Klarna Founder: From $0 to $46 Billion: Sebastian Siemiatkowski | E98 | Transcription

Transcription for the video titled "Klarna Founder: From $0 to $46 Billion: Sebastian Siemiatkowski | E98".


Note: This transcription is split and grouped by topics and subtopics. You can navigate through the Table of Contents on the left. It's interactive. All paragraphs are timed to the original video. Click on the time (e.g., 01:53) to jump to the specific portion of the video.


Intro (00:00)

He had a discussion with me sleeping in the street. That scared me. Be careful with who you're listening to. Have they really contributed to success? Have they really built success? Or have they simply been in a company that was successful? Afterwards, I've heard from journalists that like a ton of emails were coming from banks 'cause they simply, you know, they're threatened by our existence. And so they kind of articles and the writing about us shifted from their hair to screw customers over to do bad things. And that was tough. I went home at dinner with my wife and we talked about it and I was like, no, this time around I should probably help him. I decided and I tried to call him and he didn't answer and I emailed him and answered morning my mother called and said he was dead. Sebastian Shemyakovsky. He's the CEO and founder of Europe's most highly valued FinTech privately held company. His company is worth $45 billion. Sebastian isn't a guy that comes from a stable household or a silver spoon. It's very much the opposite. The stories you're gonna hear about his home life, his family, his father might just bring you to tears because that's the effect they had on me. He came from incredibly, incredibly humble beginnings and he's built a company in an industry where he was not qualified, where he didn't have technical expertise, where he couldn't code that has completely revolutionized an industry. He is humble, he is honest and he's willing to tell you the truth. And that's why it's such a pleasure to sit here with him today and uncover what it takes and who it took to build such a revolutionary pioneering business. So without further ado, I'm Stephen Bartlett and this is the DiRever CEO. I hope nobody's listening, but if you are, then please keep this to yourself.

Early Life And Business Philosophy

Setting foundations in a different country - and being different... (01:50)

Sebastian. One of the things that I've come to learn from speaking to a wide array of guests on this podcast, from sports athletes to really successful CEOs, is how often our childhood and our early is shape our adult foundations. And whenever I meet someone like you that's achieved a really remarkable things in whatever discipline they're in, my first question always becomes, what was it that made them remarkably unique in the early years? What was the experience, the culture and that shaped them into who they are today? Right. Is that how far you asked that? 'Cause I don't necessarily feel that I was remarkable unique in my early days. I, a friend of mine, their son turned out to be blind, but he has perfect pitch and he's now eight years old and he's sitting and playing the piano and singing. And that is to me a remarkable. Like, yeah. And I was thinking about that, I was like, that wasn't me when I was a kid. Look, I mean, my parents were from Poland. They moved to Sweden about a year before I was born. I was born in the northern part of Sweden. They were basically immigrants because they didn't see a future in the communist Poland, which was the case at that time. And so, they came to Sweden, but obviously as it was back then, it was very hard to integrate into Swedish society. English wasn't as profound as it is today. And there was a lot of language barriers. At that point in time, it was also like a lot of, I would say, skepticism about people with Polish name and Polish backgrounds was hard to get a job. If you had a foreign sounding name, there was a lot of these biases. So my parents struggled quite a lot to integrate. My mother was an early retiree. And my father kind of jumped from job to job, was unemployed for quite a long period of time, drove a cab from all to your years, did a lot of different things, right? And so I think that like, I do think that there's something to the fact that as an immigrant kid, with parents that still like intellectually had academical backgrounds and, you know, had studied at universities and stuff like that and never basically were able to live up fully to their potential. I do think that that kind of creates some kind of like, you feel like that's unfair. And then you're gonna like try to fix that somehow. And I was growing up among Swedish friends who just had better economical standards than we had. And I was obviously longing for what they had. You know, I remember that with my mom, like there were weeks when, you know, we were eating pancakes every day. And I thought that was great, but now I realize it was because there was nothing less. That was the only thing we had, like flour and milk and so forth. So like, so I think that like, I do think that that kind of setting, and there's obviously some research that suggests that in Silicon Valley, more than 50% of the companies are, you know, started by immigrant backgrounds. I do think that that kind of setting of, you know, having a lot of the intellectual capacity and all these things and the kind of prerequisites, potentially to do something different. And at the same time, this kind of drive of like, you kind of almost feel like it's unfair, you know? Life isn't necessarily fair, but like you feel like, this is not fair. We should have like been able to have something different than this. And maybe also to some degree, you've, I don't know to what degree that's on an emotional level, I don't think on a rational level, but on emotional level also like, your parents really sacrificed their lives. Like I think it's hard for people that are not, are not immigrants to understand the consequences of not having the friends from school, not having the, you know, the understanding of how society works, which school is better, which is worse, how do you interact with government? You know, how does the system works? Always things like that, that total lack of understanding of a specific society that it means to shifts like my parents did in their, you know, late 20s, early 30s and how difficult that means for your own ability to kind of, you know, do something with your life. I think that's something that's underestimated. So you have the kind of emotional thing that you want to, you know, you feel that they did a massive sacrifice in some due regards for your behalf, right? - Yeah, and that feels like a tremendous privilege.

Coming to a School in an All-White School (06:15)

- Yeah. - I wanted to ask you, 'cause I can relate a lot to that. I'm an immigrant myself, came from born in, you know, Africa, in Botswana, and my parents came over here, my mum can't read or write. - Fantastic country, whatever. - Yeah, yeah, beautiful, beautiful place. But I moved to the Southwest of the UK, where I was in an all white school of 1500 white kids, and it was me, and I caught, and we were also like the poorest people in the middle class. - Oh yeah. - So you have, I felt different all the time. - Yeah, yeah. - And did you feel that way? - Yeah, absolutely, very much so. I mean, even the fact that we were Catholics, now I'm not a very religious person today, necessarily, but we were Catholics, and my parents, we went to church every Sunday and stuff like that, in a very non-religious society, like Sweden, the high waters in itself, very odd. And I remember people like saying, you know, Jesus wasn't the son of God and stuff like that, which at that point on time, not today, I wouldn't necessarily put, coming to that to be where that at that point on time, it was like, somebody was like, saying things like that. And then also the poll, like the view of Poland at that point on was that there was this country behind the Iron Curtain that was spewing out toxic waste into the Baltic. And so there was a lot of like, Polish and jokes about Polish people and stuff like that. So I mean, all of this, like, I took heart. I wouldn't say I was bullied, that would be, in my opinion, I would just take it too far because people, I know people have been bullied for real, and I don't think I was. But there was like that, you know, the sense of being different, of not necessarily, you know, both not having the same prerequisites, but also getting some like, kind of like sometimes getting quite hard time over these things, right? - And when you were a kid, 'cause I know I did, I developed a very naive thesis as to how I would escape this scenario. - Oh, is that money? - Yeah. - I had success. Because it was the pain in my household, the lack of, so I thought, well, that will fix it. Did you develop your thesis of how to? - No, I think yes, very similar to yours, right? Because also what happened in my life was that my parents divorced when I was about eight years old, right? And so, and they had a lot of conflicts, right, on different topics. And I think to your point, like as a child, and interpretation of the reason for that conflicts was the lack of money, like, because that was what they were talking about all the time you were hearing that. Now, I do today probably have a slightly different view of whether that was the only explanation for their inability to be a couple and be together. But at that point of time, I agree with you, that was like, one of my interpretations was like, yes, it would be nice to have monetary success in life, and that would solve some of these problems for sure. For sure, I do agree with that. But I also, at least in my life, there was, in addition to that, something else, which I can't really explain, which was that I was always intrigued and thought it was interesting to kind of do business. Like, it's very nerdy, and I can't explain it. Like, I remember reading, like, Richard's Branson's book when I was like 13 years old. Like, and I think it was like super interesting, or the founder of IKEA, Inver Campra, it was a big thing in Sweden, obviously, because it's a, switch, so like, I remember reading up on these stories, and I also remember like, trying to start businesses very early. So I had like, I did a lot of different things in like, trying to start. It was everything from like, gathering some of my friends, and we would go to the apartments where we were living, the kind of the story buildings, there was this bus stop where all the people were coming, and we would go there and like, offer us to carry, you know, groceries and stuff like that, in return from my life, all that kind of stuff. Like, just finding different ways of like, you know, trying to do things. So.

