S14E11: Growing a business that’s never been done before, with Karl Andersson (CEO, Motatos)

Richard Medcalf
How do you grow a business that’s never been done before? How do you get a whole ecosystem of suppliers and partners to function differently because you’re doing things very differently in the market? And how do you create outstanding breakthrough success when you’re the pioneer? Well, today, I talked with Karl Anderson, who’s built an amazing business called Mattsmart and Motatoes that, has revolutionized the food system, allowing customers to buy products that would otherwise be discarded due to reasons like packaging has changed or best before dates or seasons are no longer valid. And to do this, he’s had to really innovate in all sorts of ways. Disruption looks sexy, but it can actually be messy and require a different leadership style. So in this conversation, we get into how he did it, how he found the opportunity, the difficulties he found along the way, how he built trust and our suppliers to work differently with him, and the very different mindset that he looks for in his staff and especially his sales team. I think you’ll find this a really insightful conversation. Karl’s an extraordinary entrepreneur, so enjoy this conversation with Karl Anderson. Welcome to the Impact Multiplier CEO podcast. I’m Richard Metcalfe, founder of XQuadrant, and my mission is to help the world’s top CEOs and entrepreneurs shift from incremental to exponential progress and create a huge positive impact on our world.

Now that requires you to reinvent yourself and transform your business. So if you’re ready to play a bigger game than ever before, I invite you to join us and become an Impact Multiplier CEO. Hi, Karl, and welcome to the show.

Karl Anderson
Hi. Thank you so much for having me.

Richard Medcalf
You’re welcome. This is gonna be a good one. So what I know about you, Carl, is that you’re the founder of Matt Smart Motatus, which is a a business that you started probably 10 years ago or so in the back of a supermarket, and you’ve grown it to be one of Europe’s fastest growing businesses over that period, to about 200 employees, about a 1,000,000,000 Swedish krona, which I guess is around €90,000,000 if I’ve calculated that correctly. And, you’re really scaling a really impactful business model to avoid food waste and so forth. The more we’ll kinda get into that. And, so it’s a fascinating story. And I know it’s been a messy ride, and that’s what we’re gonna do what we’re gonna explore today because you’ve been disrupting really disrupting a business model. Right? Really doing things which nobody else has been doing.

So let me just start kind of what was the kind of key moment or what was the story that led you to found this business in the first part first place? Because it’s always important, right, to see where does the business idea first come from.

Karl Anderson
Yeah. Thank you so much. Thanks for that intro. Yeah. No. I mean, you know, we are attacking a huge problem. Right? I mean, food waste is one of our time’s biggest issues. 1 third of all food being produced is actually being thrown away.

So, I mean, that’s really very much what what what our business is all about. So let’s you know, that’s very also very much where it started. Right? So, my friend Eric had a supermarket store, based, like, you know, just outside Stockholm where he daily saw good things going to waste and being super frustrated about this. And he, you know, he tried different ways of going about this, tried to talk to his con you know, customers to, you know, why should you not eat bread that has less than 3 days left or something like. So when one of its suppliers, you know, called them up and said, you know, I have this huge problem with this Christmas Coca Cola or Christmas soda, and it’s now springtime and no one wants to buy it anymore. Could you help me out a bit? He said, absolutely. You know what? I’ll buy everything you have. I mean, everything.

But I could only pay a third of what you’re asking. So, I mean, let’s see how it flies in the store. I mean, come here, bring everything in, and and let’s see how it flies. The the cool thing was the conversation with his customers really changed. So from, you know, Eric kind of chasing them to, you know, please save this bread, it turned to something it’s you know, his customer is saying, it’s amazing that you do this for saving Christmas soda. So that was the very origin about it. This got Eric a lot of confidence of trying other things. So he started to call his other, you know, suppliers to see if they had any problems.

