Road to the North - Part 1: Yielding Power
Witted Megacorp Oy is exploring the possibility of listing on Nasdaq's First North marketplace. Peek behind the curtains with Witted CEO Harri Sieppi as he opens up every step of the way towards the possible listing on First North.
Witted Megacorp Oy explores IPO possibility
We have some big news: Witted Megacorp Oy is exploring the possibility of listing on Nasdaq's First North marketplace.
That's the way it is, that's the way we're allowed to say it. You can't say you're going to get listed. People have been slapped on the wrist for saying that, so we don't want to fall into the same trap, even if you get a more dramatic headline and that's what it feels like in your head anyway.
Of course, we don't have this thing nailed down and it can actually end belly up. We were slightly tipped off that these things are usually announced when the process is in the final stages. In many ways, the issue is a great state secret, and no one will say anything about it. You don't really know what's secret and why we can't say a word, but ok then - but you secretly chat on social media and write a blog.
Other parts of the series can be found on the Witted blog.
We are not in the final stages, we are not ready with the project, instead we are now in the documentation quagmire and there are more than enough uncertainties. It's quite possible that we will mess up and the public burden of shame will come upon us and people will sprinkle ash over us. We're still going to do this openly, because we just happen to be that kind of company.
Part 1: Yielding power
Before I tell you the story of figuring out the possibility of getting listed - about this IPO, I think it's polite to introduce myself. I'm Harri, 36 years old. Born and raised in Rovaniemi and later relocated to Helsinki, quite an ordinary guy. I live in Lauttasaari with my wife Elli and my 4.5-year-old daughter Sanni. I ski in the winter and run in the summer. I've never been a top student and I don't come from an exceptionally good starting point. I look nothing like a head of a large company.
What has been important to me at work is that it gives more than it takes and you get to do it with nice colleagues. Five years ago, I started this company shortly before my daughter was born. That was the worst possible moment from the point of view of managing your life. I was stressed out, learning to live with the hustle and bustle, and sleeping rough.
The company I founded was Talented. I decided to hire people who I like to work with. The company's mission was to help others. We wanted to help software developers find their dreams and be happy in their work. The company grew rapidly, became successful – and has changed its shape and name on the way - now Talented Solutions Oy is Witted Megacorp Oy. With that name, every time I sign official papers, I feel like a Bond villain.
I ended up in this job because I never wanted to work for a big listed company. I was more interested in entrepreneurship, leaving my own mark in the world, and adventure. By the spring of 2020 I was successful and felt like I had arrived, I felt like the game had been played through. I had managed to build the company I dreamed of. Talented Solutions Oy had grown into a large company. It had expanded to three countries and five companies, we'd doubled the business every year – and we'd be doing it in the Covid year as well.
Everything was really good and the future was looking very sunny, not a bad achievement for a 4-year-old toddler.
Development discussion: what will I become when I grow up?
In May we were facing a change in our administration. Our board had been led for a couple of years by the amazing Roni Ström, a man whom even Excel bows down to. I have a lot of respect for Roni and he's been one of my mentors. With him, we had laid the groundwork for board work in several of our companies.
There was, however, one important thing that I had held up for a long time – we had not held development discussions. Roni is a man of principle and wanted to carry out the duties of the chairman of the board to a T.
For me, even the mention of such development discussion gives anxiety. I don't care about the attention, I don't like to put myself in the spotlight, I don't brag on social media. In a development discussion, all the focus is on me and it feels like a heavy thought. However, time was running out as the make up of the board was about to change. "Now if ever," said Roni. At the time I didn't know it yet, but that conversation was going to set off a chain reaction that will take us on this journey that I'm writing about.
Be yourself, unless you can be Batman
We discussed my role as CEO. If you only pick this one lesson from management literature, you go a long way: don't be an asshole. This is the rule I have tried to follow.
One advantage of the role of a CEO is that they have master keys that can get you anywhere in the organization. A CEO can direct their time to where it is most needed. This role seemed to suit me, too, and I knew the job. Besides, this is as close to Batman as you can get in my career.
However, going international and rapid growth changed the situation along the way and the role expanded. I found it challenging that in addition to working full-time, we had subsidiaries on whose boards I worked and a newly started business in Norway. It felt like there wasn't enough time to do all the roles at the level they required. The Batsignal was lit up more times than I could answer the call.
