Startupland

Startupland Plot Summary

Introduction

In the heart of Copenhagen in 2007, an unlikely revolution in customer service software began when Mikkel Svane and two friends started working on a simple idea that would eventually transform an entire industry. Sitting in a small loft with exposed brick walls and makeshift furniture, they believed there had to be a better way for companies to connect with their customers than the cumbersome, expensive systems that dominated the market. What started as a pursuit to build beautiful, simple software quickly evolved into a global company worth over a billion dollars. Mikkel's journey from a Danish entrepreneur facing failure and financial uncertainty to the CEO of a publicly traded company is a testament to perseverance, vision, and the willingness to uproot one's life in pursuit of opportunity. Through his story, we gain insights into the unpredictable path of startup life, the challenges of maintaining relationships with cofounders through extreme pressure, and the evolution required to grow from a product creator to a company leader. Most importantly, we discover how maintaining authenticity while adapting to new realities became Mikkel's greatest strength and challenge as he chased—and ultimately caught—the American Dream.

Chapter 1: From Copenhagen Dreams to Silicon Valley

Mikkel Svane never set out to build a global company. In the early 1990s, after graduating from business school during a recession, he started a small graphic desktop publishing company in Copenhagen. He created an algorithm for generating 3D stereogram images—those visual illusions that allow you to see 3D images by focusing on 2D patterns. Though this venture didn't make him rich, it taught him something fundamental: he loved creating products that people used, and he especially loved making complicated things simple and accessible. A pivotal moment came when Mikkel visited San Francisco in 1995. The Internet was emerging as a transformative force, but its adoption in Denmark lagged far behind what he witnessed in California. In San Francisco, the Web was integrated into daily life—people ordered food online, communicated via email, and businesses promoted their web addresses on billboards. The experience was eye-opening. Mikkel felt like he had "found oil on a nearby property" and understood there was immense value in this new digital frontier. Upon returning to Denmark, Mikkel built Forum.dk, one of the country's first community portals. This eventually led to his founding of Caput, a software company that provided community services for websites. The business was growing until the dot-com crash of 2001 hit, devastating his company. Customers couldn't pay their bills, and Mikkel had to let go of talented people—including David Heinemeier Hansson, who would later create Ruby on Rails, the framework on which Zendesk would eventually be built. After Caput's collapse, Mikkel took his first corporate job at Materna, a German consulting group that sold customer service software. The irony wasn't lost on him—the products they sold were expensive, cumbersome, and required extensive consultation to implement. Companies spent enormous sums on software that their lowest-paid employees struggled to use. The systems were designed more for management than for the people actually providing customer service. Mikkel and his colleague Morten Primdahl shared a healthy disdain for this model and believed there had to be a better way. By 2006, Mikkel, Morten, and their friend Alexander Aghassipour began sketching out a new kind of customer service system—one that would be simple, beautiful, and delivered over the web. Alexander initially called it "the most boring thing ever," but soon recognized the beauty of revolutionizing an overlooked industry with clean design. Working part-time while maintaining consulting gigs to pay the bills, they spent eighteen months building their product in Alex's Copenhagen loft, with no business plan and barely any funding beyond their personal resources. The three founders weren't trying to build a big company—just a great product. This product-first mentality would become central to Zendesk's identity, even as the company grew far beyond what its creators initially imagined.