You know, some and in the end, all of them had some kind of problem. The cool thing was that he got all of these exciting offerings and, you know, special flavors and all of this. And, yeah, after a few months, he got to be the guy that had a store with the exciting assortment. So, customers, you know, kept coming into the store, so the frequency went up. The few things that were not wasn’t as good was the average order value dropping a bit and maybe the the the spillover effect for a normal supermarket didn’t really happen. So, you know, he he he gave me a call, and he, you know, told me all about this. And we sat down to to understand, you know, what is this idea and how can we scale it. And the first thing we saw was, of course, you know, this the, you know, all the food being wasted can never be, you know, tackled in that little store.

That was the first thing. The second thing we saw was that, you know, the deals and the flavors, the excitement, all of that. I mean, people love that. Right? I mean, just look at, Cyber Monday, Black Friday, all of these things. Right? Until that, we saw that food online was about to open up a bit. So, we said to ourselves, let’s try to do this. Let’s try to keep it all online. Let’s try to reach as many people from the very, you know, beginning as possible.

So let’s only do dry goods, so sodas, soft drinks, rice, pasta, all of these kind of things. Right? Covered things. Yeah. So so that was very much the origin, I guess.

Richard Medcalf
Yeah. So what yeah. Fascinating story. So what I’m hearing is that’s actually it was this initial experiment, bit of a risk. Right? It was like, I’m gonna buy this stock of cola not knowing if I’m actually gonna be able to sell it, you know, in the in the volume quick enough. So that’s that’s probably a small measured risk. Fables aren’t too bad. Right? And then on the success of that, that creative confidence.

It’s really interesting. Right? Because often it’s the courage that comes first, and then the confidence comes because you see there is some traction. And then what I love as well is that you then kind of identify that there were these kind of strategic pillars, which create a business model. Right? So, you know, this food is gonna have zero value in a few days. People love a deal and online gives us the ability to actually reach more many more people than most supermarkets can reach because there is a geographic restriction. So that’s different. Right? You’re you’re serving them because you’re providing a reach that they don’t have in in the store. Oh, yeah.

Fascinating. Okay. So so so that’s kinda how it begun. And, obviously, over the last 10 years, you see huge success. You’re scaling into different markets. You’ve, say you’ve, you’ve built a profitable business in a market. Let let’s mess I mean, food retail is not known to be a highly profitable sector. Right? I mean, it’s very thin margins, and you’re cooperating at the edges of this sector.

So it’s really fascinating that you’ve been able to do this, but kind of like what’s, what’s been diff what was difficult about or what were the big challenges as you started to build this business, which was a new way of doing things, selling kind of out of date products or out of season products. People weren’t doing this. So what did you actually encounter as you tried to build this business?

Karl Anderson
I mean, I guess I mean, I’ve seen many other businesses kind of trying to disrupt the way of doing things. I I guess you you face a lot of challenges. But the first thing that, you know, came to us was, you know, how can we actually ship this to consumers. Right? I mean, yeah, we started the business in Sweden, and, you know, be able to ship it from, you know, the far end to the the far south, I guess. I mean, there are challenges just getting there. So we we also understood that, you know, if we need to be build our own fleet of lorries and, you know, going up and down the country, that that would be too expensive. So we we wanted to use the, third party logistics such as DHL and others. So we started to call them and, you know, to see if they were up to supporting us on this.

But at that time, no one was doing this, and there was no shipping of food, you know, through normal, you know, services like that. And, no one wanted to take on our food given that, you know, if our boxes of food breaks, the the the jam, the the soft drinks, or everything like that would, you know, drip down into the or wrestle down into the expensive goods that they order for from someone else. Right? So so no one wanted. So we really needed to chase someone down to to get us, get a service.

Richard Medcalf
So how did you how did you overcome that? Was it about reassuring them that actually this was this was not gonna drift that you know? Or was it actually just finding somebody who was okay to take the risk?

Karl Anderson
Yeah. I mean, in the end, we couldn’t get through the normal customer support, let’s say, or, you know, the normal way of of finding a service. We I needed to to search through LinkedIn to find a high executive that, you know, that I could really explain what we were trying to build. In the end, that that worked out really well. But, you know, we hit a few walls going there, and it was only in the end one company that could support us, actually. Now, you know, nowadays, everyone wants to work with us.

