Entrepreneurial Zen

Zendesk's Mikkel Svane tells why Silicon Valley is still the world's top startup hub. Even the weather helps, he says.

IF there is one thing Mikkel Svane wishes he has more of, it is time. To the Silicon Valley tech mogul - he's co-founder and chief executive officer of customer experience software company Zendesk - "free time" is a chimera. That's because travel is a huge part of what he does.

"I try to limit travel. If I say yes to everything, I'll be on the road all the time," he tells The Business Times.

The Denmark-born entrepreneur regularly journeys to Zendesk's 15 offices around the world and attend company events, such as the Future of Customer Experience mega-roadshow that took place in Singapore in August.

As many as 10 such events have been held around the world this year, with 2019 promising to be "even crazier", says Mr Svane.

His vacation days are therefore "just weekends", and school breaks if he can afford the time, he says. But even when he does get time away from work, he tries not to overplan it.

"I tend not to be too ambitious. I will travel with my family or have a lot of downtime with my kids."

Mr Svane, 47, lives in San Francisco. He is married with three children and has two dogs. He and his family fly to Copenhagen for short stays every year.

Besides family, angel investing is what Mr Svane - one of the biggest names in SF startup history - hopes to spend more time on. He laments the fact that he now only occasionally invests in and nurtures early-stage startups.

"If I have a little more time, I will do more."

Customer experience is tops

The Zendesk chief spends most of his time "staying focused" on the business, which he says is a challenge as the customer experience software sector is growing exponentially.

"Customer experience is going to grow like crazy. It is an area that more companies are investing in right now. The future is using data to be smarter with customer experience."

This is why Zendesk is "aggressively" investing in research and development. It is also collaborating with enterprise customers to "push the envelope" on customer experience, says Mr Svane.

Zendesk's products range from live chat and messaging and integrated customer support to proactive campaigns and analytics and reporting.

As a business-to-business (B2B) company, Zendesk is "not visible as a brand to the man on the street", Mr Svane acknowledges. Many enterprise customers in fact become customers of Zendesk after having used the company's products or services on another website, he says.

"We are a more visible brand to companies. But B2B processes today can look more like B2C (business-to-consumer) processes. The lines are increasingly blurred."

Growing old, staying zen

Founded in Copenhagen in 2007, Zendesk is now a nearly US$6 billion company listed on the New York Stock Exchange (NYSE).

Mr Svane says: "We are still trying to be true to who we are. We try not to be too serious while being a grown-up company."

At times, this "growing up" has proved testing for the company. Zendesk's rebranding exercise in 2016, for instance, "wasn't pretty", Mr Svane admits.

As part of the brand revamp, Zendesk retired its longstanding mascot of a Buddha wearing a headset and logo of a green lotus flower in favour of a series of geometric shapes - each representing a different Zendesk service - that form the letter "Z".

The new design is meant to flaunt Zendesk's multiple products. But it met with opposition from several employees, including even co-founder Alexander Aghassipour, who designed the original Zendesk product.

Mr Svane says: "People miss the Buddha. The whole rebrand was emotional and hard."

He adds that while Zendesk's branding had started out with "green and fresh colours", which were apt for a startup that was "bringing something new to the world", it came with limitations.

"We have to grow up. We can't stand still.

"It's important to make tough decisions to set yourself up for the future."

Choosing the right employees

Mr Svane says that serving in the military some 30 years ago has shaped his management style.

When he assesses new recruits, for instance, he may walk very quickly to see if they can keep up. This is because he believes that athleticism is an important trait for someone working in a startup.

He adds that military service tends to train people to be good at doing what they are told to do, or as he puts it, "jump when you say jump". It is a good quality to have but people should also have their own mind and be able to challenge orders and suggestions when they deem fit, he says.

"Zendesk should be an intelligent company where employees execute orders when they need to but know when to ask the right questions at the right time."

Mr Svane is known for his interesting screening processes.

Aside from walking quickly, he may take new Zendesk recruits to restaurants and observe if they will let him order first or offer to pay.

During the meal, he may swear like a sailor just to gauge the responses of his potential employees.

He says: "Taking people outside of their comfort zone lets you see how they react. It is a good way to know them better."

As one of three co-founders of a startup that more than did well, getting listed on NYSE just seven years after its founding, Mr Svane comes across as down to earth, speaking modestly about his achievements.

"I've been very lucky to be where I am.

"I don't credit Zendesk's success to my genius; perhaps my perseverance, the ability to not stop, and having really smart people around me."

Beware the cult of founders

Mr Svane is aware of the Cult of Founders, a phenomenon in Silicon Valley where founders of notable tech companies get propelled into the limelight and accorded "rock star" status.

"That founders become personalities is part of the Silicon Valley myth. We want to have these super founders for the same reason we need Hollywood superstars. It's aspirational."

Mr Svane adds that "a lot of storytelling" in the Valley is around founders.

This is part of the tech and startup "game" as it helps to create a momentum of innovation, he says.

"Sometimes, this is justified. There are people doing spectacular things at spectacular scale, such as Elon Musk, and there are life-changing companies. That said, there is also a lot of bullshit."

Mr Svane notes that there are "fantastic" tech companies headquartered in the Valley that "never really sought hype" and are just "very focused" on their product and customers.

"A lot of companies have come a long way without the hype. Some came out of nowhere."

Even so, Silicon Valley remains the world's top startup hub, Mr Svane says.

"It's still very unique as a startup ecosystem.

"Ten years ago, there weren't many startup ecosystems outside of Silicon Valley. It's a lot more different today, with exits happening and startups being able to raise money globally."

Mr Svane believes a combination of factors has kept Silicon Valley at the top.

The biggest reason, he says, is length of experience.

"Silicon Valley has built great tech companies for many years now.

"With this scale and momentum, it will take time for any ecosystem, including in China and South-east Asia, to catch up."

He adds: "Even weather plays a part. Silicon Valley has a good business climate; it's never too warm or cold."

It's been nearly five years since Zendesk became a public company in 2014.

In April that year, Zendesk acquired Singapore-based live chat startup Zopim for US$30 million and opened an office in the republic.

Entrepreneurship is worthwhile

Asked what the company's plans are for the next five years, Mr Svane says: "Five years is a long time for Zendesk. Five years ago, we were not listed.

"We want to invest in data and predictive capabilities, and be a better partner to our enterprise customers."

His advice to aspiring entrepreneurs? Think global - and know that while most startups will fail, this should not hold entrepreneurs back.

"It's a privilege to build your own products, be a creator and serve customers.

"Even with the high risk of failure, the journey is meaningful and worthwhile."

Mr Svane in fact authored a memoir titled Startupland, which chronicles his entrepreneurial journey through Silicon Valley's booms and busts. The book was published in 2014.

Today, Zendesk has around 2,300 employees and 130,000 customer accounts, according to Mr Svane.

"As the complexity of the business grows, the more change there is to manage. But that's what makes it fun and interesting. Every day brings a new set of challenges."


Mikkel Svane

Chief Executive Officer and co-founder
Zendesk

1971 Born in Denmark

AP degree in marketing management from Aarhus Kobmandsskole

1996 - 2002 Founder & CEO of software firm Caput A/S

2002 - 2007 General manager of German consulting firm Materna

Since 2007 Co-founder & CEO of Zendesk

2014 Zendesk trades on NYSE; Mr Svane publishes first book "Startupland"

2018 Joins board of directors for Stitch Fix, an online personal styling service in the US