Chapter 2: Building a Product People Love

In October 2007, after eighteen months of development, Zendesk went live. The founders had created something fundamentally different from the enterprise software of the time. Instead of an expensive, complex system that took months to implement, they offered a subscription-based service that customers could try immediately and purchase with a credit card—a model that's common today but was revolutionary for enterprise software at the time. What made Zendesk unique wasn't just its delivery model, but its philosophy. The founders obsessed over making their help desk software intuitive and elegant. They wanted to build something people would enjoy using, something that would help companies build better relationships with their customers rather than obstruct them. The trio recognized that the traditional customer service industry was focused on call centers and telephony, while a new generation of web-based businesses needed tools for email and chat interactions. These companies wanted to engage with customers where they lived—on the web—but the existing software wasn't built for that. Finding customers initially seemed like an enigma. There was no natural online community interested in buying customer support software, and the founders had no marketing budget. They experimented with various approaches, from buying Google AdWords to placing ads on design blogs. They even created unusual swag—Buddha Machines, small plastic boxes that played looping ambient tracks, which they shipped to customers worldwide from Hong Kong. Some marketing efforts succeeded brilliantly; others flopped completely. When they advertised on a comic strip website that ranked highly for "help desk" searches, they received enormous traffic but zero conversions. Despite the haphazard approach, customers began appearing from all corners of the globe—from Ireland, Texas, New Zealand, Brazil, and Turkey. The only thing these early adopters had in common was a modern approach to business: they were thinking differently about customer engagement and wanted better tools for the job. Soon, Zendesk started attracting Silicon Valley startups like Scribd and Twitter, validating their approach and building momentum. The product evolved rapidly based on customer feedback. In the initial version, customers had to be registered before receiving support—a model based on traditional business relationships. The founders quickly realized this didn't work for websites and web apps, where the first interaction often occurred before any formal relationship existed. They adjusted the product to create user profiles at the first point of contact, completely inverting the traditional customer support model. This willingness to iterate based on real-world usage became a core strength. The founders were opinionated and sometimes considered themselves the center of the universe—displaying what Mikkel later described as the "charming characteristics of teenagers." But they were also passionate about improving their product and responsive to user needs, qualities that helped build a loyal customer base that evangelized Zendesk to others.

Chapter 3: Funding Struggles and Early Survival

Money was always tight in Zendesk's early days. The founders had invested eighteen months building the product while supporting themselves through consulting work. Mikkel had maxed out credit cards, spent his retirement savings, and taken out a $50,000 line of credit for which he was personally liable—financial realities he largely kept hidden from his wife Mie. With a growing family at home, the financial precariousness created enormous pressure. When Zendesk launched, the founders began approaching investors, believing that with a working product and growing user base, raising capital would be straightforward. Reality proved far different. The Danish venture capital market was virtually nonexistent, with most initiatives being government-subsidized and inappropriate for their venture. Individual investors were scarce, and the founders found themselves quickly running out of options. A glimmer of hope appeared when an experienced Danish angel investor expressed interest in funding up to $500,000. However, as discussions progressed, his behavior became increasingly controlling. He made excessive documentation demands and during one phone call while Mikkel was grocery shopping, he questioned Mikkel's competence in a way that felt manipulative. After a sleepless night, Mikkel realized the investor was exploiting their financial vulnerability to gain negotiating leverage. Despite their desperate situation, the founders decided to walk away—a difficult but crucial decision that protected their autonomy. With no other options, they reluctantly turned to friends and family for investment. Mikkel was brutally honest with potential investors, telling them, "You are going to lose this money. Think about it like a lottery ticket." Despite this warning, friends believed in them enough to invest small amounts—most around $10,000 to $15,000. The timing was fortunate, as this was just months before the 2008 financial crisis, when many people still had equity in their homes and disposable income. As they were closing this round, an unexpected opportunity emerged. Christoph Janz, a German angel investor who had founded and sold a startup called Pageflakes, expressed interest in Zendesk. Unlike previous investors they'd encountered, Christoph was professional, experienced, and emphasized that his role would be not just financial but also advisory. After initial hesitation, the founders extended their seed round to include him at a higher valuation. With approximately $500,000 in funding, everything changed. The founders could take modest salaries and reduce financial pressure. Christoph helped them develop their first business plan and financial model, bringing structure to their entrepreneurial vision. For the first time since starting Zendesk, they could think beyond day-to-day survival and focus on growth. The funding round was publicly announced with a press release that Christoph distributed to his Silicon Valley network. This led to coverage by Om Malik at GigaOM, but also to an unfortunate exchange with TechCrunch founder Michael Arrington, who felt slighted when they gave the exclusive to GigaOM. Arrington's terse "Don't ever email me again" response left Mikkel terrified they'd been blackballed from the influential tech blog—an early lesson in the complex dynamics of the startup ecosystem they hoped to join.

