We Built A $600K/Year SaaS Platform For E-Commerce Brands

Kristoffer Degn

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Published: July 16th, 2022

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Kristoffer Degn

Founder, Custimy.io

$50K

revenue/mo

Founders

Employees

Custimy.io

custimy.io

from Copenhagen, Danmark

started July 2020

$50,000

revenue/mo

Founders

Employees

Discover what tools Kristoffer recommends to grow your business!

customer service tool-icon

Intercom

social media tool-icon

Instagram

design

HubSpot’s for...

crm

Hubspot

Discover what books Kristoffer recommends to grow your business!

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Hello! Who are you and what business did you start?

Hello, everybody! I am Kristoffer, co-founder, and CCO at Custimy.io. Together with my partner, Martin, I started the company about 2 years ago in the middle of the global pandemic.

We have made an e-commerce data platform, and what it is exactly can be a long explanation. So let’s keep it short for now. An e-commerce data platform is a system that connects your customer, marketing, and product data in one place. Our system can do automatic analysis using machine learning. Simply put; we help e-commerce stores make better decisions based on higher-quality data and easier access to insights about their customers and store at the fraction of the cost of many of our competitors.

While the first year was mostly spent on developing and optimizing the product, we have been in the market for about a year now. During this time, we raised the biggest pre-seed funding round in Denmark at that time, and are currently having 50K USD in monthly recurring revenue.

We naturally expect this to grow exponentially as our solution gets into more markets and more stores learn what they can do when they have easier access to high-quality data for their decision-making.

What's your backstory and how did you come up with the idea?

The origin story of Custimy is quite funny. The first time I was introduced to the idea was on a vacation in Spain. I was on a trip with a bunch of friends, one of those being Martin, my co-founder. He pitched the idea to me on a night out while we were on vacationing there.

At the time, he was working in London as a director for a software and technology consultancy and had been working with digital transformation. He had seen some heavy stuff within customer data platforms.

If you set goals that are easy to attain it is hard to truly make a difference. So it is better to always set the bar high, and force yourself to grow to reach it. That’s a great way to motivate yourself and your teams to go beyond 100% effort.

I, at the time, was CMO at a food-tech company. Before that, I was working with e-commerce for many years and was a massive preacher of data-driven e-commerce. I knew what you could, and what you couldn’t do when you had good data.

So, when Martin pitched the idea of building a customer data platform for e-commerce stores, I was immediately hooked on the prospect. We kept talking about it, discussing my pain points and challenges in e-commerce. Talking about how technology and a data platform for e-commerce could be the answers to many of the typical issues in e-commerce. I have to admit, I was really into the idea. I told Martin:

“We can change the world of e-commerce if we do this right”

And that’s where we left it for a bit. We were both working in very good positions, about to build our careers. But the idea of building this platform, solving these problems, and bringing new life into smaller e-commerce stores just stuck with us both.

As time went on we kept talking about it. We were not super close friends before. We knew each other, went to the same school and played football together. But we were just friends at the time. But as we kept discussing building this platform we also became better friends.

In the end, the pandemic hit. And we decided that it was now or never. The technology was available, the potential is limitless, and if we didn’t start this, someone else would come up and swoop our ideas.

So, we both ended up quitting our directors’ positions. I had even become CEO at that Food-tech company by that time. But this chance was too good to pass on, especially if we could truly change the way people do e-commerce.

Take us through the process of designing, prototyping, and manufacturing your first product.

In the best Steve Jobs and Steve Wozniak style, we started in a humble setting. Sadly, unlike the Apple founders, the setting did not take place in a garage, but instead on a small kitchen table. We were stocked up on the cheapest red soda, some traditional easy danish lunch, and just two guys working their asses off trying to figure out how to build a software company from scratch.

When I think about it, it was some of the most inspiring and fun times. It was all about creating, building, and pushing the limits and boundaries of ourselves and where we saw the world the e-commerce industry could take it.

Going through the process of designing and prototyping it, we knew that time was a limit factor for us. So we hired two different development companies to build the framework for what we needed to build our data platform.

We poured all of our own money into this, and I was living off of discount vouchers and referral bonuses for months (shoutout to Hello Fresh) as I had no income for about 11 months.

