14 Minutes of SaaS

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14 Minutes of SaaS

Listen to 14 Minutes of SaaS  Spotify Apple podcasts / Google Podcasts / TuneIn Stitcher

E120 – Trustpilot CEO Founder Peter Holten Muhlmann – 1 of 3 – From the Basement

Peter Mühlmann:

I sold a lot on the eBays of the world and then I thought, actually I would like to start my own website also, because of that’s what I saw other people did. So I did that and I thought lots of people were just going to buy automatically. The trouble was, we did get some visitors but nobody bought because they suspected that it was just Peter sitting in a basement with his friend, two kids, selling electronics. And the trouble with that was it was actually true. And I didn’t want to refer them to the eBays of the world because all my competitors were there. So I thought, why isn’t there a way where I can gather my customers’ opinions and show it in a credible way so that people trust my business 

Stephen Cummins: Welcome to 14 minutes of SaaS! The show where you can listen to the stories and opinions of founders of the world’s most remarkable SaaS scale-ups!

Stephen Cummins:  Welcome to the first of 3 episodes with Peter Muhlmann, CEO & Founder of Trustpilot. When you’re looking to select SaaS applications, you want detailed, validated, credible data – not magic. I interviewed Peter because he built a phenomenally successful B2B SaaS company that holds a huge position in online reviews – with its biggest success in the B2B2C domain. Finance and retail are the biggest parts of that. It’s a remarkable growth story. It has over 100 million reviews on it’s platform – with well over 5 billion monthly impressions on its Trustpilot widgets. It has about 760 employees, 660 of those located in Denmark, the US, and the UK. This is Peter’s story and was recorded in the Web Summit in Lisbon at the end of 2019. I’m recording this update … literally … in a telephone box in the amazing Dogpatch Labs in Dublin in September 2020 – as Peter takes us from his idyllic youth all the way to the powerful ‘why’ behind Trustpilot, and their 2-stage experience of achieving product-market fit.

Stephen Cummins: Peter Muhlmann, CEO and Founder of “Trustpilot”; a major global independent review platform reviewing businesses across multiple categories worldwide. Delighted to have you here on 14 Minutes of SaaS Peter.

Peter Muhlmann: Thank you for having me. Appreciate it.

Stephen Cummins: Tell us a little bit of your life growing up in Copenhagen, I believe, prior to … and including perhaps your days in Aarhus University.

Peter Muhlmann: So, I actually grew up in a very small town close to the German border. My Dad is a doctor. My Mom’s a nurse. I have two younger sisters. We had a dog that thought it was a lion. And life was really good and simple. Then when I was 18, I thought it was time to do something new. So I moved to a city to take an education. That was the city called Arhaus where I spent an enormous amount of years in business school before dropping out to do Trustpilot.

Stephen Cummins: And your dog that thought it was a lion? Tell me a little about that? And how small was the village? Tell us a little bit about that?

Peter Muhlmann: A little… It was called a Cairn Terrier. So, so it’s a terrier dog and it’s, say about, 30 centimeters long and 15-20 centimeters tall. And the Danish name it had, translates into the English language as; it’s a one word that means “a lot of noise.”

Stephen Cummins:  Perfect guard dog, right. Won’t do any damage but will keep you away.

Peter Muhlmann: Exactly. And it had an amazing self-confidence.

Stephen Cummins: And how small was that town?

Peter Muhlmann: It was about 1,000- 2000 people; I think, last year in… in the local newspaper, they marked that it had now passed 2000 people.

Stephen Cummins: Wow.

Peter Muhlmann:  So it was the sort of town where we were 11 people in the class and you basically knew everybody. And so a little bit like this movie childhood where you live in a house and you play in the forest and you …

Stephen Cummins: Nice.

Peter Muhlmann: … walk to school. So very… very safe. But… in some way I’m… I’m actually also jealous of the kids that grow up in a city because they can meet other kids who are exactly like them. And I think that can also be a gift when you’re… when you’re growing up.

Stephen Cummins: Absolutely. Yeah. Yeah, there’s a bit more energetic conversation and there’s more … there’s bigger crowds of kids together. But then you had all of that beautiful experience with nature. Childhood is lost today. You know, you had a childhood by the sounds of things.

Peter Muhlmann: I did have a childhood, I didn’t get a cell phone until I was 19. So in that way for me, the real world is having a landline telephone where you call your friends and say, “Hey, do you want to meet there at this time?” And when you do that… and all this new technology in some ways, it seems a little fake or unreal. But yes, I had a real childhood.

Stephen Cummins: Aarhus University. How were your days there?

