Transcript
Mohamed Alkaduhimi: Welcome to Scaling with Purpose, the show where we explore what it takes to build companies that aim for commercial success and meaningful impact.
Mohamed Alkaduhimi: I'm joined today by Michael Hillhorst, founder of trein-vertraging.nl Great to have you here.
michael hilorst: Thank you very much. Thank you for the invite.
Mohamed Alkaduhimi: Yes, when I was preparing this episode, i was asking myself, what motivated you to become an entrepreneur? entrepreneur How did this journey start?
michael hilorst: Yeah, I think as we are currently talking about drive trafficing It could have been any other topic, to be honest.
Mohamed Alkaduhimi: Yeah.
michael hilorst: We have success with Treimvertraging. That's why currently today we're talking about Treimvertraging. But it started very early, actually. I started actually when I was 13 years old with selling designs.
Mohamed Alkaduhimi: Mm-hmm.
michael hilorst: And I always had the feeling at a young age already that like a normal job was not it for me. So my parents, they always said, why why don't you go to the supermarket and work in Albert Heijn in the local grocery store?
michael hilorst: but I always refuse do it. I always found my ways online to, to, to make my zak centje in Dutch. They call it like pocket money. And, there, actually, I always have been interested in building stuff online, uh, building services online.
michael hilorst: And this has been, going on since approximately 2015, I would say when I really got into programming. And from there I started several ventures,
michael hilorst: where one is kind of interesting to mention, which is actually, a, uh, online software platform that we built to help, gamers actually to build their own, uh, kind of like, virtual gaming website where they can sell and trade their own virtual gaming items.
Mohamed Alkaduhimi: Yeah. Yeah.
michael hilorst: So for example, in Fortnite, you have these skins. Well, we supported people who wanted to actually create their own digital software platform where people could trade those for coins.
Mohamed Alkaduhimi: Oh, yeah. So not to create games, but to create a platform to sell those items or to trade those items, right?
michael hilorst: Exactly. Exactly.
Mohamed Alkaduhimi: So it's a secondary market or something like that.
michael hilorst: Correct. Yeah.
michael hilorst: Correct, yes. And that was around the age of 16. And from there, at around the age of 18, I went to university. And from there, basically, we kind of quickly rolled into Treinvertraging at some point.
Mohamed Alkaduhimi: yeah, interesting. It's also a very, very studentish kind of startup, right? So I can imagine that you were a student, you were going with the with the train, and you were like, this doesn't work for me.
Mohamed Alkaduhimi: So tell me, how did that start?
michael hilorst: Correct. Yeah, so basically me and my co-founder Daan, we both traveled to our university by train in the beginning before we actually lived in the city of Utrecht where we studied.
Mohamed Alkaduhimi: Oh,
michael hilorst: And we did experience a lot of train delay as we had to come from a small village and this train was often broken. And we wondered why is it so hard to get your money back? Because we knew that it was possible to get your money back However, we noticed that if you want to get your money back, you needed to fill in forms, not only fill in the forms, but you also needed to know exactly at what time the train left, when did the train left, what time would the train have arrived.
michael hilorst: And all of this information is quite cumbersome. And from there, we thought, well, why not automate it Because we both were computer science student the students or information science, kind of the same.
michael hilorst: And that was the moment we thought, well, why not automate it And from there, actually, it started off.
Mohamed Alkaduhimi: Yeah, beautiful. It's actually interesting what you're saying, because it's a problem you have lived yourself, right?
michael hilorst: Yes.
Mohamed Alkaduhimi: And I see that a lot of good startups start with the problem that the founder himself experiences. So you understand understand the feeling, you understand and the exact details of the problem, and you can provide the right solution that fits the audience that is experiencing this issue. So that's beautiful. But yeah, in the Netherlands, you have a lot of delays, right? is it did Did you do some study to compare that with other countries?
michael hilorst: Well, actually, it's quite funny, but in the Netherlands, we are doing very well with the trains. So in the Netherlands, we have a punctuality rate of around 95%, which basically means that a lot of trains are actually running quite well.
michael hilorst: The thing is, however, the Dutch people like to complain a lot. And that's why there's some general sense around in the media or online or wherever you are.
