Venture Everywhere Podcast: Tuomo Laine with Eamonn Carey
Eamonn Carey, GP of Tera Ventures, catches up with Tuomo Laine, co-founder and CEO of Rentle, on Episode 13: Reduce, Reuse, Recycle, Rentle
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Tuomo Laine is the cofounder of Rentle, a circular economy platform that empowers merchants to expand commerce from unit sales to service, from ownership to access - while retaining full control of their customer experience. Prior to Rentle, Tuomo was a founder, a teacher at Aalto University School of Science and Technology, and an award winning video game developer.
This episode is hosted by Eamonn Carey, General Partner at Tera Ventures and LP in Everywhere VC. In this interview, Eamonn and Tuomo dive into e-commerce platforms, working with merchants in the circular economy, and how to measure success. Hear the start and pivots of Rentle, and lessons learned from other Scandinavian startups. Listen till the end for Tuomo’s take on the entrepreneurial ecosystem in Finland, and his two favorite podcasts!
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FULL TRANSCRIPT
Jenny Fielding
Hi, and welcome to the everywhere podcast. We're a global community of founders and operators who've come together to support the next generation of builders. So the premise of the podcast is just that: founders interviewing other founders about the trials and tribulations of building a company. Hope you enjoyed the episode.
Eamonn Carey
Hey folks, how's it going? My name is Eamonn Carey. I'm a general partner at Tera Ventures and LP in Everywhere Ventures. Was part of the team that ran The Fund in Europe back from 2019 onwards and really excited to be here today hosting this podcast with Tuomo Laine, who's the founder and CEO of Rentle. Tuomo - Thanks for coming on. And thanks for joining us today.
Tuomo Laine
Great to be here. Thanks for the invite.
Eamonn Carey
So maybe just for the uninitiated, tell us a little bit about what is Rentle, what are you guys doing, and then we can dig into the background and much more.
Tuomo Laine
So Rentle is a commerce platform designed for circular economy. And essentially, that's what we do with the Shopify of helping merchants and brands launch circular offerings, whether they are service subscriptions, rentals, resales, buyback or trading programs. That's in a nutshell what we do. And my background comes from Tech. I've been always a geek, as we will probably getting into doing this podcast. But that's kind of where we operate on what we do.
Eamonn Carey
And how are you guys tracking success, right, because this, obviously Shopify has been around for a long time, e Commerce has been around for a long time. Rental subscriptions, various different things have been around. But I think combining it all into one platform, kind of how do you think about the impact you're making and the success metrics you're tracking?
Tuomo Laine
Yeah, I think, well, this is true, probably to any e-commerce platform. But at the end of the day, I think the only way to measure your impact and success is through the GMV off of the platform. So how much are actually merchants selling with the tools that you provide with them. In our case, the fun fact is that all of that GMV also represents a transition from linear towards circular commerce. So the models through which the merchants are doing that GMV are by nature a lot more sustainable. Due to the fact that in most of the times, it's not actually a new item that gets sold for ownership. It's something that - there's an item that gets conservatized, so it's going back to the merchants. So it serves more people during its lifecycle, or that it's a pretty loved good, where it's getting that second lifecycle. So that's a big, big, big measurement for us. At the end of the day. It's the GMV in our case resonates both for the sustainability metrics. And at the end of the day, the success of our customers as they are building their businesses.
Eamonn Carey
Maybe take us back a little bit. The first time I went to visit your office in Espoo, just outside Helsinki, you had a full ski shop set up as a testbed for the business and some people could see the in store experience of using Rentle. But where did the idea kind of originally come from and maybe talk us through the journey that's brought you to this platform play?
Tuomo Laine
Yeah, sure. So the history is long and seredipitous. But I'd say that there's a couple of these key points that built the dots that it starts to make sense. So back in, I think it was around early 2000 in Helsinki, there were city bikes. And these city bikes, it was like bike sharing system. But how these bikes work that was that you had like two Euro coins as a deposit system. It was a great service, it worked for one season. But not more due to the fact that two euros of deposit is not enough to incentivize. Often maybe a little bit intoxicated, young Finnish male to return that bike to that place where they took it. So half of those bikes ended up in the Cedar River. So then time goes on. And somewhere, I think it was maybe 2010 - 2012, or something like that, we got a new cohort of a new bike system. There was a slight difference there, they got rid of the deposits in the form of coins. And actually how that worked, you had an extremely lightweight account system that was powered by this Stripe setup where you created a lightweight account, you attached your credit card to it, Stripe data authorization or if required, and then if you didn't return the bike, you get I think, charge up to 500 or so. And that changed stuff quite drastically. You know, I think it was out of basically -
Eamonn Carey
A lot less pollution in the river basically after that.
