AI Integration in SaaS Industry | Interview with Daniel Soussan

In this episode of The PinMeTo Podcast, we welcome Daniel Soussan, an investor, business leader and chairman at Cloud Capital with a rich history in the tech startup world. 

Daniel shares his journey, starting from his early days selling profile clothing to founding tech companies like Insplanet and MediaPlanet and growing them into profitable ventures.

Our discussion goes into AI integration in the SaaS industry and the challenges facing today's entrepreneurs, "It's all focusing on growth with profitability and positive cash flow," Daniel stated, highlighting the shifting priorities in the SaaS industry.

We also explore Daniel’s role as a chairman at PinMeTo, discussing his decision to invest in the company, its future trajectory, and the cultural dynamics at play within the organization.

To get the full scope of Daniel's insights and experience, tune into "The PinMeTo Podcast" on your preferred podcast platform or find us on Spotify.

The text has been lightly edited for clarity.

Bernardo (00:10)
Hello, Daniel.

Daniel (00:11)
Hi.

Bernardo (00:12)
Welcome to our podcast here at PinMeTo.

Daniel (00:15)
Thank you. Thank you for having me.

Bernardo (00:18)
It's great to see you again. I remember about a year or two ago, I made a magic trick for you here in Malmo in one of the PinMeTo gatherings. I can see that you have forgotten about it. Never mind. When I see you again, I'll do some magic tricks again. But thanks so much for being here on our podcast. The first question, of course, is about you. For everybody that does know you and is listening to our podcast or watching our video, can you give us a quick rundown of your professional journey?

Daniel (01:03)
Yeah, sure. Well, I started my career… First of all, I turned 50 last year, so I'm an old man now. I started my career way back by selling profile clothing to companies and, in parallel with that, I studied at Stockholm Business School, getting my Master Degree in Economics. After a short period of time as a management consultant, I founded Insplanet back in 1999. A few years after the dot-com crash, me and my partner, Richard, founded MediaPlanet. And these two companies have very much been the foundation of my professional journey. I had MediaPlanet for 16 years before we sold it. And I had Insplanet for 18 years before we sold that one. But these two companies quickly became profitable and grew with profitability and they could also pay out dividends annually. With that money, I started to invest in other startups. A few of them, which I invested in, have become very successful. And with that money, I've continued to invest mainly in tech startups. So today I have approximately 20 startups in my portfolio, and I'm actively working with a couple of them where PinMeTo is one of them.

Bernardo (02:56)
Yes, it is. You are a chairman at PinMeTo?

Daniel (03:01)
Yes, that's correct. I'm chairman of PinMeTo, and I'm also chairman at Cloud Capital, with which we've invested in PinMeTo from and then I'm also sitting at the board of directors in a couple of other companies like Scrive and Bitlog.

Bernardo (03:27)
Perfect. That's awesome. Okay. Daniel, growing up, what kinds of experiences or influences led you to pursue this career? It was something that was an interest of yours when you were a teenager to invest in companies. Tell us a little bit about that.

Daniel (03:49)
Yeah. Not really, actually. I come from a classic Jewish family. Where the best thing is becoming a doctor and the second best, a dentist, and then nothing. But education has been important. When I grew up, my whole entire family consisted of doctors and dentists. But as a teenager back in the 80s and '90s, I went to a school in a fancy area in Stockholm named Östermalm. I was somewhat overwhelmed by all the big apartments, summer houses and fancy cars all my friends had and their fathers, mainly fathers back then were businessmen. So somewhere between that and the movie ''Pretty Woman'' with Richard Gere, I think I decided I wanted to do business and become good at it.

Bernardo (05:14)
Oh, that's a good influence. Richard Gere, Julia Roberts. I think that the young people right now listening to this are, “What is 'Pretty Woman?’” I have no idea what these guys are talking about.

