Scaling through Specialization with Niclas Lilja, CEO of Younium

Dan Balcauski interviews Niclas Lilja, founder and CEO of Younium. They discuss Niclas's journey from founding Younium to leading it through rapid growth, including expanding into the U.S. market. Niclas shares transformative moments, the challenges in scaling, strategies for building trust among C-level executives, and the importance of having a focused Ideal Customer Profile (ICP). He also provides insights on pricing strategies in the SaaS industry, highlights the importance of staying active and realistic about pricing, and emphasizes the need for adequate sleep to maintain sharpness as a leader.

00:28 Meet Niclas Lilja: Founder and CEO of Younium
02:27 The Decision to Start Younium
04:22 Expanding to the U.S.: A Bold Move
06:20 What is Younium? Mission and Goals
09:47 Challenges and Strategies in Scaling Younium
16:44 Insights on Pricing and Packaging in SaaS
22:03 The Importance of Ideal Customer Profile (ICP)
27:30 Rapid Fire Closeout Questions

Guest Links
www.younium.com
https://www.younium.com/demo-request
https://www.linkedin.com/company/younium
https://www.linkedin.com/in/niclas-lilja/
niclas.lilja@younium.com

Transcript

Dan Balcauski: 0:20

Hello, and welcome to SaaS Scaling Secrets, the podcast that dives into the trenches with the leaders of the best scale up B2B SaaS companies. I'm your host, Dan Balcauski, founder of Product Tranquility. Today, I have the privilege of interviewing Niclas Lilja. Niclas is the founder and CEO of Younium, a fast growing subscription management and billing platform for SaaS companies. With over 13 years of experience and leadership roles at Medias, a global SaaS for AP automation, Niclas took the bold step of starting Younium and has since led the company through impressive growth, including an expansion to the U. S. market. Join me as we explore Niclas's unique journey from making the courageous decision to start Younium, to fostering a culture of trust, transparency, and teamwork, to moving his family to the U. S. Let's dive in. Welcome Niclas to SaaS Scaling Secrets.

Niclas Lilja: 1:01

Thanks, Dan. Great to be here.

Dan Balcauski: 1:03

Yes. This conversation has been a long time coming. Many beers over time at SaaStock has finally landed us in this position. So super excited to finally be able to have this conversation today. I gave folks a little bit of. Sense of you in the intro, but for folks who aren't as well equated with you as I am, can you please just briefly introduce yourself? Tell us a little about your journey in the SaaS world.

Niclas Lilja: 1:25

Sure. So I've been in the SaaS and, before that the software world for 20 years now? Previously worked at a company called Medius, in the accounts payable automation space, closely related to financial transactions, but more around supplier invoices, I did a lot of product and marketing roles Actually spent some time as well being VP, people and performance as well. So I did a bit of HR but mainly dealing with contracts, metrics, data, KPIs, and all that good stuff. And then in 2017 decided to start Younium originally out of Stockholm, Sweden currently in Philly, as you said Yeah, what is there to say, really?

Dan Balcauski: 2:05

Let's build on that. I find that, we all have transformative moments in our life that make us see the world different. I sometimes refer to it as a superhero transformation moment. What's your, I'm Peter Parker, I'm bit by the radioactive spider. I go to sleep, I wake up and everything is different moment. What was that for you in your life?

Niclas Lilja: 2:27

Maybe a bit cliche, but I think it actually was, at least for me personally, that decision to start Younium and take that leap. I think up until then I'd been, doing quite a lot of different things, learning a lot, but always sort of having someone else. In front of me playing, safe, you might call it I think we can all have our times of self doubt what am I capable of? I think like doing that and it wasn't a single moment, but I think that period has changed me and, was a very transformative for me at least. Course, other things the usual having kids there are a few obvious ones,

Dan Balcauski: 3:10

If take us into that, maybe not a moment, but into that time period around starting Younium, like how do you think your perspective worldview mindset changed during that?

Niclas Lilja: 3:22

As I said, I think one of the things were really like what you're capable of. And, I had a lot of discussions before starting Younium. Some thought don't do that. That space is full. There are ERPs, there are financial applications, there are CRMs, so you know, there are all these other players. And then there were a few like, why don't you do that? So I think, sort of, Betting on, that's doable that's one thing. I also come from, like, quite a long story in software all the way from software being installed and all the bad things with installing software and the business models then with perpetual models and maintenance fees, I Love the idea of providing a service and you have to, deliver on that service every day for every customer. I think that does a lot of good for the business models as well and how you act as a vendor. So wanted to support that.