Chapter 4: The Art of Relocation and Cultural Adaptation

The journey from Copenhagen to Silicon Valley wasn't a straight line for Zendesk. In early 2009, the company secured a Series A investment from Charles River Ventures (CRV), a Boston-based venture capital firm. The investment came with a condition: the founders would need to relocate to Boston, where CRV could provide hands-on support. Though none of the founders knew much about Boston, they agreed—seeing it as the crucial first step in leaving Denmark for the American market. Relocating meant uprooting not just the business but their entire lives. Mikkel had to convince his wife Mie, who is deaf, to move their three children—including his stepson from her previous relationship—across the world. None of the kids spoke English, and they would be leaving behind a comfortable setup in Copenhagen with good schools nearby. Despite these challenges, Mie simply said, "Yeah, let's do it. We'll figure it out." The founders set up their new office in Boston's Leather District and began hiring local talent. Their first employee, Matthew Latkiewicz, was hired despite having no technical background or corporate experience. He had majored in philosophy and previously owned a café. What he lacked in traditional qualifications, he made up for in creativity and work ethic—qualities that would define Zendesk's early hiring philosophy of valuing attitude over specific skills. Just as they were settling into Boston, Zendesk began attracting attention from Silicon Valley investors. Several top firms flew to Copenhagen to meet the founders, including Matt Cohler from Benchmark Capital, who had been an early executive at both LinkedIn and Facebook. During a visit to Copenhagen, Matt spent an evening at Mikkel's home, watching Pippi Longstocking in Danish with Mikkel's children—an unexpected but natural interaction that built trust. By the summer of 2009, Zendesk closed a $6 million Series B round led by Benchmark, with participation from CRV. The investment created an opportunity—and pressure—to relocate again, this time to San Francisco. Though they had just moved their families to Boston months earlier, the founders knew San Francisco was the epicenter of the tech industry and where their customer base was rapidly growing. The decision to leave Boston was difficult, particularly for Rick Rigoli, a key early employee who couldn't relocate due to family commitments. Nevertheless, in September 2009, Zendesk officially moved to San Francisco, setting up an office on Townsend Street in the South of Market (SoMa) neighborhood, home to many prominent tech companies. For Mikkel and his family, the transition brought new challenges. They found a small house in Noe Valley, but everyday tasks became complex in an unfamiliar country. One evening, the bathroom door locked from the inside, and Mikkel spent two hours trying to open it, exhausted and stressed before an important board meeting the next day. These small but taxing incidents highlighted the isolation of starting over in a foreign country without a support network. Despite these difficulties, San Francisco quickly felt like home. Within six months, the children were speaking English with American accents and enjoying the California sunshine. Mikkel traveled less, dropping the kids at school and returning home for dinner. The city's startup ecosystem provided natural connections with other founders and companies, creating a sense of belonging that had been missing in Boston and Copenhagen.

Chapter 5: Growing Pains and Management Lessons

As Zendesk transitioned from a product to a company, the founders faced the challenge of building an organization—something very different from building software. They had little experience hiring for non-technical roles and struggled to develop structured processes for recruiting and onboarding. When their first marketing hire, Amanda Kleha from Google, arrived for her first day, Mikkel was surprised she hadn't brought her own computer. "Can you go to the Apple store and buy one?" he asked. She did, returning through the rain with a new laptop and the realization that she had indeed joined a startup. The company was growing rapidly, with customer acquisition accelerating and the product gaining popularity. This growth created technical challenges when high-profile customers like Twitter experienced explosive user growth themselves. After Twitter CEO Evan Williams appeared on Oprah in 2009, traffic to Twitter's site grew a hundredfold, pushing Zendesk's infrastructure to its limits. The company's chief technology officer, Morten, spent months working day and night to scale the infrastructure, developing solutions that would later serve Zendesk well as other fast-growing startups like Airbnb, Uber, and Groupon became customers. Cultural differences became apparent as the founders adjusted to American business practices. Coming from Denmark, where the "Law of Jante" cultural norm encourages modesty and discourages standing out, they were unprepared for the self-promotion common in American job interviews. They initially took candidates' grand statements literally, believing everyone sounded amazing. With experience, they learned to expect this and developed other ways to screen for talent, focusing on qualities like adaptability, curiosity, and authentic communication. In May 2010, Zendesk experienced its first major crisis. The company implemented a price increase that sparked an intense backlash from customers. Within hours, hundreds of angry comments flooded their forums, and TechCrunch published an article titled "Zendesk raises prices, pisses off customers." The founders, who had prided themselves on transparency and customer focus, were devastated by the reaction. After intense internal debate, Mikkel published a blog post titled "Sorry. We Messed Up," reversing the decision and grandfathering existing customers into their current pricing indefinitely. The experience taught them valuable lessons about customer relationships: "Relationships are not about reasoning; they are about how people feel. It is not about who's right and who's wrong." They also learned that in a subscription business, raising prices for existing customers on existing features violated an implicit trust. As the company continued to grow, Mikkel's role evolved from hands-on product development to organizational leadership. He had to learn how to build a vision that people could work toward without direct management, create a corporate culture that employees could identify with, and develop an effective executive team. None of this came naturally to him, and he often struggled to balance authenticity with the professional demeanor expected of a CEO. One of his most important realizations was the value of building a management team whose members genuinely enjoyed working together: "When you have a management team of people who appreciate spending time together, who can have a good time going out for dinner, who are not afraid of calling out each other's bullshit, and who are comfortable having real hard conversations and can laugh and cry together... your life as a CEO is so much easier."