Mohamed Alkaduhimi: Yeah.
michael hilorst: Actually, people always try to blame the the train operator in the Netherlands. However, compared to, for example, Germany or France or Spain, we are actually doing very well.
michael hilorst: For example, in Germany, we have around one in the three trains that are delayed. So that's around 66% punctuality compared to the 95%.
Mohamed Alkaduhimi: lot.
michael hilorst: so I would say we are actually very lucky to have the NS in the Netherlands and that they're doing quite well.
Mohamed Alkaduhimi: Yeah.
michael hilorst: However, it can always be better. And I think we are here too to make sure and that we we keep them sharp, basically.
Mohamed Alkaduhimi: Yeah, that's beautiful. And I think it's about rights, right? It doesn't matter how how many times it happens, but it's your money that you need to to retrieve.
Mohamed Alkaduhimi: And that is, sad in the end, what you're helping people do.
michael hilorst: Correct.
michael hilorst: Yes, correct. So basically, the the the where we are built on is a like and legal framework from the European Union, actually, which was created to protect passenger rights.
michael hilorst: And why was it needed? Well, if you look at, for example, the flight industry, where you have similar ruling, for example, you might be delayed on on an airport and you have to wait for the next flight, which can take up to four hours or five hours of waiting time, and you would get compensated by the airline for this.
Mohamed Alkaduhimi: Okay.
michael hilorst: Well, This ruling was not in the US. And if you actually compare what has happened in the US and Europe, you see that the European airlines have been focusing way more on improving their punctuality rates and making sure there are less delays and less cancellations because they got punished, of course, with this regulation for paying the customer.
michael hilorst: However, in the US, you see that the delays are still very high. And that is because they don't have any incentive to improve this delay and cancellation rate. So the same actually is applied to the trains a few years later. And this regulation is the same across Europe. And this is something we also built on in the Netherlands.
Mohamed Alkaduhimi: Yeah, beautiful. So there is some kind of accountability system in place that makes sure that the KPIs are not just numbers on a dashboard, but they they they are felt by these trained businesses.
Mohamed Alkaduhimi: Yeah, beautiful. And and so what what I was curious about is, of course, you start this startup with a certain idea in mind.
michael hilorst: Exactly.
Mohamed Alkaduhimi: And then you see the world in a certain way. And then when you build the startup and it starts to run, then you could also evolve your thinking about the problem.
Mohamed Alkaduhimi: Is that something you have experienced? do Do you see the problem a little bit differently now in comparison with what you had in the beginning?
michael hilorst: So I think it has been a lot of trial and error in our run. And we started off the company basically having more interest in the technical side of things.
Mohamed Alkaduhimi: Yeah.
michael hilorst: Meaning we like to make make a good UI for the customer, make a very nice backend system. And it was also basically just some project we could work on to improve our own software engineering skills.
michael hilorst: So it was very tech oriented. Whereas nowadays, it's more business driven, meaning everything we do has some business requirements or yeah, basically it's more business oriented. Whereas in the beginning we were way more tech oriented, meaning also, for example, that in the beginning we would over-engineer things before releasing them. Whereas now we tend to go way more in an iterative process.
Mohamed Alkaduhimi: Yeah, try to extract extract value from the business side and then translate that to the tech instead of building beautiful tech products, right?
Mohamed Alkaduhimi: Yeah, beautiful.
michael hilorst: Correct. I think it's something a lot of people experience and it's a never ending problem, I guess.
Mohamed Alkaduhimi: lets
Mohamed Alkaduhimi: Yeah, there are good books written about this subject. i mean, The Lean Startup is, of course, a classic one that has been written around the startup IMVU.
michael hilorst: Yeah.
michael hilorst: Yeah. Classic. Yeah.
Mohamed Alkaduhimi: And he went through the same journey. And then in the end, he this yeah he extracted this knowledge and and put it in a book. And now we have the Lean Startup methodology, which is exactly what you're what you're explaining now.
michael hilorst: Yeah.