Entrepreneurship Appeal (09:40)

- Is there, there's something really intriguing about that in my mind, because as you've highlighted, immigrants tend to be more entrepreneurial generally, and in the situation you're brought up in, and I reflect on my own situation, because of the circumstance, I had made this connection that, if I was to have anything, or become anything, it would be a direct consequence of my own actions. And then I think maybe entrepreneurship appealed to me, because it was, I knew I wasn't gonna do great in the conventional route, but then this bit, it was this really nice route to potentially huge success. And it was all kind of centered on what I did. It was gonna be me. And I think, you know, from hearing about the scenario you were in with your parents, and you're upbringing, and being an immigrant, entrepreneurship, or something that maybe you could control. - No, but I think you write an instance that like, I think definitely in that environment growing up in that setting, you know that like, there's nobody who's gonna help you. Like there's nothing, you're not gonna get anything from anyone, right? It's just gonna be, either you do it, or it doesn't happen. Those are the two options, like it doesn't happen, or you do it yourself, like those are the options. I think if I look at my own kids, there's a lot of things that happens in their lives that fit into a third category. It happens because that a mom helped out, and you know what I'm like. There's a lot of things that happen. But here was like, you know, if I wanna have an adventure, if I wanna go and see the other part of the city, I bike there, I have to go there myself, nobody's gonna drive me. Like, you know, it's like, and I do think that there's some lack of like, healthiness to that as well, right? Whereas like, it kind of educates you and I haven't thought about it, but now as you're saying, it's actually kind of thought about it, that it does help you. But I would also say on the immigrants, I would you said, but like, they are more commonly among entrepreneurs. But I also think that like, when I look at like, you know, when we have problems in neighborhoods with a lot of immigrants and so forth, I think that to me, it's almost like, I wish that society would realize that like, there's gonna be a lot of frustration, a lot of people with like, you know, energy, they want something different, they want something changed, they don't want things to be the way they are. That's kind of where you're coming from. And then it's just society's ability to try to showcase that that energy can be used to become slat and Ibrahimovic, it can be used to become, you know, music artists, it can be used to become an entrepreneur, it's that energy. Or if we fail to offer those opportunities or showcase that those alternatives, they may come out as burning cars and doing other things that are less, less, you know, less productive, right? So I think it's really that, you know, to me today, I was just like, wish that society would really see it as like, how do we help showcase and show that there are these great options for that, like build up energy of wanting something to be different, right? And for that, you need sort of great empathy and to understand that people are different shapes and sizes, that kind of brings me nicely to the education system and your personal experience with the education system.

Did the school system serve or fail you? (12:25)

And do you think it did you serve you well or did it fail you? Well, I think it did, one thing that, to your point which you were describing as well in your own history, is that I, one thing that I do worry for today, compared to me, was that I was in a school with mixed, I would still say 70, 80% were Swedish, 20% of that point of time had different immigrant backgrounds. If they would been only immigrants in that, I would not have anything to compare to, right? So I do think that the school system at that point of time was less segregated than it is currently, at least in Sweden, I'm not that familiar with the UK current situation, but I think that was a case. So in that case, now, where the teacher's that amazing and like, you know, like, you know, there was a mix, like some were good, some were bad, right? And so, and I remember like, you know, I was one of the kids who had very easy at school, I learned to read quickly and so forth, right? And I believed to some degree, then I became slightly bored because the Swedish school system at that point of time was very much set up as like, everyone equals. So if you were like, ahead in math or ahead in reading or whatever, I literally still remember from like, you know, second grade, which is 80 years old in Sweden, you know, 80 years old, you know, we were having like reading, which meant that everyone was reading from a book and like some kids on four people for them, like they were still struggling reader, right? And I had already read the whole book. So I was quite bored sitting there, listening to the story that I already read. And then I started disturbing the lesson because that was kind of the same. So I became a person that was quite problematic for the teacher because I was just like, I was so understimulated. And that I think is a little bit sad that I hoped that like, schooling has become better in like, you know, actually, you know, understanding that all pupils are different than need different support and you know, can get a different challenge because you all need to have like, continues challenging. - And those, that lesson there you learn about that need for challenge, you're now the headmaster of a great school that has thousands and thousands of employees in it. And that point about making sure that the people that attend your institution are also challenged must still sort of be important to you, right? - Absolutely. I think it's like, actually, you know, and in a way, especially in Swedish society, which I, you know, the Swedish culture is very much just saying that Alaskamiad, which means that everyone should join, like everyone should be part of this. And that's a fantastic ambition and vision for society that like no man left behind is kind of a different translation of it or no woman left behind. But, and for a while, that was creating a conflict because Klona as a company, we have very high aspirations. We wanna do something very different. We wanna, you know, really, as I say, sometimes play in Champions League. And then, you know, the problem is that's not true for everyone in the work world. Some people are fine with playing Kids League and so forth, right? So, so it took us some time to dare to say that Klona is not for everyone. That Klona is actually a company that wants to attract people that want to make a real impact, make a real difference, that wanna learn, that wanna be challenged. And that took some time, and it might sound odd, but for us, at least in the Swedish culture of context, it took some time to get to that where we started saying, you know what, Klona isn't for everyone. Not everyone is gonna enjoy this environment because not everyone is willing. A lot of people will say, it's amazing to climb out Everest. Did you climb on Everest? They're fantastic. That's one thing, but it's a very different thing that like how many people are really willing to like freeze their fingers off, train for four years. Like all the things that you need to do to climb that mountain, then like the number of people that like check the box and say, I wanna do that, becomes massively smaller, right? And so I think the same applies for a company. It's like a lot of people will say, I wanna work for a successful growth company doing things that's really cool. Like climbing my Everest, but then the question is like, are you willing to do all these things? Like that means that you need to do in order to be able to accomplish that, right? And so yeah, to your point, like I think the challenge today, I always tell that people like when they, you know, when I interview them or it was just like, just be like, be aware like this is, you're gonna be very challenged. It's not gonna be a place where like, it's just gonna go easy. You're gonna be very, very challenged here. - What's the perfect balance of challenge between being two challenge that they, you know, they end up in the, don't burn out something. Or under challenge that they lose motivation like you did as a kid in the book. - No, it's super difficult, right? And I think that's why it has to be about encouraging them and seeing like each individual by individual where they are, right? So think about a great personal trainer, right? When you go to the gym, you know, how do they find the balance of, you know, how much to push you and when to kind of hold off a little bit and let you, you know, breathe and so forth, right? Actually, you know, it kind of interesting because my kids have this swim teacher, her name is Petra. And I can sometimes just sit and watch her when she's training my kids swimming because she has that perfect balance. I've never seen a teacher that finds that perfect balance as well as she does. So she pushes my kids exactly to the point where they're like, dead scared, like almost like, they're almost there where they're like, gonna want to give up and get out of that, but they're doing it. And then they're proud of what they accomplished. And that to me, to your point, like that's almost like a piece of magic that a teacher has. Like the best teachers can spot that in their pupils, can spot that and really find that perfect balance, right? But it's very difficult. And it's obviously difficult in a company with 4,000 people. Like how do you try to put mechanism plays to ensure that you find that balance, right? And that you really allow people to get to that perfect spot where they develop heavily, but at the same time doesn't move, you know, ahead and just bang the heads of the wall and feel a givap or, you know. - To a point then as well about it took you a long amount of time to realize that you wanted to just say to the world and to anyone that was considering joining your company, we're not for everyone. The pandemic happened and what I saw was leaders were kind of forced in this wave of virtue signaling to say, everyone can work from home forever.

How a company culture should be determined by a mission (18:43)

If you didn't say that, now you're a bit of an asshole company. And as I reflect on that and as it went through, I started to reject that narrative because I think that the culture of the company should be determined by the mission. And also the other thing was I actually think that companies as you said should have really clear communication at all stages about who we are, how we work and what our culture is. And allowing it to be kind of you decide, I actually think it's for me super weak as leadership, but I also think it'll have an adverse effect on the ability for the company to achieve its mission, but also the company culture. People knowing like what's expected of them, but now it seems to have become really like politically acceptable to just say, our employees will do whatever they want. How do you feel about all of that? - It's a very complex topic. But I think, look, I think that the, look, I'll give you an example, right? Is that previously, which you might found odd, Klon, I was not really following kind of agile work tactics.

