A start-up with an edge - how Kausal became a pioneer in climate action software
The trailblazing climate action software firm Kausal turned three years old on Sunday. What contributed to the creation and the early success of the company, operating in the intriguing intersection of technology and sustainable practices?
Kausal team's newest members Magdalena Vallazza and Evy Saputri deep dived into the company history with founder Juha Yrjölä. In the interview, he reveals where the energy and zest to tackle some of the world's most pressing problems comes from and what drives Kausal to provide the best-tailored quality solutions to cities and regions around the world.
Let's start at the beginning: What is the background of Kausal and why was the company founded?
The very beginning was a series of happy accidents. The task at hand was to come up with a way to monitor and publish the Helsinki climate action plan, which consisted of 147 actions. I was joined by Sonja, Tero and Jouni whom I knew from previous work, and they would later become our gifted CEO, talented designer, and knowledgeable science officer, respectively. Originally, we thought a simple WordPress site could suffice, but realized quickly that we need a custom-made, intuitive, visually appealing software, capable of distributed information gathering and reporting. In 2017 we started building it and it was a lot of fun!
It was important to meet different city employees responsible for various climate actions, to understand their work and identify the kind of solution that would help them to do their job better. And that's what we did: we published it, and people liked it. I then started to get inquiries from cities around the world asking how they could implement similar solutions. Unfortunately, we did not have a solution to offer as the system we had developed was custom-made for Helsinki, and the city did not have the capacity to provide it to other cities. We would often share our source code and say “help yourselves”, but many cities lacked the necessary technical expertise to implement it themselves. We felt disheartened that we got all that interest but there was nothing we could do to help.
What was the push to found Kausal?
We thought of different structures for promoting the software, under different umbrella organizations like ministries or research centers, but there was no way they could offer a 24/7 software service. Setting up a company would eliminate those challenges, but we all knew that it would be a lot of work. So, we left it on the back burner.
However, Tero was living in New York at the time in September 2019 and I was there to pay him a visit. Jouni was attending a scientific conference there. Greta Thunberg's Fridays for Future climate march was happening at the same time. I never saw so many people in the same place, very passionately delivering one message: climate action now! The three of us felt the buzz. Over lunch we decided to do our part, step up the game: we are gonna do it! Fortunately, Sonja, after some convincing, agreed to be our CEO.
Please take us on the continuing Kausal journey!
The early months were challenging because COVID has had just started spreading.In the middle of lockdowns left and right, we founded the company in early 2020. There were only a few meetings in person, but the upside was that all our potential customers needed to learn the tools of online communication. This was beneficial for the company: instead of traveling to different cities, sales calls with cities around the world were now online, with fewer emissions. However, the pandemic was also distracting, one of our early mission statements was to help cities deal with infernal challenges. Because it was so pressing, we found ourselves developing a pandemic model that health authorities could use and only focusing 20% of our time on the actual business. But we survived!
That's an ambitious mission! How did it develop and what makes the software so successful today?
Developing today's mission to provide public administration with the world's most powerful tools to turn climate and sustainability goals into actions by enabling accuracy, transparency and collaboration came a bit later. We took part in startup accelerators and they required us to formulate a strategy, mission, financial projections, etc. We were all in a strange land, because the development so far was demand driven and happened very organically. Still, partaking in those accelerators was good to better align the company's course of action.
However, we had many things to learn. We were facing a lot of headwinds and were refused often. A reason for accelerators' refusal was that we entered in a too early stage, where we only had a few clients. They were high profile cities. Lappeenranta was the winner of the European Green Leaf award, and Lahti was the European Green Capital at that time. That meant a lot to us, but not to the investors. On top of that, we were first-time founders. That meant we were going to discover all the mistakes by ourselves, however I am actually unsure what we could have avoided through that. We were beyond the scope of typical investors: targeting the business-to-government market, which very few investors have experience in. There is a lot of suspicion about this market, because most companies don't know about the challenges of selling to the public sector. But we had the right kind of experience, which was a big benefit for us. All of us have been working for public authorities, so we knew customers' needs and were expecting those long processes. Nevertheless, we eventually managed to get in and that helped us with building a startup toolkit for ourselves. We had to get our structure in line, go-to market strategy, pitch decks, all these kinds of things, and we learnt to dance the dance.
Kausal steps out of line in start-up terms, and develops more slowly and sustainably instead. What makes it stand out?
We care more about the results of our work than the short-term financial gains. And so far, we are doing well: we are up and running! We have built a great team and are already generating enough cash flow to support the costs. We have expanded internationally and most importantly, the cities and regions we are helping seem to find value in the services that we provide. They are happy with us, and we make the climate coordinators' lives easier. The biggest achievement is that we built something that is actually useful and we are providing an actual solution to a real problem. In the end, cities are huge emitters of GHGs and are thus facing super-wicked problems, and we can help them solve those.
What does success look like for you?
Success for me is when clients find that we are helping them meaningfully, and most importantly, that the cities would be able to reduce their emissions faster because they're using our tools. We are working towards that every day, because the vast majority of feature developments are based on customer needs. We are building what's useful for them. In the future, we are looking to integrate more functionalities to equip the climate coordinators for political argumentation. Those include cost-benefit analysis of actions to save the city money in the end, but also an increase of transparency. This provides science-based support for the policy-makers, and potentially additional pressure from the public. In the end, climate coordinators and decision makers should have a firm ground to stand on and say: this is the way to go: these are the actions we need to take next and this will be the impact.