Mohamed Alkaduhimi: and beautiful Yeah, and learning means failing enough times to know when not how not to fall, right?
michael hilorst: And it's something, you know, like, or you read the book or front or you reinvent the wheel while building, I guess everybody would at some point fall into this the traps and the problems related to, yeah, having a startup basically.
michael hilorst: Yeah, definitely. Yeah.
michael hilorst: Yeah.
Mohamed Alkaduhimi: Yeah, wonderful. All right, and and then you had this idea, and then you build the tech, and then how did you market it?
michael hilorst: Yeah, so this is was the the big problem. As I just mentioned, we were tech-oriented in the beginning. We first built a platform without even knowing how are we going to market this. So I think we started around 2022 with actually the development and the first customers actually came only in 2024, meaning two years spent just building. But it was not a full-time job building, but just, you know, occasionally working on it. We had some other projects.
michael hilorst: But at some point in 2024, in the first quarter, we saw, okay, well, this might be something because we started sending it around to friends and family and they actually like to use it.
michael hilorst: And they were sending it also to their friends again. So we were seeing some accumulation of, of user growth, but it was nowhere near, uh, anything very big.
michael hilorst: so. Dan and I basically thought, okay, how are we going to market this across a broader audience? And we didn't have actual any plan. We didn't have any experience with B2C marketing brief before or paid ads or any organic type of attraction.
Mohamed Alkaduhimi: Oh, yeah. Yep.
michael hilorst: So what we basically simply did was just contact the newspapers. just Just through the traditional channels and see, hey, we are two students. you know If you you're you' a student, you have some, like they they they would are tend to help you a bit more.
michael hilorst: And we just came up with the story that we had, of course, with the trains. And from that point, we noticed that we found some type of way to actually get newspapers hooked up on our idea.
michael hilorst: So we would basically get into the newspaper team, look of all the people who work there, and We tried to pick the people who were like interns because they were more tending to respond to us.
Mohamed Alkaduhimi: Yeah.
michael hilorst: And we actually got some publications this way. And we would also try to use a FOMO strategy, meaning once a newspaper said, hey, we want to do this with you, another one would come. And we would say, hey, we had this newspaper item. It went quite well with this newspaper. Is this something you would also like to do?
michael hilorst: And this was actually really the first moment things started blue started to, yeah, blew up. So from that point on, we started gaining new customers every day.
michael hilorst: And i think we reached around the 10,000 users mark within four weeks since the first publication. So the first publication till the fourth week, we had, I think,
michael hilorst: one tv appearance uh five newspaper articles so it was quite a lot of stuff happening in the first month so this would i would say is really how we got our first 10 000 paying customers i would say yeah
Mohamed Alkaduhimi: Yeah, beautiful. And I think especially the idea you have and that is that it's interesting for a broad audience. I mean, a lot of people go with the train in the Netherlands.
michael hilorst: yeah
Mohamed Alkaduhimi: I think that that makes it also a little bit, yeah, oh yeah more potential to go viral it has more potential to go viral because the audience is very very typically it's not a niche audience no it's a very broad audience so the newspaper pr typically attracts a lot of viewers from the broad audience and this this is a beautiful way to market such a product i like that
michael hilorst: Yes.
michael hilorst: Yes. Yeah, I would like to add to it that quickly after we started noticing that traditional, however, that traditional newspaper media outlets are not the way to actually grow. It's a nice booster.
michael hilorst: However, we also learned very quickly that this is not the way to move forward because we noticed it's not safe scalable.
Mohamed Alkaduhimi: sustainable
michael hilorst: You don't have the luck that you will always be in a newspaper. There's always just this first time, of course, and people find the first time very interesting. And That was actually the second chapter of how will we grow further?
michael hilorst: So we had these news media outlets promoting us, but how can we grow further? How do we go from the 10,000 to the 100,000?