Daniel (05:28)
Yeah, probably. That's probably true. But still a good movie, though. Maybe not politically correct nowadays, but still a good movie.

Bernardo (05:37)
I have the VHS, which is also something for the kids out there. Anyway, never mind. It's a device, basically. Awesome. Let's talk about SaaS, SaaS industry. How would you describe the current state of the SaaS industry? Not just in the Nordics, but all around the world?

Daniel (06:08)
I'm mainly a Nordic SaaS investor and also focusing on companies up to a billion, a couple of billion in value, a half a billion in revenue, a couple of hundred employees. That's where I've spent most of my career, working with these companies. They have very little to do with what's happening in the US or unicorns. With that said my perception of SaaS has become more sober and perhaps too much at this stage. It is for sure a strong business model and companies with good product market fit can really scale fast. But I think, what has caused the major shift is that the cost of growth is now something that can't be like… You are incentivised for growth at any cost. And today it's all focusing on growth with profitability and positive cash flow. And of course, that has an impact on a business model like SaaS where quite a lot is happening in the beginning. Yeah, of course. I mean, I strongly believe in the SaaS model and why some of the greatest companies in the world are shifting towards a more SaaS-oriented business model.

Daniel (08:07)
You can see Google, Microsoft, all these companies, even Amazon, all these companies are shifting and seeking more SaaS models for their business model. So of course, it's a strong model that will stay for a very long time ahead. But of course, it's been sobering up for the last 12 months.

Bernardo (08:38)
Absolutely. Let's talk about the people behind all of that work, which are entrepreneurs, many of them young people. They do face many challenges in scaling their own start-ups. What do you think are the common hurdles today? How should founders navigate these issues?

Daniel (09:07)
Yeah, for sure, it's challenging times for entrepreneurs today. I think VCs, early stage investors, are now focusing almost all their resources on AI and sustainability. SaaS has somewhat become something or similar to where e-commerce and marketplaces were 10 years ago, still exciting business and good business models, but not so new anymore. I mean, with that, rightfully so, the bar is rising and you cannot anymore approach an investor with just a PowerPoint presentation or business idea with low impact, expecting to secure funding just because it's based on a SaaS model. You could do that 24 months ago. You cannot do that anymore. You need to do better. And if you do, if you have a good business idea, if you have proof of a good market fit, then you will secure needed funds, but it will be smaller tickets. It will take you a longer time to build your company. But in the end, I actually think it's a good thing for both the company and for the entrepreneur.

Bernardo (10:43)
So good challenges are always opportunities.

Daniel (10:46)
Yeah. I think it hasn't been healthy. We have seen a lot of companies that have been funded that never should have been funded or too many companies or investors that have poured too much money into a business that hasn't proven itself. I think we will see better companies come out in the future, SaaS companies.

Bernardo (11:23)
That's great. You just mentioned AI, which is very interesting. The intersection of SaaS companies and AI is a super hot topic these days. In your opinion, is this intersection of AI and SaaS companies a good thing, a bad thing? How do you think this is going to grow? Because this has grown too fast. How do you see SaaS companies working with AI in a couple of years?

Daniel (11:58)
I think it all depends on whom you ask in the years to come. I think we are in an adapt or die situation here where many SaaS models are being challenged by AI. First, you took the Excel format and turned it into an AI or into a SaaS model. And now the SaaS model is challenged by an AI offering. I think if companies can find ways to adapt and integrate AI into their product offerings, I think it can strengthen and also add more value to the customers than before. I mean, there's no doubt that AI will have a strong impact on the SaaS industry, for sure.

Bernardo (13:14)
Everywhere, actually, sure.

Daniel (13:15)
Yeah, everywhere. But I'm not an AI expert and it's early days. I just think it's super important to think a lot about it and learn more about it and find ways to integrate it with your product.

