Peter Carlsson - Co-Founder & CEO, Northvolt
Northvolt was founded 2016 in Stockholm, Sweden, by Peter Carlsson and Paolo Cerruti with the mission to build the world's greenest battery to enable the European transition to renewable energy. With more than 800 employees, Northvolt partners with industry leaders such as ABB, Siemens, Volkswagen and BMW, and has raised more than EUR3bn in capital today.
On the importance of strategic partnerships:
My Tesla background gave us the credibility we needed to start most of our discussions on our strategic mission pretty high up in the customers’ hierarchy.
Our partnerships had a crucial influence on the early development of our company. We started out thinking we would develop cells first and combine them into battery systems later. But partnering with Epiroc really kickstarted our battery systems development--even before we had our own cells! Today, we develop both within two different business units.
For the partnerships with our customers, we need a strong alignment of their senior management with our strategic vision. To create this alignment, we even asked a dozen of our potential strategic partners to invest in our company. Creating a credible commitment was more important to us than the potential backdrops of having future customers as shareholders.
On sales strategy and pipeline building:
To fill our order book for the upcoming years, we started to approach all of our customer groups in parallel. This is necessary because they have very different lead times. The automotive industry decides 3 or 4 years in advance which batteries they are going to use, so to be able to sell to them in 2023, we need to start sales discussions now. In contrast, customers for our energy storage solutions have lead times of only 12 months. Making deals with them helps us to generate revenue for further building our company.
On sales organization:
In the early days of Northvolt, both me and my co-founder Paolo were out there meeting our key customers. We continue to put a lot of effort in maintaining those relationships. At the same time, we work hard to prove ourselves operationally in order to build further trust and make our customers feel comfortable cooperating with us.
To fill our first sales roles, we brought in highly skilled, senior technical sales people with strong project management credentials. Of course, those people come at a high price, and most startups would shy away from executive pay at this early stage. But for us, this was a crucial part of our success. Consider that at this time, we had just 4 or 5 critical relationships. You don’t need many sales people to maintain those relationships. Instead of investing in a big sales team, we used those resources to invest in co-development with our customer.
On using feedback from sales:
My advice to founders is to constantly validate and reevaluate the fundamental pillars of your business by engaging with your customers. For example, our customers have strengthened our conviction that investing in sustainability pays off--because they told us that it has also become a much more relevant criterion for them over the past years. In other areas, they have made us change our mind: we thought we could achieve scale by mass producing one form factor--but many of their customers wanted their own form factors. As a result of this feedback, we needed to redefine our portfolio and consider other strategies.
On recruiting and building culture:
When building a new company, focus on recruiting and on building culture. Your culture and the speed of your operation are the single most important competitive advantages you have versus bigger and more established companies.
The mindset I brought back from Tesla was: if you want to build a world-class company, you can’t just look at the local labor market. It was very costly for us as a startup to help world-class people transition to our local setting, but this investment was worth every cent.
In refining our recruitment strategy, we also reviewed very critically which people integrated best into our culture. It turned out that hands-on people from fast-growing companies--those who knew how to build the rails in front of the train--integrated the best: they had done the journey before and were not afraid of taking ownership. On the other hand, we had huge integration problems with people from established companies: they were just not used to defining their own processes, and were totally lost.
Entrepreneurship is contagious. If you have a hub or a cluster of successful entrepreneurs, it makes others want to dare, too. Unfortunately, the European ecosystem today is pretty meager. I hope that Northvolt, if successful, will spin off and lead people to found their own companies.