Company learning process on adopting Agile work methodology. (19:46)

And then a few years into Klon as development, we realized that some aspects of agile, like daily standups, weekly retros, working as small teams on specific topics. There were some aspects of these that are very productive and really help, productivity, help achieve our goals and so forth. So then what we did is we said, like, okay, now all teams within Klon, I should do daily standups, should do weekly retros. And I think currently when we look at it, our data about 50% of teams are following this, right? So then the question is like, how do you then approach that? Because you feel yourself very convinced that, for example, the idea of daily standups is helping to be productive. But if you enforce that, if you simply go and say, everyone has to do this, period, like check the box, the problem is like, you can do daily standups in very productive ways, where you're engaged, the whole team is engaged, you're discussing, what can we do, how can we move faster, et cetera, et cetera. Or you can do daily standups only to check the boxes. Like, there are different ways. And in that it applies to almost all such rules and concepts within companies. So I think that like, what I'm still, and I still, I don't feel that I entirely figure this out, but there's a balance in an organization around like, when are we prescriptive and mandating things? And when are we suggesting and highlighting? Because in the end, the reason I believe in daily standups so much is because of my own experience of that. But there was also something that I seeked up myself. There was a willingness to, I was interested in trying to find out better ways to working. I learned about this, I saw it in practice being done in a good way. And then my conclusion was that this was that. So if you think about my learning process, my personal learning process in that situation, it was driven by my interest, my passion. And then I accomplished, that's a very different thing. So if my board suddenly would have dialed me up one day and said, everyone has to do daily standups period. 'Cause it would not have given me the opportunity to learn and reflect on it. That's when I, so a lot when I think about learning within an organization, I think about like, the carot the masters and the Japanese. They're kind of like, remember all this like carot the kid and everything. Like how they learn in those environments, it is like, obviously at the beginning, there has to be an interest by the individual self to try to learn. But then the master doesn't always tell you like exactly what to do. They like, they provoke you to try to learn yourself. There's an excellent example from the Toyota way on that topic where like some of the like masters of Toyota way within Toyota would like take a lot of their senior managers and they would draw a circle on the factory floor within the Toyota factory. And then the managers would have to stand there and observe the manufacturing of the cars. And then by the end of the day, the totally silent teacher would come and say, okay, so tell me, what have you observed? And then the senior managers within the circle have been standing there the whole day. Had to say, well, we saw this, we saw that. And then he would look at them, the senior, you know, senior kind of shins in like that, the senior, he would be like, no, another day. And I said, I have to do another day. So like, and I said, I like provoke them because I think that's the, and it's very, learning is such a difficult thing, right? Because you don't, as much as we think that learning is sitting in the room and listening to somebody on that is, you know, a very inefficient way of learning. We learn by doing, by doing things ourselves, right? That's really, that's the truth. And I think that COVID is such a good example of that because we had a lot of experiences that we've never had before and they taught us a lot about our life, our priorities, a lot of people talk about that today, because we were forced to do things differently, not because we read about COVID and we read about, you know, how things can be different because suddenly we had to experience it. And when you experience that's when you truly, that can impact your behaviors can change your ways. So the kind of, it's a very difficult balance in these companies, consistently from a culture perspective, like how do I, how do I encourage and kind of push people to go and find out, like, you know, try to experience that and learn for it, but not trying to enforce it too much. And that's a balance game, right? You cannot be entirely without rules to your point because like, if you join a soccer team, like there are some rules, like you come into exercise every morning, if you just don't come to exercise, you're like, okay, look, you know, maybe you have a different philosophy about how you're gonna become a great soccer player, but like, I just don't believe in your play. Like, like, it's not gonna work. So like, if you wanna go and believe that you never have to exercise to become a great soccer player, you do that, but you can't do it online too, like great. So there is obviously some selection criteria we have to decide within our ecosystem, within our company, these are the rules that will apply and because we just feel that they're so fundamental and so important, but once you're beyond that level, then it's more like, how do I intrigue you? How do I challenge you to develop that insight for yourself so that you really come to embrace those ways of working and really make them your own and really expedite them? I think, and I haven't solved all of this to be very, you know, honestly, I think we have lots to learn still with Klorna, but I think that just a very interesting, sorry, it was a long answer. - No, it's amazing.

How to best embrace learning? (25:04)

It's really, really thought-provoking and I was thinking, yeah, I don't think a lot of people would have given that answer, but I feel it's the right one for so many reasons, especially as it relates to the process of learning, I think the things that I was most successful at, all facets of my life were things that started with interest and the things that I had an allergic reaction to in terms of topics in school with the things that there wasn't that fundamental curiosity. So I was kicked out of school, but if you look at business and psychology, like I would have gone to more lessons. I was 30% attendance in these other subjects and that's so true. So it's, it provides a different way to, I think.

Take this into consideration! (25:40)

- And I would say one more thing on your specific work from home thing, which is also another thing to take into consideration is that what's ends up happening, and this is not a problem when you're 10, 20 people on the start up, but when you start becoming 4,000 people, that what ends up happening is you have, obviously, unfortunately, that's the only way to describe it, layers of management and then you have the people actually doing it and that's just how most organizations are structured, but what ends up happening is, okay, how are we gonna do with this work from home? What are the rules they're gonna be set? And there is a tendency for people to go and say, management team, the top people have to tell us what the rules are. And if you write those rules, the problem is, like, look at Klana, we're active in like 40 offices across, you know, 20 countries. Each one, which will be in a different phase of COVID or not, and stuff like that, right? So try to write a rule that is applicable for each team and then you're gonna have individuals, maybe some individuals have immune diseases and are extremely worried about, you know, moving into that environment, they're more careful than others. Maybe you're gonna have like, you know, some people that have religious concerns somehow tied to that. You know, you're gonna have a flora because you have so many people, you have so many different individuals with different perspectives. So what you then sometimes need to do in my opinion is you need to say, look, you will decide for yourselves. And what then ends up happening is, in my opinion, what I'm supposed to say is that the people actually do new work, they usually find that quite attractive, that they can take that decision. So the managers of those people, they may find it's more difficult because to them, it's nicer that the top management team has written a policy and they can say like, this is the rules. But why? Why these rules? Because it was said so, right? And so then they can hide behind that, right? And if you don't allow them to hide behind that, they will actually have to motivate, why are we gonna do like this? We've decided in this team that we're gonna work in office, so we're gonna do this. And that forces them to do that, which is good for them. They need to do that. They need to provoke that. But there's always a risk when you write two strict rules on the top is that they're being used and then there's just management said so. And that is just so bad for the culture. You wanna provoke an environment where people feel like, the rules are there, they were well intent, they had a good purpose, but they also need to be challenged. If they, on a specific individual, in a specific situation, do not apply, there needs to be a mechanism where those rules comes back and say, let's, what if we were in this? And in the end, rules can never be an excuse for not thinking for yourself, right? That never happens. And they always have to be, there's gonna be exceptions in a large company. There has to be exceptions. 'Cause those are healthy signs of the fact that people are thinking for themselves and judging by themselves and not just hiding behind the rules. - I always reflect on the, that made me reflect then on the example of the, someone told me, certain country, I think it might be Germany, where pilots were having a huge amount of crashes. And it was because the culture was, you don't challenge the pilot. So even when the co-pilot knew, there was-- - I think it was South Korea. - It was South Korea. Yeah, yeah, yeah, yeah. I think it was, yeah. The planes were crashing, but because the co-pilot didn't feel like a challenge. I think that's sort of analogous to what you were saying there. I talk about Hule a lot in this podcast because of the transformative impact it's had on my life. But there is such thing as the Hule Bug. And the reason I started my Hule journey and became a Hule again as they call it, was because of a guy called Mike in my office back at Social Chain who would evangelize about it all the time. And then once I tried it one day and I saw the impact it had on me, I became the same type of evangelist. And even here at the Diary of a CEO Studios, we have now three people that are stood currently in this room with me that have caught the Hule Bug, Dominic Murray, Jack Sylvester and my assistant Sophie Chapman. They're all now working out and they're all addicted. I think addicted is a strong word. They're all heavily reliant on Hule to plug that gap in their diet and their lifestyle that a busy lifestyle and convenience food options sometimes create. So I want as many people listening to this to try Hule. And if you catch the Hule Bug then I genuinely believe it'll change your life. I have to go back and hear about the start of Clannins. You know, one of the things that really intrigued me and made me feel a lot of respect towards you was that you're not technical as a co-founder. Unfortunately no. So I would have built this mega tech company but you're not technical. And I know, I tried when I was 18, that was my first failure. But I found that really just horrifying and respectful.

