Ep 186: Anna-Liisa Palatu
Being a Startup CEO in Constant Crisis Mode, Why Founders Make the Best Salespeople, Balancing Values & Profit, Why Companies Should Take a Political Stance
Anna-Liisa Palatu is the co-founder and CEO of Woola, an Estonian startup transforming waste wool into sustainable packaging to replace plastic. Under her leadership, Woola has gained recognition across Europe, securing high-profile clients like LVMH and raising €2.5 million to scale operations.
On this episode we talk about:
Why plastic is harmful, from fossil fuel origins to its lack of recyclability.
The challenges of pricing sustainable packaging in a plastic-dominated market.
How end-user demand is driving companies to adopt eco-friendly solutions.
Why founders are the best salespeople and how Woola built its customer base from day one.
Staying true to company values while navigating crises and rejecting unethical opportunities.
We are on YouTube and Linkedin as well
Watch select full-length episodes on our YouTube channel > https://www.youtube.com/channel/UCP6ueaLnjS-CQfrMCm2EoTA
Connect with us on Linkedin > https://www.linkedin.com/company/pursuit-of-scrappiness/
Read the full episode transcript below
Janis Zeps (00:03.865)
Hello friends, we're back with another episode of Pursuit of Scrapiness podcast. Whether you're building a business, running a team, or just starting out in your career, we're here to bring you scrappy and actionable insights to help you become more productive. My name is Janis Zeps, I'm here with my co-host, Uldis Teraudkalns as always. Hey!
Uldis Teraudkalns (00:19.712)
Good morning.
Janis Zeps (00:21.549)
morning. Good or bad, we'll establish that. Some election jokes seeping in, let's go. Before we start, quick reminder to follow us on YouTube, Spotify and Apple podcasts. Helps more than you know. In the exchange of that, you will find almost 180 episodes there covering all topics you need to become Scrapier and better version of yourself in life and business. There's plenty to explore if this is your first episode, scroll back our feed and by following us
you will be the first ones to know every Tuesday when the new episode comes out. So open your Spotify, Apple Podcast app and click follow button there, we'll greatly appreciate it. Right, well, let's talk about today's topic and we talk to entrepreneurs a lot and obviously building profitable business is by itself hard. That's what everyone will tell and challenges are different but definitely is one of the hardest pursuits one can take in life.
Uldis Teraudkalns (01:05.644)
You
Janis Zeps (01:17.456)
Pretty much everyone in the last 180 episodes have spoken to have something to say about that. But for some founders, it seems like just building a profitable business alone is not challenging enough. And some founders are determined that they want to build not only a business that is profitable, but that's also done in a sustainable way. They already need to build a product, convince VCs to invest, outcompete their competitors, product market fit, price and quality, all these problems.
Uldis Teraudkalns (01:29.728)
You
Janis Zeps (01:47.364)
to do this without compromising your values and sustainability, it's even more harder, I would argue. And these crazy, positively crazy founders are exactly the type of people we like to have on our show. So today we're very happy to have co-founder and CEO of company called Woola, Anna-Liisa here. Hey.
Anna-Liisa (02:06.096)
Hi, good morning.
Janis Zeps (02:08.437)
Woola, this Estonian startup aims to replace plastics with sustainable packaging and they've raised 2.5 million at the end of 2023. The products are used by companies across the continent in Europe. Some of the companies are very large like LVMH Group, one of Europe's largest companies as well. And today we'll look for answers for questions such as how...
a company such as Vula can get established big brands, e-commerce brands to buy into their products. How can sustainability and profit coexist in business and how can one build a company with both in mind? Like I mentioned, it's very challenging to build a non-sustainable company, not to even mention sustainable one, I guess. How do VCs look at businesses that come to them and says like,
Impact Over Profits, which is one of the motos I think Walla has put also on their website, about challenges in the e-commerce industry overall and maybe some scrappy tricks that startups can use to get ahead also with this competitive environment. Let's just dive in. First, actually, I wanted to compliment you. I saw your LinkedIn. You have a job title, Somehow I Manage, and I think I know where it comes from and I've read that book as well.
Love that humor.
Anna-Liisa (03:30.131)
Really? Where did you actually get that book? I haven't seen it in print though.
Janis Zeps (03:35.969)
It's an Amazon actually you can buy. It's a book of empty pages but it's like a good notebook.