It's been good so far - so let's set the pieces on the board again.
As a result of the development discussion, I had options for potential development paths. There was an opportunity to focus on Finland and reduce other responsibilities or, alternatively, to focus on the whole. I chose to give up control and responsibilities of running our Finnish business, find successors and focus on building the group. At the time, however, we had no group, no succession plan, and I had no idea how to go about taking this group thing forward. There were no courses for this at school. Covid had unfortunately taken over the world in the spring. There were a lot of uncertainties everywhere.
In November 2020, I relinquished all of Finnish responsibilities. I was very worried about how this was going to turn out and how the new leaders are going to pull it off. I wondered if I'm about to be the most useless employee in the firm. Powerless, unnecessary, knocked off the throne, back to being a student. Batman had become Robin. Was I now just sedimented organizational fat and a pointless running expense?
Boredom forced creativity
I've been reminded of the phrase ”Creativity is Intelligence having fun” – and it feels very accurate. However, it is hard to be creative in the rush of everyday life, as we humans tend to shy away from boredom and fill even small empty moments with something filling, such as social media.
I was bored in the winter. This boredom lasted about 4 weeks until I couldn't take it anymore: I enrolled in a Certified Board Member course and as a student at Lappeenranta University of Technology in the KATI-16 program. At the same time, I added a lot of exercise and lost weight. I worked out an internationalization plan for the Group.
However, this was not enough to fill all the vacant time, so when I finished my ”7 ways to conquer new markets” analysis and gushed about it to everyone who agreed to listen, I took preparing an M&A strategy as a new challenge. I was very tempted to identify all the factors that would enable the company to sustain rapid growth and this aspect of M&A was completely foreign to me.
Several acquaintances in the industry had managed to destroy millions of euros worth of the company's shareholder value by merging companies and it is said that up to 70-90% of M&A projects fail. Interesting! If I were doing this, how many companies would I destroy on the way? And can merging companies ever even work?
Life changes with a Mickey Mouse toothbrush in hand
We got a new board in the summer 2020. Roles were recycled, and my closest interlocutors also changed, as Roni stepped aside. I was used to sharing even very preliminary ideas with the board and juggling them together. This time, when the subject of my research was M&A, I very quickly came across the fact that most often people do this with a listed stock and that stock is the best possible currency for inorganic growth. For listed companies in general, M&A is much easier than for others. Now we're on the cusp of a big realization.
To pass the time, I talked to the managers of listed companies because I'm not shy about asking when I don't know. I read M&A related literature and got stuck with this idea that we need to explore this IPO route and go through the pros and cons that come with this scenario. Sort of play out this route through post-it notes so we understand more.
After all, we have Reaktor on board as a big owner and they are not a listed company, so I thought there is probably a reason behind why this path should be closed right away. Reaktor is known for its low hierarchy, organic growth model and management that does not include structures and reporting obligations. I thought that this IPO route will never come to fruition, but maybe I call our Chairman of the Board Juha Ilola anyway and ask for his thoughts and would he be up for a post-it workout?
Juha was nervous, I noticed it on the phone and so was I. Feel free to jump into my boots and explain to an experienced lawyer and my new ”boss” on the phone thoughts on M&A and a round of IPO-post-it-game. A theme I couldn't really claim to know well. However, Juha did not dismiss the idea, although it clearly surprised him. It was agreed that we would look into this and do a scenario exercise.
I was really happy and left in the belief that this is what we are going to do next time. That night, however, the phone rang again. This time it's Juha calling me when I'm taking care of our child's evening activities. I have a Mickey Mouse electric toothbrush in one hand and a daughter in the other when I answer.
"I made a couple of phone calls and the feedback was good. We could start taking this forward first thing tomorrow, " he says. The toothbrush was left buzzing through its automated program before I catch up with my own thoughts: I didn't... what about... what?
The story continues in a couple of weeks. Follow Witted on LinkedIn, Facebook or Twitter, and we'll tip you when a new part comes in. This story is also told as a (Finnish language only, sorry!) podcast, which you can find on podcast services such as Spotify and Apple Podcasts.