Bernardo (13:36)
Absolutely. Now it's the time to be creative and try to think a little bit ahead of others. Let's talk about PinMeTo, which is a company you have invested in and you are the chairman of PinMeTo. You've invested in several companies, including ours. What drew you to PinMeTo? Yeah. And what made it a compelling investment for you?

Daniel (14:06)
Yeah. Well, first and foremost, I mean, PinMeTo, I think it's a fantastic company. I'm very proud to be part of the PinMeTo journey, and I try to contribute wherever I can. When we invested in PinMeTo, and when I say we, I mean, Cloud Capital, Johan Crona, and myself, there weren't actually many Swedish SaaS start-ups back then. I think Johan was familiar with Daniel Melkersson. It was an easy decision for us to make. We were quite passive back then. And after a few years when we sold Scribe, and Scribe got a new majority owner into that company, Daniel asked me if I could consider taking the chair and as Henrik, would take the CEO role. And I mean, since we sold Scribe, I had some time off and I was happy that I got the question and I said yes. By then I had followed the company and I liked what I saw. So it wasn't more complicated than that.

Bernardo (15:50)
Well, just taking on what you just said, how do you currently view PinMeTo's trajectory and what are your expectations for us in the future?

Daniel (16:05)
Yeah, I have really high expectations for PinMeTo in the future. I think we all are entitled to have high expectations on ourselves and our colleagues. I think we are progressing well. With that said, it's challenging times because I think some of our customers will struggle a bit in the next coming years. But I think the underlying growth into this industry is good. So I also think that PinMeTo has always been run in an effective way. I think for some of our competitors, PE firms and investors have poured money into them in order to grow at any cost. I think they are now facing challenges. PinMeTo  is in a much better position since we always have been running the business effectively. We have a high level plan formalizing for the next coming three years. I'm sure when we are ready, Henrik and the management team will present it to the company. We're not there yet. And I think the rest will come down to execution and execution will be crucial in the coming years to achieve success. But I'm certain we will reach our targets and goals.

Bernardo (18:01)
I'm sure. We have an amazing team of dedicated people working at PinMeTo.

Daniel (18:07)
Yeah. I was down in Malmo a couple of weeks ago and I met the product team and also the sales team. I was really happy when I left the office because I was really impressed with the people who I met there and how we work in a structured way in order to evolve the company. For sure, we have a good thing here.

Bernardo (18:45)
The culture of the company, it's very good. It's very nice to be part of the team. Not just for me, but for people who might join in the future.

Daniel (18:58)
Yeah, I agree. Yeah. And with that said, I always say this to the people I work with, it's important to keep up with the new talents arriving into the company. So the bar is rising constantly. And that's a good thing that we recruit better people than ourselves. And then we need to improve in order to tag along and evolve. Absolutely.

Bernardo (19:32)
Learn and improve. That's what we're all here for. Daniel, last question, and the most difficult of all. These videos are for everyone to watch, of course, but especially for me too, for us to understand and to humanize the figure of the investor. My question is, tell us something funny or interesting about yourself, or of Daniel, behind the investor.

Daniel (20:06)
Wow, that's a tough question. I wish I could say, Yeah, in my spare time, I'm an opera singer or something like that, but I'm not. But I'm somewhat a golf addict. I play more rounds or similar to Barack Obama and Trump, more than 60 rounds per year and dream of becoming a scratch golfer. Still improving, though. Still improving. I haven't given up yet.

Bernardo (20:47)
There's a very good joke to wrap this up, which is - there are two friends playing golf, and one of them says, "Well, let's make this interesting," and they both left. Thank you. I'm sorry, Daniel. I had to. I am the clown of PinMeTo, so I had to tell this joke.

Daniel (21:13)
Thank you.

Bernardo (21:13)
Daniel, thank you so much for being here, and being part of the PinMeTo Podcast. And looking forward to seeing you again in the future.

Daniel (21:21)
Thank you so much. I enjoyed being part of it.

Bernardo (21:25)
Thank you, Daniel.

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