Peter Muhlmann: I… in some sense, I quite like being a student because you had a lot of freedom… and I was the kind of student where I played the game too much. So for me, the game was “get as good grades as you can with as little effort that you can.” And so I was very good at just coming to… a week before we had a test I would just… read and read and read … and do a lot of similar tests and then do really well.

Stephen Cummins: And did you stay up late at night before them?

Peter Muhlmann: No, no. I… I need my beauty sleep, but I think in hindsight I would actually recommend the exact opposite strategy, that… that you learn because you’re interested in learning something. And people obsess over the grades when they should actually obsess about getting some knowledge. So in that sense I was a very good, but bad student.

Stephen Cummins: So, I’m guilty…I’m guilty. I did the exact same thing except I stayed up all night actually before exams. I was like a slightly exaggerated version of that, but looking back, I’m almost ashamed of my younger self because it was just such a pointless exercise in some ways.

Peter Muhlmann: Exactly, because now I can remember nothing of it, absolutely nothing, I took away with me from that place.

Stephen Cummins: Yeah

Peter Muhlmann: But the beautiful thing about being a student in Denmark is that the government will actually pay you to study. So, so you’re being paid, say, 500 euros a month…

Stephen Cummins: Ah ha.

Peter Muhlmann: And most people listening will say “Oh, that’s not a lot,” but… but when you are at 18 or 19, that… that can buy you a lot of pasta and tomato sauce. And so actually life was pretty good. And… and there was the safety net that if the company didn’t do well, I could also always just fall back on that. I could always just fall back on studying.

Stephen Cummins: Yes. Yes.

Peter Muhlmann: and a lot of my friends did that, like it’s… it’s a very Danish thing that you start a company next to studying. So, so I was very fortunate there, that I didn’t amass any student debt that like you do in other countries.

Stephen Cummins: Like the United States, for example.

Peter Muhlmann: Exactly. Exactly.

Stephen Cummins: I think that’s a great thing about Europe, and of course Denmark’s an even better example than the average; you’re even given money to… to survive, basically, while you’re doing it. So what drove you to… to build Trustpilot? And what was the initial problem you set out to solve?

Peter Muhlmann: Yeah. So I created Trustpilot to solve two problems really. So the first problem was that people like my parents could sometimes have a hard time shopping online and then they would get bad experiences because it… it could be very hard to see if you could trust a company or not. And it would be hard to see if they will give you a good or bad experience because there was virtually no information about these businesses. And e-Commerce was in its very early stages.

Stephen Cummins: Yes.

Peter Muhlmann: And so I thought, ‘Hey, wouldn’t it be better if you could compile all the customers’ opinions about a business and put it somewhere trusted?’ And… and… and that it was necessary for that third party to be independent; both of consumers and the businesses. Because a lot of companies will say, “Hey, like we did a survey and 98.9%  of our customers love us” and they would advertise with that. But if that’s just the company saying that; it has no credibility. There has to be something else, somebody else, saying that… that you can actually trust. So, that was the one problem I wanted to solve. So I think about that as… as when my parents, if they buy a new kitchen, they may want to buy it from a company that is a little cheaper, but will then actually get a good experience.

Stephen Cummins: Okay.

Peter Muhlmann: If they’re going on a holiday; are they going to get a good holiday?

Stephen Cummins: Yes.

Peter Muhlmann: And so the beautiful part about Trustpilot is that you can see what other moms think about a business before you buy. The other problem I wanted to solve was a personal problem I had which is; I was selling electronics online, selling them on eBay. And so, the beautiful thing about selling stuff on eBay is that after each transaction eBay will say, “Hey, what do you think about the purchase?” Did it go well or did it not go so well? And so what that allows is it creates a world where the thought of buying a used cell phone from a gentleman in Hong Kong who claims that it’s as good as new and he will send it to you if you just wire him some money.

Stephen Cummins: Sure

 Peter Muhlmann: Isn’t as crazy as it sounds because you can see the 10,000 other people did the same thing. And so, I sold a lot on the eBays of the world and then I thought, actually I would like to start my own website also, because of that’s what I saw other people did. So I did that and I thought lots of people were just going to buy automatically. The trouble was, we did get some visitors but nobody bought because they suspected that it was just Peter sitting in a basement with his friend, two kids, selling electronics. And the trouble with that was it was actually true. And I didn’t want to refer them to the eBays of the world because all my competitors were there. So I thought, why isn’t there a way where I can gather my customers’ opinions and show it in a credible way so that people trust my business. And so that was really the… the starting point for Trustpilot was that I could help businesses and I could help consumers and everybody would be better off.

Stephen Cummins: So that was your starting point..and at what point did you feel “I’ve got product market fit? businesses are interested in listing with us” and how did you get the businesses to trust you enough?

