About Building Localyze
Our journey & the key learnings
This is a shortened version of reflections we shared with our investors when we made the final decision to sell Localyze. It was both for us to reflect but also to explain why we thought this was the best way forward. That is also why what I am sharing below is very honest, but I hope someone might benefit from it and I am more than happy to spend 1:1 time with anyone going through a similar decision making process, as letting go of something you have poured years of your life into is never easy.
2018: How it all started
When we started Localyze in 2018, we didn’t know what we were getting into. We didn’t have any prior experience to build on, no network from one of the startup universities to get insights from, so we’d never seen what a scaled tech company actually looks like and no one to tell us how to do it - so we had to figure it all out on our own. In retrospect, that made things a whole lot harder, but in the first few years, our intuition really worked for us. We just had a good feel for our customers and the market, and we did a lot of things right just by trying to figure it out.
Back then, there was very little tech in global mobility, even more so in Europe. We had to build up a market without even realizing we had to. Considering this and the fact that we had no prior experience, I think we did a pretty good job. We just went out, talked to customers, and tried to sell. That got us early traction, and getting into Y Combinator was a big step that made us lean even more into what we were good at: Staying close to our customers.
Sidenote: I know this sounds very cliché and basically what everyone else says as well, but it is interesting to see what being close to customers actually means in the early stages, especially for people just breaking into tech. A lot of people worry endlessly about getting a technical cofounder and see that as a blocker, but a lot of problems can be solved with 90% manual work and forms in the frontend, and once you have proven someone actually needs this, it is so much easier to get both a team and funding, and the key to that is to see what is actually the minimum solution a customer would buy
We kept seeing how much pain it was for people to move and even though a lot of companies didn’t have a structured spend for Global Mobility yet, we were big believers in the market potential. That conviction is what saved us during COVID. Investors were saying relocation was dead and everyone would just work remotely. But we talked to our customers, and they all said people would still move. So we stuck with it. We could have pivoted into timelier services, Employer of Record, compliance, but looking back, I doubt we would have been successful. Given our lack of experience and connections, the competition would have swallowed us. For us, sticking with immigration and relocation was the right call. We survived, and I’m really proud of that time because managing a team through a crisis without any prior management experience and training isn’t easy.
2021: The Year We Thought We Had It All Figured Out
After surviving COVID, 2021 was an amazing year. It’s funny because I remember thinking, “What could go wrong now?” (plotwist: A LOT). We were growing, we found a super strong product-market fit with tech companies, had our first profitable quarters and it felt like this would just continue forever.
Because we had that slow year during COVID, we had built a really solid foundation and cleaned a lot of things up. So when growth exploded in 2021, it took a while for things to start crashing again. We had this feeling that everything was great. But we completely underestimated how immature our go-to-market was. We were getting a ton of inbound demand and just riding that wave. We were profitable for most of the year, but we didn’t use that time to lay the right foundation for the future. Had we started building our enterprise motion back then, things probably would have turned out differently.
2022: When The System Started To Fail
Things started getting challenging in mid-2022. The market really started to turn, which was unfortunate timing because we had just raised our Series B. While it was good that we had the cash reserve, I think it made us slower to pivot our operations. We still had most of our Series A money, and without the new round, we would have been forced to cut our spending much sooner. Still, this is something we only have ourselves to blame for and I genuinely think a lot of other companies have done better and turned quicker, but we came from a time where we were always told we were profitable too early, not aggressive enough and needed to scale quicker. My most important learning here is that you always need to find your own speed and see what the “system” aka your company, can support. If you try to scale a not-so-great structure too quickly it’s a recipe for disaster.
One example was hiring, we thought, “Okay, we raised a Series A, now we need more experienced people.” It’s not a bad thought in theory, but we didn’t spend enough time on thinking through what we actually needed and who was a fit for this stage. We hired people from big-name companies, with big titles and even bigger salaries, who just weren’t a fit for an early-stage startup, or for the industry. That first big wave of mis-hires set us back, and we had to start from scratch. At the same time, we made a bad decision to expand to the US. We just weren’t ready. We thought because we had so much growth in Europe, we could take on the next challenge, but it just made everything worse. Our core market in Europe was starting to have problems, and the US expansion was incredibly costly and distracting.
The Last Two Years: Getting Hit Hard
By the end of 2022, our situation had really changed. Our existing customers had way less volume, and onboarding new ones got a lot harder. From that moment on, our go-to-market strategy was what made us struggle so much. Some of the hires we made had a bad influence on the culture, and it took us at least a year to rectify that.
We should have acted faster to curb spending. It felt counterintuitive right after raising a big round, but it took us a solid year and a half to get our burn back down. That was self-made. We had money, so we spent it. We grew so fast that we had to make people team leads quickly, and then everyone wanted the same. Getting that entitlement out of the culture and going back to our nimble, efficient 2020 mindset was incredibly tough.
2023 and 2024 were defined by a lot of very tough rebuilding. The majority of our old customer base was affected by the market as well and had significantly less volume. We had to push into new segments and industries, but it all took longer than we hoped. That delay is what really hit us hard. We had to do a lot of cleanup, move towards profitability, let people go, and try to fix the culture, but doing all of that in a remote setting was super tough. At some point, you realize catching up will be harder and harder and you start to get left behind. And while we were seeing good traction in our new segments, we knew that scaling this would take a lot more time, and additional investments which interfered with trying to be profitable. That’s when we looked at options and started considering an acquisition, because we had a feeling that doing it alone would have meant even more of an uphill battle.
So, what were the biggest obstacles?
If I had to sum it up, I think there are a few main reasons.
Team, Culture, and Hiring: We made a lot of mistakes here. We should have defined who we were and what we needed, and then hired for that instead of focusing on where we were different and trying to lose that by bringing in people from big brand names. We were good while we were the underdog, did things differently, and remained authentic. We lost that when we tried to blend in with other startups out there.
A Challenging Market: I do think global mobility was a tough market in the last years with a lot of volatility and we didn’t do the best job in pivoting into the areas that were still growing. Going after tech companies first was a good start, but getting into enterprise deals was a very different game. One year in we went through Covid, and following that we saw a shift from employee to employer market with drastic cuts across programs. I still see the potential in the market but you have to be very clear on what area you want to win, and if you focus on immigration, the global edge and the US coverage needs to be there.
Lack of Go-to-Market Experience: We were just super reactive. We had early success and then didn’t know how to build a strategic, scalable GTM function. We should have tried to scale up what was already working internally instead of bringing in outsiders to solve the problem for us.
Being Afraid of Change: In the last two or three years, we got burned a lot by negative feedback from the team when we started to save money or slow down promotions. It made us more cautious than we should have been. In retrospect, we should have acted harder and faster in 2023, and accepted that the market had changed. By tolerating the negative culture for too long, we waited almost a year to make the really tough calls.