Richard Medcalf
Everybody wants yeah. They yeah. Too late now. Right? Yeah.

Karl Anderson
Yeah. I guess.

Richard Medcalf
Yeah. That’s really fascinating, actually. So first of all, that great point. Right? That sometimes when you’re being disruptive, it is a skill and it is a game of influence. You have to get yourself into new rooms, higher rooms. One of the things I spend my time doing often with my clients actually is, like, what are the rooms that you’re not in right now that would change everything if you were there? I’m from a session called the president is on the line, which is like, how do you, you know, how did you get into the rooms with the people that would change everything? One of my clients, you know, he was had lunch with him and he said, I’ve got a really boring operational meeting I’ve got to go to after this lunch. That’s why I kind of started off the meeting. It sounded very exciting.

Right. Anyway, we’re talking. It turned out and he said, I love Bill Gates’ new book. He was in the climate change space, basically. And he was very, he’s a really big hitter in Europe. He doesn’t, you know, he’s really running the massive company in this space. And I said, oh, do you know Bill Gates? And he said, no. I said, well, you should.

Like, somebody, like, playing at your level with the business that you’ve built. You should be you should know Bill Gates. I’m sure you could get lunch with Bill Gates. And he said, oh, yeah. I probably could actually, now you say that. That’d be a lot more fun than going to this boring operational meeting. But I was like, falling off my chair, like, how many people in the world know they can get lunch with Bill Gates? And he wasn’t doing it. Right? So he wasn’t getting into that next room.

So that was what you’re sharing this story about. Yeah. Go to LinkedIn, you know, find the person, build a new relationship, get into a different room that can make it happen. And, the other thing came to my mind is it’s just more of a humorous aside. When you’re talking about the problem the difficulties of shipping all this food, it must be a a cartoon or a a saw many years ago, which was around, a pizza delivery service that was run from a call center, you know, in the other side of the world. And so when you order pizza, they literally would, like, get some, you know, get some person onto a plane holding your pizza to kind of fly it to you, you know, and obviously it ended up cold and everything else, but it just reminds me of that. So, yeah, it’s difficult, right, to keep transporting these kind of products.

Karl Anderson
Yeah. Really are. And then, I mean, you you often forget, I mean, in our business and especially in the beginning. I mean, we’re try we’re selling Coca Cola and pasta. Right? And you know what they cost. And, I mean, to ship just a Coca Cola and a and a and a I don’t know, a bag of pasta or rice or something to you, I mean, that’s expensive. So we need to buy a lot of these to actually make it worth our while. Yeah.

Richard Medcalf
So what did what did you find? Did you find that people would they buy, like, really huge quantities, or did you manage to figure out ways of combining people in a certain town to reduce the shipping costs and doing drop offs? How did you?

Karl Anderson
Amit, so you we needed to find that sweet spot. Right? Where the price, is right. The you buy also the quantity you’re looking for. And and for us, that was also super important. So we we can’t sell you one one Coca Cola, obviously. Right? We need to probably sell you a 6 pack or something like. Right? We’ll preferably a a full, 24 pack or something like that. Right? So we want we needed to find the balance there because we don’t want you to stock up too much.

And then in your end, have a lot of food waste. So, we we have been juggling with that a bit or or quite some. But now in the end, we have a fully automated warehouse. So the the handling of the goods are are, you know, quite, you know, cheap, or or or a lot so much more efficient these days. On the so that’s the first thing. The second thing is that we’re trying always to find the deal that is, you know, as good as possible for our consumers. You know, not too big of a pack, but still making sense. And then we have a, you know, a what a value that you need to reach.

And, yeah, some you know, we can’t go below that either or you know?

Richard Medcalf
Yeah. Amazing. So what what are the other things that you had to overcome as you as you started to build this business? Because I can imagine there’s things like out I mean, is it even legal to sell things that are out of date? Was that an issue? Or, you know, was there any what did you find? Yeah. What things do you perhaps try that didn’t work and you had to kind of learn to do things differently?