Dan Balcauski: 4:22

Maybe this is a little bit, after you started Younium, but you made the very bold decision to move your family to Philly. Can you walk me through that decision making process and like, how did you, how did that come about? What was the impetus to finally make it happen?

Niclas Lilja: 4:40

Oh, it was a long journey. Definitely a business decision to start with. We were doing really good. You had a good growth from the get go we decided on a very niched ICP and a rapid geographic growth. We decided to go to the U. S. much earlier than most companies and, most books would tell you. I felt like, we have a good organization. It might make more sense if I go. That was a bit of the business rationale. Also realizing, that typically these things take longer than you would like to, and you have to be patient. So let's do it sooner rather than later. When it comes to the discussion at home, planning a seed maybe six months beforehand I think we should have involved the kids a bit more if they were to tell the story, it would be, Yeah, we decided to go and then we were on a plane and then they dropped us off at a school and we had to do this in a new language and it was, hard. That's probably their story. So, but all in all, I think, very much a business decision, but also, of course a family adventure. Seeing that things can work a bit different if you are elsewhere. It can be quite a mind opener, both for kids and adults. Hopefully, I usually say that maybe when they are 30, maybe they will say thanks or something. let's see.

Dan Balcauski: 5:58

I'm sure you're over dramatizing that, but I was going to say those six months is not a huge amount of lead time for let's pick up and move across the ocean. So, this is fascinating. We have been,

Niclas Lilja: 6:09

I an image of the whole family moving and it was us and it was like eight suitcases. That was it. So that's the full move. So maybe it was almost packaged like a vacation trip.

Dan Balcauski: 6:20

We've been circling around this discussion of Younium for those who, aren't familiar with Younium in the audience tell us a little bit about, what inspired you to start it? What is Younium sort of mission and goal for Reason for Existence today?

Niclas Lilja: 6:35

So, it was really an experience back at Medias where we transitioned from that old perpetual model into a subscription model, we did the whole transition of an existing customer base. We rewrote the whole software, we didn't take care of, managing the contracts the subscriptions and the billing that led to us having quite a few people on board. I also looked through the market and felt like, they are all about, these perfect SaaS companies who are doing everything right. They don't have any legacy and, always get paid. It was perfect for me and I was used to, a bit more discussions. Maybe you have to Change, sometimes the contracts, maybe you have to credit something, negotiate and that was the world I was in, it was also partners, etc. So I felt like let's see if we can do something in this space and be very clear on, B to B with more advanced subscriptions, not the sort of e commerce kind of, online highly standardized, quick checkout kind of subscriptions. But the world I came from I felt like there were really European alternatives that played into the picture as well. initially I also had an idea that maybe this could be a whole ERP suite luckily Changed that quite quickly But basically on the thesis of we should not decide what the customer should do. We should be a vehicle for them to, put whatever contract they have, make sure that becomes automated and allow them to Develop, optimize, and expand their business and how they do business. We should not be in the way. We should not dictate you should do it like this. You need to have one subscription with one plan and nothing else or whatever it is. But try to be very flexible in that sense, but still making a product. Not a, not a big consultancy project. So that was sort of, starting out. We were also quite early into niching down or making it very niched. We wanted to be really good at something rather than somewhat good at a lot of things. Many in the business were trying to attract a lot of different segments, a lot of different industries, a lot of different models. And we said, Hey, we just want to go with SaaS and software because that's what we wanted to do. Love, that's our history, and you could probably find different industries, but I think that thing we did just there deciding, let's go very pointy has been quite instrumental in how we built Younium, and for the successes we've had.

Dan Balcauski: 9:10

And you laid out a couple of breadcrumbs of things I want to touch on, but, just so folks are following along at home. Younium in the subscription management and billing space, really saw this opportunity in some of the more complex pricing and packaging scenarios that are non existent or very rare in the industry. A lot of these more transactional B to C software or other services. You think like, yeah, I swipe my credit card for Netflix or Spotify or whatever, right? There, there's a lot of sort of highly transactional, very all the, all customers generally look alike. There's not custom, contracts or negotiations that need to happen. And so, playing in that space, then you lay down some other interesting breadcrumbs I want to touch on a bit in terms of your ICP and your journey there You look at every founder faces challenges, along the way, like you share a particularly difficult obstacle you've overcome in scaling Younium to its current stage?

