22nd - Aug - 2018
CLX 10th Birthday Part Two: The Beginning
When would be the worst possible time to start your own business? Easy. Days after the collapse of the global banking sector. Here, Johan Hedberg remembers the uncertainty and chaos of CLX’s ill-timed launch.
In early Summer 2008, five friends and I gathered around my kitchen table. We made a big decision. We would quit our jobs, leave behind the security of our corporate careers and start a new kind of mobile messaging company. We would call it CLX.
It worked out pretty well.
In the end.
But if we had scheduled that conversation for October 2008, this blog post probably wouldn’t exist. Neither would this web site.
And, if you work for CLX, neither would your job.
Why? Because by October the 2008 Financial Crisis was in full swing, ultimately becoming the worst global recession in 80 years. It was not a time to be leaving behind a safe career at Ericsson.
But, to repeat, it was too late. We had already resigned, handed back the keys to our company cars and our Blackberry Curves. We just had to get on with it.
The thing I remember best about those early days was that there was no money. There was never any money. OK, that’s not strictly true. There was the 10,000 euros we pooled together to get CLX started.
I’m proud to say, it remains the only ‘external’ funding we took in CLX until the IPO in 2015.
Obviously, 10,000 euros is not a great deal of cash. But we didn’t need much. We favored a frugal ‘Swedish’ approach to spending.
Here’s an example. The company’s first office was part of the display window of a travel agency, Afro-Caribbean Travel. The space was the cheapest we could find on the local classified advertisement website.
The office might have been affordable, but it was noisy, tiny and cramped. Obviously, it was no place to bring clients. We were reluctant to show them the full Afro-Caribbean Travel experience and just how small we actually were. So instead, we’d ask if we could meet customers at hotels in the area.
Thankfully, those hotel lobby meetings paid off. The business grew quickly. In 2008 no one really envisioned and addressed the full opportunity of mobile messaging for enterprises. But we did. We resolved to make wholesale SMS reliable and affordable – not least because there was so little competition with messaging as their core business.
Ericsson IPX and Mblox were the major players in the market back then. But the truth was that neither focused on messaging itself. It was even the same with big multinational aggregators like SAP. They were all focused on messaging as facilitating mobile payments.
We felt we could make SMS traffic cheaper and more reliable. That way, we could sell connectivity to the established players.
Within just a month, it was clear this hunch was correct. Starting late October, traffic was flowing across the network. A multinational mobile operator came on board as the first client. Then came a spree of SMS aggregators from all over Europe, the Middle East and Asia, including the likes of Mblox and SAP. By the end of the year our business was flourishing.
That said, CLX wasn’t flourishing enough during that Autumn for one member of the team. Henrik Sandell had built the core messaging platform in the evenings and ran all support operations while still working his day job. But months went by and he still wouldn’t commit to the company full time.
He had two small children and he lived in a smaller town where there were very few other jobs in tech. He was very worried about leaving his job. We kept saying ‘it’s going so well’, but he just wouldn’t do it! Henrik finally stopped working two jobs in January 2009 when we were able to start paying ourselves salaries.
We had based our first core ‘SMSC’ platform on a free shareware product. But with the success of the business, it was creaking under the strain. Long-term we needed a built-for-purpose platform that could handle the escalating traffic.
Eventually, we found what we were looking for in Symsoft.
Shortly after, we approached Symsoft about licensing their platform. But for various reasons, that led to us buying the whole company.
Thus began the second phase in the CLX story.
To find out more, check out the post entitled ‘The Turning Point’.