Anna-Liisa (03:39.544)
Interesting, interesting.
Uldis Teraudkalns (03:42.321)
I feel like an outsider in this conversation.
Anna-Liisa (03:49.121)
everything you need to know about being a manager and there's no content inside so you're good to go.
Janis Zeps (03:54.342)
Yeah, I love it, yeah. The office jokes. I'll give it to one to you at some point in life. No, no, it's from the office. Let's dive into actual content. I was first thinking, the packaging that comes to mind when I think about packaging are these fun bubble wraps that you can pop and people use that. how do we like...
Uldis Teraudkalns (03:55.776)
Well, I can definitely relate to that for sure.
Janis Zeps (04:23.564)
replace it like I know plastic is a terrible thing for us but how many sheep do we even need to know replace all of it with a sustainable packaging just a bit like a moonshot question like if this would happen if this vision would come through wouldn't we run out of sheep at some point
Anna-Liisa (04:43.343)
Yeah, funnily enough, that's like the first question we get from investors, from people we meet at expos and everyone is coming to us with this question thinking like, I'm going to get them, you know. But it's actually crazy how much waste wool there is. So we only use leftover sheep wool. So sheep need to be sheared every year. But the quality of wool that we have in Europe and actually everywhere in the world, except for Australia and New Zealand, the quality is so low.
Uldis Teraudkalns (04:55.294)
Gotcha.
Anna-Liisa (05:09.821)
that you can't use that wool anywhere. You can't use it in textiles because if you were to make wool sweaters or socks from it, the quality of it would be so scratchy that nobody would wear it. And for this reason, farmers were just burning or burying the wool that they had to shear every year. And there is so much waste wool generated in Europe every year. So it's around 200,000 tons.
that this wool could replace all plastic bubble wrap globally and even more. Like it's around 120 percent of bubble wrap that it could replace globally. So to answer your question, don't worry, we will not run out of wool.
Uldis Teraudkalns (05:51.478)
Such a failed gotcha moment.
Janis Zeps (05:51.507)
My, you know, like it's political interview, like, gotcha. No, no, it's, I didn't know actually about the quality. And I had heard that in New Zealand, there's like what 10 sheep for every person or something like that. And then no wonder, guess, you know. Why I mentioned plastic is bad and there are a lot of reasons, but one of the things that come up at least on my radar frequently is this, the dangers of
Anna-Liisa (05:53.564)
Ha ha.
Anna-Liisa (06:06.767)
Yeah, something like that.
Janis Zeps (06:20.581)
of microplastics that people start to talk more. We don't know actually what the dangers are even, but like, you know, they are finding these microplastics elements in our brain now. It's literally sipped through all human body. I wonder, yeah, I wonder if you have looked into dangers of plastics and, you know, a listener, an average listener, why the person should kind of care about replacing plastic at all.
Anna-Liisa (06:50.663)
Yeah, so you mentioned microplastics and it's kind of like an interesting thing because a lot of times when the, let's say the average person thinks about why plastic is bad, they think about microplastic and pollution. But that's actually only a small part of the problem, the pollution part. The real problem with plastic starts like way before. And the real problem starts from the fact that plastic comes from fossil fuels. And fossil fuels are the biggest source of
So if we want to stop climate change, we need to stop using fossil fuels in as many sectors as possible. I really want to say all sectors, we need to completely stop using fossil fuels, but I don't want to fuel the haters this early on in the podcast because I know that it's very difficult to find alternatives right now in many sectors like energy and stuff like that. But when we talk about packaging, it is very much possible to.
completely get rid of fossil fuels, for example, in e-commerce packaging. So the whole idea of using fossil fuels and taking resources from Earth and manufacturing something that we use for 30 seconds, it's completely insane, but that's what's happening, right? So after plastic is being used, it does not get recycled. Recycled plastic is a myth, and it will never become true. So right now, the number is about 90 % of plastic that never gets recycled.
and this is because the supply chain is built to be linear. So it will always be cheaper to make new plastics rather than to recycle it. And companies that are still using plastic nowadays, for most of them, it's a question of price. So if recycled plastic is more expensive, they will not start using it. So in short, the plastic problem and why you should care is because it is so directly linked to climate change.