Niclas Lilja: 10:06

Yeah, sure. There's been a few of those. I mean, getting the first customers, when you look back at it, it's like, how did that come about with the product? It's like, that shouldn't be possible moving a bit further down the line, I think being a small company and establishing trust. With customers and C level executives in a world of, big brands like, Salesforce, HubSpot, NetSuite, etc. They are really big. In all honesty, we're not as big, not yet anyways. But that's our landscape. That's where we fit in. We sit in between these systems. We orchestrate a lot of the subscription and billing mechanics. That, requires us to work a lot on knowledge and trust. It's easy to be less trusted if you don't have that brand. So tying back to the ICP we decided to be very niched, not only for product purposes, but also for how we train, develop our, salespeople, do marketing and all the other stuff as well. Cause we have to, show how it can be done all the way from the first touch point up until being customer and from then on. I think we spend a lot of time on knowledge and training. And I think it served us that we've been quite niched in that and we've been able to do it You have to sort of play to your advantage somehow, right?

Dan Balcauski: 11:32

I want to dig a little bit on that. yOu mentioned, you had to establish trust with, C level execs in a market dominated by much larger incumbents. Can you share any specific strategies or approaches that have been particularly effective in winning over those high level decision makers?

Niclas Lilja: 11:52

One thing is, Don't play the other's game play your own game. What does that mean? We typically have been much more directive Sometimes you win by that, sometimes you lose, but for us it's been a way of like, okay, maybe we don't have ten meetings, maybe we don't come, ten people to a meeting, cause, we don't do that, we do We've made it much more efficient, much more tighter. Maybe we don't have the biggest, greatest words and all the stories and all the user cases, but we've been quite quick at, Hey, we understand this is your problem. This is our solution. We can be quick about it. As long as what you present aligns well with what you, What the audience perceives that you can deliver, quite good. I think it's when, there is a difference between what they believe and what you say. I mean, that's the, that's where it starts getting difficult, right? And problematic. Staying very true to our ICP being very true to what we do, but also I think we do have a lot of knowledge. We do have quite, especially around these systems, around doing, integrations, understanding that whole playing field. We don't sit only doing subscription management and billing. We typically have to talk about how does this work in the CRM, in the sales process, and we're quite fluent talking about that. We can talk about, revenue recognition, how you do a monthly close, what's the reconciliation taxes, et cetera, in the financial system. We can talk about provisioning and how you measure usage and how you do this from more of a product standpoint and how you automate that, beyond just this sort of core scope of Younium, so staying with RICP and knowledge,

Dan Balcauski: 13:38

So you said a couple of things. Staying focused on the ICP, I heard a bit of, responsiveness and I can understand how that can favor the smaller player because the big folks are, a bureaucracy and so they're not going to be able to, respond. They've got ways of doing things and, they're juggling a bunch of other things. You can win by just being responsive. You said direct. I wanted to unpack that a little bit. It sounded like you meant responsive, but I wasn't quite sure if there was something else underneath the surface of direct. Is that part of your sales process, you guys felt like you're more direct? Unpack that a little bit for me.

Niclas Lilja: 14:12

I think we're quite practical and the people doing sales with Younium are knowledgeable, not only on sales process, but also on the domain and how it's done. So if we're talking about like the phase before becoming customer, I think that is one way, you can have a quicker path to getting to some sort of, this is how it can be done. Instead of having one meeting, another meeting, discussing a bit more, a third meeting, maybe we can bring in someone who knows something about, this particular problem, and then another follow up. And, what you said around bureaucracy is definitely one thing. But also I think when it comes to being direct, we typically walk away from this if we don't think we're going to be good at it, if you're running, a B to C business, we're going to tell you that, there are other options that are better. We can name them, give them away and we will walk out. The same goes for, B to small B where it's very B to C use case oriented. And there are, no real reasons why we would be better. We typically leave as well. So I guess that's also a way of being direct and not wasting anyone's time

