Kofi Acquah for Forbes
A decade ago, with Google and Yahoo lumbering onto its turf, Jorn Lyseggen’s fledgling media-intelligence company, Meltwater, faced an existential challenge. Getting clients to pay Meltwater to track press mentions suddenly became a lot harder when Google Alerts was offering the same service for free. Rather than cut back, Lyseggen went on a recruitment binge–interviewing 3,000 job applicants face-to-face in a dozen or so countries over a span of five years.
To find unorthodox solutions, he brought on an eclectic cast of characters. There was executive director Kaveh Rostampor, an Iranian refugee who arrived in America via Sweden. Another hire, Sebastian Geides, had been a competitive handball player on the verge of finishing a theology program. When Lyseggen asked him why he would choose Meltwater over the priesthood, Geides responded that Meltwater’s product was easier to sell.
“Talent is talent, everywhere,” says Lyseggen, 48. That philosophy has helped him not only survive the challenges from Google and Yahoo but also transform Meltwater into a company that produces annual revenue approaching $300 million, with an estimated profit margin of 15%. Meltwater, based in San Francisco, has 25,000 clients–from Harvard Business School to the Denver Broncos–all paying for what’s essentially a souped-up Google Alerts. It notifies clients about media mentions but also offers tools that, for example, can distinguish positive mentions from negative ones. Prices for Meltwater range from $5,000 to $25,000 a year.
Lyseggen didn’t have to look far for proof that talent is talent everywhere. Born in South Korea in 1968, he was adopted by a Norwegian family and raised in a tiny farming village near the Swedish border. “When people meet me, they’re a little surprised that I don’t look tall and blond and dashing,” Lyseggen says. “I was pretty much a redneck kid. I didn’t know much about the world. I have friends that still are pumping gas.”
He went a different route, enrolling at the Bergen University College of Engineering in 1988, where he spent nearly all of his student-loan money–roughly $10,000–to buy the fastest personal computer available and began to design software. After graduating, he went to work for the Norwegian Computer Center, where he grew fascinated with Java. He then quit and founded an internet-consulting outfit, EU Net Media. In December 1995, with Lyseggen’s help, Norway’s first online transaction was recorded. Two years later, he sold the consulting firm for $7 million; he then launched a similar firm and got $40 million for it in 1999. He started yet another and watched it go public in Sweden and soar to a market cap of $500 million, only to see the share price plummet during the dot-com bust.
Lyseggen forged ahead and founded Meltwater in 2001, seeding it with just $15,000 and a tiny office in an Oslo shipyard–because, he says, he was pouring money into other startups that excited him more and didn’t want to subsidize a struggling business for long. But he believed in Meltwater’s premise. At that point, Google was just three years old and hadn’t yet launched Google Alerts. In Lyseggen’s view, the world was drowning in information, and he wanted to find a way to use software to help simplify things. “The sell was a subscription to the service that monitored all the news that was published online,” he says. “Whenever news that was relevant to them was published, the clients would be notified.”
Initially, Lyseggen and his very small sales team pitched Meltwater to 1,500 companies. The answer from 1,499 was no, with one maybe. Lyseggen told his team they couldn’t pitch the service until they got a sense of their clients’ pain points. Only with that context in mind were they permitted to proceed with the hard sell. He also required that all subscription fees be paid up front for the entire year so he could continue bootstrapping the business. Both moves worked: By the end of 2003, Meltwater had signed 1,000 clients and revenue had reached seven figures.
The following year, it expanded into Sweden. Warming up to his own company, Lyseggen brought new hires to Oslo and trained them for three months before returning them to Stockholm to open a new office, which was cash-flow-positive after two weeks. He repeated the process as he spread Meltwater across northern Europe, and by the end of 2005, annual revenue had reached $11 million.