Janis Zeps (08:27.762)
Alright.
Anna-Liisa (08:44.835)
And in order to stop climate change and for us as humans to have a better life and not risk all of the effects that climate change brings, we need to stop using plastics.
Janis Zeps (08:58.599)
Yeah, their mounts are crazy, like...
Uldis Teraudkalns (08:59.05)
That's a big ask.
Anna-Liisa (09:03.098)
Luckily, we're not just asking, like we are offering a solution as well.
Janis Zeps (09:06.847)
Yeah. And that's exactly like, that's the thing. Like we've tried asking, we've tried pushing, we've tried regulating. It does its share of work, I guess, for sure. But you know, how the global system runs, if like you mentioned, if it's not profitable, it's very hard to push it. you know, companies such as yours, I think it's very interesting to talk with these companies that you have found ways of looking, you know.
Uldis Teraudkalns (09:07.948)
It's better.
Janis Zeps (09:35.729)
In the end, the company doesn't care whether it's plastic or wool, right? And maybe even, you know, there might be some additional benefits now for the wool. It's kind of outside even from an environmental perspective. But if you offer them solutions, they will listen. I will...
Uldis Teraudkalns (09:51.744)
But money wise, being sustainable in your sector, does it hurt my bottom line if I want to use wool packaging instead of plastics?
Anna-Liisa (10:05.767)
Yeah, so alternative packaging compared to plastic will never be as cheap as plastic because the plastic industry has been optimizing its production for so many years. So it's never going to be at the same price point or cheaper than plastic is. But I also think that plastic is massively underpriced. So we are not going into the price battle. Our view is very different. So first of all, a
big reason why companies buy Woola is not just for the sustainability, it's for the other benefits that it provides. So for example, wool, it does a lot of things naturally. So for example, it regulates temperatures, humidity, and these are things that are really important in packaging when an e-commerce company is buying them, especially in sectors like cosmetics, where you're selling products that are temperature sensitive and also sensitive to humidity. So that's one thing.
Janis Zeps (10:54.462)
Mm-hmm.
Anna-Liisa (11:05.519)
Another thing is the branding part. So a lot of the big clients that we have signed, they are buying Woola because it gives them an opportunity to brand themselves better. So all the products that we sell, they're branded. We don't sell anything white label. And actually, like one of the first sales that we ever made, it was to an Estonian department store. And we branded the product with their logos and ours. And after they shipped it out to their end users, they started getting like a flood of
of social media posts from their end users who were saying like, I never thought I would make an Instagram story about packaging, but you know, here we are. So there is like all of this added value that goes on top of, you know, just being sustainable.
Janis Zeps (11:51.307)
What do companies say when you go to them? You're obviously going for big standard enterprise, large with their processes, with their internal politics, with their internal systems running.
How do they look at the innovation overall?
Anna-Liisa (12:48.477)
Well, we are still here after four and a half years, so I guess they look at it well, otherwise we wouldn't have survived as a company. But yeah, like the sentiment in the market has changed a lot. So we founded Woola in 2020 and it's a different world today than it was back then. Even if we just focused on the sustainability part in 2020 and 21, we had to do like a bit more of this sort of educating the customer thing.
While as today, when we're doing sales calls, we don't even talk about why plastic is bad or why you need to switch to sustainable packaging. The initial trigger for the companies is always sustainability. And it's not necessarily the fact that, I'm a very good person. I don't want to use plastic. It's actually all about money. In Europe, we're seeing a lot of companies are facing pressure from their end users.
end users are like contacting customer service and saying that if you're going to keep sending me my products in plastic, I will stop buying from you. So they have to like they have to switch. And we're also seeing a lot of big customers who they have like rules that have been decided for the entire group. So for example, the entire group needs to get rid of single use plastic by 2026 or 2027. And again, they they don't have a choice.
Janis Zeps (13:54.999)
Mm-hmm.
Anna-Liisa (14:15.236)
So I would say that it's mainly about money, how these companies end up at our doorstep.
Uldis Teraudkalns (14:23.604)
Have you considered investing in some kind of mass campaigns to get people asking their suppliers to use Vulo or something like that?
Anna-Liisa (14:39.824)
That's an interesting idea. It's kind of like something that Anonymous would do, the hacking group. actually, we haven't thought about it. But yeah, that might be a cool hack to do.