Co found a tech company without a technical bone in your body! (29:57)

Yeah. So tell me, so how did it start and where did you find the courage? Sure. No, so look, as I said previously, like it's kind of ironic. I always had tons of business ideas and I even remember like when I was like probably 13 or something in Sweden was the first time we had private radios, private radio stations. And I thought the one in my home city of Uppsala sucked. So I kind of wrote the business plan for them how they should change the shows and the intent and actually called them and tried to convince them to change. I can imagine they were like laughing, they're got so like this 13 years old is calling us like, you should do this programming stat. You should have a show about this. I bet they got it now. I bet they got it now. Yeah, yeah, yeah. Exactly. So for whatever reason, I always had this like inclination to wanting to do something. And then I did two years at Stockholm School of Economics, which is one of the like top schools in Sweden around. If you're, you know, want to study it in a canonical direction. Everyone at that point, this is 2000. Everyone wanted to work with Goldman Sachs, Morgan Stanley, McKinsey. That was really the vibe. It's actually interesting because they had a survey where they said like at that point of time when they asked students, 7% wanted to start their own company. Today, it's 70%. It just gives you like how much of a shift has been during that period of time. But anyways, and then in 2002, because I went directly from college to university, I was like, okay, I just got to do something else. I mean, every my, all my friends had like backpack and stuff like that. So ended up me and actually what became my co-founder in a class. We went back, backpacking, which at that point of time, because we always wanted to do something that was a little bit different. We ended up going around the world without flying, which was a lot of fun. So if you want to go to YouTube, you'll find the videos when we're like from this. Oh, really? You can find them. Yeah, because we had this idea that we were, this was just at the beginning of all these like, you know, big brother and all these like, you know, docu, documentaries and stuff. So, so we thought that we were going to like, we recorded the whole thing and we did list.

How did you get to Australia without flying? (31:43)

We thought we were going to like air this as a TV show. That was a very funny question. I need to ask you one question now. How did you get to Australia without flying? Yeah, so you had to, we took a, a carborship from Singapore to Brisbane. Ah, okay. And then we had a carborship from Sydney over New Zealand, up to Mexico. So that's how we went. And then we actually took the QE2, you know, Elizabeth for a second, between New York and, and Southampton. So, so that was kind of really the, those were the expensive parts of the trip. I mean, we, we did it on an extremely low budget. I think on average, we spent like $10 a day, like we spent, you know, we're sleeping in the streets. I actually slept on, pick it at a circus on the street when we were in London at night and we were passing through London. And then I went, we went to Hyde Park when, when the sun had risen and slept. Because you don't sleep really well and pick it at a circus. I didn't, I didn't, I didn't, I didn't, I didn't, I didn't, I didn't, I didn't, I didn't. So like, you can imagine how, you know, the vibe there.

How you turned your scrappy mindset of traveling into business. (32:36)

I thought, what a fun. But anyways, so we came back and then I missed to start my semester. And so instead I was like on the second sabbatical, the other hadn't expected. And it was 2003 and I was looking for a job in my home city of Oopsala. And I couldn't get a job. I was actually on welfare for a time because I just couldn't get any of it. It was low economy was very hard. Eventually ended up working at this account receivables factoring firm, which was like the last place in the world I ever thought as a sales guy. Yeah. And, and I was like, okay, but now I'm here. I'm going to do the most out of this. So I started calling and trying to sell these services. And then I, it was very difficult to sell such services to companies because they're all like, yeah, you can save me 400 pounds a year, but I don't really care because we work with this other company for 15 years and they're great and whatever. But then I started talking to entrepreneurs and these entrepreneurs were starting small e-commerce companies because some of them had figured out that that was on time. You could buy Google AdWords super cheap because no one was buying them. And then you can get some traffic and you can sell some stuff and like it was, like it was all canceled stuff, right? So you started talking to them and they were really keen like, oh, I can say 400 pounds a a year. That's awesome. I'm going to worry with you. So then I started like thinking about payment services and I was asking them, what are your problems? What are the things that you would like to be solved? So that was kind of where the idea came from. But then a year had passed and I want to go back to school. So I came back to the Stockins Group Economics to start my third year. I left my job. But there was an incubator at the school. And there was very early at this point of time now everyone has an incubator, but at that time it wasn't that common. So I went to the CEO of the incubator and I said, hey, you know, I have this idea. It's kind of payments offering by now, pay later services. It would look like this and whatever. And she was like, this is awesome. You have to do this. And when she said so, I was a little bit like, now I can't just like give up on this. You know, so I was kind of looking around and then I stumbled into one old friend of my Victor, when he was a little bit and he was like, because I was sitting in the cafeteria of the school and I was telling some friends, like, I want to do this company. It's going to do this and everyone was like, yeah, good luck to you man. Like kind of like patronizing? Yes, patronizing and like kind of like, fake support. You do that and I'm going to go to Morgan Stanley and make all my goals. Exactly. Like that was like kind of the perception. So so let's go for it. The Victor then was the only one who was like, wow, that's awesome. I'm with you if you do it, right? So I was like, okay, that's cool. Let's do it together. We didn't know each other that well. And I had Nicholas who was an old friend of mine. I did the trip around the world with so so we kind of joined forces. But then but it was still like a huge decision to us like starting a company at that point on time felt like, wow, crazy. Are we giving up on careers? What's going to happen? You know, so it was only when we came to the conclusion. We were like, okay, you know what? Let's not think about this as a lifelong decision. Let's think about this as a six month decision.

Why did you feel like building a company was a huge decision. (35:11)

I often tell this to people today like we said like, we're going to do this for six months. But if we do it for six months, we're going to do like all of our energy, all of our time. It's going to be this for the next six months. So we even had like a rule. We had to eat breakfast in the office, we had to be there. We were counting the hours, whoever one else was there. So it's fair. So we were like, we were living in the office for the first six months. And we were just like focusing on that and nothing else. And but it was when we decided it was going to be a six months and then we're going to evaluate. Then we kind of was easier to take a decision because you're like, yeah, six months, whatever. That's fine, right? So we got off and then what we did, we realized that we couldn't code to your point, right? We couldn't code.

Building A Business And Defining Success

Father Investors (35:50)

We needed a system, right? So we're like, how are we going to solve that? So are we going to raise money, try to pay some engineers and hire them? What are we going to do? And eventually we ended up that the incubator we're in, they had this like Christmas drinks thing where they invited some business angels and they invited the companies that were in the incubator to pitch. And so Nicholas, my co-founder did like a 30 second pitch. And after that, a woman called Yain Valerud kind of approached us and she almost like pushed me up to a corner and she's like, this is awesome. Tell me what you're going to do. She was like, she just heard that pitch and she was like, I like this business idea. And she told us, look, I have these engineers and they're like the best engineers. They're amazing because she had actually done one of the few really successful exits during .com area where they had sold a company for 150 million pounds. And so she had money from that and she had the engineering team from that. So she said, I'm going to connect you with those guys. And so we sat down with those engineering guys and they were much more senior in us than we were like in their 40s and we were 20s. And there unfortunately, a misunderstanding arose, right? Where our understanding was that these five engineers or four engineers, they were really aware, they were going to join us full time and work on this and continue developing the company with us, right? Their understanding was they were going to give us some source code, some code and a system that works and then they're off and doing something else. And so, but as it is, and I now try to tell other founders this today, like if you found a friend and you want to start a company together, don't only talk about all the amazing stuff you're going to do and everything you're going to accomplish. Also sit down and ask like, how many hours per week are you going to spend on this versus because you love exercising and you love, hang out with your friends and so forth? Just so like, not that you can do it on 30 hours a week or you can do it on 80, but just so you're aligned. It can't be too big this alignment. It's going to be one person doing 30, another one doing 80, make it super concrete exactly what expectations you have on each other because otherwise, there's just such a big risk of like misalignment and conflict. - Resentment comes quickly, doesn't it? - Right. So then what we did, so we brought those engineers on board and they started coding and they were excellent. They were amazing engineers. So they started coding the system in December in April, four months later, we launched with the first customer. So it's four months and they put together a lot of the fundamentals that actually still, you know, today are part of what the client offers as a service. So they were super up, but then, you know, after that, they were like, good luck guys. See you later. And we were like, no, no, no, that's not what we agreed. And then we looked into the contract and we had given up 37% of the company to them for the technology. And then we had given 10% to Jane as the business agent, but she gave us 60,000 pounds, right? And so, and then so each one of us then had equal. So we had 17% each. And so that was kind of the setup after that. And then we had basically given every way now all these percentages to these engineers and they just left us. And so that became a quite tough conflict, obviously. But legally speaking, they had followed the contract. So there was nothing for us to go into contracts and say, you know, whatever, because the contract was, we just, we just hadn't talked about this and we were on the different assumptions of what the meant. The contract was just there. Like we didn't think about, you know, this consequence. So they ended up leaving us and it was kind of funny because in that room at one point of time, in the boardroom, one person said, well, you know what, just so you know Sebastian, you have to calm down on this topic. Klona is never going to be the size of a company where it's going to need for great engineers like this. That's kind of funny. I almost laughed at it. Yeah. It's going to be funny. Now I think about it. Did you ever resolve that? Sorry? Did you ever buy them, buy it, buy them out or? No. So what ended up happening is to some degree, I think, just because they didn't understand the potential of what they had built together with us, they also sold much too early. So as a consequence, I mean, they sold at a very early, they were maybe the company was $10 million worth or something. Oh, God, that's awful. Yeah. So, I mean, well, it's not awful in a sense because to me, it feels a bit fair. Yeah. They got the upside of what they did. If they would have participated longer and so forth, they would have seen it very different upside. True. And they would have built the company with us. But, you know, but this was a challenge for us as a consequence to your point because, at least, what it allowed us to do is very quickly get a system live and get something going. But then, as they left, I needed to figure out, okay, I need to hire engineers. And I have no clue how to code and how do I evaluate a good engineer for a bad engineer? I have no clue. You're like, architecture? What is that? You know, like there was like zero knowledge, right?