Dan Balcauski: 15:23

so I heard, cause you've mentioned knowledge a few times. It sounds like those two things are coming together of knowledge and sort of the directness. Because what that brought to mind for me was the memory I've had all too often, which is I'm looking to buy some software. There's no public pricing. There's a chat box. It says, talk to a product expert. So I say, okay, this is what I'm interested in. They're like, you need to get on a call. Then I get on a call with that person. They start talking about, Product Overview. And I'm like, that's not what I'm interested in this specific thing. They're like, Oh, actually, I don't know anything about that thing or how it's priced. You need to now have another call. And so now I'm a web visit, a chat bot interaction and two phone calls deep before I get the basic answers that hopefully were on your website to begin with. Is that sort of the picture you're trying to paint of like avoiding all those shenanigans?

Niclas Lilja: 16:16

Yeah, definitely. I think that is one point but it could also be, a follow up to that is if you get good answers to your questions you could probably also be fine with, if you want to dig deeper, let's move this from the chat bot and, maybe have a meeting about it and, see, what you want more. And then you have another set of, Things I definitely write and I think that goes in sort of every step in the process right?

Dan Balcauski: 16:39

And look many companies. Struggle with, pricing and packaging. It's something that's near and dear to my heart and Younium plays, in the subscription management and billing space. I'm curious your opinion. What do you see most B to B SaaS companies getting wrong with pricing and packaging?

Niclas Lilja: 16:55

If it had to be one answer I think Being passive and inactive is probably the worst thing

Dan Balcauski: 17:06

not doing anything

Niclas Lilja: 17:07

yeah. I think we can all agree that the world changes, we changes, you have to also change your pricing and stay active and work with it. I think the other part is aligning with where you're at on your customer journey. It's really different if you're in the early phase, you need to get customers in, or, if you started to scale or if you're going to set up your second revenue stream, or if you're going to your seventh country, they all have different characteristics, right? So I think being very realistic about that, what is the most important, right? Are we running a very, like, if we're going to make just a few deals a year, the pricing on each and every deal is super, super important? Whereas if we do just a high volume of these, standardization will be, more important and then we're probably somewhere in the middle. But I think having that discussion and figuring out what makes the most sense for us where we're at right now and I don't hear that too often. It's quite quickly into like. Hey, it looks like everyone else is doing some sort of usage based pricing. Let's do that. Okay. Why? I mean, I think answering why is really important as well.

Dan Balcauski: 18:29

Fair.

Niclas Lilja: 18:29

continue on this, then you know, like, two sides to to, to a coin, I guess, like one is getting it way too complicated. But on the other hand, I also sometimes feel like, This pricing is too simple in the sense that it's maybe it's just three plans with a fixed price or it's just seat based there are so many opportunities to, carve out a few things handle them separately or make different plans I think you're at least getting into more of the details. At least for myself, I like to think, what is the price point? Regardless of the mechanics, what is the reasonable price point for the value we're providing, if you can get that a bit right, then it opens up and you can package it in different ways. You can have different strategies. Do you want like a big, Go big early or do you want to land and expand? Do you want it to be more recurring or pay as you go? Or, different variants of that.

Dan Balcauski: 19:26

I'm curious about this because, obviously, so, so you and EM, you're sitting on top of a bunch of data from different SaaS companies using your subscription management billing service, from the, kind of customers you see, has that taught you anything about like how we should trade off between. Flexibility with sort of desire for simplicity or clarity in a pricing model. Are there lessons you've learned by seeing companies with different models and being, being out there successfully sort of, running revenue through, through Younium system, like, where you're like, maybe you onboard them as a customer and you're like, man, you guys have a really complicated model. This is not, I can't imagine this work well for you. And then you see their billing data come through. You're like, yeah, it doesn't look like it's working so well. How do you think about that trade off?

Niclas Lilja: 20:14

I really do believe there is no silver bullet in this. But I think sometimes we see things that are just not logical. It's difficult, even if you dissect it, how to calculate this but I do think that, Many companies still like to have a big portion of recurring fees, topped with, Some usage fees. That's one thing that I see and they seem to be doing pretty good if you're going all the way on pay as you go You have to get your cash flow elsewhere, right? We're being blunt about it. So, having a mix of that, they seem to be doing really well. And maybe it gives some sort of, security to their business as well. Having a portion being quite secure and recovering and then topping it off.