Janis Zeps (14:45.334)
Yeah.
Uldis Teraudkalns (14:51.262)
Yeah, exactly.
Janis Zeps (14:53.063)
or raise at least somehow to raise awareness that it exists because I do think most people would, like I said, I mean, I got this package, I was like, totally make sense. Didn't know it even existed before, you know? It's not on the radar, like I think, you know, it's hard to change the world, it's step by step, but like I think, in that sense, the sentiment of users demanding it, I also put a lot of hopes in it in the future. I think overall these,
I don't know why, just people these days, just, I don't know, wanna have less stuff maybe than the generations before. It's kind of things or packaging, just a bit of clutter. you know, talk a lot of people wanna live with less and just they think of it not just as possessions and something good, but as actually something that kind of weighs them down. yeah, think hopefully, and the same with packaging. If you see you throw out like a...
ton of garbage every day. I myself, I feel like that's something weird. I don't want to do that.
Anna-Liisa (15:56.741)
Yeah, I mean, it's kind of a yes and no. definitely is this movement of minimalism. But at the same time, what's happening in the fashion industry is just insane with companies like Shein and AliExpress and Timo. And you just see how they change their entire collections in one week. And people order stuff from them just to wear it once, and everything is made from plastic.
Janis Zeps (16:12.396)
That's true, actually,
Anna-Liisa (16:26.667)
I don't want to be like the bummer here, but I would say that the minimalism movement is as popular as buying crap online and wearing it once movement.
Uldis Teraudkalns (16:28.972)
you
Janis Zeps (16:36.962)
Very good point. I've totally sort of blanked on that because exactly like and even even stuff that you buy from brands as are I was always fast fashion or agent I might think as well but I've noticed even brands that are not known for that the quality of their clothing is decreasing meaning you have to throw out stuff and I myself really also hate that like you buy something in like in the new year and a half you throw it out but even like big name brands have reduced quality
I guess it's also pressure from competition. True, true.
Anna-Liisa (17:04.807)
for sure. Yeah.
Yeah, it's kind of like, you know, fashion industry has a huge problem and, you know, we could do a separate podcast about it. But yeah, there are ways of like sort of countering that yourself as a buyer. So there's this mentality, buy once, cry once. So if you buy, like, for example, outdoor gear, if you buy a winter jacket that's very expensive, but it comes from a quality brand, then you will actually wear it for more than 10 years. So there are ways of countering it.
Uldis Teraudkalns (17:16.108)
you
Anna-Liisa (17:39.27)
But we need more awareness about that.
Janis Zeps (17:43.652)
Yeah, 100%.
Uldis Teraudkalns (17:47.048)
Yeah, there are these outliers. I have one Timberland winter boots that I bought in 2013 and I'm still wearing them. So looking forward for the winter.
Janis Zeps (17:58.851)
And 10 years is exactly, there are some items I think like it's more than 10 years. It goes by fast, so don't be discouraged. But when you talk, when you go into the sales process, are there any kind of things you have discovered that other companies can learn from, from how you even create interest or grab their attention or like what do you start with? Like how do you build your pitch? Anything you observed?
Anna-Liisa (18:26.857)
A lot of lessons from the sales sector. guess, you know, sales is so difficult and I guess it's the biggest challenge that every company needs to solve. I am kind of like happy though that we have gotten to this point, like, you know, as a startup sector that we understand in 2024 that, by the way, we need to make sales as well, not just like, you know, build products somewhere in the dungeon. And something that sort of helped us a little bit is the fact that as a startup, are maybe
a bit un-stereotypical because we started selling our product from day one. You know, we made the first prototypes very quickly and then we started offering it to online stores right away to see if there actually is a demand for it back in 2020. And so we've had like quite a lot of time to learn from our sales process and so many mistakes that we made along the way. So at first, you know, we were thinking, me and my co-founders, we were like kind of new, I would say.
into the entire world of business because we pretty much started right after finishing university, did a few things here and there, but we didn't have experience working at an actual startup before. So we thought that we are not competent to run the sales team ourselves. And after doing our first round in 2020, we hired salespeople who had 20 years of experience or something like that.
did not work because founders are always the best salespeople. That's something that we learned because you were there to create the product so you obviously know how to sell it best as well as you know your motivation is very high because whether or not you make the sale has a very direct impact on whether or not you have food. you know that always is a plus. And sales is like I guess all about trying things out and seeing and measuring it.