People Management (40:23)

So you, and that is one of the biggest challenge, I think, for a lot of people, like managing people that do the same thing that you know yourself is one thing, trying to manage somebody that does something that you have no clue how to do is very, very difficult. I was in the same place. I knew I needed to build a website, not technical, went on Google, just started looking at their own website, trying to using that as a, yeah, this is cool. This animation looks good. I will hire. Right.

How did he solve the problem of what good looks like? (40:47)

There. So how did you solve that problem if not knowing what good looks like? Well, first and foremost, I think, unfortunately, you know, in what ended up happening in our situation was that one of the guys from this engineering team stayed on because they were still shareholders for a period of time, right? So he stayed on as an advisor and we started hiring some engineers and some of which were better, some of which were worse, some, you know, as you will always have a mix. And we also got a CTO eventually who came in. And the C, he, he as a CTO was an amazing programming and developer, but he wasn't necessarily the CTO that would, you know, hire the right talent and build it. He wasn't business oriented. He was very much like technically interested and wanted to build like really beautiful code bases and stuff like that, which, you know, some engineers tend to have more of that tendencies. And what was the frustration to me is that for a long period of time, and this was a challenge in Sweden and Stockholm at that point of time, the advisors that we had around us, none of them had built a $45 billion company like we are in today. None of them had that experience, but they were senior in our opinion compared to myself. They had done great corporate big jobs. We had like, you know, advisors and board members that had corporate backgrounds and been in big institutions and so forth. And so they were giving us a lot of advice on topics like, is this the system that you're building, is this fast enough? Should you be able to build it faster or slower, like the progress and things? And so when they were giving us that advice, it was bad advice, but we were too young and too inexperienced to be able to recognize that. And so unfortunately it took us some time and it created a lot of frustration because I was always sitting there, it's like, does it really need to take this long time to build something? And is it really unfair of me to expect that the engineers are like a little bit interested in the product they're building as well and the business side of it? Or are they only always going to be interested in the coding itself? And the technical challenge, like, shouldn't I be able to engage with them on the product side as well? Like, and a lot of times we were like, they were like, oh, we want to build this product, you need to give us more clear specifications. And I was like, but if I write those specifications, what's left to do? Like, that's part of the creative process to sit together and create these. So, you know, you get stuck in a lot of these things. And then, and then eventually, I remember I was very frustrated because at one day when Sequoia invested, and that was why Sequoia was so important to us because in 2009, we got Sequoia to invest in the company. Michael Moore is joined our board. And one of the ambitions we had with that was to get, get some kind of contact point to somebody that had actually seen large tech companies grow, had seen real success of a tech company and started understanding their mindset. And at that point of time, I unfortunately concluded that like, it was not going to work with our CTO because he didn't have that right mindset for it. And he was interested in something very different. He's a great guy in many ways, but he wasn't the person that would be able to allow us to build our engineering organization and bring us to become a true tech company and be really technology driven. And I remember going into the board eventually and saying like, and at that point of time, the representative of the engineers that build the original system who was on my board, he had been telling me all over and over again, like, I was like, I'm really worried. Should really be the slow? And he was like, yeah, you know, it's different. There's this and that. And then eventually, I came to him one day and said, look, I'm taking the decision. I'm fortunate I have to change CTO. And he was like, good decision. And I was like, I almost wanted to smack him in the face. I was like, for four years, you were telling me that this is okay. And now I'm doing this change and you're saying, good decision. Like that's not like, you should have said you're wrong. That would be respecting him more. Right. So there was in that setting we were coming up for it. It really nowadays, I appreciate much more like how I have to really look through a person and ask myself, is this a believer person? Is there somebody I should really take advice from? And I think a lot of entrepreneurs that will listen to this and start up people, like be careful with who you're listening to. Have they really contributed to success? Have they really built success? Or have they simply been in a company that was successful? Like, those are very different aspects, right? So being very careful about who you get advice from. But that's kind of how we solve this. It was just like we had to learn, have to test. And then the last piece of very practical advice that we did, which was one of the best things I ever did, was because I was so mixed up like engineering, whatever, what does it mean? And then I said to my CTO, a very practical thing, I was like, hey, can you show me how you fix a bug? And so we sat down together by his screen and he basically took one bug that we had and he started searching in the code and then he wrote, you know, the fix. And then he wrote a test case for the fix. And just sitting and watching him do that made a huge difference for my understanding of like, you know, how long to... So I think as much as sometimes you may feel like very, whatever you're managing that you don't understand, you may feel like, oh my God, so difficult and to talk about all these technical terms and so forth, sit down next to them, spend half a day, spend a day, just look at when they're doing it, a design there or whatever it is, something that you don't know how to do yourself, just sit next to them, see them do it. And that already will at least put you at a different level of understanding of, you know, the job and so forth. So there are practical ways in which you can try to gap that, you know, bridge check out.

What does good work look like? (46:05)

So important, because again, it comes back to communication and I had the exact same thing. And I think in my first tech business, I wish I'd done exactly that. I wish I had taken the time to go in, build empathy towards the role of my CTO and understand what his job was and I guess how I could make it easier. But also to really also should have had a objective outside of coming and doing assessment on how he was working, how I was working and everything in between. I think entrepreneurs don't do that. I think because they don't know what they don't know, you don't know that that's the biggest curse in business. It's not only entrepreneurs, it's great managers and people as well.

Knowing What Good looks like (46:44)

I think to your point, the really tricky thing is to know what good looks like. What does good look like? Oh, God, yeah. That's different. Like you judge some work like, what great work, work, look like. And it's when you've established that understanding, whether it's in communications, marketing, you know, whatever, you know what good looks like, then your job becomes so much easier. But the only way to find that out, obviously to your point, is introducing external people, talking to people, comparing, you know. We also did that actually with my CTO at that point of time, which was one of the things we actually did that led me to conclude that I had to let him go was that I was having a lot of dialogue, like should this take us a long time and so forth. So one thing I eventually said was, you know what we do? We booked meetings with five other CTOs in five large Swedish companies. So among them were like Ericsson, the more traditional ones, but it was also like a gambling company that was doing fantastic. There was a gaming company, DICE, you know, stuff like that. And we went and had meetings with them. And in those meetings, I started raising my concerns and stuff like that. And I was listening to the other company CTOs answering to the same discussions, comparing it to the answer of my CTO. And in that conversation, I really saw the difference in how they were attacking these problems and what their philosophies and the, you know. And the level of optimism in which they approach problems as well? Yes, for sure. Because that for me has been the biggest differentiator between the really exceptional CTOs I've worked with in San Francisco when I was there versus bad ones is they have a everything as possible at attitude, right? And those people are an absolute joy to work with. Speed and optimism in a CTO is just to make sure life. For sure. And again, I just want to highlight here that like my CTO wasn't bad. He wasn't bad. He was totally fine and okay, but he wasn't the right person to build a $45 million company. Yeah, right. That was just like two different things, right? So you're giving me many of those. No, no, no, exactly, right? So he wasn't exceptional and even had the right mentality. Yeah. To do what we're doing now. Pain. Yeah. Part of the reason I started this podcast was because, and why it's called the Diova CEO is, I wanted to show, I wanted to really give a fair impression of the other side of entrepreneurship. It's been super glamourised. It's probably why, you know, that start you shared where you went from 70 to 70%. That's probably why it's now seen as a very sort of glamorous thing. And I wanted to create a bit of a platform to share some of the harder parts of business. And listen, you've built a company worth $45 billion. I know that it was painful.