Dan Balcauski: 21:03

I think we've seen a lot of, volatility in the pure pay as you go companies in terms of their revenue. They were faster on the way up and then faster on the way down. And that's a whip saw that looks, if you only saw that first part of the curve, you're like, man, those numbers look really good. And then as soon as the breaks. Happen on the economy. It goes the other way really fast and can really screw up your planning.

Niclas Lilja: 21:29

yeah, I think so and I mean, I guess if you're huge and having like, like really high volume of transactions, maybe you sort of get that magic of big numbers that it becomes almost. Secure, almost recovering. But I think most companies don't, right? Most companies are not that enormously big that they have those vast, like, numbers of usage transactions. So, so I think yeah absolutely right.

Dan Balcauski: 22:03

I wanted to ask, go back to something we were talking about earlier in the conversation where you were talking about narrowing your focus on an ICP. I think this is a critical issue for a lot of executive teams. Founders in general worry about narrowing their focus, too much, how did you go about your determining who the, your ideal customers were when you first started Younium? And has that changed over time?

Niclas Lilja: 22:29

I think we've improved on it throughout the journey, definitely. And I think what has happened is that we've gotten better. I would say more and more niched, the bigger we get, which is a bit counterintuitive, right? But we also had a phase, in the beginning, when you're looking for your first customers, you don't really know, you don't know what will work. I mean, you don't have any proof. So we definitely had a bit of a wider scope, but I also think we realized like, We know this industry is quite open minded. It's an industry where you don't have, ERP systems that are 70 years old and, carry a lot of consultancy and claims to have done everything before. So accessible in that sense. But also quite global, right? And I think if you talk to a SaaS company somewhere in Europe or somewhere in South America or somewhere in North America, they typically, read the same books. They have the same heroes. They all listen to SaaS Scaling Secrets and other podcasts, right? They allowed us to, have success with being, very pointy, but for instance, we were quite long in discussions with a big 100 plus year old company, more towards the manufacturing industry, wanted to go into servitization. We've been through legal and IT and, all the procedures are a really big deal. It looked really nice. We're about to sign and then COVID hit. And like all big companies, Pulled on the handles, like no more purchases, no more spending, no more investments, no more. So it didn't happen and, quite happy about that today, because I think like if you get those big, shiny, deals too early, and they are a bit sort of outside your scope, either you have to be really good at pivoting in that direction really fast. Or you're gonna you're gonna slow down for some time until you get that going and can sort of get back onto your original trajectory. A bit of luck, I guess, with everything.

Dan Balcauski: 24:47

I want to go back to something you said at the beginning of your answer, which was, as you've grown, your ICP has got more pointy it sounds a little counterintuitive because, the average practice is, as we grow. We need to expand who we're serving because that's where we're going to get better growth opportunities. So kind of talk to me a little bit about like, what was that, what did that look like for you as you were growing, but then also getting more focused was there a tension of like, if we go over here, we can grow faster by serving these other customers, how did you think through that?

Niclas Lilja: 25:22

We Typically do strategic planning for, three years at a time. A reasonable amount of planning that is, but doing that we, this one year we went through like different growth opportunities and different sort of paths, very general paths of growth. And, one would be, maybe go into a few other industries. Like adjacent industries. All companies are becoming software companies anyway, so why don't we serve all of them, that could be one track Or maybe, maybe we can expand our product offering a bit Maybe we don't have to do only what we do. We had a few different discussions the third one was Geography partly because we'd done it before in previous companies and knew what that meant in terms of regulations, laws and, financial practices, et cetera. But also because, back to that same, it becomes almost a bit boring, but that we felt like we want to be really good at something. And they seem to be the best path for that. So we have, a path that is growing where we can do much more than today. There's really no problem. And I'm sure at some point we'll open up other growth paths, but Not doing all at once. I'm pretty sure we would have done worse Trying to do everything at once I'm sure there are other companies good at that, but I'm not so we try to be simple, let's just go with this SaaS software, geographic expansion, let's figure this out, that has also led us to, do, gain a lot of knowledge, but also do a lot of, like, a Connectors with other CRM systems, with financial packages, with different ways of both paying and distributing invoices, handling tax, et cetera, so we're pretty well covered with that. And, despite being our size, customers in 16 countries with different rule sets. That has been, of course, there's work to this as well, but we felt pretty comfortable. With that,

Dan Balcauski: 27:26

Niclas, I could talk to you all day, but we are running out of time. I wanted to wrap up our conversation today with a few rapid fire closeout questions. Are you ready?

