Cheers. Thank you for watching this show of the grow your B2B SaaS podcast. You made it till the end, so I think we can assume you like this content. If you did, give us a thumbs up. Subscribe to the channel. If you like this content, feel free to reach out if you want to sponsor the show. If you have a specific guest in mind, if you have a specific topic you want us to cover, reach out to me on LinkedIn. More than happy to take a look at it. If you want to know more about relatives, feel free to reach out as well. But for now, have a great day and good luck growing your B2B SaaS then.