The Pain of Money (49:05)

So talk to me about the pain and the unexpected pain that might have put you off starting this, had you known it, had you not been naive enough to realise how painful it is at times. Well, I think that like my, a lot of my pain, I would feel equals when I see athletes, you know, trying to throw or trying to jump and then failing and the frustration that you see in them when they cannot achieve what they want to accomplish. I feel that's a lot of the pain that I've experienced. So like my, a lot of my frustration and pain has been associated with like, oh, you know, I know we can do this. I know we have the opportunity to do this. And we're just not getting there. We're not getting there. It's not getting through. It's not happening the way it could be. I think that's a big piece of pain for me. Is that lack of like, ah, so frustrating to feel like you're so close. Something could be there, but it's not that. I think that that's one part then. I mean, another part is obviously, you know, when things go wrong and you're frustrated because, you know, you wanted something to be better and it didn't work out and stuff like that. So you're very like, you challenged by those situations in terms of stress. How do you feel that and how have you dealt with that? I am not that stressed, to be honest. I don't know why. It's almost like, to some degree, I'm almost more stressed when things are good. No, because like, like, when we have some crisis or something happens, right? Like, you know, we had an incident with some breach of data, for example, few months ago, right? In those situations, as much as it's painful that something's happened and I'm sad about potential consequences for individuals that we might have made some errors, I feel like it all becomes like execution mode. We bring everyone into room. It's just like, what do we do? What do we do now? And I kind of in a way enjoy that work. It's very concrete. It's very like, you know, focused and you're like, there's nothing else you have to do. Only this now. Let's see about what can we do about this problem? How are we going to fix it? Who's doing what? You know, so forth. In those situations, I don't feel that stressed, actually, I can even feel an adrenaline in that situation as much as it's painful to me to see the consequences. Like, if you're an adrenaline and like, let's get this to work, let's do this. Let's, you know, let's take on this challenge that has subtly arise. It's funny, the best leaders and I'm sure you'll find this even in your company all seem to speak to that. They all seem to be really emotionless in those absolute chaos moments. And it becomes a, you know, a methodical process of how to solve the problem versus. And I do think, again, as much as, you know, I don't want to, obviously, I feel a lot of pain from the perspective of like, if we've done a mistake or done something wrong as a company, it might have had implications for our customers or whatever, that's very painful. But at the same point of time, those incidents of situations when you're going through something that was very chaotic or very challenging are the moments that have created the strongest relationships within the companies have shown, you know, has shown some amazing talents stepping up to. It's a little bit like you go on a vacation. It's just sunny. You don't really remember it. But if you had like a, you know, a thunderstorm, you'll talk about it for years, right? So like, there's something to that. So I think Moistress may actually more come from sometimes when I feel like we're all kind of happy. We all feel as going, well, like, it cannot be true. There must be something that's wrong. Yeah. And I think Alex sitting over there will, we'll, we'll kind of smile now. I can see, I think you will recognize this. But like, so I think that that's where I can, I actually more get stressed from like, are we doing fast enough? Is this good enough? Like that's really interesting. It also relates to your point about bit needing to be challenged. You talk about in school when you'd read the book and you got bored. And that it's funny because I, I was writing my book and I finished writing my book recently and it was published.

Personal Struggles And Growth

When Stability Causes Chaos (53:04)

And one of the paragraphs in it talks about how I used to believe that my life was the pursuit of trying to get to stability. But in fact, when you look at when people arrive at a point of stability, yeah, everything is fine. Yeah. When they've won the gold medal, then they descend into chaos. Yeah. Then they get depression and they get, they lose their sense of purpose. And then they, they get irritable. So I flipped it and thought, you know, my life is actually the, the, the pursuit of staying in chaos because chaos is my stability. And if I ever get to stability, completed goals, nothing to strive for, then I descend into chaos. And it sounds exactly what, like what you've described that. Spiring and working for things is so motivating, important. I think to some degree, as much as Klona had a lot of success in Europe, there's a kind of funny story around this topic because on, you know, we were doing really well in Europe and developing our services, but there wasn't necessarily that much fierce competition from one perspective, right? And then as we were moving into the US market, there is this company in Australia called Afterpay run by Nick. And they are competing head on with us, right? And they were doing really well. This is back in like 2018. And I was like, ah, this is so annoying. Like they're coming in here. They're taking our market share, they're doing our product, they're copying us, you know, all this frustration building up. And the funny thing is I happen at that point on time to be visiting with Mahmood who runs Buhu, right? Oh, good friend of mine. Yeah. So I'm sitting down with Mahmood and I'm like complaining to him. And I'm like, look, Mahmood, it's a little bit like, you know, you know, the Olympics, when there's this guy who's been like, this is his fourth Olympic. And everyone knows like, now finally he's going to get the gold medal because he's been training like, and then this young guy comes from nowhere. And like, but that's so unfair. This is my fourth Olympic and this guy comes in. And Mahmood looks at me and he's just like, Sebastian, shut up. Stop whining. Stop whining. And like, this is going to make you so much better. You have been not having proper competition. You now have proper competition. And it is so true. Klorna in the last three years, thanks to the competition with Afterpaine the US has become such a much better company. It has helped us so much to improve, to get focused, like, and it was just so funny when he was just like, stop whining. And I can't, you know, he will speak his Manchester.

Kristo's Toughest Business Moment (55:14)

I can't do that. I won't be able to try to replicate how you expressed this. But I thought, well, that's Mahmood. I remember the first time I met him. I was in his office four days that week, and he insulted me several times. But in the most loving way, like, you remember him smashing his pen on the desk and telling me how stupid I was because of a decision I was going to make. And we've been, I've been like, good family friends with, with the whole family for a very, very long time. Yeah. What was it? Just on that point then, what was the toughest moment in your clan journey? I mean, you think that was, that was a, that was a fucking day. I'm similar to there's been some media scrutiny of us in the UK. We had a similar experience in, in Sweden, but a few years earlier, which was in around 2012 and 13. And like, it started off with this like media inquiry about what we were doing, because we were, you know, first just like, oh, it's an amazing successful company. And then once we were like, oh, we actually do incredible. And what does that mean? And stuff like that. And so, it started to be in quite a lot of like, and it actually started with a mistake that we had done internally. It was an operational mistake. We had done a stupid thing. And, and that had resulted into a lot of customer complaints and stuff, which was our own fault. But that was the beginning of it. And, and I think through that process, when the papers started writing about us in a negative way, I kind of jumped in, and it's kind of funny, because I was actually, at that point of time, it had comments fields on the articles. So I would go into the comments field and write my responses in real time. And then other consumers and readers would answer. And I would answer them. And even the newspapers started writing about like, look, Sebastian, CEO is on our forum discussing the topics. So I was very engaged, I was sitting like working 24 hour, and I was thinking about like, how do we give, because quickly the media went, you know, out of control. And there was a lot of bias and, and, you know, inaccurate reporting and just like a lot of things, some were accurate and some was fair, but a lot of it was also like out there. And then obviously the banks, because we are a big threat to the establishment banks. So even, you know, afterwards, I've heard from journalists that like a ton of emails were coming from banks saying like, Oh, you know, they're bad, they're this, they're that or whatever, because they simply, you know, they're threatened by our existence. And so, so there was that going on. But I remember what was the hardest thing to me to point is that that situation itself was fine. But at some point of time, the, the kind of articles and the writing about us shifted from their bad, they've done these mistakes, to they have bad intent. They're here to screw customers over to do bad things, right? And that was tough. That was really tough, because I know that wasn't true. And I know that we have good intentions and we're trying to do that. We have done mistakes and we can fix things. But being judged and questioned on your intentions of what you do. Yes, that hurt a lot. And I took that very hard. And I took that to heart. So that was very, very challenging to cope with.