Karl Anderson
Yeah. But thanks. Yeah. I mean, first of all, I mean, what we’ll need to remember is that everything that is sold on our side has some kind of problem or, you know, it’s a reason to why it’s on our side. So we bring a huge portion of of transparency to the game. Right? Right? So so that also pushes you know, our our suppliers are very much our customers. So we need to hold their hands or, you know, have a cooperation with them, and they also need to feel very secure and comfortable with us. And it’s a huge amount of trust in that.

You know? Not destroying, cannibalizing on their own brand and all of this. So it’s a lot of these discussions going on. So when we started, the business, you know, the conversation I was having in the beginning was very much, yeah, great of you to call me, the custom the the the supplier said, and it’s a great idea. I don’t have obviously, don’t have any of these problems, but I’m sure my competitors have bunch of them. Right? So please call them instead. So that’s how it’s very much started. And then, you know, we we kind of took on small portions and and we grew very much, light up. And, I mean, today, we have, corporations with all of the biggest players you can imagine in the FMCG world.

But that was a problem we really need to conquer. That was the biggest step. And, I mean, today, Unilever and all others are doing, you know, campaigns together with us, And and we’re all together, you know, telling the story of of the of the things we’re doing good.

Richard Medcalf
I hope you’re enjoying this conversation. This is just a quick interlude to remind you that my book, Making Time For Strategy, is now available. If you wanna be less busy and more successful, I highly recommend that you check it out. Why not head over to making time for strategy.com to find out the details? Now back to the conversation. Yeah. That’s amazing. How did you win their win their trust?

Karl Anderson
Yeah. So it’s it’s not a quick game. It’s, it’s a long game. And, no. But we want we needed to prove that we, first of all, could sell the volumes. We said that we could sell. We also needed to prove that, you know, we could, you know, keep some kind of dignity in the pricing. And on top of that, you know, not selling things that are, you know, too out of date or out of date in in general and so on.

So, I mean, those are were a few things. And then, of course, there there is a bit of secret sauce in all of this, but, yeah, I think that a lot of conversations and and really proving that we, we want to be in a cooperation with them. So one way we did was that instead of hiring, you know, really strong purchasing people and people that are, you know, strong on that side, we hired people that were strong on their selling side and the personality and, you know, in getting people excited about selling things on our side and, you know, that getting excited of of joining our course of, you know, our mission. You know, join the team, be with us. We we’re together changing the world. So, that was very much, you know, the important part of it, I think.

Richard Medcalf
Yeah. I love that. So, yeah, rather than having rather than seeing your suppliers as as kinda just, yeah, suppliers to be squeezed by purchasing as many companies do, yeah, you really see them as your customers as you mentioned before. And, also, therefore, you need to win them on, win their hearts and minds and and yeah. Share the vision. Right? I mean, it’s interesting. I mean, I wonder how many companies actually share their vision with their suppliers. Probably not enough.

Right? And probably don’t necessarily then get the support you need, which is Yeah. Which is really fascinating. When you’re building this, did you your I guess you’ve got on one side, your customers and the other side, your suppliers. Right? You need both. So how did you kind of pick all that, you know, the chicken and the egg situation where you need to have both sides growing at the same time?

Karl Anderson
Yeah. Yeah. I mean, that’s super tricky, especially going into new markets because in the beginning, I mean, we’re, of course, you know, we get these big offerings today given that, you know, we are known to to to to these companies already, but we can’t take on these volumes or the big volumes in the beginning. So we really need to grow into them. And if we don’t have, you know, the all of those SKUs or the widest assortment, the the customers won’t, you know, come. So I think, yeah, that is one really, you know, tough task, especially in the in the new market. So, again, the the storytelling is the very important part here. If you, you know, if we can take smaller quantities but a wider assortment, then we can grow, and then we can be take, you know, bigger bigger parts of your problem on, and and, you know, that’s that is the conversation we’re having very much in new markets.

