S 01 | Ep 40 Unleashing the Power of Passion: Driving Entrepreneurial Success | Show notes

Kristjan Vilosius is the Co-Founder and CEO of Katana – manufacturing ERP software for total visibility. Before Katana, Kristjan was the CEO of one of the largest investment firms in Estonia and had been an angel investor for nearly a decade in technology and manufacturing. He was excited by the impact of these two worlds merging and could see the need for a more modern solution to the outdated business suites of the 90s. With this inspiration, a 10-slide presentation became the beginning of Katana.

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Estonia's Entrepreneurial Echo: From Skype to Global Ambition

How come, for example, Bolt has been able to compete against Uber while many others have failed globally? It's also the mindset of being super efficient. Bolt’s CEO Markus Villig has commented many times that they are trying to run very efficient operations and that efficiency and that kind of scrappiness that is built into the company's culture has allowed them to take on those giants, and many founders from the region think alike. (Kristjan Vilosius)

(00:00-07:50)
Estonia's journey from post-Soviet era to a hotbed of innovation is underscored by its small size and lack of a significant domestic market, forcing startups like Katana to adopt a global outlook from inception. Kristjan Vilosius credits much of Estonia's success to the catalytic impact of Skype's founding, which attracted talent and served as a springboard for subsequent startups, including unicorns like Wise (formerly TransferWise) and Bolt.

Discussing Bolt's ability to compete with Uber, Kristjan attributes success to a combination of entrepreneurial spirit, a sense of liberation post-USSR and a culture of efficiency ingrained in Estonian startups. This efficiency, coupled with a mindset of taking on industry giants head-on, has enabled companies like Bolt to thrive in highly competitive markets.

Disrupting the ERP Status Quo: The Katana Story

(07:50-15:42)
Kristjan shares his frustration with the clunkiness and expense of traditional ERP solutions. He explains how his quest for a user-friendly ERP solution led to the birth of Katana, driven by the belief that there must be a better way to streamline inventory management for modern manufacturers. The speakers talk about the importance of simplicity, ease of use and scalability in disrupting the ERP market dominated by giants like SAP and Oracle NetSuite.

Despite the challenges of entering the ERP market, Kristjan remains optimistic, outlining Katana's strategy of starting small with a clear focus and gradually moving up the market ladder.

Katana's Evolution in the ERP Landscape

The lines between manufacturing and retail, e-commerce and retail are getting blurry. Many of our customers don't identify themselves anymore as direct-to-consumer manufacturers or distributors. They rather say, “We are a cosmetics brand”, “We are a furniture brand” or “We make electric bikes”, etc. (Kristjan Vilosius)

(15:42-21:50)
Kristjan reflects on the founder's dilemma of whether they would have embarked on the journey had they known all the challenges ahead, highlighting the necessity of a certain level of naivety in entrepreneurship.

He discusses Katana's strategy of targeting the SMB market and gradually moving upmarket, leveraging a strong founding team with diverse expertise. Kristjan suggests breaking down the daunting task of disrupting the ERP market into manageable steps, akin to "chopping the elephant into smaller pieces."

As they delve into market trends, Kristjan explains how Katana initially focused on direct-to-consumer manufacturers but evolved to serve a broader range of businesses, including traditional manufacturers, retailers and distributors. He highlights the blurring lines between different business models and the increasing importance of brand-centricity, which influences customer expectations and communication strategies.

Exceeding traditional ERP standards

We put a lot of effort into making sure that we have proper product design included in whatever we build. So we wouldn't end up with a spreadsheet in the browser with 1,000 buttons while the user needs 10. (Kristjan Vilosius)

(21:50-29:33)
Kristjan delves into the realm of customer expectations, especially for brand-focused companies that demand excellence in product delivery and service.

He explains how Katana becomes the backbone of these brands, ensuring smooth operations and timely deliveries. Kristjan talks about the importance of customer support and success, highlighting Katana's commitment to exceeding traditional ERP standards.

Moreover, he discusses Katana's strategic approach to market expansion, forging partnerships with industry leaders like QuickBooks Online and Shopify. By integrating seamlessly with these platforms, Katana provides customers with a solution tailored to their needs.

Lessons from the Investor's Chair

I really love surfing. I'm not really good at it, but I love it. I think of it exactly as a sport that suits very well a founder or an Estonian. You have to spend 59 minutes of an hour in the water, paddling and fighting the waves for the potential to get 60 seconds of riding the wave. There's a lot of grit and hard work that needs to be done to get the reward. And I think it helps to build that mental resilience that is required. (Kristjan Vilosius)

(29:33-35:56)
Kristjan begins by reflecting on the surprising prevalence of spreadsheet-based systems in businesses, emphasizing the critical need for proper inventory management solutions, especially as companies scale.

Transitioning to his experience as a fundraiser, Kristjan shares the advantages and challenges of wearing both the investor and founder hats. While his background in investment banking provided a solid foundation for pitching and financial modeling, he says it's important to demonstrate genuine passion and commitment to solving customer problems.

Kristjan candidly discusses the lessons learned along the way, highlighting the value of decisiveness and personal resilience in the face of entrepreneurial challenges. It's important to align with the customer's perspective and maintain passion for the problem being solved, rather than solely chase financial gain.

Offering a personal anecdote about his love for surfing, Kristjan draws parallels between the sport's perseverance and the entrepreneurial journey, where hard work and resilience are essential for achieving rewards.

Building a Team and Culture for Global Success

(35:56-40:06)
Alex guides the conversation, uncovering Kristjan's strategies for attracting top-notch talent and nurturing a culture of transparency and accountability.

Kristjan opens up about Katana's journey from its humble beginnings in Estonia to its current status as a key player in the cloud inventory software arena, predominantly serving North American clients. He talks about the importance of transparency within the company, where every team member is privy to both triumphs and challenges, fostering a sense of ownership and camaraderie.

As the discussion progresses, Kristjan sheds light on Katana's culture, characterized by direct communication and empathy. He shares his approach of empowering team members with ownership and autonomy while maintaining a steadfast focus on the company's goals and values.

Check the the episode's Transcript (AI-generated) HERE.

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