Uldis Teraudkalns (20:17.548)
you
Anna-Liisa (20:26.138)
it works and then making changes within the process but yeah I think sales is the most difficult thing for any startup to crack and it is the only job that feeds you so very important.
Janis Zeps (20:41.62)
You hear it like a lot of times from people exactly in different sectors how important that is. At the same time, most people don't, I guess, grow up with the goal to be a salesman, maybe in America. But like here, think in our countries, it's a bit of profession that a lot of people don't want to take, but they have to take on at some point. Maybe some kind of lessons from...
encouragements of another founder who's thinking about in the cycle that founder might be in the spot where you were like, I need to hire somebody. But like, you know that it's not that easy, right? So any kind of encouragement you would say like, go out yourself and try it.
Anna-Liisa (21:27.431)
Yeah, just go out yourself and try it, right? So salespeople are also very expensive. So I guess if you're like in a very early stage startup, it's easier for you because you don't have a choice. You can't afford a really good salesperson. And my biggest encouragement would be the fact that I can guarantee you that you can answer any question that the client has. Because if you were actually there to create the product yourself,
Janis Zeps (21:31.28)
Just do it.
Janis Zeps (21:35.985)
Mm.
Anna-Liisa (21:57.507)
You know everything so you really don't have anything to worry about because you will be able to answer any questions Or you know worst case just get back to them later and Yeah, well we have learned also in the sales process is that different European countries work very differently Here in the Baltics like I'm guessing it's quite similar in Latvia than it is in Estonia. You can make a sale Via email without ever seeing the person or talking to them on on the phone because we don't really like to talk right
While if you go to France, it is like the polar opposite. Relationship building is the key to making sales there and it takes a long time. You have to be patient and you actually have to meet the person face to face several times. You need to discuss things that are not business. Actually, you mainly discuss things that are not business like you have to go to lunch and things like that. And then once they have like established trust with you.
they're going to start discussing business. So you really need to adjust your approach as well to different markets. That's what I've learned.
Janis Zeps (23:09.376)
You're in e-commerce, one of the groups that you're selling to, but still I was interested in, we had quite a boom of e-commerce during COVID and then a lot of people speak about adjust, not like drop, but like basically adjusted to a bit slower growth. You're linked to e-commerce a lot. Did you feel that? How does it impact your operations in life?
Anna-Liisa (23:34.109)
Yeah, I would say that being in e-commerce and selling to clients that are in e-commerce, over the last four years there have been minimal effects to us because e-commerce is something that is kind of always growing no matter what is happening in the world and this will continue for several years to come. So even if the demand drops a little bit, the sector is still so big and growing at such a high rate.
that there haven't been a lot of like implications for us after COVID.
Janis Zeps (24:11.007)
It's good to hear, I think...
with all we have, demand, number of people, easy to buy, can't not imagine that trend to go anywhere else. Does 2024 present other kind of 2025? If you look at it in e-commerce, you see any other kind of difficulties? don't know, the inflation decrease the purchasing power or vice versa. Again, you hear sometimes very different answers to this question.
Anna-Liisa (24:46.428)
Yeah, so the only business environment that I know is constant crisis. We have been in constant crisis since 2020 and we will be in constant crisis for several years to come. So we've kind of like, you know, seen everything because we founded Vula at such a time, know, 2020 was COVID and this was a crisis on its own. So although e-commerce was booming, we had a lot of uncertainties and we had like, you know, massive
Janis Zeps (25:00.094)
you
Anna-Liisa (25:16.382)
problems with supply chain that was caused due to COVID and lockdown and everything. So we had those crisis to deal with. Then the war started and this had also a very big impact on the fundraising climate as well as supply chain, again, affected in a very big way. So...
Janis Zeps (25:19.869)
Hmm.
Anna-Liisa (25:36.558)
I don't really think about that environment a lot because I have accepted that we are in constant crisis and that's kind of the only approach that I know.
Janis Zeps (25:47.986)
What does the CEO and the co-founder like learn from this experience in terms of how to communicate to the team, how to keep them motivated in like these uncertain times? What are your like, know principles you have now learned after these four years to keep them motivated, to keep them focused on the goal.
