Part IThe Story
The jury needed three words. Ogenomtänkt. Naiv. Ogenomförbar. Ill-conceived, naive, unworkable.
It was 2005, in the packed aula of the Stockholm School of Economics. Every year the school holds an event called Partnerstämman, where a handful of student business ideas are chosen to be presented to a jury drawn from the people Handels students are raised to treat as idols. That year Stefan Persson of H&M sat at the jury table. So did Marcus Wallenberg of Investor, and Peggy Bruzelius. The King of Sweden attended. On stage a tall, intense 23-year-old named Sebastian Siemiatkowski, the son of Polish immigrants, described a business so modest it was almost funny. His company would sit between online shops and their customers. The customer would receive the goods first and pay by invoice afterward, without ever typing in a card number. The company would carry the risk that the customer might not pay, and for that it would keep a couple of percent of each transaction. The heads at the jury table shook. By one account, the entry finished near the bottom of the competition.
Siemiatkowski later told the trade paper Computer Sweden what happened inside him in that room:
"I was 23, but emotionally I was taken back to the schoolyard in Uppsala, when I was ten and heard the jibes about my family coming from Poland. I didn't consider giving up for a moment. I became even more determined to show how wrong they were. I decided to go home and work myself to death. Just you wait."
Vänta ni bara. Just you wait.
It is an odd founding sentence for a payments company and also a fitting one, because the business he pitched was a form of waiting: goods now, settlement later, with someone standing in between who trusted you would make good. He walked out onto Sveavägen, the long avenue that runs past the school. Twelve years later his company had a full Swedish banking license and a headquarters at Sveavägen 46, a short walk down the same street. Twenty years later, on September 10, 2025, it began trading on the New York Stock Exchange under the ticker KLAR. Klar is Swedish for clear, or finished, or done.
He has said that ringing the bell in New York was not the emotional peak of that period. The peak happened in a cemetery in Arkansas. We will get there. Most of his story moves this way: a debt taken on early and repaid much later, sometimes with interest he did not expect to owe.
By the Numbers
Twenty Years of Klarna
SEK 600,000Jane Walerud's first check, for 10% of the company
$45.6BPeak private valuation, SoftBank-led round, June 2021
85%Valuation decline by July 2022, to $6.7 billion
$40.00IPO price per share, NYSE, September 10, 2025
$127.9BGross merchandise volume, fiscal 2025
118MActive consumers, end of 2025
5,527 → 2,907Headcount, 2022 to 2025, as AI absorbed work
A Name Nobody Could Spell
In the autumn of 2017 the writer Niklas Natt och Dag came to interview Siemiatkowski for King magazine and got stuck at the front desk. Klarna's lobby on Sveavägen had a high ceiling and a wall of twelve television monitors, each the size of a ping-pong table, joined into one huge screen playing Klarna advertisements at a resolution so high that, he wrote, the real world looked blurry when you turned away. Visitors had to register on a computer and type the name of their host. He tried. S-i-e-k-o-w-a-l-s-k-i. That was wrong. S-i-e-m-i-e. Also wrong. A queue built up behind him. The receptionist asked how it was going, and he admitted he was trying to work out how her CEO spelled his own name. She gave him what he read as a sympathetic smile, the smile of someone who had watched this happen many times.
The name has a history. In 1980 Siemiatkowski's parents left communist Poland for Sweden. They had to leave their daughter behind while they fought through immigration bureaucracy, and the separation briefly made them a minor story in the Swedish press. The girl came a year later, when her brother was a few months old. He was born on October 3, 1981, and the family settled in Uppsala, the old university town north of Stockholm. Sweden then felt much farther from Poland than the narrow strip of Baltic between them would suggest. At home they spoke Polish, ate Polish food, and kept the Polish Catholic holidays. There were stories about what earlier generations had suffered in the war, including relatives who had been held in German concentration camps.