Tuomo Laine
Exactly. We saved the river. But I think it was like two bikes got stolen or not returned. So at the time we were working with cofounders, we were studying in Aalto University in this program called information networks. Which is a combination of technology, business and arts and humans, I'd say at the end of the day. So we just got super intrigued to the fact that with this kind of, let's say fintech setup, you could actually make people behave a lot better. And that was the point where we wanted to utilize that same technology in some other setting where we essentially make sharing economy work. We ended up working with the local 7-11, enabling them to launch this power bank proof of concept that wasn't that great of a business when it comes to numbers. But if you think about the UX of 7-11 it is this kind of transaction that could last maybe 20 seconds or so. So you go out there, you take your lottery ticket or whatever is the reason why you came there. And then you grab five chocolate bars and that's how they make their gross margin.
Tuomo Laine
So we have the challenge on how do you actually design UX where you sell access to a good and not the ownership of the goods? So essentially a rental without any pre-existing accounts, any pre-existing apps or so. So how do you kind of do this? And that's where we started to play around with a lot of payment technologies and commerce set kind of related technologies, and started to understand that that's actually super underserved market. Prior to many of those kinds of experiences there, we called through most of the European payment service providers and payment terminal providers and tried to ask a simple question that we just want to sell access. So the good comes back to the merchants. So we need this returning aspect of things. And we did things like deposits and paying various charges, and all of these and all of them said that that could be done. And we just knew that yes, it can be done, because we just experienced it with the citibikes and Stripe and so on. So that's where we started to understand that. Yeah, actually, what the market needs is better infrastructure when it comes to sharing economy in terms of commerce software.
Eamonn Carey
And then I guess, bring me up to date, because you went in from various different types of equipment rental to now working with big, big companies like Decathlon here in the UK and talking to lots of folks kind of more globally. So tell me about that kind of expansion of the idea and where you guys are in terms of the company size?
Tuomo Laine
Sure. So at that time, we were three founders, so quite scrappy, small team. When we started out, we wanted to kind of figure out what's our go to market? Where do we actually get to experience stuff in a way that we fully understand the problems that Merchant that operates rentals have similar might have? We actually ended up renting from one of our demo customers. We rented an RV, we drove through Finland. We slept at the kind of yards of local ski resorts and ski rental shops for a couple of weeks. We actually did the inventories of I think, maybe 30% of the skis in northern Finland, just to understand how a circular business works. And why we ended up actually focusing on ski resorts as our entry target was that - we knew that they were a operator that at high volumes, high demands both in retail and e-comm at the same time. So you have a bunch of tourists coming to the store at the same time, you have to be able to kind of get 1000's of skis out in a half an hour, and then get them back in. So we figured out that if we can help them with better software, we can help anyone. So that was our entry market.
Tuomo Laine
And then a small thing called COVID started about, I think we raised our pre-seed investment. And then like three weeks later, there was COVID. And our main focus at that time was to help in store rentals were ski ski resorts, we had to do a little bit of pivoting there. I think that was the point where organically you know, of course, the need for E commerce was quite big. So we go through randomly across the world. We just set a target that we want our per week talk with over 200 rental operators in a week. We call through the 1000's of rental operators around the world. And we're asking their main problems and of course, ecomm ecomm ecomm came about. So that was the point where we started to expand our offering from the retail optimization, got the instore optimization towards e commerce optimization. And that was the point where it really started to get enough then resemble full blown commerce platform when it comes to going after big value propositions. And then fast forward today, we're now about 30 people, we have great backers like yourself and everywhere VC. And we serve over 20,000 merchants. So we count into all of the merchants that join into our freemium program and then go to our paid plans. And then larger brands, like you mentioned, like the Gatlin and local brands like Motonet or Wrap from UK.
Eamonn Carey
With great power comes great responsibility, and with more money comes more problems. One of the challenges that you're facing at the moment. What are the big things for you, whether it be hiring, whether it comes to juggling, do you go to the US market? Do you go to other markets, kind of what are some of the things that are on your mind?
Tuomo Laine
So yeah, that's there's a plethora of problems, I'd say, and challenges. But gladly if you think about challenges as opportunities there, you have some actionability related to them. So I'd say the main stuff, of course, we have eternal problem when it comes to our R&D roadmaps. So already having 10s of 1000s of merchants that provide you with insights on what are the features that they need, etc. And then I think one of the challenges is that when you truly become a commerce platform, it's kind of you can connect it to anything. There's so many potential opportunities for you to build extra value for the merchants that use you. Whether it's a payment integration, or shipping integration, or some kind of different kind of a partnership, integration or specific features for specific verticals. You have to become extremely good at prioritizing and understanding what are the necessities that you build that serve everyone? And how do you enable the more edge cases to be maybe provided by an agency or a third party app developer or just build on top of API's and web hooks? So that's a continuous challenge of course for us. How do we prioritize? What's the maximum kind of benefit that we can provide for all of the merchants? Then, more on the maybe operational side? Building a commerce platform is, is an art of doing a lot of front loaded R&D and marketing investments. And then understanding that how do you do that capital efficiently is is no small task. And that's where great investors come into play that understand the platform playbook. I think those are a couple of examples.
