On January 13th, 2020, we visited the headquarters of a company called ZIVVER. This organization specializes in offering a service where information is exchanged via email or file transfer in a secure manner. Because privacy plays an increasingly important role in society, the exchange of information must be safer. We visited the office to interview Wouter Klinkhamer, COO of ZIVVER and talked about the formation of the company and the plans and goals of the organization.
Who founded ZIVVER and what was their inspiration?
Our co-founder and CEO Rick Goud came up with the idea during the period that we both worked at a previous company. This healthcare strategy consultancy worked with a lot of data that had to be shared both securely and easily, but a comprehensive solution for this did not exist yet. Rick noticed that this was a much wider issue in healthcare, but similarly in other verticals like legal and financial services.
A trigger for founding ZIVVER was that the Data Leakage Notification Act came into effect in the Netherlands. That’s when the bell started to ring that probably there would be a market with growth potential. We weren’t entirely convinced yet and a little cautious, in part because we both had good careers in strategy consulting.
The most convincing argument for starting the company was the announcement of the EU General Data Protection Regulation (known as GDPR or AVG in Dutch). This regulation in EU law underscored the importance of data protection and privacy and came with strict enforcement through administrative fines up to 4% of an organization’s global revenue. When this happened, we realized that now the whole EU had to comply with stricter regulations and that this will spread to the rest of the world as well. We realized there was a gap in the market that we wanted to tap into.
Many vendors already offered email encryption, but that was typically hard to set up and only solved a (small) part of the data protection challenge that comes with online communication. Nobody had solved the problem of sending information both easily and securely before. We wanted to offer a service that would offer protection before, during and after sending, while ensuring optimal usability to end-users and recipients of protected messages.
What were the initial steps to set up the company?
The first thing you need is great people. Especially people who can help develop the product. It was important to deploy people with a good technical background. We also needed people who wanted to participate in something that’s nothing yet. The people who are willing to work on little more than a vision for a potential future. The people who are working here now really wouldn’t have been appropriate in that start-up phase, but they are crucial now that it comes to execution on an equal level to having a vision.
Another thing that was very important was that immediately after starting the company in March 2015, the first employees for the Sales team were hired in June 2015 to talk to prospective customers in the industry about what the product should offer.
Did the company originate in the attic room or was it at this office?
This is already the 4th different office location for ZIVVER in 5 years. We have grown in employees and therefore had to look for a larger space practically every year. We started with 3 employees in Amsterdam in 2015 and now in early 2020, we have nearly 100 in four countries. With these 100 employees, we want to build a strong foundation for the coming years. We have a full focus on upskilling staff as well as hiring highly experienced people.
Did you need a lot of money to set up the company?
We needed significant capital to initially set up the company. First hundreds of thousands of euros and later millions. We were able to finance this from interested parties in the industry, from the CEOs, including myself, as well as FFF (Fools, Friends and Family) who wanted to help contribute to our success. In our growth stage, we secured equity investments from venture capital firms in Amsterdam and London.
This was all very exciting because a lot of money had been invested and for almost two full years we had no revenue. At one point there were only 1000 euros left in the bank account and salaries still had to be paid. That was an interesting period, to say the least, but fortunately, it all worked out in the end.
Do you have plans for further expansion to other countries/markets?
Our international expansion efforts have mainly focused on Belgium and Germany. We have also recently begun operating in the UK and expect a growth spurt to occur there as well. As we start to see momentum in the UK, we will see this as an indicator that the time has come to direct our attention to the United States. The US still is the largest and most mature market for SaaS (software as a service).
While we continue to do very well in the Netherlands, the downside of our beautiful country is that it doesn’t have a very big market. We already have a large market share in the healthcare sector, the public sector, and the financial sector. At this stage in our growth phase, it is important to expand our geographical reach and provide even more valuable products and features to our existing customer base.
What impact does the stricter privacy legislation have on the number of customers and competitors establishing themselves on the market?
For more people and customers, this is becoming a relevant topic. Initially, the legislation only had an impact on the healthcare sector and the public sector. Practically everything they do is affected by this legislation, so that needed to be addressed. You increasingly see that because of the stricter privacy legislation, the financial and legal sectors are also seeking new solutions to be compliant and (perhaps more importantly) live up to the security and privacy expectations of their clients.
What did you study?
Originally I started with Business Administration at the Erasmus University in Rotterdam. Because this wasn’t particularly challenging for me, I began studying Business Law as well. Just 2 years ago I added a Master’s degree in Internet law, Intellectual Property, and Privacy law at the Vrije Universiteit in Amsterdam in order to have a good basis for my role at ZIVVER. Thus, in this way, I was one of the first groups of law students to be schooled on the new GDPR legislation. It has been very effective in running our business to have some authority in the field of privacy law.
Do you want to say something to our students?
The Netherlands has a rather tight labor market and obviously is a bit locked up. What I would like to see even more is for students who have already graduated or have had 1 or 2 years of work experience, to take the initiative to embark on a new adventure. With this adventure, I mean taking a risk and starting an interesting project, because you don’t have anything to lose yet. Jump into the deep end and see where you end up. I would like to see more people willing to embrace that challenge. Then you will experience really cool things!
ZIVVER is a fine example of such a place where people spontaneously plunged into the deep end. Interested in reading another entrepreneur’s story? Check out Picnic’s story via this link. Looking for any work opportunities? You can check out Aureus’ career platform via this link.