Mohamed Alkaduhimi: Yeah. Yeah.
michael hilorst: So yeah, it was a good one for the first part. But for the second part, I would say we really focused on, what well, the the big problem we had is, a newspaper article would give us a spike in in in in marketing. It would just change gain us like 1,000, 2,000 new customers.
michael hilorst: But then the next day, it would be very little again because we didn't have any marketing machine running for scaling the system basically. So that was the point we started learning about organic content producing online through LinkedIn, through short content, se SEO, all these kinds of stuff, like the the known channels is where we started to dig into and understand how can it work for us.
michael hilorst: And from there, we started doing paid ads, all kinds of stuff, which is what we still do nowadays, but it helps us at least to maintain a healthy user growth.
Mohamed Alkaduhimi: Yeah.
michael hilorst: So we try to grow still every day between the 100 and 500 users. So 500 customers per day.
Mohamed Alkaduhimi: Quite a lot.
michael hilorst: Yeah, so we try to maintain somewhere like 300 is our aiming point. If we do below 300, we are doing bad. If we do higher than 300, we're doing good. So yeah, that's that's how we grow.
Mohamed Alkaduhimi: Yeah, exactly. And of course, if we're talking about the bigger user user base, then even a small churn, will will will be a big piece, will will result in a large amount of levers, right?
michael hilorst: Yes. So the thing is, we don't have a lot of churn.
Mohamed Alkaduhimi: How beautiful.
michael hilorst: We actually have only a churn rate of, I would say, i believe it's under the 1%. So as you see, I don't even have the numbers in my head because it's not a KPI we need to focus on because it's very little.
Mohamed Alkaduhimi: Yeah. Yeah.
michael hilorst: it's So that that's that's quite good. And why that is, is because our platform is free, of course. So we only charge at the moment that we receive compensation for your delay.
michael hilorst: and we take a no cure, no pay model, we take 25% of it. So that's why, as far as I'm aware, we have a loader.
Mohamed Alkaduhimi: And then at the moment in time, you had to hire people. How did that go?
michael hilorst: Yes.
Mohamed Alkaduhimi: All
michael hilorst: Well, actually, we, so one funny thing I read this week was the Elon Musk mentioning the Twitter team size.
michael hilorst: So they,
Mohamed Alkaduhimi: right.
michael hilorst: went from 7,500 engineers, 7,500 engineers. And nowadays they just have less than 30. I found that a very huge accomplishment.
michael hilorst: Of course it has this like disadvantages, definitely.
Mohamed Alkaduhimi: Yeah.
michael hilorst: But like what, like the, the thing is here, the the bridge to our story is we try to be, just with the two of us as long as possible without that.
Mohamed Alkaduhimi: course
michael hilorst: It was, uh, having an issue on the, uh, scaling. So growing. as As long as we were able to do stuff without us slowing the company down, it was fine.
michael hilorst: However, at one point, we had to make a choice. Are we going to stay in the Netherlands and just focus on the Dutch market and try to grow our product here? Or are we going internationally?
Mohamed Alkaduhimi: Exactly. Exactly.
michael hilorst: And this point is where we are going to have to change focus, meaning we cannot just focus on the Dutch market anymore. If we want to go internationally, we have to have dedicated focus also on these other countries.
michael hilorst: And this was the decision moment for us to decide, okay, that's the moment we need to have a team and because then we can divide focus between the different services, actually products.
michael hilorst: So I would say this is the moment that we, we decide, okay, we need more resources. It wasn't ever an engineering, a decision or a commercial decision or a like resource cost wise decision no it was because we are going internationally we need focus on two different platforms that's why we need dedicated people on both sides
Mohamed Alkaduhimi: yeah yeah yeah actually very funny that you mentioned that because uh what we actually do is we help our clients to create product teams so we say if you want to grow and you want to not overwhelm your leadership.
Mohamed Alkaduhimi: You want to create multiple product units or product teams so you can divide the focus.
michael hilorst: Yep.
Mohamed Alkaduhimi: And actually what you're saying is exactly what we are trying to educate people on is that if you want to really grow and and you want you you want to be able to scale up without too much overhead or or overload in your leadership team, you want to be creating multiple product units or teams.
michael hilorst: So that's exactly what we do. Where my shift basically, it's kind of weird because as as the CTO basically, I have all the knowledge in me of the Netherlands as as I built the whole technical product.