Eamonn Carey
On the opportunity side of things I know we've talked about this in board meetings and beyond previously. That you know, Shopify unleashes kind of generation of ecommerce enablers, right? E commerce businesses and marketplace businesses. Do you see the same thing happening in the circular economy? Are you starting to see I mean, I know when we spoke first, you talked about like, a guy in Sweden, who started off renting one kayak and is now kind of building a little kayak empire. Are you starting to see more and more of that emerge?
Tuomo Laine
Yeah, definitely. For me, it's always like thinking what are the next 1 million rents or merchants or retailers? What kind of business models do they use and what kind of solutions they need? Maybe jumping out a little bit from that kind of rental side of things, just to kind of make sure that we also talk a little bit about the resale side. I think the one way of how to think about the market is that we're entering into a world where it costs more to manufacture goods. At the same time, consumers aren't necessarily increasing their purchasing power. So it's either stagnating or even decreasing in some cases. So it's the margins are getting squeezed for any retailer. It starts to be challenging to make kind of finance your objects from individual, one transactional sale. You can simplify by saying that we're entering a world where brands and retailers need ways on how to, at least at minimum, sell an item twice. So that can mean by design systems, like rentals and subscriptions. Or it can mean buyback trading programs where you get back that item and then you sell it as preloved goods.
Tuomo Laine
Now, what combines all of these things, in our opinion, is that we are entering a world where every item that gets sold is unique. So it has a unique user history, has unique conditions, grading etc. So our bet is that the next 1 million merchants in the world actually need commerce platforms that acknowledge the fact that you don't anymore have SKUs and then a big number next to it. Where it doesn't matter which one of those items you take off the shelf when you when you pick pack and ship it. Actually, each one is unique and optimizing your business becomes understanding your inventories in a single article level. It's gonna be single SKU commerce, if that were to be a term. And maybe finally, it's not anymore just about pick pack and ship. It's about pick pack, ship, receive, inspect, repair, pre stock, and then simultaneous sell that item in your resale and rental catalogs. So it becomes a lot more complex.
Eamonn Carey
I guess that complexity is one of many things that keeps you awake at night. But maybe tell me a little bit about the -because I think Rentle is the first investment into Finland that Everywhere Ventures has made me. Tell me a little bit about the Finnish ecosystem where people might well people will remember, Nokia, right. Who started out I think making tires and wellies and ended up with phones. And they'll know Supercell and some might know Oura and others. But tell me a little bit about the kind of ecosystem there and how supportive it is. Because like you mentioned Maki leading your your preseed round, obviously they backed Volt and others in the recent past.
Tuomo Laine
Yeah, definitely, I'd say we're extremely lucky to exist in Finland. So we have a super good and I'd say quite mature ecosystem at this point. So you mentioned all of the big names from Nokia, to Supercell, to Volt to Oura, big gaming industry. We have quite professionalized investment side of things that are is well networked both into kind of Nordics and Middle Europe and all the way to the US, I'd say. Thanks to these larger players like Volt and Supercell. So the Finnish ecosystem, I'd say it's a great, great place to operate. Because at the same time, if we have all of those benefits, it's small enough that we can even have like a WhatsApp group where you can reach out to some of these giants and just ask them, Hey, how do you do this? And then at the same time, you know, demystify some of this stuff and understand that these companies were also built by humans, and not some, like unicorns. Even though they built unicorns, they weren't built by unicorns, maybe if you can say like that.
Eamonn Carey
In my experience, Finns would not necessarily be best known for their self promotional skills. But in these WhatsApp groups, you know, now that you're at the stage where you're scaling the business, and there's probably founders who are at the earliest stages joining in. What do you think they look to you for? What do you think they see as Tuomo's superpower?
Tuomo Laine
Yeah, I'm not sure whether I have any superpowers, I hope they don't expect those. But maybe at the end of the day, my superpower has been throughout my life, the fact that I'm super bad at saying that something cannot be done or accepting maybe that. So I'm the youngest of three brothers. So I kind of have that eternal need to prove that I can do stuff on my own and all of that. So I think that's one of the superpowers and then another one is that I consider myself at the end of the day, just a regular person. And I often say that I'm the stupidest one in the room, which means that I have to ask why, why many times. I'm not willing to accept these kind of high level abstract things that I could just memorize. I often need to go the quite fundamentals to feel content that I understand something. So my superpower usually is that out of the people in the room, I'm most content in asking "why" quite many times and trying to understand the fundamental. And I found that that sometimes helps the founders in the early days when they are faced with complex things. Whether it's about VC funding as such. That you have that ability to simplify it to basics and remind themselves that, hey, it's not so complicated. You have two players, and they're trying to achieve something.