Kristo On Being A Good Partner & Father (58:02)

When those things happen, what kind of partner do you become to your romantic partner? Your wife, you got a wife? Yeah. Yeah. She knows that I'm like extremely passionate about Klona and the company. And I think that she's she knows that like a lot of my thought process will be here all the time, right? So I think that, but you know, I'm very lucky in the sense that Nina is an amazing person herself. She's done amazing things. And now she's running a startup with 30 people. So that helps because she has her own like things. And actually, we can come together at the dinner table and we can, you know, we can talk about the challenges and the things that we, that we face and we can exchange thoughts about that. So it when we have three kids as well, right, I have a four year old and a six year old and a seven year old. So, so I actually, you know, as much as I live my life, I try to work really hard and then come home, turn off the phone, be very present with the kids, and then they go to sleep and then I get to work some more. And then me and my wife has a very like, which is, I think maybe most families with kids are age, but they're very strict. You always thought that was going to happen. You're going to stay spontaneous and all that. Yeah. You end up having an extreme district calendar was like, Wednesday is dinner night. Me and Nina have dinner together. Tuesday were working like nights and so forth. So it's extremely strict calendars to make that work. Quick one. As you probably know by now, I'm trying to make my life a little bit more sustainable. And I consider myself to be on a bit of a sustainability journey in the same way that I'm on a health journey. And it's a privilege to be able to share that with all of you. And you, you all know, if you've listened to the last podcast that I traded in my Range Rover Sport in for an electric bicycle, which is now my only vehicle. And next year, hopefully, I'll have my electric car to if Tesla hurry up with a cyber truck. And that's where my energy comes into my life and my sort of sustainability journey. It makes your life, if you are on that sustainability journey, 10 times easier. This is one of their, if you can't see this, I'm holding it in my hand. If you're all listening on Spotify or Apple, this is one of their renewable energy products. If you're watching on YouTube, you'll, you'll see this. This is called the Harvey. It's this very clever little device that allows the Zappi and the Eddy, which I've talked about before on this podcast, to be installed in your home without hard wiring or without batteries or without those god-awful transformers that a lot of people have in their house. It's basically a tiny device that's going to save you both time and money. And for someone like me who doesn't have loads of time on our hands, it's a real lifesaver. If you're looking to make a conscious switch and you need a quick fix that's going to save you a load of time, then head over to myenergy.com to see this product and many, many more. You, you're a, you know, grew up from very humble beginnings with immigrant families, you've said.

Does Money Make You Happy. (01:00:40)

And because of the success of Klarna, that's now made you very wealthy. And it's something both beyond probably you've ever imagined. I don't know how ambitious you are, but what role does that, that play now in your life in terms of your relationship with money? It was the thing that, as you say, you thought might have been liberation from a lot of pain and heartache and what role does the financial side of it success can in your life? I think it's an interesting topic. And, you know, I've been asked sometimes like the classic question like does money make you happy, right? And, and, you know, I, I understand why some people try to say no, it doesn't. Because to some degree, like you're the same person, even if you have a different income level and wealth than you used to have. So you're the same person, you still get angry at things and sad at things, you know, still things happens, you lose a relative or something happens in your life, you know, you go up and down. So from, from one perspective, I can understand why people, but I've stopped saying that because I actually think that it's slightly out of touch. I mean, there are elements in my life I don't have to worry about. Like, I can still remember the feeling of like, you know, I used to go into 7/11 and I would be like, oh, just love to have orange juice, but I can't afford it. Or I would just love to have a sneaker or I would just like, like, I don't remember the day coming in into 7/11. Like, it doesn't matter. I can buy whatever I like in this story. It will have no impact. And that is a difference. And I just, you know, I think it's a little bit like I don't touch to say that that doesn't impact you. I don't have to worry. I never worry about finances. Like, it's all taken care of, right? And that obviously creates a different life. It gives you a different thing. Then I'm not a big, like, I don't like have 10 cars or anything like that. I'm not a big interested in cars. Like, like, I'm not necessarily the person I have a couple of things like I have, for example, my I'm very, very proud that I bought a Steinway piano that is self playing. So you actually have this like app, like Spotify, you can go in and select. Perfect. And you can sit there and do the video. Yeah, exactly. If it's pretend that I have learned to play piano as well. So like, I have some like luxuries that I really afforded myself that I think I mean, we have in a beautiful house and things like that. But, you know, but I still think that like, the key thing is I don't worry about it. And I know that most people, and I remember myself worrying about it, worrying about next month and the, you know, end of these things. And that is a difference in life, obviously, right? So that has changed. I read something which was, um, was quite difficult to read, actually, which was about your father. And his response to your success. Yeah. Not being, not being particularly proud, necessarily, of your success. Yeah. But that also comes back to alcoholics, like, because, so when I happened in my, um, my life, right, is that, um, my grandpa, unfortunately, drank himself to death. And then when I was growing up, my father was very conservative and I never saw alcohol in our house. He barely had a bad glass of wine. And unfortunately, that started changing in my, like, teens. So I started discovering bottles of vodka at home and so forth. And then over time, there were instances where I would come home and that would be quite drunk and act in a very rational way.

My Greatest Addiction - My Father (01:03:44)

And he became more aggressive and so forth. And, and this was at a point of time where I was still partying and drinking and so forth. And it was interesting, because at that point of time, as, and that just tells you about, you know, the problems of alcohol, addiction, I never reflected that maybe I have a problem as well. All right. That was like out of of course not like there was my father who had an issue, right? And, but he unfortunately found himself in a spiral in his life where, and I think it's almost like people find themselves in a positive spiral, negative spiral. The positive spiral is like, you know what? I can actually affect my own life. And now I'm going to try it a little bit. Oh, things got better. You know what? I can maybe do even more. I can do even more. And then some people are on that positive spiral. What other people's find themselves in a negative spiral was like, I have found myself in this. It's not my fault. It's everything else's fault. And then, you know, things get even worse and then look, and they just found something in a very negative spiral. Obviously, I'm simplifying people are different in all these situations, but there's something that found himself in that spiral where it was everyone, everyone else. And alcohol tends to extrapolate that and make it even stronger that you basically blame everything else and you take, don't take the responsibility. That's the beginning of the 12 steps of the anonymous alcoholist is actually to take responsibility for your own actions. And so, unfortunately, and it went as far as as, you know, he lost his job, he lost his apartment. And I found myself in a very tricky situation because at the same point of time, my economical situation was improving heavily. And I was trying to figure out what do I do now? Because he could call me and he would ask for money. And I would be like, well, of course, I want to help my father. And so, I would help him. And then if I did that, I didn't hear from him for a couple of days. And then he would call me super drunk or text me something very nasty. And so, it was very difficult because, and then I started seeing counselors and understanding that like maybe actually in the situation, I needed to put like limits, you know, and ask him to not, to say, look, I'm not going to do this unless, you know, you do this and stuff like that, which was kind of the right way to deal with it. But very, very obviously tricky. And unfortunately, in my situation, it didn't work. So at the end, there was a situation where, you know, he was, he was about to lose his apartment. And he had a discussion with me. And I was very like, ambiguous. Should I help him? Should I help him? And then I was, it was an evening in the office. And suddenly I see my phone's phone number. He's calling me on the phone. And I was like, Oh, I don't know yet what the right answer is. Should I help him? And all should I do? It's difficult. So I was like, I'm going to call him later. So I didn't answer the phone. I went home, I had dinner with my wife. And we talked about it. And I was like, no, this time around, I should probably help him. I decided, and I tried to call him. And he didn't answer. And I emailed him the answer. And I was like, okay, fine, maybe just, you know, whatever. And then in the morning, my mother called and said he was dead. Right. So it was a, so that was like a very, very obviously dramatic moment in my life. And very difficult, like, you know, from that perspective. So he was so smart. He was so thoughtful. He had gone to the places we had worked. He had tried to do things better and so forth.