Chapter 6: Customer-Centric Revolution

When Mikkel and his cofounders started Zendesk, customer service was often treated as a necessary evil—a cost center that companies invested in reluctantly. Traditional help desk software reflected this attitude: it was expensive, complicated, and seemed designed more for management control than for providing excellent service. The founders believed there had to be a better way, one that would make customer service more human, accessible, and even enjoyable. Central to Zendesk's philosophy was the idea that customer service shouldn't just be about resolving problems, but about building relationships. As Mikkel often emphasized, "The customer relationship is just like any other relationship. You have to consistently put in effort and not rely on the past." This perspective was revolutionary in an industry that typically focused on efficiency metrics rather than customer experience. Zendesk's timing proved fortunate. The rise of social media was transforming customer service from a private interaction to a public one. When customers had negative experiences, they could share them instantly with the world, creating reputation risks for companies. Conversely, positive experiences could turn customers into powerful advocates. This shift made Zendesk's relationship-oriented approach increasingly valuable to businesses of all sizes. The company's product reflected this philosophy in several ways. It was designed to be intuitive for support agents to use, reducing frustration and enabling them to focus on customers rather than on navigating complex software. It emphasized multichannel support, allowing companies to meet customers where they were—whether via email, chat, social media, or other platforms. And it included analytics that helped businesses understand and improve their customer relationships over time. As Zendesk grew, the founders realized that their initial self-service model had limitations. While many customers were happy to sign up for a trial and purchase the product online, others—particularly larger organizations—wanted more guidance. This led to the gradual development of a sales team, starting with inside sales for small and medium businesses and eventually expanding to include field sales for enterprise clients. Though this shift initially felt like a compromise of their original vision, they came to understand that even with simple, self-service software, many companies needed help implementing it effectively and integrating it into their business processes. The company also had to evolve its own customer support practices as it scaled. In the early days, everyone at Zendesk worked to "touch" every customer, creating a frictionless experience. Michael Hansen, one of the first employees, gave his personal phone number to thousands of trial customers. Thomas Pedersen personally handled three thousand support tickets in his first year. This high-touch approach became harder to maintain as the customer base grew into the thousands, but the company worked to preserve its customer-centric ethos by developing structured processes that still felt personal. One enduring practice was having every new employee spend their first week working in customer support, regardless of their actual role. This ensured that everyone in the company understood the product from the customer's perspective and recognized the importance of the customer experience. It also reinforced the idea that customer relationships were not just the responsibility of the support team but of the entire organization. Through this customer-centric revolution, Zendesk didn't just build a successful company—it helped transform an entire industry's understanding of what customer service could and should be.