Richard Medcalf
Yeah. That’s yeah. Yeah. Really, yeah, really, yeah, tricky situation. I mean, say it’s but it’s super valuable once you build both of those sides up. So, Carl, tell me, what about your kind of leadership journey as part of this? Because, obviously, growing company from, you know, when it’s just the 2 of you to this kind of 2 100 person company, a lot of growth, a lot of innovation having to happen, you know, doing things very differently from perhaps most most people who’ve joined the company, probably were doing very different things, I guess, in their previous lives. It wasn’t the same business by definition. So what have you kind of learned or what have you found has been like, what’s been your secret sauce personally to be able to be able to build this? You know, what do you what have you done really well, would you say? Or what have you had to learn to do really well?

Karl Anderson
Oh, you need to to speak to my colleagues if I’ve done it well or not. But my philosophy here philosophy around it has been to always, trust them with the the most important part. If I don’t trust them doing their job or using their knowledge to solve the problem, then I could might as well hire someone much more junior or as we like to call it, we could just hire monkeys. Right? If I am the one telling them how to do their job or, you know, do do go about things, then Yeah. So that has been the first thing and the most important lesson in my life, at least, to to trust the people. You know? I I, along the way, always told them that, you know, this is what we need to achieve. Are you that person? You and I need to work, you know, very close to one another. But I will trust you completely because I don’t know so much about the things that you know.

And I think one one thing that we realized very early was that, you know, we can’t be the smartest person in the room because then we’re not able to scale ourselves. And and then so that’s how it has been the new so always hiring people that are smarter than us and also then trusting them. If I’m, you know, I’m in those management meetings and always need to be the one that telling others how to run their their business, then I, yeah, then I I, we won’t scale. So I, that I think has been the most important in my leadership.

Richard Medcalf
Yes. And sometimes people I fear that have this tension between I trust people, yeah, I need to be responsible still for, you know, for the, you know, the buck stops with me, and, you know, how I how I trust people without kind of abdicating, or holding people to account. So how have you kind of balanced that trust on one side with kind of making sure things are actually getting done and people are are delivering?

Karl Anderson
I mean, first of all, I mean, we had a joint mission. Right? I mean, we both you and I, we we decided that this is what we’re going to achieve. So, as long as you and and I there are bunch of systems. There are OKRs. There are you know, you you probably know them all, Richard. I I and I I trust that you are so much better than me and then all of this. But what I use is that, you know, I have this conversation, you know, constantly, the the small conversation. So very much you and I walking shoulder to shoulder, and discussing things.

I don’t I, you know, I don’t need to know exactly how much you spend on x, y, zed as long as you and I know that this is what we need to achieve. So that has been very much how I I run things. I I don’t think I don’t believe so much in in having these OKRs where you spend hours and hours just to understand what an OKR is. As long as you understand the targets, and maybe you need a model for that. Right? But, as long as you have a great communication, then I can I think you can achieve amazing things? You know, add trust to that. I think you have a perfect portion of success. That is how I view things.

Richard Medcalf
Beautiful. Thank you. So so what’s next for the business? Right? Where do you wanna take the business, multiply its impact over the next, over the next, you know, 3, 4 years? What what what’s yeah. What’s the next lever?

Karl Anderson
Yeah. But first of all, I mean, we we are an we’re a food retailer. Right? We we sell food online with a hard discount, and, we have managed to to prove that this is a scalable model, in multiple markets. And we also proven now that is you know, we’ve taken it to profitability, so it’s actually profitable. So we’re really proud about that. And so so, yeah, what we as a next step, we would like to use this blueprint now to continue on scaling and scaling in new markets because, you know, this is, of course, not a problem that only, you know, existing our market, the markets we are in. It’s a it’s a universal problem. So, I mean, food waste exists everywhere.

It’s just a matter of, you know, putting a nice model together and and how to deal with it. And I know that, you know, our model is not the one that’s changing, you know, the full world, but at least we could, you know, have an impact on on how people think about food waste, and also we could be a support for the big companies, actually. So, no. I think we’ve proven that this is a European, you know, scalable model and very much I would like to continue to prove that this is a global model.

