18 Months ago, I started to build Likvido together with my co-founder Max. We launched in April 2018, with the goal of becoming a smarter and more digital debt collection company.
18 Months later, I’m constantly in surprise how smooth everything has turned out. With this post, I’d like to give a brief update with our progress:
Many of our original assumptions were indeed, absolutely correct:
– Yes, debt collection sucks. Yes, it can be fixed.
– Yes, companies spend A LOT of time on administrative tasks around invoicing and getting paid. Yes, it can be fixed.
– Yes, you earn a lot of money in debt collection. Yes, it can be achived.
Because the majority of our assumptions were correct, it turns out we managed to find product-market fit quite fast: We have a product that works really well, the product is spreading slowly through word of mouth and we have ridiculously low churn.
The real fun part, however, is that we realized how big the problem around “getting paid” is. We thought the problem was debt collection (and indeed, debt collection sucks), but the problem is so much better. The whole space of “account receiveable” – getting paid – is a crazy mess. That means we made a bit of a pivot and changed our product to become a really sexy full-account receiveable platform.
In terms of company-building, we’ve also been quite lucky. We’ve managed to get around 1 million EUR in funding and build a solid core-team of great developers, supporters, and salespeople.
Our biggest struggle has been finding product-channel fit. We’ve grown very well through basically word of mouth, and that means all metrics are quite pretty. However, we want exponential, 20% MOM growth and to do this: you need a product-channel fit.
We’ve spent (a lot) of money testing out different sales methods & channels, without any significant success. However, 1.5 months ago we believe we found what will be our product-channel fit. IT’s still too early to celebrate, but we’ve made a pivot in our business model and is now selling subscriptions (starting from 500 USD / year, going 1000 USD / year). We’ve found a way to sell this on the phone with a scaleable sales setup.
We now have roughly a thousand companies, growing at least 100 new clients every month. With our new sales model, I am sure we can double or triple this, so we can grow even more. We are not yet profitable, because we spend a lot of money on investments, but we are in a situation we could stop these and be profitable tomorrow – and this makes me insanely proud.
We still have a long way to go, of course, since when I Google “Likvido Unicorn”, we’re not there yet. However, I would say: these last 18 months have been fucking awesome. We’ve grown much, much faster than I would ever hope to believe – and I look so much forward to the next 18! But it’s a great start. Today we even hit the front page of the biggest Danish business magazine, Børsen:
Looking further ahead, we have a very interesting decision to make.
We’re currently only in Denmark. And if our current sales model works & we scale it, we will hit some kind of maximum in Denmark with that channel within 6 months. Then we have 2 options:
- Take on a new market
- Go up-market
Here, I would be inclined to take on a new market. And this is extremely interesting. Denmark is so small that many niches are not interesting. One of our big successes in Likvido in Denmark is hairdressers. Here we help hairdressers collect money from “no-show-fees”. This is a great but extremely small niche in Denmark – and it’s very hard to use marketing to hit these. If we went to the UK, this would be very different.
Another thing we’re looking at is crypto. I love cryptocurrencies and believe they will play a huge part in the future. Imagine if Likvido could be used to both pay all bills in crypto (such as Bitcoin, Dash, and others), but as a company provides us a crypto address instead of a bank account. By doing this, we could help all companies in the crypto space a great way to stay in crypto on larger bills.