Niclas Lilja: 27:37

Sure, shoot.

Dan Balcauski: 27:39

NNiclas how do you define success?

Niclas Lilja: 27:43

On one hand being a bit uncomfortable, like, starting a new company. On the other hand, I also think that sometimes I feel uncomfortable. Things being calm and quiet around me and I guess that is also a bit of success. So maybe I feel like having, those ups and downs on my heart rate monitor.

Dan Balcauski: 28:06

Is some heart rate variability and uncomfortable calm probably going between those two on a daily basis. I get that.

Niclas Lilja: 28:13

I

Dan Balcauski: 28:15

When you think about all the spectacular people you've had a chance to work with, learn from, is there anyone that pops to mind, has a disproportionate effect on the way that you think about running or building companies?

Niclas Lilja: 28:28

I have a few from my former company Medias. I think I learned a lot there, I looked at other people and how they did things and I learned. Paranodling taught me grit and there's always a solution to the most complicated problems. Mika Limblom was another one doing sales, competitiveness in business. Being very structured and accountable. I had others like Torbjörn Alfman, very positive energy, always overcomes, correctness and perfect strategy. Pontus Björnsson Per Åkerberg, there are a few others as well. Also a few at Younium. I feel like I hijacked that bullet. Finally, I get to thank a lot

Dan Balcauski: 29:10

I'll have to get those names from you over email because I have no idea how to spell any of those names you just mentioned, but I'm sure they're all fantastic people. Look, being a CEO and founder could pull you in a lot of different directions. Are there any habits that you've cultivated to help you stay on the top of your game, intellectually, emotionally, physically?

Niclas Lilja: 29:31

I think I spent 20 years trying to work a lot and sleep little. That was bad. It worked for a while. I tried to sleep a lot. I at least, get my eight hours. I think that really helps me because nowadays it feels like the problems that I'm facing are not really. Won over by brute force. It's more like being a bit sharp and awake and Being in the right mindset. At least right now. I think Sleeping is a good thing.

Dan Balcauski: 30:04

Your eight hours. If you're constantly depriving yourself of sleep, you're also potentially in this mindset where you think you're going to be out of the woods soon because the human body, can only maintain that for so long. So knowing that it's going to be years, not months that you have to feed the machine

Niclas Lilja: 30:23

I think If you wanna Be, a leader. People typically want their leaders to be present and aware and awake, right?

Dan Balcauski: 30:35

hopefully.

Niclas Lilja: 30:36

serves a purpose in that way as well.

Dan Balcauski: 30:38

If I gave you a billboard and you could put anything on it for advice for other B to B SaaS CEOs trying to scale their companies, what would you put on it? What advice would you give them?

Niclas Lilja: 30:49

It would have to be super clear on your ideal customer profile And you can draw a lot of things from that. A lot of other things fall into place. Don't fall into the trap of, this great market. Try to really focus on how to serve someone in the best possible way. And, I think you will sort the other things out along the way.

Dan Balcauski: 31:13

Be clear on your ideal customer profile. Niclas, this has been fantastic. If our listeners want to connect with you, learn more about Younium, how can they do that?

Niclas Lilja: 31:23

On the web, www. Youniumium. com or LinkedIn, our main channels. So you'll find Younium on LinkedIn and you'll also find me. There's quite a few events out there. Typically they start with SaaS something. And we're often there in our pink caps, looking something like this.

Dan Balcauski: 31:42

I gotta say,

Niclas Lilja: 31:43

they are pink.

Dan Balcauski: 31:44

If you do see Younium at a event. I highly recommend stopping by the booth cause they have the best booth swag of any company I've seen. I've got a couple of your stickers still hanging around here. I will definitely put those links in the show notes for listeners. Everyone that wraps up this episode of SaaS Scaling Secrets. Thank you to Niclas for sharing his journey insights and valuable tips for our listeners. If you found this conversation as enlightening as I did, remember, subscribe so you don't miss out on future episodes.