But it was an incredible time. We eventually got some investors on board, to help with funding and resources, so that we could build a product to get tested.

In the beginning, the first version of our product was being tested by people in our network who ran successful webshops. We pitched to them about this new product we built, the cool features of consolidating e-commerce data all in one platform, and what you could do with automatic analysis and segmentation. Some of them came on board, for free of course. The product was not finished yet.

But we used their insights to constantly learn how to improve the product, where it had flaws, learned what worked well, and saw with our own eyes what this could do for a webshop.

Describe the process of launching the business.

A final first product was developed in May 2021, and it kicked off when we raised our pre-seed funding round. It was the biggest in Denmark at the time, and at that point, we had raised 1.6M USD to take this software solution to the market.

However, the customers did not come to us immediately as we launched. Nobody had heard much about a customer data platform, let alone people in our target group.

We focus on SMB e-commerce stores, which means in many cases they do not have the resources or capabilities to understand the complexity behind a solution like ours.
The biggest companies are pouring millions and millions into their data software, but the smaller ones have not yet realized how incredibly deciding this is to be successful in e-commerce today.

So we started to educate the market and started to explain all those gaps in your data infrastructure that we saw with my own experiences and all the test customers we had on board. We started to develop different partnerships with agencies to help spread the knowledge and understanding of what our e-commerce platform could do.

Some of these agencies include one of the world’s biggest media companies in Publicis Groupe, as well as other major partners. However, our key kept being on the SMB e-commerce stores, because if we could help them understand how much more you could do with your shop with a data warehouse, we would be able to change the landscape of e-commerce.

You see, as it is right now, 96% of all e-commerce stores do not have proper insights into their product, marketing, and customer data. They don’t have one place where they can understand what is happening across the business. They don’t have a tool that can collect, consolidate and analyze the data from many different sources so they have a full overview of how their business looks. And that is what we wanted to solve.

We wanted to equip David (the SMB webshops) with the tools to fight against Goliath (bigger enterprises like Amazon, Zalando, ASOS, etc) and give them opportunities to succeed.

One of our biggest lessons was that we learned that we had to do a lot more educating the potential customers than we thought was needed. And it makes sense, we were stuck in our bubble of nerding about e-commerce customer data platforms for years. But the rest of the market had barely heard of it, let alone understood why it was such a gamechanger for their stores yet. So we set out on a mission to do exactly that.

Since launch, what has worked to attract and retain customers?

What gave us the first real push was when a national newspaper picked up on our funding story. We were one of the first companies ever to make it into national media with pre-seed funding, and it created a lot of buzz about us. People wanted to learn more about Custimy, they wanted to learn more about the product we offered and what it could do for webshops. It even made it to international media!

Naturally, with the funding, we also had a budget for advertisement and could start to look at bringing customers that way. Facebook and LinkedIn ads were the first channels we tried out.

However, we also made sure to be very active on social media. By this time, it was not just Martin and me, we were already an established team of 15 people, many of them active on especially LinkedIn.

We used social media to build personal brands that people would follow, interact and engage with. And used this for what we call “social selling”. Explaining how you can solve some of the issues you are faced with daily with different solutions, often tied to Custimy.

A second push came in September 2021, when we once again created headlines when we were accepted into an accelerator program with Facebook/Meta. We were building something unique when it came to conversion on their social media platforms and it led to some interesting talks.

Lately, we have expanded our sales teams and added some business development representatives that do outbound sales as well. So we are working with a setup of trying to create demand through social media and ads, and at the same time bringing in customers by calling prospects and talking to them about their pain points and how we can help them build a data-driven business in e-commerce.

Right now, we are seeing an increased interest in our product and the growth is beginning to pick up speed. So we expect the current MRR to increase manifold over the next years as many more e-commerce stores come on board our platform.

How are you doing today and what does the future look like?

Today, we are still not profitable, but that is not the goal either. We are very much in a growth stage. We are working on go-to-market strategies so that we can enter more markets and are already seeing customers come in, also outside of Europe. The first American customers are on board, and from what I heard, they love what they can do with an e-commerce platform like ours.

The expectation is that we will expand to most of the European market by the end of this year. But we are especially looking to enable e-commerce stores in the UK and the US in the coming months. We see a market where amazon in many ways dominates it, and with a platform like ours, we can give the smaller stores a fair chance to compete against them by making smarter decisions.

