The Beginning of his career
Paavo was a social pedagogy student in the University of Tampere and had no background in business. Together with his close friend Jussi, they always dreamed of being real rock stars but at a certain point the reality hit them and they realized that dream wasn't going to work out for them. So instead they decided to start a record label. Paavo and Jussi both took student loans and were able to raise a thousand euros. At the time it was just enough to buy a computer. Their office was infact Jussi’s bedroom and consisted of a table, Jussi’s bed and their computer. They started contemplating on why they failed as being sensational rock stars and who could make it in this line of business. More importantly they started reflecting on how can two guys with a background in social studies make it happen in the business world?
They signed a few totally unknown bands to their label. Paavo was very involved in the music scene. He was pretty much found in every music convention and he was on the board of various music organizations. Soon enough the people in the music scene started thinking that their record label was a lot bigger and more influential than it was in reality. Few people even told Paavo that he shouldn’t be allowed in the board meetings anymore because of their record labels “significant role” in the music scene. Although he reality was quite the opposite.
The income of Paavo and Jussi’s record label was basically just coins but they really needed a few extra hands to help out with the label. They ended up hiring two 16-year-old high school students that were just stoked to be a part of a record label. Paavo and Jussi, two young and unexperienced entrepreneurs, started thinking of ways to compete with the big shots, such as Warner and BMG. These multi-national record labels had heaps of money and were able to purchase media space etc. Paavo and Jussi couldn’t compete with that but what they had was an understanding about the fan community. They decided to sign an entirely unknown band and not to tell anyone about it. They didn’t waste time on efforts into getting the media’s attention because the media wouldn’t care about an incognito band anyway. The radio stations wouldn’t risk playing songs by a band nobody knew anything about. Printing flyers wasn’t an option they wanted to pursue either, besides they didn’t really have the money for it.
The band that Paavo and Jussi signed had 19 fans on their mailing list, this was the time before social media was a thing. These fans were some teenage girls from Tampere. Paavo and Jussi weren’t going to rest before this band was number one in the Finnish music charts and they only had a marketing budget of 80€. They begun by focusing on the 19 fans they had because unlike the rest of the world, they were the ones that cared about this band. Big record labels generally have a good understanding about the distribution channels and they know how to work the media to their favor, but Paavo and Jussi needed to find an other way around.
Paavo was the manager of the band and together with the band’s lead singer they started contacting the fans directly. They came up with a story to tell to the fans. The story was about how the band is currently negotiating for a record deal and they told them that this is highly confidential information and it needed to be kept as a secret. It wasn’t technically a lie but what it meant was that the manager of the band and the head of the record label were negotiating together, which basically meant that Paavo was negotiating with himself. The fans were asked if they wanted to play a part as the band’s insider group, which in a way made them feel like they had a major role in making the band successful.
The fans ended up marketing the band themselves. These girls stole toilet paper rolls from their schools and wrote things about the band on every sheet and then returned them back to the school toilets so every time someone would use a sheet of toilet paper they would notice the band. This obviously raised a lot of eyebrows and made people wonder about the band and who they were.
When the band’s first CD was released the situation had escalated to a point where all the kids around the bigger cities in Finland were skipping school to go queue in front of the record stores to get their album. A massively popular finnish rock band Hanoi Rocks was releasing an album on the same day so naturally the record shop owners thought the crowds in front of the shops were coming in to get the new Hanoi album. You can imagine their surprise when everyone waiting in line wanted to buy an album by a band the record shop owners hardly knew anything about.
The bands album jumped to #1 on the Finnish Music Chart and sold twice as many copies as the band in the second place, which was a very popular band at the time called Teräsbetoni. It wasn’t long until the media started to contact Paavo asking about the band. Jussi and Paavo had made a list of the medias that they favored and that were less important to them. For their preferred medias they would tell that "maybe we can find a slot for a short interview" and for the less important medias they would offer an interview for a fee of 4000€. This raised the media’s attention even more because they were used to being paid by the bigger labels to write a story about the artists. This goes to show that everything that is exclusive in the world becomes valuable even if it doesn’t have usage value.
Paavo and Jussi wanted to concentrate on smaller fan groups because these groups had a genuine interest in the band, unlike some hot shots in big magazines. The fans were enabled to get close to the band and because of this personal touch, some of the fans were willing to chip in money to be able to play a part in building the band’s success. The results of this approach were extensive, here are some titles the band one that year:
New Comer of the Year by Suosikki (at the time biggest music magazine in Finland), The Best Song of the Year by YleX (the national broadcasting company’s music station), The Best Music Video by noise.fi, Young Power by Rumba (the most appreciated music magazine in Finland) and in addition to this three hit chart #1 singles. The album also reached fourth place in the whole year’s Finnish Music Chart.
Around this time Myspace was launched and some bands, including Paavo and Jussi’s protégé, were using it. Through Myspace the band got some attention abroad. A German girl commented on their profile expressing her interest towards the band. They contacted this girl personally and the same thing they did with the fans in Finland started happening in Germany. The fans started marketing the band and soon enough the fans started calling radio stations asking why they weren’t playing any songs from this particular band.