Anna-Liisa (26:10.106)
Yeah, so I kind of don't like this question because it makes it sound like, I'm now lecturing people on how to be a great leader. And that's very funny because, A, most of the time I actually don't know what I'm doing. And secondly, I have learned that within this job, if you're a CEO, if you're a leader, you can't win. There will never be a time where everyone likes you or you're really well loved by everyone.
because if that is the case then you're probably like quite a bad CEO because you're like too soft, you're not really like looking after the interest of the companies, you're just doing what people want you to do. So yeah, I think it's just like very hard to answer how to do this job well because I think nobody can do it well or nobody can do it in a way where everyone is pleased, like people will always have problems with you or they will not like agree to all of
decisions and stuff but it is still important to keep like the average standards very high and do your best in trying to keep people happy. guess like to give just like one tip would be be transparent and be honest and I think this is even more important in bad times because in good times it's easy to be honest it's easy for me to go up to the team and say like hey we had an excellent month our sales are booming our investors love us like it's
Janis Zeps (27:34.047)
Mm.
Anna-Liisa (27:39.87)
It's not hard to do that. But if you're running out of money, it is very difficult because you know that you have like a short amount of runway left and this has happened to us twice. So we've done three rounds in total, three investment rounds. And the last ones were both 2.5 million. And both of them, like we almost died as a company. And it's funny because the first one was in 2021. And this was a time when like
every kindergartener could raise a VC round because money was just like being thrown out everywhere without any kind of due diligence. But for us it was still very difficult because we're a production startup. So at that time I spoke to 79 funds that all said no and we had like about one one and a half months of runway left and I had to tell the team because they have you know lives they have families and they need a salary and I had to tell them that you know
Uldis Teraudkalns (28:12.747)
you
Anna-Liisa (28:39.646)
in one and a half months, we will run out of money in case we don't find any investments, but we are doing our best to get those investments. And I was worried because obviously I didn't want my team to quit, but still they have the right to know because if this would have gone south and we would have indeed ended up with no money in the bank, then this would have affected their personal lives to such a degree. I think that is very
Janis Zeps (28:54.954)
Mm-hmm.
Anna-Liisa (29:09.636)
important to be honest in bad times and say like you know this is the situation but this is what we're doing to to fix it.
Uldis Teraudkalns (29:18.656)
Did anybody walk?
Janis Zeps (29:18.945)
Yeah, and it-
Anna-Liisa (29:20.9)
No, that has never happened to us for like, you know, runway reasons.
Uldis Teraudkalns (29:27.747)
I thought that nobody ever left.
Janis Zeps (29:30.53)
No, it's a good point to continue, meaning that companies often will have maybe these are very extreme difficulties, but some form of difficulties and then the CEO or founder can make a choice telling the truth or not. And obviously a lot of the times arguments against telling the full truth will be like, what if people walk, right? In your company, what do you think keeps them going? Is it?
Have you picked people who really believe in the mission? you picked people that you really know how to reward them with whatever or what made it keep going?
Anna-Liisa (30:15.197)
Yeah.
Yes, over the years, our recruitment process has turned to become extremely selective. And so, yeah, it's true that if you apply for a job at WU, there are many steps that you have to go through. Because one of the very first advice that I got when I did my first angel round, one of the investors there told me that recruitment and hiring people is the most
important thing about your company and if at any point in the interview process you feel that it's a maybe then it's a no. So we are indeed very selective or we have like you know grown to be very selective because at first also with recruitment we again didn't know really what we're doing. So we have a checklist of values and we don't make an offer to a person unless I am like convinced that they check all the boxes with the
that are important for us. And of course, we are a very mission driven company. That is the reason why we founded Vula, to fight the plastic problem, but in order to fight it successfully, you also need to be profitable. But we also check a lot of things that there has to be a very strong culture fit. And if a person is like...
excellent at their job, really high performer and does all of those things right. But if they are not a culture fit, they don't communicate to the team the way that we want them to communicate, then we will stop working with them. So it is like very serious for us. A culture fit is at times maybe even more important than the other things because the other things can be taught, but you can't change a person's personality. yeah, we put a lot of
Anna-Liisa (32:07.651)
effort into checking the values of a person when we hire them because if the values are correct and if you see that there is a team of thriving people around you, this will also motivate you as well. And then of course there are the material benefits. We do our best to give people a good salary.
