Anna-Liisa Palatu came to Riga in 2020 with the aim to participate in TechChill. She was one of the founders chosen for the Fifty Founders Battle. Anna-Liisa was about to pitch her newest idea – startup Woola. She came without any expectations but left as a winner.
Can you explain a bit in detail what Woola products are about?
We have currently two products on the market. One is the Woola envelope which was launched at the end of 2020. We are selling it to online stores that sell cosmetics, jewelry, and books. This product is mainly targeted at stores that would otherwise use bubble wrap envelopes. And the second product was launched at the beginning of 2021 and it is the Woola bottle sleeve. It is for drink manufacturers to safely ship glass products – wine, champagne, spirits, beers.
We just raised our seed round. We were very clear from the beginning that we had to launch the product as soon as possible. We wanted to get out of pre-revenue as soon as possible to actually validate demand and not to waste anyone’s time and money. So the first product has been out for more than a year. We spent the first year mainly just validating it and building the feedback. Now we have actual customers and actual revenue and for the next year we are scaling production and sales in Europe.
How the idea about the Woola was born?
One of the side businesses I had before Woola was an online store. That’s where I saw a packaging problem. I was looking for sustainable packaging because I was working together with the factory that by default packed everything in plastic. I decided that it should be changed. It is impossible to hope that someone else will come and fix it. So I had to try to fix it myself.
I started to look for different solutions. I tried a bunch of different materials. And then I read the article that 90% of sheep wool goes to waste. This instantly clicked in my head. Sheep wool is such a fluffy and valuable material! It is moisture resistant. It regulates temperatures. It is fossil fuel-free. It can be reused. Not using it is just a waste of resources! So that is how we got the idea. I offered it to a potential customer who made an order the same day and things started to move really fast.
How did you find your co-founder?
We’ve been working together in previous startups.
What’s your background?
I don’t have this stereotypical Estonian startup background when you either work at Bolt or Pipedrive and learn a lot of stuff from super talented coworkers and then start your own company. I don’t have any of this. I had one full-time job in my life for a year in consulting and then I quit my job. I just tried to start startups, but they all failed. For two years I worked part-time jobs and tried to survive while creating a business idea.
On the one hand, it was tough to start a business when you did it – at the beginning of the pandemic. On the other – you experienced an e-commerce boom that is the main industry that relies on you in terms of sustainability. How did you experience that?
In terms of the pandemic, there are two things that changed for us. One is the e-commerce boom. But this was ethically a very hard concept to understand. On the one hand – once e-commerce demand increases we have more business. At the same time, it is so hard to understand why people need to overconsume. So in this sense, I was not happy to see such a rise in overconsumption.
However, the biggest thing, and even bigger than the eCommerce boom was remote culture. The pandemic taught us a lot about it. There are travelers in Woola team and we have always been this way for our whole life. From the very beginning, we knew that it was important for us to bring this mentality of remote and flexible work and culture. Since we started in 2020 everything was remote so we were remote from day one. It is in our DNA so this is definitely a huge advantage for us – we have worked really efficiently while working remotely. We have been doing it for two years and it has changed our culture. It gave us the opportunity to continue traveling and give all of the employees at Woola a yearly travel allowance. It builds empathy and creativity. So this is what we have learned from the pandemic.
How many people are you on the team?
We are 11 people at the moment.
What additional products are you working on?
The next product that we are launching is bubble wool – roll material that is a direct replacement for bubble wrap. You can use this for packing larger items.
Why did you decide that TechChill’s Fifty Founders Battle is something for you?
We applied for the competition because it was sort of a lifestyle for me back then. That’s what I did. I was in this loop of coming up with business ideas, making a prototype, sending them to competitions, getting rejected, and trying again. It was a no-brainer for me. I was doing it for two years until coming up with Woola. I wasn’t putting much thought into there at that time. It was just something that I needed to do.
The process was a bit different though when I came up with Woola. It is because I knew that it was a different idea itself. However, I knew that idea was good because in one week we have come up with the idea, made the first prototype, got our first customer, won Climathon, and for the first time ever felt – wow, this could actually work! We didn’t give so much thought to finetune the application. It was super brief. And I applied with something like – sheep wool instead of bubble wrap.
What do you think – why did you win this competition?
I was thinking about that almost every day for the next month because I was so shocked. One thing – the idea is very easy to grasp because it is a physical product. We were the only startup there with a physical product. And sometimes it is very hard to get into the world of SaaS and fintech that in the Baltics are dominating massively.
As our product was a physical product it was very easy to understand the concept. And it just makes sense. We were also at the beginning of the sustainability wave where people started to get actually anxious about the climate for the first time ever. Investors really started to invest in climate. And when the coronavirus hit, everyone saw what an international catastrophe can look like and it added even more to the sustainability wave. So these were those aspects there.
What are your memories of TechChill?
This sounds super stereotypical and maybe stupid, but you have to believe when I say that I was never in a million years expecting to win the competition. I think I already booked my bus ticket back to Tallinn on the same evening as the semi-finals so I was really not expecting this. When I heard that we made it to the finals I think I was sitting at Mcdonald’s and writing down bullet points on how to make the pitch more detailed. I was definitely not ready for the big stage.
Then once we won the finals, I was extremely shocked, because that was the first time we had won anything in the startup sector. Even anything minor. And it sounds maybe weird, but winning can be such a shock when you used to fail all the time. I remember that my co-founder was also quite shocked. He was watching a live stream from Estonia. He saw from the video that I won. I got a backpack full of prizes from sponsors. And the first message from him was – hey, can I have the backpack? So he got the backpack and he is still wearing it. It was a really crazy experience for sure. It was the first time when we got some kind of momentum and became known.
What were your main takeaways from TechChill?
It was the first time we got some momentum. We got some coverage in the Estonian ecosystem. It brought us some opportunities for the next step. It helped to have some references and prove that we are serious as nobody knew us before.
What are your goals for 2022?
We are hiring a sales team. We need to scale in Europe, because to actually make an impact we need to take a market share away from plastic bubble wrap. To do that we can not be a small company operating somewhere in Estonia. We need to be the European market leader in sustainable packaging.
A lot of work has been done already. We spent the last year working on a product so we did a lot of investments and work on product development, production automation, and scaling. Now we are looking for people to put everything together. Since we were producing here in Estonia it is like a puzzle. It is not just about generating demand. It is actually having a physical product that we can sell. For the first year, it is always like – production is working, now we need sales; when sales are working, we need more production. So it is about bringing this puzzle together.