Miserable Endings (01:07:26)

But he had been in normal places where if, you know, I remember him working for the municipality, for example, and he created some Excel systems that would rationalize everybody's work. And nobody wanted to rationalize their work because that meant that they would have less to do. And maybe somebody would lost their jobs. So he's doing all these things. And nobody was showing gratitude to his attempts of trying to fix things and things. Similarities to what I'm doing, I could see him having those things. But because of his background, because of his situation, and to some degree, probably because of his addiction, he just found himself in this negative spiral rather than the positive spiral that I found myself in. And it just made him, you know, more and more depressed. And that made him also very difficult for him to relate to me. Because like, in one way, I must believe and hope that at some point of time, he was proud and happy about how things have evolved in my life. But at the same time, he was very clear that he felt frustrated by the fact that what he had gotten and how his life had turned out compared to mine. As crazy as my scene that you thought it would relate in those terms. But I think unfortunately that was part of the case. So, you know, it's very tricky and difficult. And but I'm very happy, at least, that I stopped drinking. And I'm a sober alcoholic since nine years now. So, yeah. Well done. My last question then, that was incredibly, you know, incredibly moving for so many reasons. And I think it's, it's really also inspiring that you have that sense of sort of empathy to be able to look back at you and your father and understand that a lot of his circumstances came from his own pain. And that was a generational cycle. Yes. One that you you have the power to to stop. Yes. I say, and and also to kind of, it sounds like you've kind of forgiven him. Yeah, I have because look, I think, you know, people, I don't think people still fully understand a call of alcoholism. In my opinion, it is a disease. He was sick. He had, you know, he had an addiction. Yes. Was he, does that mean that he couldn't cure himself? No, he could cure himself. If he would have found himself on a positive spiral, he might have been able to cure himself. That doesn't mean he wasn't sick. This the father that I had lost years was not my true father. Those are not the memories that I have from my youth when he would bring me into the forest outside of up Salaam.

Parenting And Self Reflection

What do you hope to teach your children? (01:09:35)

We would go and long walks together and we would fantasize about being space explorers or he would introduce me to amazing science fiction literature or what are these? And it's like, there are different memories of my father. That was my true father. That was a sick man. And that's just unfortunately like how things develop, right? And now your father, three beautiful kids. What matters to you in terms of the principles in which you hope to raise them. And obviously now as we talked about the start of this podcast, much of the, I guess the circumstances that created you were because you you were, you went without and you didn't have things handed you and you formed that connection that if I'm going to be, then it's going to be a direct result of my actions. So what do you, what's your thinking is and what do you want to impart on them? And well, it's a topic I tend to talk a lot about with my wife and that's very difficult. I mean, it's a mix, right? Because first and foremost, obviously my kids are not going to have the same amount of bringing that I had. There is a massive difference. Look at our vacations, look at our summer house, look at all the things. There's no way I'm going to be able to ever recreate any of that. But that's part of it. But I do think also when it comes to being spoiled, like to some degree to be entirely fair, like, and I love my mother, she's amazing, but she did spoil me. She had a very hard time saying no. And if we were in the grocery store and there was some candy and I would be like, I want candy. She tended to give me the candy. So I'm a pretty spoiled person by my upbringing, even though we didn't have that much financial means. Now, she wouldn't buy the candy if there was no money left. But if there was money left, she tended to buy them and there was no money left for something else, right? So like she had my, my, especially my mom had a very hard time putting nose to me. And she would say yes to basically everything as long as she could basically, right? So you can spoil somebody without having financial means to some degree, right? Now, so that's one thing. But there is something where I, you know, and it was funny because now it's like, my son was invited to like a party, a birthday party with some of his friends, like six years old, right? And you're standing and talking to the parents. And we have this amazing school. It's not a private school. It is a private school, but it's not kind of the like upper class private schools. It's actually a really nice school with a good mix of people from all types of society and stuff. But very ambitious teachers and a good school. And we're starting that and the other parents are a little bit like complaining about like, you know, oh, this could be better and this could be better. And it's not like I didn't agree with them that some things were couldn't be improved in our school as well as they always can be. But then I told them to, I didn't like stop them a little bit and said, you know what, I, to be honest, like for myself, if I think about the schools that I went to in the environment I brought up into, I sometimes wonder whether I want my kids to continue going to this very good school or whether maybe when they're like 12 or 13, I'm going to try to find the worst school in Sweden and put them in there for three years. Just to create a little bit of resistance, like to get something like a different perspective on like be an environment where it's very difficult. And like, I was like, because I really want them to get the resistance. I want them to get to know themselves and get to know that they can actually fend for themselves, that they can solve these problems for themselves. I don't want them to be without resistance. And I feel like all of our parenting today is about like remove or resistance. And I'm like, no, I want some resistance. And the funny thing is I'm telling this to the other parents and they're all looking at me like, is he stupid? Is he, is he wacko? Like what's wrong with him? Like, you know, it was like, no, no, I want some resistance, right? And I remember I just threw round off. Look, when we did that round the world trip, we had very little money on that trip.

Keeping your ego in check as youmreter large ups and downs (01:13:17)

And at some point of time, we arrived from Singapore to Brisbane. And we were going down to Sydney. And we were actually supposed to take the cargo ship the next day to go to US already. So we were only going to stay one day in Australia. But we missed the boat. We had an unfortunate event that we came to late. And the cargo ship was not going to wait for two passengers. I promise you. So they just left. And we went to the firm that helped us find these cargo ship trips. And they said, sorry, next boat is in a month. And we're like, okay, but we don't have any budget, no money. And now we're like stuck in Australia for a month. Obviously quite a nice place to be stuck on the street. But but still, and I remember walking down the street, I think it was Elizabeth Street or something in Sydney. And I remember that like, I have no job. I have no money. I have nowhere to stay. I have only my backpack. And you were like, and we're going to say it for a month. Let's try to start a life. And we had to find a place to live. That was affordable. And we had to find a job. And we actually started working as furniture movers for a company called CityMooV. Everyone worked, they call it CityMooV because they have to survive. But it was like, and we were in. But the point is that like, it taught me, I can fend for myself. I'll survive. And like, it's only dependent on me. And that resistance created a sense of like, I can do this. And so forth, right? And that's what I hope to give my children somehow. But how would you do that if you pass them your wealth? Well, I'm not sure I'm going to pass them the wealth. So I actually have officially said in some interviews in Sweden that I am. And my wife and me are still not entirely aligned on this topic. But I have actually said I'm not going to give them anything. And I tell them in that, and it was even funny because in Sweden, I'm quite well known. So even the fact that I said so on public TV, then my kids heard from their friends like, Dad, you said on TV that you're not going to give us anything. That's unfair. We were like, I don't like stuff. No, but I'm telling you consistently, like when you're 18 years old, you're on your own. And then my wife was going, we may buy an apartment for them, right? And I was like, I'm not sure. Let's see. Like, I just, there is to your point, like, I mean, I don't, I don't want to like, and in Sweden also, it's a little bit provocative for somebody with money to say I'm not going to give anything because I don't, I'm not saying I don't be even welfare. I think sometimes you need support people in difficult situations and so forth. So I said, look, I'm not talking about people in general. I'm only talking about my kids. But for my own kids, I'm not convinced that giving them all of this is going to make them happier. And I meet a lot of people from family wealth that have inherited wealth that are extremely unhappy with the pressure and the expectations that comes with that. So as much as, and again, I'm not saying that money doesn't make you happy. We won't talk about it. But like, there are some aspects of it that are very difficult. And I think that like, in general, building a person's own self confidence and belief in their own abilities to actually have a positive impact on their lives, I still still think that that is the key, you know, path to happiness. I agree. Listen, Sebastian, thank you so much for your time and your honesty and your humility.

A Note On The Algorithm

Gift for the WDFH algorithm (01:16:17)

And you're a massive inspiration to me for so many reasons. Thank you. Not least for your business success, but I really do come back to that point about you building such a great tech company without technical expertise. I hear it all day every day from entrepreneurs. I felt it myself. I think I've told myself that there's certain industries I can't build in because of that, because I lack fundamental expertise there. And I think you kind of buck that trend and prove to me and entrepreneurs listening that you can, if you have the drive and determination and that's underlying self belief to get there, what you've done is just absolutely phenomenal. Thank you very much. Unbelievably pleasant human being as well. And you're very sort of very, very honest. And I think that's a gift that I'm glad you shared with us. Thank you. But yeah, thank you so much for your time. And I can't wait to continue to watch your journey. It's been a pleasure. It's been an exciting, thank you so much.

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