We are not a huge company yet, so we cannot outpay some bigger startups that are on the market, but we definitely give people a fair salary as well as benefits. So we have things like a travel allowance, so we actually pay people to travel the world. Every employee gets 1,000 euros per year to go somewhere on a trip, learn about the world, learn about the nature, go either to the Arctic or to the desert and see the effects of climate change.
and come back and be motivated. So yeah, there is also the material side that definitely matters when it comes to people's motivation.
Janis Zeps (33:10.391)
Yeah, makes total sense. No, I think in any field, if you talk about retention, whether it's like employee retention or whatever user retention, then a lot of it actually happens in the process of acquiring or hiring. There are people who you will not retain, just the wrong fate or just people who want to jump the ship at every opportunity, right?
Uldis Teraudkalns (33:11.03)
Does it does?
Anna-Liisa (33:13.052)
you
Anna-Liisa (33:37.755)
Yeah.
Janis Zeps (33:39.503)
this crucial to do and no amount of snacks in the office will change that. When we brought up that you offer a cool product that maybe some people don't know about that it even exists, I was wondering just in this world and startup world, how many other such ideas must be out there that are not getting the attention yet?
Uldis Teraudkalns (33:45.036)
you
Janis Zeps (34:09.528)
And I'm just thinking maybe you also have some examples that you've seen in like climate tech or environmental startups of some kind of cool solutions, technologies that are out there that people should know about more that are doing the same thing as you doing like solving with profitability in mind.
Anna-Liisa (34:29.85)
Yeah, so...
It's kind of an interesting one because I like my philosophy and what we have seen also is that if you want your company to do well, if you want your company to be known, your brand to be known, you have to go out there and make it known. You cannot be like, I'm making something sustainable, but nobody cares about it because it's not as profitable or whatever. Like that's that's just like loser mentality. So if you want your brand to be known, like you have to go out there, find clients. You need to
Uldis Teraudkalns (34:56.063)
you
Anna-Liisa (35:02.483)
raise money to build a bigger company, need to have a marketing budget to get your brand out there and you basically just have to go out there and do it yourself. I think especially this is important with like impact startups that you need to have this kind of like very intense mindset because it is going to be more difficult for you than it is for companies that operate with very low costs and maybe like you know in the software sector it's easier to reach...
profitability faster because you don't have as many like capital expenses so basically if you want to be known then just go out there and make yourself known.
Janis Zeps (35:42.639)
Yeah, it's task that you, I guess you have to do. When you go to VCs, for example, and you talk about your role submission and the deep purpose you have, and even I read that impact over profits, that was somewhere on the website or somewhere in the materials I found about Vula. How do they react? VCs invest, Patagonia invest, looking to earn money. How do they view these startups?
Anna-Liisa (36:11.067)
Yeah, so it's...
It's not really about just saying impact over profits. It's about the values that we have and the values that under no circumstances we will back down from. So obviously we are a business. We are not an NGO. And from some of the previous things that we have talked about here, you can probably tell that we have a very high sales focus. We have a very high focus of reaching large numbers, becoming profitable, and becoming a unicorn.
Janis Zeps (36:26.384)
Mm-hmm.
Anna-Liisa (36:43.914)
So this is not, you know, the talk that you would hear from an NGO. We are a business, but we are a business with values. And we refuse to back down from these values. So for example, we will not go to Saudi Arabia to have business meetings with local investors there because we refuse to support a system that funds climate change and violates human rights. Even if they would give us like, you know, millions in investments in very good terms, which is
Janis Zeps (37:11.619)
Mm.
Anna-Liisa (37:13.614)
is quite achievable given the interest of the Saudi investors at the moment. Or we have also turned down clients who operate in Russia because we refuse to support a system that funds the Russian war machine and this goes against our values because they don't respect international law. So we are still a business but we just have values that we respect. So that is the whole idea of like you need to make a profit.
and you need to put your values and impact before that.
Janis Zeps (37:48.391)
Mm-hmm. Well, I mean...
Uldis Teraudkalns (37:49.94)
Has it been that your values have been very strongly tested in a survival situation or something like that where you had to really, really, really stick to your values to do it?