Eamonn Carey
Yeah, I think if you're the smartest person in the room, you're generally generally in the wrong room. Right, I think is the is the phrase. On the topic of kind of learning more and educating yourself. You know, are there podcasts that you listen to? Or any books that you've read recently that you kind of go: Yeah, this is kind of changed my perspective on things.
Tuomo Laine
Yeah. Well, the podcast front I think I was checking, what are the most recent podcasts that I have? I have two. I have Conan O'Brien needs a friend. And then I have Acquired. The other's for leisure and one's for business and you can -everyone can judge which one is which. But I've been enjoying those quite a lot. So I have about 25 minute walk to work and out of the work. And I think those are extremely good for me to listen. Either, it's kind of just to get your mind out of the operational mindset, or then just kind of listen. What I like, for example, about Acquired is that when they go through the stories of these big giant companies and the classics, it's interesting to hear the actual story behind the founder or similar. So you get these kinds of connection points at some points. So those would be my two recommendations, I'd say.
Eamonn Carey
Yeah, I think they're great recommendations. And I think, as you say, seeing people as human beings. Founders, particularly ones that have already been lionized and mythologized as unicorn founders. And hearing them talk about, you know, when it was them and an idea, a bag of croissants and some supermarket coffee, trying to get it off the ground is, I think, quite refreshing to hear. And then on a similar vein, I guess, how do you relax? And are there places in the world do you go, you know what, I would love to go and spend a year two years there?
Tuomo Laine
Thinking about like, how do I relax and maybe switch off? Annually I go to Lapland in northern Finland, off grid. There's this hunting cabin, where I spent minimum a week usually, without any phone connectivity and such. I think that pretty much roots you quite quickly. I'm actually super happy to live in Finland, due to the fact that, you know, like we said, we have a great ecosystem here. I think there's a lot of good things. And that support you in building unreasonably big dreams. Because Finland does have a quite nice safety network in catching you if you tried to do something big. Now, if you force me to leave the borders of Finland, then yeah, it's a good question. I might actually want to live a year in the US in a city like Chicago or something. Just to get a taste of that also.
Tuomo Laine
Yeah, Finland is the happiest place in the world. For the last five or six years I think.
Tuomo Laine
Yeah, I think we're with Denmark, we're kind of either we're one or two every year.
Eamonn Carey
That's a good place to be. Any productivity hacks, any things that you do? You mentioned kind of listening to podcasts, while gonna get in and out of the work zone. But when you're trying to focus or when you're trying to kind of amp up for meetings, anything that you do?
Tuomo Laine
Yeah, I think, for my personality, specifically, if I hit like a roadblock, it's usually due to the fact that I have too many things on my head and my head has turned from instead of it being a thinking device, it has become a storage device. So then I tried to offload all of those. So I follow this productivity - I don't know if it's a hack but or system - called getting things done or GTD. I think that's where I tried to kind of offload all of those things in a way that I can utilize my head for thinking and usually at that point, you started to get things done when you can again, use your head for thinking rather than storing thoughts.
Eamonn Carey
And for founders, for potential clients, partners, investors, others, your work in the inside of Maria 0-1 in Helsinki, which will be a bit of a stalker, thank you for listening to this podcast. But where can they find you online? Where can they learn more about you?
Tuomo Laine
Yeah, so personally, I'm most active in LinkedIn when it comes to - by professionally sharing content at this point. And I don't even know what's the official name of Twitter anymore. So probably by the time this airs, who knows? It's one of the letters. I don't know what. But anyhow, that LinkedIn would probably be better place to be. And if you're a client, you just need to ping us and we come to you most likely, so you don't even have to come to Finland.
Eamonn Carey
Alright, well, Tuomo, thank you very much for joining us and sharing your thoughts on the podcast. By the time this comes around. I'm sure we've all changed our names to just emojis or something equally easy in honor of everything that's going on Twitter or X or anywhere else. But thank you for tuning in and joining us from Helsinki.
Tuomo Laine
Thank you Eamonn.
Scott Hartley
Thanks for joining us and hope you enjoyed today's episode. For those of you listening, you might also be interested to learn about everywhere, we’re a first check preseed fund that does exactly that. We invest everywhere. We're a community of 500 founders and operators and we've invested in over 250 companies around the globe. Find us at our website, everywhere.vc on LinkedIn and through our regular founder spotlights on Substack. Be sure to subscribe and we'll catch you on the next episode.
Read more from Tuomo Laine in his feature in Founders Everywhere!