Mohamed Alkaduhimi: Yeah.
michael hilorst: However, we still decided that I should focus on the European development and still have another engineer taking over stuff in the Netherlands, which is, I think, feasible nowadays because the ramp up speed is very...
Mohamed Alkaduhimi: Yeah.
michael hilorst: and much smaller nowadays due to all the AI stuff we have available.
Mohamed Alkaduhimi: Yeah. Exactly.
michael hilorst: So this ramp up is becoming less of a problem, which makes like puzzling who is going to do what's easier. So that was a quite good like turnover point with AI, of course, and all the stuff together. We could easily say, okay, Michael, you focus on European platform.
michael hilorst: This guy, Dirk, his name is, will focus on the Dutch platform. firm
Mohamed Alkaduhimi: Yeah, interesting. I think that's an interesting decision because it shows that you, let's say, delegated the known and you started to explore the unknown yourself.
Mohamed Alkaduhimi: You didn't delegate the unknown and kept yourself in the known.
michael hilorst: Correct. Yes.
Mohamed Alkaduhimi: And I think that's a great...
michael hilorst: Correct.
Mohamed Alkaduhimi: well-thought decision there because if you would like delegate the unknown then it it would stay unknown for you and the team the new team member would need to first understand what you are already doing and then extrapolate that to the new a market instead of doing that you already took your knowledge to the unknown market and you got someone to hold the existing market so I think that's a great decision
michael hilorst: Exact now.
michael hilorst: Correct. Yeah.
michael hilorst: yeah i think it's quite the opposite of what other companies do often often when you grow to another country often like the leadership stays on the focusing on the market that's generating the revenue of course as as that is the big one and they're taking account managers or or they're placing country managers into certain new markets to focus on of course it depends also on like what type of scaling it is is it like just the sales scaling across the border or is it also just building a new product?
Mohamed Alkaduhimi: Yeah. Yeah.
michael hilorst: That's of course, it yeah, it differs. It makes the context a bit so more important.
Mohamed Alkaduhimi: Yeah, and and i'm I'm very curious. Which countries are we talking about? Because I know you're in the Netherlands, but you're also in other countries.
michael hilorst: Yep.
michael hilorst: Correct, yes. we We also operate in Germany, France, Spain, Italy, and the UK. Why we focus on these markets? These are the biggest real markets in in Europe. and and And our end goal is really to help the the European passenger to have a good travel experience.
michael hilorst: And by focusing on these countries, we are covering the the large portion. So we see this shift going from short haul flights in Europe, getting replaced by long train rides, basically.
Mohamed Alkaduhimi: Yeah. Yeah. Yeah, definitely.
michael hilorst: so And to stimulate this, we need to, of course, also improve the customer experience of these people traveling around. And that's where we come in. in the European side.
Mohamed Alkaduhimi: Yeah, and I think your product, especially as we are looking at the same legal framework, then your product would automatically fit those different countries easily.
michael hilorst: Yes.
Mohamed Alkaduhimi: Yeah, beautiful.
michael hilorst: Correct.
Mohamed Alkaduhimi: and So what is your biggest challenge in scaling up?
michael hilorst: Yeah, so from a legal perspective, as you mentioned, it's quite unified. In Europe, we try to unify the rules a lot. And that's why it's quite nice that our rule we have in the Netherlands also is dissimilar in Germany. However, the technical systems are often different.
michael hilorst: And that's where we have to aggregate and unify data sources from multiple countries, which are all in different formats. And they are not always that up to date, making it harder for us to go from it, to to to roll out our products from a technical perspective.
Mohamed Alkaduhimi: Yeah. Mm-hmm.
michael hilorst: What we tend to see is that Netherlands is a low margin market for us with
Mohamed Alkaduhimi: Yep. Yep. Yeah. Mm-hmm.
michael hilorst: low ticket values, but a very good digital environment to build products in general. I think it's it's it's the case for a lot of stuff we have in the Netherlands.
michael hilorst: However, if we go to Germany, we see we have high ticket prices, higher amounts of disruption. However, a lot less digitalization, meaning it's also harder for us to implement our product there.