Richard Medcalf
Yeah. Amazing. So I know that you’ve as you do that, I know that you’ve stepped down from the CEO role, to focus on the board level. But in what ways might you need to, you know, shift your own way of leading and operating to, you know, even more to facilitate your next level of impact.

Karl Anderson
Yeah. But we spoke about it. Right? I mean, you we need to trust, and now I need to trust the management team. And, also, now I need to trust them doing their job without me always getting all the details because that you get that anyways in all reports and all that. So that is a bit of a mind shift for me. So so that is one thing. But, I mean, my work is still the same. I mean, I still try to to work with the, trying to expand the the business as such.

I mean, finding others’ revenue streams, expanding them, widening our our our our impact, maybe to other channels, let’s say, and to that also, of course, working with financing and and and also supporting the, the business from the board, I guess.

Richard Medcalf
So, yeah, so it’s a different it’s a different, it’s a different set of levers, right, that you get to play when you’re at the board level from when you’re focused day to day operations. So, so it sounds very exciting. Right? And you say your Europe is your oyster probably. Right? There is a lot of opportunity there to scale. Is it easy scaling? I mean, I have the impression that, you know, often in the States, financing is more available, funding is more available for companies, especially as they’re trying to scale, across that that territory. Are you finding it’s it’s kind of, it’s easier than you thought or harder than you thought as you start to look at breaking, you know, breaking out of the the your initial markets?

Karl Anderson
No. I mean, it’s it’s tricky. Right? I mean, we, today, have raised roughly around, what, almost, like, €200,000,000 to this stage. So it’s a lot of money at least in my world. But, but it’s tricky. Right? I mean, we, one needs to remember that. I mean, food retailers, there there are not so many out there successful ones. And and also we are niche player.

So it’s very much us kind of proving this and being the front runner for all of this. Right? So, it’s again, comes in. We need to to to to, get all of that trust again and and and so on and continue doing that and and showing you know, pointing towards our vision and mission and and getting the the investors to join and back us on that. So I I it’s not an easy thing. Right? But we have really strong and very supportive investors. Yeah. So I’m happy about

Richard Medcalf
So, Carl, what I love about this story, you know, about your journey so far is that you saw an opportunity which there was a business rationale, and there was an impact story, if you like, that you can make through this. Right? Dealing with food waste, which obviously is just ridiculous use of resources if you have to throw food away. Seeing these things, you’re building a business that they can actually support that impact. And so you are, as you said, you are a bearer of a flag. You know, you do have a mission and a vision, and it’s not just, you know, we’re just turning the same old handle, but you’re saying, yeah, we’re pioneering this field, taking that opportunity. And I think that’s, that’s that’s what I love. That’s why you’re an impact multiplier. I wish you all the best on the next phase of this journey as you kind of take this this vision and scale it out beyond perhaps even what you can currently imagine.

I think there’s a huge amount of opportunity here. So all the best in this journey.

Karl Anderson
Thank you so much. Thanks for also painting that picture. I mean, bear on the flag. I I like that picture. I I would, you know, stuck on my mind now. I will continue on having that like that mission. Thank you so much.

Richard Medcalf
Yeah. Perfect. Well, Carl, if you wanna find out more about you or more importantly perhaps about the brand, about the business, where do they go to do that?

Karl Anderson
Yeah. They could go to motetos.com or, you know, or a local site, maybe motetos.de in Germany or motetos mattsmart.se for that matter in Sweden.

Richard Medcalf
Perfect. Great. Well, I look forward to following along on the journey. Thanks so much, Karl, for taking the time today.

Karl Anderson
Thank you so much for having me. Really enjoy this. Thank you.

Richard Medcalf
You’re welcome. Bye bye now.

Karl Anderson
Bye bye.

Richard Medcalf
Well, that’s a wrap. If you received value from this conversation, please do leave us a review on your favorite podcast platform. We’d deeply appreciate it. And if you’d like to check out the show notes from this episode, head to x quadrant.com/podcast where you’ll find all the details. Now finally, when you’re in top leadership, who supports and challenges you at a deep level to help you multiply your impact? Discover more about the different ways we can support you at xquadrant.com.