Daan Donders, the 31-year old founder & CEO of the SO WIFI Group, rarely talks to the media. So what? SO WIFI. The world’s leading provider of Social WIFI with over 20.000 clients and millions of users in 30 countries. Daan has wit, charm and is full of street smarts. In this exclusive interview, BrownCow shares with you (1) how SoWifi grew into a global player, (2) business lessons from Daan & (3) how the future of his company looks like.
Have you ever watched Bill Clinton shake hands? He doesn’t just clasp your right hand in his, he also touches your arm with his left hand. During the conversation, as he makes a point, he might reach out again to touch your arm or put his hand on your shoulder. Clinton’s use of nonsexual touching is, arguably, one of the reasons people seem to like him so much. Daan Donders has the same social savviness as Bill Clinton.
In my opinion, this is the main reason why this young Dutch entrepreneur has been able to build a global business within a period of 5 years. How did this fascinating story start?
Part 1: The past
2012: Selling the product to verify whether people liked it
Daan: In 2012, we started selling our product in Weesp to test whether there would be demand for the product. Why I didn’t start in Amsterdam? I first wanted to try in a smaller place and afterwards launch in Amsterdam, to avoid making mistakes in the capital city, which would be our most important market in The Netherlands.
In 2012, an IT expert told Daan that is was technically possible to use Wifi as a marketing tool. Daan immediately saw great potential: restaurants and bars were interested in generating more Facebook likes for their venue. At the same time visitors wanted free Wifi. The idea of SO WIFI was born. With a Facebook like or email signup, users get free Wi-Fi at bars, cafes, restaurant or retail stores. Businesses, in return, gain the opportunity to stay in contact with their customers.
2013: Penetrating the Dutch market & learning from failure
Daan: The majority of our costs are sales related and we have to scale up rapidly to cover all these costs. Currently, we have already attracted 1.000 clients, including bars & restaurants (90%), sports clubs (5%) and hairdressers (5%). Clients pay €24.50 monthly in case of a 2-year contract and €29.50 in case of a 1-year contract. In return, they receive on average 5 Facebook likes a day.
Daan: After getting traction in The Netherlands, we wanted to see whether we could scale to other countries. We decided to start in Germany. Unfortunately, we chose the wrong partner. Their employees were twice as old as ours and therefore lacked the dynamics we needed. After this experience, I knew far better what to look (out) for in a partner.
2014: Expanding to other countries
Daan: In 2014, SO WIFI expanded to countries such as Belgium, Spain, France, Germany and Dubai. Taking a small business global is a complex and dynamic process. Gaining a deep understanding of the targeted markets, current local market trends, and the requirements to successfully launch and drive growth lays an important foundation. Cultural differences, whether it is language, regulations, or customs, required SO WIFI to be flexible. We found managers for every country and guided them in setting up the business. Afterwards, we give them a lot of ownership.
2015: Scaling up the international expansion
Daan: Once we established our selves as serious player, many people wanted to become part of SO WIFI. We set up a licensing system to provide entrepreneurs with the opportunity to set up a SO WIFI ventures in other countries. We support them with setting up and growing the local business an receive a revenue share in return. We are running in more than 30 countries.
Lesson for BrownCow members:
Once you are successful, more opportunities will come along. Make sure you build a system, like we did with the licensing model, that works for you.
2016: Raising millions in venture capital from 5Square
We help entrepreneurs reach their full potential and achieve healthy sustainable growth. When we invest, we fully commit ourselves. This is what we call Committed Capital. Since 2004, 5square has been the investor of choice for ambitious entrepreneurs.
The transaction is thought to be worth a few million euros. The new capital will help So Wifi accelerate its international growth. The company plans to launch a service for businesses to generate social media marketing through connections to their Wi-Fi hotspots. The launch is planned for May. The application will be launched in 14 languages and is expected to provide mobile internet users to over 1 million free wifi-hotspots around the world. Furthermore, SO WIFI has signed a partnership deal with rating company TripAdvisor.
Next to raising a venture capital investment, Daan signed an important deal in Brazil. SO WIFI will provide 5.000 cabs with WIFI access during the Olympics in Rio de Janeiro.
Daan on signing deals:
When I do business abroad I spend a lot of my time with my potential clients in restaurants or even in clubs. For instance in Brazil, it is important that you get along well and that people trust you.
Part 2: Business lessons from Daan
Lesson 1: Don’t celebrate until the ink is dry & the cash is in the bank
Do I need to say more? Don’t pop the champagne corks yet. After closing a deal, wait till the cash is in the bank, then, and only then celebrate your victory.
Lesson 2: Motivate, don’t manage.
My main skill is to be able to motivate people. Other people are better at managing. Do what you’re good at and let other people do the rest. As a founder of SO WIFI, it is important to manage your time well, so spend time on the stuff you love doing.
Lesson 3: To know what your clients really want and if the product really has the potential you think you will first need to sell it
Some entrepreneurs spend a lot of money on designing business cards, decorating office space, hiring people and their marketing strategy before selling 1 product. I’d rather do it the other way around, When I have an idea, I start selling it on the street right away. If people want it, I will make it. This way you avoid throwing money away on products nobody wants.
Lesson 4: CEOs know CEOs
Once you know a couple of CEOs you will get introduced to other CEOs. This is how you get to the right introductions and are able to grown fast. Simple, isn’t it?
Lesson 5: Everybody within the company needs to understand how sales works.
When someone starts working for So WIFI, they have to work in the sales department for 2 weeks. It is of vital importance that all the people of So WIFI understand who our customers are and what they are looking for. Customers and sales are the only things that really matter.
Part 3: The future
I asked Daan how the future of SO WIFI looks like.
He said: we will continue to scale our current products to other countries. Furthermore, we are developing a couple of new exciting products with the main objective to provide bar, restaurant and retail entrepreneurs with the opportunity to know who their clients are and to help them maintaining a relationship with them through our SO WIFI data. Needless to say, the data that we have our never used in a way that they are intrusive.
He said: a good friend of mine, Willem Rens, asked me to join the investment circle. When a friend asks me to do something, I am always happy to help out. Furthermore, I am open to receive investment opportunities, as long as I understand the business the entrepreneurs are operating in. I am working on a couple of new projects, but I like to keep them secret.
P.S. Twice a month I will write blogs as a BrownCow reporter, a company that helps gifted entrepreneurs “play Champions League” by connecting them to former captains of industry, seasoned entrepreneurs and hungry investors. I will interview people within the BrownCow network: former CEO’s (e.g. Anthony Ruys of Heineken) and high-flying entrepreneurs (e.g.Daan Donders of So WIFI Group). I will share their insights on business building, leadership, B2B sales and funding. And last but not least, I will travel the world to assess start-up ecosystems in places like Silicon Valley, New York, LA, Tel Aviv, London, Berlin and Paris.
BrownCow has a network of 150+ start-up and scale-up Members and 100+ experienced high rollers. BrownCow offers (1) Coaching, (2) Masterclasses,(3) Young President Inch by Inch Program and (4) Investors circle The Herd.BrownCow has the ambition to invest a staggering €25M in start-ups over the next 5 years (Dutch Financial Times: Old Boys storten zich op start ups).
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