Mohamed Alkaduhimi: Yeah. Yeah.
michael hilorst: So there's also this this that this problem, of course, in the Netherlands versus the other countries. but I would say that the biggest issue we have with scaling at this stage is making sure the technical systems are correct.
michael hilorst: But we are we are managing managing it quite as well. So at this stage, what we do, we track every single train in the Netherlands, in France, in Germany.
michael hilorst: every 30 seconds and this data we archive this and then we can run an algorithm later on to detect which train ride you took and how delay you have accumulated.
Mohamed Alkaduhimi: Yeah. Well, that's super cool. Sounds like a cool tech challenge. I'm i'm a technical guy myself.
michael hilorst: Yeah.
Mohamed Alkaduhimi: so I get excited by hearing such challenges.
michael hilorst: Yeah.
michael hilorst: yeah
Mohamed Alkaduhimi: Yeah, beautiful. Yeah. so and And in terms of impact. So if we're talking about impact, it sounds like Germany is a very an interesting country to make more impact.
Mohamed Alkaduhimi: So how do you balance between impact and profit and and and your roadmap?
michael hilorst: Correct.
Mohamed Alkaduhimi: How do you choose?
michael hilorst: Yes. So we are really in it for the long run, meaning we don't want to just be this transactional company who you go to for when you have a delay.
michael hilorst: We want to support the traveler in a broader way. This is our end goal. This is our North Pole Star, North Star basically we aim for. it So that also means that as we have this larger vision, which is not bound to the Netherlands, we have to make the choice.
michael hilorst: Are we able to spend the money that we earn from our cash cow basically, which is the Netherlands to do this European growth?
Mohamed Alkaduhimi: Yeah, I imagine.
michael hilorst: And Therefore, the impact is more important to us than the revenue at this moment. And we don't mind taking a long breath, basically, to build these countries. Because often you see, if you want to do it correctly, you need to do one country at a time and really focus on that country. And we're now focusing on five different countries.
michael hilorst: So that's why the breath we have to take is quite long.
Mohamed Alkaduhimi: yeah can imagine
michael hilorst: and But, however, the return, if we are able to to manage to help more customers in Europe, the reward will also be bigger. So it was really a turning point.
Mohamed Alkaduhimi: Yeah. Yeah. Yeah.
michael hilorst: where Or we stay in the Netherlands and we built this company and we just make it, we try to maximize the the the margins and lower our costs.
michael hilorst: and And we would have a great cash cow there. That could be an option.
Mohamed Alkaduhimi: ye
michael hilorst: But we decided, no, we are going to hire a team. We are going to basically generate loss just so we can grow in this international section sector.
Mohamed Alkaduhimi: Yeah, super interesting. And is that the KPI you're you're tracking?
michael hilorst: So the KPI we track is basically from a technical perspective, can we set the system up? And from a revenue perspective, at what point are we going to generate this this money basically?
michael hilorst: so So we have, of course, we cannot do this forever, of course. so So we need to have some point where we see traction coming in from these other countries. So that's basically the where we are working towards.
Mohamed Alkaduhimi: Of course, the end, that you need to keep the lights on, right?
michael hilorst: Yeah, exactly.
Mohamed Alkaduhimi: Yeah, beautiful. Michael, I enjoyed our conversation a lot. And I think yeah our audience will enjoy this conversation too.
michael hilorst: Thank you.
Mohamed Alkaduhimi: So I think they would like to follow you to see where you end up in the journey, how many countries you will help to to make the traveling by train more comfortable and better doable.
Mohamed Alkaduhimi: So where can we follow you?
michael hilorst: We are quite so active on LinkedIn. So on LinkedIn, my name is Michael Hillhorst and my co-founder is Dan Ekman, but we tend to post on my LinkedIn often. So we try to let people see behind the scenes what are our struggles, where do we accomplish stuff, but also stuff related to trends.
michael hilorst: So basically these three points, we try to share as much as possible. So feel free to follow.
Mohamed Alkaduhimi: Yeah, beautiful. Thanks a lot for the conversation. And we will chat soon, probably.
michael hilorst: Thanks. Thank you.
