NEW YORK, United States — Founded in Stockholm in 2005 by Sebastian Siemiatkowski, Klarna has rapidly grown to provide payment solutions to more than 60 million consumers across 130,000 merchants in 14 countries. The company lets shoppers pay later for online purchases in several ways — either 30 days after delivery, in short-term instalments, or, for higher-ticket items, in 6-36 months finance plans. To date, the fin-tech company has partnered with US fashion, beauty and lifestyle brands including Daniel Wellington, Lyst and Acne Studios, as well as notable technology platforms and providers such as Shopify, Salesforce and Magento.
Klarna aims to create a positive purchase journey with alternative payment options that are easy to use, convenient and give “financial control” to shoppers. Klarna’s consumer communication strategy, featuring rapper Snoop Dogg, is centred on the lack of friction its services create: “so smoooth it requires 3 o’s.” To guide its ongoing strategy, Klarna regularly leverages its consumer research and data insights and shares them with its partners. One of its recent studies found, for example, that 37 percent of luxury shoppers would use payment instalment options and 31 percent have abandoned their carts because checkout took too long.
Now, BoF sits down with Sebastian Siemiatkowski to hear how he created a company culture that drove his start-up to reach a valuation of $3.5 billion in 15 years.
How would you describe the company culture behind Klarna’s success?
We are a young, hungry, fast-moving company with corporate muscle to make things happen. We continue to be results-driven and think the status quo is there to be changed and bettered. For our team, customer obsession is at the heart of all our work. We are focused and determined on simplifying the buying process. We are the original providers of “pay later” and that pioneering attitude is the driver of our success.
Our culture continues to shift with our mission. In the beginning, much of our culture was focused around the retailer and how we can deliver great products to them. We still, of course, are strongly focused with helping retailers drive and grow their business, but because of our expansion over the years, we’ve taken a wider view on the total consumer shopping experience. We are now focused on adding value equally to both retailers and consumers alike throughout the entire shopping and payment experience.
How does the company’s focus on a smooth experience impact its operations?
Everything we do is about delivering a “smoooth” (with three o’s) shopping experience. It’s our overarching mission for our products and therefore flows through everything we do — across our marketing, social, customer service, compliance — and even our talent acquisition efforts. We are no-nonsense and ensure that each process and project is executed with an unrelenting focus on the customer experience from start to finish.
What talent pools and idiosyncratic skillsets do your teams possess that enable you to do the above effectively?
We don’t necessarily hire for industry expertise, we hire for mindset (all employees must pass a logic test). At Klarna, we hire smart — our employees think creatively, start small and learn fast. We are brave enough to fail, and through our mistakes improve, grow and succeed.
How do you empower your teams to be innovative in their strategies?
We recently concluded an overhaul of our operating model based on 14 years of iterations and learnings. We empower each team to own a “problem space” and each employee to own their responsibilities from start to finish. We follow a model that allows for agility and bias for action. Each colleague’s impact is tangible, with many smaller teams equipped and empowered to experiment, try things out, fail fast and rebound faster. These traits of start-ups are combined with the benefits of a large company's scale, resources and centres of excellence.
At Klarna, we hire smart — our employees think creatively, start small and learn fast.
We currently have around 280 teams across the organisation, with 2,500 employees across 11 offices in 14 countries. From our headquarters in Stockholm to our North America headquarters in Columbus, Ohio, we try to gather once a week on Fridays for fika, a Swedish tradition of a social coffee break with treats. At HQ, we go through 7,500 kg of coffee, 6,600 kg of fruit and 3,000 kg of candy per year. This allows for the team camaraderie and encourages employees to get to know those outside of their team.
How do you enable your teams to reimagine the payment process?
By taking the time to fully understand the changing needs, preferences and demands of today’s shopper, as well as their emotional drivers (being more connected, better informed and less loyal), we can assist and better the purchase journey. At Klarna, we take a broad view on the impact of alternative payment options and how they affect every part of the shopping journey. Our products are for anyone that values and appreciates financial flexibility and convenience, but above all, experience. We like to say we give shoppers superpowers — joy, time and control. We provide an experience that is seamless, fast, easy and empowers shoppers with choice. We think of it beyond simply a transaction.
Where do you believe the greatest potential lies in the intersection of fin-tech with the retail and fashion industries?
Payment and checkout processes have been often overlooked by retailers — considered dull and fixed, never to be changed again. We're here to challenge that assumption by providing alternative payment methods that let shoppers pay later or over time simply and seamlessly. This boosts purchase power right when it's needed, at the point of sale.
Whether it’s the way they shop, what they buy or how they pay, fashion consumers expect retail technology to be focused on enhancing their experience. Consumers are demanding more when it comes to the way they shop. We believe the greatest potential lies with the checkout journey. We will see payment providers like Klarna, as well as retailers, continuing to work together to drive a cohesive consumer experience.
This is a sponsored feature paid for by Klarna as part of a BoF Careers partnership. To explore careers at Klarna, please click here.