At the same time, we are now looking at raising a seed round. The expectations are that we will raise several million dollars that we can use to further expand the team, and accelerate the growth. But to do that we naturally need to make sure that we are solving problems in e-commerce.

So while we look to expand our teams and customers, it is always most important that we can deliver what is needed for e-commerce stores, so a lot of investment will go into improving our platform and enabling customers to get the most out of their data possible.

Just a fun fact, we just won 3rd place as the digital startup of the year in Denmark, so it seems like we are onto the right track in some way

Through starting the business, have you learned anything particularly helpful or advantageous?

Talking about mistakes and learnings. There have been plenty of them, naturally. But to highlight some of the learnings that I take from the mistakes my top 3 would be:

80% is enough. More is waste of time. This early in the journey it is not important that your marketing campaign is 100% perfect, or that your sales pitch is the best it can be. It is more important to do things. So just like an electric vehicle charging to 80% quickly, that should be the goal too. Create, execute and learn from it, and don’t make it 100% perfect. 80% is enough to create results and learning.
My second biggest learning is to distribute responsibility. Not only because you have hired people who are most likely better at what they do than you are. But also because it is important to do it to be the most efficient with your time. Additionally, it also adds a sense of ownership to the people, if you show them trust, they will deliver results too!
Be clear in your communication. You must establish expectations early on. This helps avoid misunderstandings and people being frustrated. If something is not going to plan, it is always better to share why/how and solve the problem through communication.

Being cryptic and hard to communicate with will only install doubt in your employees, and this will hurt your business as you either limit their potential to do amazing things when they have confidence, or they leave for another place, where they feel more heard and trusted.

What platform/tools do you use for your business?

We use Hubspot as our primary CRM. As we have kept growing, we needed a system that was able to handle everything we need in regards to leads, email marketing, and marketing nurture. And Hubspot is just incredibly powerful and has a vast variety of functions when it comes to the B2B part of it.

Other than that, we have Intercom for live chat and customer responses, as it allows us to be more personal and quick in replying to them.

What have been the most influential books, podcasts, or other resources?

One of my favorite books of all time is Atomic Habits. It is a brilliant book for changing your habits for the better. I have used it myself to challenge my mindset and how I approach life. And often I come to realize it comes down to good and bad habits. Today, I wake up quite early. Typically around 5 am, just because it means I can get more out of the day. And my mindset is: that if I wake up before the competitors I can achieve more than they can that day.

This mindset has also helped me push myself in other ways. I was recently challenged by one of the board members at Custimy to run a marathon. And as the competitor I am, I had to take up the challenge despite not being in a marathon running form at all. I made it in the end, and even in a better time than I set for myself. (And I beat Robin, who challenged me for the run).

So if you are looking for a book to help you grow and achieve your goals. This is a good place to start.

Advice for other entrepreneurs who want to get started or are just starting out?

I think one of the things people often are afraid of, is giving away equity. But I would say, that if you find people with the right skill set that you need. It is worth it to give them equity in the company. They will help you grow immensely.

Another piece of advice I want to give forward is to remember that no one knows your business better than you do. Naturally, it’s healthy to stay humble. But you have to believe in what you do. You have to be the biggest believer in yourself, your team, and your business. That is how you will make it through tough times too

Finally, always think big. We said quite publicly that we wanted to become a unicorn after 5-8 years. And it makes us push hard to achieve success. If you set goals that are easy to attain it is hard to truly make a difference. So it is better to always set the bar high, and force yourself to grow to reach it. That’s a great way to motivate yourself and your teams to go beyond 100% effort.

Are you looking to hire for certain positions right now?

We have quite a few open positions, and some of them are receiving a lot of candidates too! But we are currently looking for a Senior Front End Developer to join our team, so if you are down to solve how we can make an easy-to-use and beautiful platform for our customers to get more out of their e-commerce stores, this could be what you are looking for.

Otherwise, have a look at our open positions or see more about who we are here.

Where can we go to learn more?

If you are an ambitious e-commerce owner or just want to get a better understanding of your business, you should have a look at our Customer Data Platform - I think we can do great things together.

If you have any questions or comments, drop a comment below!