Peter Muhlmann: Yeah. So, so, so…there were two stages of product market fits. So the first stage was the consumer product market fit and that was there from day one.

Stephen Cummins: Okay.

Peter Muhlmann: Really, we were very early to the market, but I think we were right in predicting that opinion sharing would get popular.

Stephen Cummins: Yes.

Peter Muhlmann: And so, so when we started, there was no Twitter, there was no Facebook there was no LinkedIn. Certainly, I didn’t know about them. They were just in… in the early stages. And so, so what has happened after us starting Trustpilot is that the… the opinions sharing online, it just become so commonplace. Today you cannot buy a pizza without sharing your opinion about the pizza, the delivery person and the company behind it all. You’re taking it actually for granted and if you’re not being asked about your opinion, that’s weird.

Stephen Cummins: Yeah.

Peter Muhlmann: So, but… but it wasn’t like that back then.

Stephen Cummins: Yes. Sure.

Peter Muhlmann: But people like that.

Stephen Cummins: Cause we’re talking in 2007.

Peter Muhlmann: Exactly, we’re talking 2007 and people like to read other people’s opinions, also. So everybody thought that… that was interesting. Now, the second stage was then… making companies interested. And… and so I was the first telesales representative for Trustpilot because there was just me to do that.

Stephen Cummins: Yeah.

Peter Muhlmann: And I don’t know if anybody has tried that, but I can actually be rather grueling; calling people cold and trying to persuade them that… that they should speak with you in the first place and use your product and the second place and… and maybe even pay for it.

Stephen Cummins:  Today’s nearly impossible. Yeah. And it was hard in 2007.

Peter Muhlmann:  It was, I think… I think it is… it is, it can be soul crushing. Yes. But what we found was that we… we had product market fit with two types of customers. So the… the first type of customer, what was the one who was extremely customer oriented. Who obsessed about the customer experience, but didn’t feel rewarded for it.

Stephen Cummins: Yeah.

Peter Muhlmann: So often we would speak with people where they would say, “Hey, I care more about customer service than all of my competitors, I know that. They’re not giving a good service, they’re selling it much cheaper than me, but I don’t get rewarded for it.”

Stephen Cummins: Yeah.

Peter Muhlmann: And… and they saw, “Huh, if I can just show that. That’s… that’s really good.” And then the other one was the ones who were on the avant guard of the customer opinion and online marketing. Where they were… and also picked up that this opinion sharing and opinion consumption was popular.

Stephen Cummins: Yeah.

Peter Muhlmann: So was very much this about… about getting the early adopters and the small companies. And then as the small companies started doing it,  their competitor said, “Hey, what’s going on here? Now, this company is showing that their customers love them. Why can’t we do that?” And then… and then initially it was primarily online retail, but then other industries said, “Hey, I’ve seen… I’ve seen this on all the retailers. So I’m selling broadband connections, or I’m selling you a travel package or I’m selling whatever it is. Why do customers not care about this in my world?” Well, obviously, they do. So in that sense, we also started to get a lot of businesses to self select onto the platform.

Stephen Cummins: Okay. so tell us how, you… you know, how you make money. And give us an idea if that’s… if that’s okay, of what, I know you’re… you’re incredibly broad. I looked at the list of categories and I got dizzy. You know, it’s you’re… you’re a huge player, really, in terms of volume of reviews. It’s… it’s… it’s remarkable and great credit to you. But what would be the category, I know you don’t want to limit it, but what would be,the categories that we bring in the bulk of the revenues currently for Trustpilot? And I know you’re probably going to evolve into many other areas. Would it… because it looks to me like the… the… the kind of the meat of it is consumer and the meat of it is… is kind of consumer brands…and… and is that a fair comment?

Peter Muhlmann: Yeah. So so partially, for historic reasons though, because… because the early adopters of online marketing, really, were the online retailers, It was eCommerce. So they’re the ones who were onto this at first. And then came travel. And then came everybody.

Stephen Cummins: Yeah.

Peter Muhlmann: So we’re now in the phase where we have a lot of retail. We have a lot of travel. We have a lot of services companies. Also financial services companies.

Stephen Cummins: In the next episode, episode 2 of a trilogy with Peter Mühlmann, we double down on the company itself and find out what markets Trustpilot does particularly well in.

You’ve been listening to 14 minutes of SaaS. Thanks to Mike Quill for his creativity and problem solving skills, to Ketsu for the music and to Anders Getz for the transcript. This episode was brought to you by me, Stephen Cummins. If you enjoyed the podcast, please don’t forget to share it with your network, subscribe to the series, and of course give the show a rating

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*Also big thank you to Hallie Therrien for proof-reading transcript!