Zendesk: A Loft-Project Turned Unicorn Company
A decade ago, it took a whole village of people to make customer support work.
As businesses continued to grow, however, so did the responsibilities business owners had towards customers.
It is in a customer’s nature to ask business-related questions, employees still struggled to provide them with a timely response.
Eventually, this led to a mass of infuriated customers left with unanswered questions.
Solving this problem, once and for all, were Mikkel Svane, Morten Primdahl, Alexander Aghassipour - a trio of Danes fixated on the idea of boosting customer experience globally.
Part of their solution was to create a help-desk system that gathered all customer questions in one place, thus making it easier for company employees to manage these more efficiently.
As the trio’s vision grew, so did thousands of businesses worldwide who relied on their newly introduced and smart innovation - Zendesk!
How did these three co-founders scale a company from zero to business hero?
Read more below:
The Mighty Danes
Mikkel Svane, Morten Primdahl, Alexander Aghassipour- three simple names, one complex mission.
Born in Denmark, Copenhagen, the three intellectuals followed separate pathways before colliding together to work on what was to become the leader in the customer service software industry.
For Mikkel, the path towards ambition began in 1990, when he graduated from Aarhus Business College with an academic degree in marketing management.
Following his college days, Mikkel initiated a job hunt, but unfortunately so, right in the midst of an ongoing recession.
Before even broadening his business horizons, a life-changing trip to San Francisco would inspire Mike, career-wise.
Impressed by the abundance of billboards packed on websites, Mike began playing with the idea of launching one of the first horizontal community portals back in Denmark.
A year later, his new software hit the roof, and as a result, was acquired by a local newspaper, prompting Mike to move on to his next big project.
Meanwhile, Morten graduated from the IT University of Copenhagen with a Bachelor's degree in biotechnology. Throughout his early university days, Morten fell head over heels with the spirit of people as well as the power of teamwork.
While studying, Morten kept himself busy with various side-projects, all the while collaborating with colleagues who had mastered various crafts- from chemistry to architecture.
Although Morten felt at home in his new surroundings and showed no intention of leaving, bigger responsibilities laid ahead of him, so in the 90s, he left his cozy place to pursue a more fruitful job.
Alexander, Zendesk’s third co-founder, shared a somewhat similar experience to Morten’s. But, instead of chemistry, he was more of a math genius as well as a sublime designer.
Thanks to his dual interests, Alexander graduated from Denmark’s Ingeniør Akademi, earning both a degree in electrical engineering and a Master's degree in IT from the Technical University of Denmark.
Rising From Failure
Back in 1997, Mikkel founded Caput, a small enterprise company concentrated on software components associated with social networks and community building.
Upon graduating, Morten also joined Mikkel’s company which would, sadly, rise fast and crash before their eyes ever faster.
The duo wasted no time and sold the software to resellers all around Europe - a smooth sail business for the time being.
Interestingly, the two visionaries financed the company out of their own pockets, with all money reinvested back into it.
However, once the recession kicked in, all of Caput’s resellers withdrew from the company entirely. Eventually, this brought Caput from a fast-growing business to rock-bottom status.
The hardest thing for Mikkel was having to let go of all of his employees, despite understanding the major potential in each and every one of them.
After closing the business, the Danish duo didn't wait for an opportunity to show itself but took matters into their own hands and landed a new job - implementing customer service solutions for a variety of companies.
Caput's duo emerged stronger from their earlier collapse and more assured of their powers in creating a brand new software. The only thing lacking in the equation was a designer’s input, and the pair had the perfect person for the job.
Both Mikkel and Morten appreciated Alexander's creative work with Araneum, a digital media agency promoting products to clients using online channels. Alexander’s aim within the company was to target a greater number of customers - which was the exact same thing Mikkel and Morten were after.
Fortunately for them, Alexander's agency was acquired by TietoEnator not long after they took notice, so they wasted no time in reaching out and presenting him with their plan.
One Obstacle at a Time
Aware of what was missing in the whole picture, the newfound Danish trio made their first business move.
One day, while working at Alexander's loft, the three men finally got it - they would create a platform to reinvent customer service, based on an online SaaS model.
By the end of 2006, Zendesk was officially a project in motion, launched from Alexander’s small airy Copenhagen loft.
Since its inception, Zendesk has been a software platform designed to help companies deal with dissatisfied customers.
Like many other start-ups, Zendesk attracted its first customers by word of mouth only.
A few months later, however, over twenty Danish companies implemented their software as a super-useful customer service tool.
Nonetheless, Denmark is one small country in a world of dozens, and while their local advertising worked, it also drained the company’s entire budget, barely delivering any fruitful results or prospects for global expansion.
And yet, the three Danish men had nowhere to go from here but forwards.
Shortly after releasing their first global advertisement, a tailoring company from Ireland paid their subscription, while additional support came from a chain gas company based in Texas, and a few other worldwide brands, too.
But, as the company grew, the team made various unfortunate decisions blinded by their overconfidence, and soon a new approach was to make way to the brand.
This time around, the trio would stay fixated on testing users as real living clients, instead of just data and statistics.
Upon analyzing user purchase data, the Zendesk team also introduced a whole new pricing system and kicked off an email campaign in an effort to please their customers.
Unfortunately, the outcome they were hoping for turned sour pretty soon.
Given their revolted customers, and the mass outreach on social media, ZenDesk had no other option but to publicly apologize to all its users. Not just that, immediately after making their peace, the trio went back to the basics of their business and initiated a fresh start.
In early 2008, the Danish co-founders decided to, for the first time ever, reach out to investors, thus bringing the economic strength back into the company.
However, as the company left less credibility to look forward to, no investor was interested in pitching in. It wasn’t until Mikkel finally reached out to a German investor, Christoph Janz, that the company welcomed its first funding of half a million dollars.
Ever since, both the company's employees and new customers just kept on coming.
Another page was turned for the company, this time when Mikkel decided to pay a visit to good ole’ Silicon Valley. After attending the TechCrunch annual party, Mikkel found that many guests there already knew who he was and what Zendesk did.
That was a make-or-break moment for Zendesk, and the only way Mikkel could ensure the company’s stability was to persuade the team to relocate its office to San Francisco.
Come 2009, CRV poured another $3 million dollars in Zendesk, followed by $6 million in Series B round funding, from Benchmark and Charles River Ventures.
With all necessary resources in place, Zendesk finally opened its San Francisco office, thus getting a proper feel of doing business out of Silicon Valley.
By the end of the year, countless customers had already subscribed to the platform, ultimately steadying its revenue.
A defining year for the company was undoubtedly 2014, when Zendesk became a publicly traded firm, debuting with an initial public offering of nine dollars per share.
As expected, this led Zendesk to acquire over $40 million by 2015.
Two years later, Fast Forward invested $2.2 million in Venture Round, followed by Series B funding from Stella Connect, worth $11 million.
Lastly, in 2020, Zendesk secured his most recent funding of ravishing $15 million in Series C from Lessonly.
Nowadays, Zendesk serves over 150 000 customers across the globe, in a variety of industries.
Its employees’ count surpasses 3000, yet the company is still looking for intellectuals no matter the age, gender, or race.
Lastly, its annual revenue surpasses $800 million, and the cash keeps pouring in.
Throughout its journey, Zendesk faced it all - the ups, the downs, the struggles, the doubts, and the triumphs - all the while resolutely pushing forward and masterfully weathering any storm coming their way. Just shows that solving a real problem brings real profit!