Janis Zeps (38:03.067)
and then Putin offers money, you know.
Uldis Teraudkalns (38:07.27)
One month left, Putin calls.
Janis Zeps (38:08.817)
Yeah.
Anna-Liisa (38:10.106)
So that hasn't happened, that particular case, but...
If you're a startup in the sustainability sector, you're a production company, you are in constant survival mode. It's not like you're ever in this mode where, things are good. This hasn't happened yet because your runway is quite short, because it's not that easy to raise large rounds because you'll be giving up too much equity. We have had these cases that I mentioned and we have had to turn down clients and this kind of snowballed
very fast because if you lose one deal and it's a recurring deal you're losing like a chunk of revenue every month and soon you will be out of money and it will also be more difficult to raise because you don't have like you know this revenue boost that this client would give you so yeah it is like a constant survival state but at the same time like if we were to sacrifice our values then you know we wouldn't have anything
shift.
Janis Zeps (39:16.743)
And also like the employees you have hired, that's the thing, you've spent four years picking those people based on those values. I'm sure that if you would, you know, yeah, take some money from like oligarchs somewhere in Russia, they would be like, come on guys, like you, you know, we're no longer can be part of this. And many companies don't understand that. I think there are a lot of companies that are good and relatively purposeful, but maybe, they have these few clients in portfolio that I'm sure a lot of...
employees are like, do we really need that? Do we really need that a few percent just because, know, CEO wants a bigger car at the end of the year and doesn't, you know, this is like, yeah, like, but it
Uldis Teraudkalns (39:55.53)
That's the reason, yeah. Typical employees think, right?
Janis Zeps (40:00.999)
Yeah, so I honestly really admire your courage to say these things loud because a lot of CEOs, founders, they would be just not mentioning it and not drawing those lines. And this is something I think a lot of others can learn from. And I do think also people appreciate hearing direct language like your employees or something. Like if you stand for everyone, you don't stand for anyone. You need to pick a side.
Anna-Liisa (40:24.646)
Yeah, exactly.
That's a big issue. Silence is the biggest danger that we actually have. when we've done some talks and presented Woola somewhere, I have encouraged other companies to go political. When we were doing the intro to this podcast, we kind of discussed this a little bit as well. And I don't think we have the luxury to stay neutral. Being neutral is very,
very dangerous because like you mentioned, you can't stand for everyone. You need to pick a side. And especially, we're living in constant crisis as mentioned before. it is encouraged to be political. That's what I think. And there was this example last year that there's, I guess, the world's biggest climate conference, COP 28. was taking place in UAE.
We really tried to understand why companies are going there because there were delegations from every country, including Estonia. So we reached out to the organizers from the government side because there's also like obviously funding that goes into this and this funding ends up in a system that supports climate change and that violates human rights like in a very severe way. we didn't like all we heard from the organizers and the companies who are also going is like, like
I haven't thought about it. Like I guess it's okay or like, you know, it was like this neutral mentality that I understand the problem But what are we gonna do like we're too small to change things. So we came up with this like counter campaign So it wasn't COP 28 It was called nope 28 and we really tried to get like a lot of companies to join but you know, it wasn't very popular But we were we are going to try it again. So if anyone here is listening that wants to join our boycott
Janis Zeps (42:00.678)
Uldis Teraudkalns (42:13.932)
you
Anna-Liisa (42:26.767)
NOPE 28 or NOPE 29 coming soon.
Janis Zeps (42:31.707)
Yeah, and I'm not surprised it wasn't public. That's what I said about the silence. It's so much easier to stay silent in whatever field, like in business, to keep your options open in politics, to keep your options open and stuff like that. But I really admired your passion and direction for that. And like I said, I'm sure a lot of employees and partners see that too.
Yeah, Annalisa, thanks for the conversation today. think enormous amount of insights. Like you mentioned, you've gone through a lot of stages in the company, sales, super important, motivation, retention, employee retention, and a lot of insights for startups in and out of climate space to learn from. Thanks for sharing those.
Anna-Liisa (43:16.742)
Thank you for having me. It was great to chat.
Uldis Teraudkalns (43:20.022)
Thank you very much.
Janis Zeps (43:20.455)
to the listeners, and we see you next Tuesday. Bye.
Uldis Teraudkalns (43:26.634)
Bye.
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