Paavo and Jussi wanted to hand out 40.000 flyers in Germany and asked the fans if there were any volunteers for this job. Not having any money to go through with this plan, they agreed with a merchandise company that they would get the flyers if they advertised the merchandise company on the backside of the flyers. Soon after this, some fans in America contacted them asking if they could distribute some flyers too. These American fans had already designed their flyers and wanted to print them out themselves. Obviously Paavo and Jussi had no trouble saying yes to this offer and the fans got their “go ahead”.
Without any promoters or distributors the band’s single ended up at the 65th place in the Euro Chart’s most singles sold. At this stage Paavo and Jussi made a deal with Sony and licensed the band to Sony. The band was getting a big tour in Europe, they were booked to a lot of festivals and clubs. Unfortunately, two days before the tour was meant to start, the tour manager called Paavo and told him that the band had started throwing fists and instruments at each other in the middle of a show and broke up. The band never got together again and all their shows had to be cancelled.
In 2007 Paavo and Jussi started thinking if the same things they did with the fans before, could be done with mobile phones. They started playing with the idea that, for example, the lead singer of a band could send a personalized message to say, 10 most active fans that would go along the lines of : “We’re coming to Berlin guys, it would be great to meet up!”
Without any kind of knowledge about technology they started working on the idea. Paavo heard about a competition in the US called “Mobilerules” and they decided to apply. A few months later they found out that they were chosen to compete with 9 other applicants from around the world. Paavo and Jussi knew everyone else would have great videos and other impressive visuals, so they tried to find an other way to compete with the other contestants. They took 50€ and hired an artist to draw a rock themed comic for them.
The finally of the competition was held at Yahoo’s headquarters in Silicon Valley, Ca. Paavo had to convince all the investors that they were going to make a ton of money with their idea without any kind of experience in pitching. To everyone’s surprise, they won the entire competition with Paavo's limited English skills. Paavo was told to haul his ass to a hotel in New York and the next day he would be picked up from there. He did as he was told and the following day a limousine was waiting for him in front of the hotel. All of a sudden Paavo was in a penthouse with a backpack on his back talking with big time investors. At the end of the night he had gathered a couple of millions in investments.
There he was now, the CEO of a mobile company. Jussi operated as the designer and was forced to buy his first cellphone. He was probably the last person in the whole of Finland who didn’t have one. Jussi suggested that they should build their so called application for the iPhone, which had just been released. The culture of mobile phone applications didn’t really exist yet. At the same time a tech company was developing a type of a social platform, but had no knowledge on fan bases, so they decided to join forces with Paavo and Jussi. The tech company would provide them with the code for the platform and Paavo and Jussi would tell them how they wanted the platform to work. After a year they bought the IPR and some software developers from the tech company.
Well, things didn’t go as planned. Where Paavo and Jussi went wrong was when they hired people from ten different countries and had offices in San Francisco, London and Helsinki. They forgot where they were good at and lost their focus.They had tons of traffic but due to the pressure brought on by the rapid growth and the investors, they ended up doing everything else than what they were supposed to be doing, connecting with the fans on a personal level.
In 2012 Paavo moved back to Finland and hired IBM’s former Bigdata director as the CEO. The plan was for him to move back to Finland while the entire operation was to move to the US, where additional investments were meant to be made. Some of the investors didn’t agree on relocating the company. Some of the investors thought that the company should get the investments first and then move and others, of course, thought the opposite. At this point Jussi and the company’s new CEO made an ultimatum and gave a deadline for things to be sorted out or they would walk out of the company. The deadline came and there still was no consensus, so what was left was an empty company without employees.
What Paavo learned from all this was that you should focus solely on the people who want to be a part of your idea and that you should personalize marketing in a way that the people who care can experience the whole journey feeling like they’re part of it. Transparency and a humane attitude wins over official and uptight communication. It’s important to see the other person in a humane way and show your own personality too. When you give people a reason to tell stories by getting to be on your side of it all, they will be sharing your story. If you want to reach 100.000 people, focus on a 100. It feels more personal, more involved. When you get those 100 people on your side, they will be spreading the word wherever they go. Instead of trying to reach masses of people, find the early adapters and focus on them. It’s a lot easier to pull with a piece of string than to push with it.
Even people in charge in big corporations are only human, so find that one guy that gets excited about what you have to say and he will sell it to the rest of the company. This is a logic that applies not only in music business but in everyday business activities.
After moving to Finland Paavo mentored in some of the biggest startup accelerators and hubs, as well as in big corporations. This is when he realized how slow the whole startup progress actually is, no matter how brilliant the idea behind it is. This is what inspired Paavo to start solving problems that startups face, and he himself had faced in the past 15 years in the business. This inspiration lead to the concretion of Startup Catapult, a company that changes the way that European startup success stories are built.