In a recent conversation with Vincent Bieri, co-founder of Nexthink, we discussed about his fascinating journey at the company. One of Vi Partners' earliest investments, Nexthink, stands out as a remarkable success story, becoming one of the first unicorns in the fund's portfolio.

This article highlights key points from our flash Q&A session, showcasing the challenging path Vincent and his team took in building Nexthink into its established company today and, hopefully, further providing valuable insights for inspiring entrepreneurs.

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Vi Partners: Reflecting on the early days of Nexthink, what would you say was your biggest mistake or underestimation?

Vincent Bieri: Mistakes you make many and it’s ok. In fact, you spend a lot of your time fixing mistakes. What’s hard is to anticipate as many of these as possible. What we definitely didn’t see coming and underestimated was the amount of time, effort, energy, and resources it takes to move forward and accomplish each and every step needed to move close to what we wanted to do. It was much harder than I thought. After 10 years, we've done half of the initial plan in twice the time, with double the amount of investment we anticipated to need. The journey is longer and harder, and you always have to be ready for much more effort than you think.

Nothing is linear; there are always surprises. Some you may control, but many you don’t and can only accept and adapt to this in the equation.

For example, we created the company in 2004; you can imagine that expectations were high after the VI Partners investment in 2006. When the 2008 financial crisis hit the market, we were not expecting it, not prepared for it and, nor were we responsible for it. Our prospects and customers froze their budgets. It was hard, if not impossible, to close new deals. We had to fight for our survival, be very creative to face the storm, and keep the motivation that there is a way out on the horizon.

Vi Partners: How did the 2008 financial crisis affect your strategies at Nexthink?

Vincent Bieri: One of the key criteria for building a successful company or any project in life is to have this constant adaptation capability for yourself and the entire team around you. You sometimes have to take a step back, look at what’s going on, and see what you can do and how you can maneuver around the situation. Obviously, if it’s a global world financial crisis, you cannot change the way things are in terms of stock markets, banking systems, and others.

So the question we asked ourselves was, “Are there any businesses out there that are not impacted as much as others?“. And we found some, and they were in the Middle East and working in the public sector with government, cities, and hospitals. That was where we focused our strategy on those two sectors. The biggest uncertainty was how long the crisis was going to last. We had to plan for a longer journey in a degraded mode. We lowered our costs and made sure to have the minimum we needed to get those businesses and forget the rest. The hardest part is not to find ways to deal with the crisis, it’s not to know how long it’s going to last.

Vi Partners: you also transitioned from on-premise software to the cloud during those crisis years; how did you manage it?

Vincent Bieri: When we started the company, subscription, SaaS, and cloud were embryonic ways to deliver software to B2B enterprises. We had a new technology to push, one disruption at a time is hard enough so for software delivery and business model we followed what everyone did these days, where we delivered our software a CD ROM with a perpetual license plus annual maintenance, and customers installed it locally on their servers. Then, the market transitioned, so we had to follow. The transition was dual. We anticipated it. It was not like 2008, it was something visible, slowly coming, the choice was there. First, on the product side, everything had to be web-based and optimized for the cloud. But then, you also had to re-design how you sell, package, and price your product. We did this technical and economic transition in parallel. We experimented with different ways to package and sell. For a time, we even had on-premise software that was no longer sold with lifetime licenses but with annual subscriptions. It’s tough to transition; let’s say for a 100k lifetime contract, you switch to maybe a 30-40k yearly subscription; how do you not fall down your revenue that year? Well, you have to get more customers. It’s tough not to get hit too hard, and we managed it pretty well with our team. Mainly because we anticipated a lot, we didn’t panic; we allowed ourselves time to try, make mistakes, and improve while maintaining the alternative options alive. A cloud and SaaS-only model was activated after many years of dual options working in parallel. Don’t kill what feeds you before you validate how to feed you with a more modern way.

Vi Partners: Looking back to Nexthink’s journey, what would you say was your best stroke of luck?

Vincent Bieri: I think we are a typical example where positioning and communication were not always well done. And I was part of the people who were doing it wrong. It's what I call the Swiss Army Knife Syndrome, which is that: “I do so many things, but nothing outstandingly well”. The Swiss Army Knife has not the best knife, nail cuter, scissor or screwdriver. If you have the alternative at home, you will take a proper tool for its purpose simply because it does the job much better or because you are used to it. To crack a market, you need to stand out, to have an exceptional solution that is not simply better than the alternative, it must be a genius step forward. You can’t do it for many at a time, focus is key.

Ultimately, we decided, okay, what we do is not an improvement of known solutions or tools categories. We have to create a new category, define it, and convince the market that there is a need for it. The digital employee experience is a perfect example of something that we created. If you go back to 2004 to 2010, that category did not exist anywhere. It’s easier said than done but that's how we became a really fast-growing business once this was in place. That creates a complete shift in the way people buy your product because they can now budget it and assign it to traditional processes like RFPs. It's a good question to ask yourself when you create something: Am I a replacement or improvement in an existing category? Am I somehow inventing or reshaping something fundamentally new? That makes a big difference because, in our case, we underestimated the importance of product marketing, communication, and the time it takes to do so. But we learned, we worked hard and eventually made it. So, it’s not because you miss a key point to grow your business that it’s lost forever. It is if you don’t accept and don’t change.

Vi Partners: What would be your one piece of advice to give to young entrepreneurs?

Vincent Bieri: Alone you may go fast, together you go very far. So really, focus on people that you bring around you, treat them very well, build trust and a strong team. Because it's going to last, and it's going to take a lot of time to go where you want to be. If one person at a moment is behind, help them to stay with you because later in life, you might be the one behind and you will be very grateful to get some help. I found it very valuable to have a diversity of backgrounds and personalities, and to have a mix of more fresh minds and some that have done it before; naivety and experience are very complementary to keep moving under all type of possible situations.

About Vi Partners:

Vi Partners is the longest-established Swiss Venture Capital firm. For more than 20 years, Vi Partners has been supporting innovative Technology and Healthcare companies, investing over CHF 350m in 66 startups. Vi Partners-managed funds are backed by Switzerland's most visible companies and institutions, including ETH Zurich, ABB, Buhler, Credit Suisse, Hilti, McKinsey, Nestlé, Schindler, Sulzer, Suva, and ZKB, as well as the European Investment Fund and many other institutional investors.