Chapter 7: From Startup to Public Company

On May 15, 2014—seven years after sketching out their initial idea in Copenhagen—Zendesk went public on the New York Stock Exchange. The company achieved a valuation of over $1 billion, officially reaching "unicorn" status. What had begun with three friends working in a loft had transformed into a global enterprise with thousands of customers across 150 countries. The path to this milestone was far from smooth. In the months leading up to the IPO, the market for high-growth technology companies had deteriorated significantly. Other software companies like Box had delayed their public offerings, and Zendesk's advisors expressed doubts about the timing. Despite these concerns, Mikkel was determined to proceed. "Postponing would just keep us in this limbo state," he reasoned. "I wanted to get the IPO done and move on." The two-week road show before the IPO was an intense experience unlike anything Mikkel had prepared for. He and CFO Alan Black traveled across the country, pitching to institutional investors at pension funds, hedge funds, and financial institutions. Though Mikkel was fighting a cold caught from his baby daughter and struggling with the physical demands of constant travel, he found himself energized by the interactions with investors. He realized they weren't just interested in financial metrics—they wanted to understand the passion and people behind the business, to believe that what they were investing in would make a difference. The night before the offering, the team gathered in a small conference room at Chicago's airport to determine the opening price for the stock. After much debate, they settled on $9 per share—valuing the company at approximately $700 million. This was considerably less than what similar companies had commanded months earlier, but Mikkel focused on the long view: "Where we priced on opening day was unimportant in the grand scheme of things. And it was nothing anybody would remember by the end of the day." On the morning of the IPO, forty employees from Zendesk offices worldwide gathered at the New York Stock Exchange. The iconic building was wrapped with the company's bright green banner, featuring their smiling Buddha-inspired mascot. Mikkel, Alexander, and Morten took a selfie in front of the building—a moment that symbolized how far they had come from their humble beginnings. Inside, surrounded by early employees and family members, they pressed the button that made Zendesk a publicly traded company. The stock closed its first day at $13.43, up 49 percent from the opening price. That night, the team flew back to San Francisco on a private jet, celebrating briefly before returning to work the next day. For Mikkel, it was important to run the company the same way he always had, while acknowledging the new responsibilities that came with being public. The stock price now affected employees who owned 25 percent of the company, influencing their ability to buy homes or start families. Despite achieving this milestone, Mikkel viewed the IPO not as an endpoint but as "the first step in our journey to becoming a next-generation enterprise software company." When Benchmark partner Peter Fenton sent him an expensive bottle of champagne to celebrate, Mikkel couldn't bring himself to open it: "After I drink it, the value will be gone. I'm not ready for that yet. I'm not ready for any of it to be over." In the years following the IPO, the founders' relationships evolved. No longer spending every waking moment together, they took on different roles within the growing organization. Alexander, now married with children, could no longer work the hundred-hour weeks of Zendesk's early days. Morten, still single and living what Mikkel described as "the rock star life that any aspiring entrepreneur seeks," sometimes missed the romantic version of the old days while acknowledging that the company could now accomplish much more with its expanded team and resources. Through all the changes—from three friends in a Copenhagen loft to a global public company with nearly a thousand employees—Zendesk maintained its focus on making customer service more human, accessible, and beautiful. The IPO represented not just financial success, but validation of the founders' original vision: that even in something as seemingly mundane as customer support software, there was an opportunity to build something people would truly love.

Summary

Mikkel Svane's journey from struggling Danish entrepreneur to CEO of a billion-dollar public company embodies the essence of what makes startups both terrifying and exhilarating. His most valuable insight may be the realization that success comes not from following a formula, but from finding the courage to pursue opportunities that others overlook—especially in seemingly "boring" industries where innovation has stagnated. By focusing on making the complicated simple and creating software that people genuinely enjoyed using, Mikkel and his cofounders transformed not just their own lives but an entire industry's approach to customer relationships. The Zendesk story offers several enduring lessons for entrepreneurs and business leaders. First, great companies often emerge from authentic needs rather than calculated market opportunities—Mikkel's frustration with existing customer service software created the spark for something better. Second, maintaining strong relationships—with cofounders, employees, customers, and investors—ultimately matters more than any particular business strategy or technology. And finally, there's immense value in balancing idealism with pragmatism; while Zendesk began with a revolutionary vision, its success came from adapting that vision to reality without compromising core principles. For anyone passionate about building something meaningful that impacts how people work and interact, Mikkel's journey demonstrates that with persistence, adaptability, and a willingness to venture far from your comfort zone, even the most unlikely dreams can become reality.

About Author

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Mikkel Svane

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