"I remember how we as Poles were not welcome," he told Dagens industri years later, "and my father's strange surname affected his job applications negatively."
Both parents had academic backgrounds. Accounts disagree about what his father did in Poland. One Swedish profile says he was a veterinarian, and Dagens industri describes him as an agronomist, which he worked as for a while in Sweden. After the Swedish financial crisis of the early 1990s he lost that job and drove a taxi. Back problems pushed Siemiatkowski's mother into early retirement. The family lived in the high-rise estate of Eriksberg, and Sebastian's roots also reach into Gottsunda, the Uppsala suburb that Swedish officials now list as an utsatt område, a vulnerable area. He has described weeks when he and his mother ate nothing but pancakes. "That was always the topic at hand," he told Fortune. "We don't have money for this, and we don't have money for that."
What came out of that household was a specific kind of grievance, the grievance of people who expected more from life. "Having a lot of the intellectual capacity and all these things," he told Steven Bartlett on The Diary of a CEO, "and then the kind of prerequisites potentially to do something different, and at the same point of time this kind of drive of like — you kind of almost feel like it's unfair. Life isn't necessarily fair, but you feel like this is not fair. We should have been able to have something different than this."
One profile, summarizing his interviews with Bloomberg, says that hearing debt collectors harass his parents gave him a lifelong drive to go after the banks. Keep that detail in mind. It returns later.
His father drank. This is a fact Siemiatkowski has discussed publicly and seriously, and with an obvious effort to keep two fathers apart. "The father that I had last years was not my true father," he said. "Those are not the memories that I have from my youth, when he would bring me into the forest outside Uppsala and we would go on long walks together and we would fantasize about being space explorers, or he would introduce me to amazing science fiction literature." The other father, the one the alcohol produced, was "a sick man, and that's just unfortunately how things develop."
The state supplied part of the escape. Sweden's late-1990s program subsidizing home computers gave the Siemiatkowski family its first computer, and he has credited that policy with his success. Books supplied another part. At 14 he read Richard Branson's account of building Virgin. He found a second model closer to home in Ingvar Kamprad, the austere founder of IKEA. The Uppsala newspaper Upsala Nya Tidning went through its archive decades later and found that his first appearance in its pages came at about that age, when he was the student spokesman for an environmental school project at Katarinaskolan. He then went to Katedralskolan, the city's prestigious old gymnasium, which also produced Skype's Niklas Zennström. When Siemiatkowski returned in 2015 to speak on an entrepreneurship panel, the first thing he mentioned was the bench by the entrance. "That's where the cool guys used to sit," he said. "So it was a bit of a flashback."
He was clear about why he wanted to go to business school, even though the honest reason was, as Computer Sweden put it, "as simple as it was forbidden to say out loud in Sweden." The local paper later supplied the rest in a headline: he had wanted to be killen med många leksaker och ett stort hus, the guy with lots of toys and a big house. In another interview he went back on a line he had used for years. "I said you don't become happy from money," he told King. "That's not true."
The Beauty of the Script
He started at Burger King in Uppsala at 15 and stayed about two years. Most founders who mention a fast-food job treat it as a humble backdrop for the story that follows. Siemiatkowski talks about Burger King the way an engineer talks about a well-designed machine.
"These restaurant chains have incredibly meticulous processes," he told Sequoia's in-house writer, with real enthusiasm. "They don't have the advantages of a software firm; they are thin-margin businesses that are always squeezed. I realize now after running my own business for so long how well-engineered those kinds of systems are."
Two things came out of that kitchen. The first was a habit of looking at operations as systems. He would later borrow from Toyota's lean manufacturing, idolize Sam Walton, and add Terry Leahy, who turned around Tesco, to his list of heroes. All of them ran businesses with thin margins and enormous throughput, and none of them was a software visionary. The second was a friendship. Another Uppsala teenager, Niklas Adalberth, was also working at Burger King.
— Sebastian Siemiatkowski, to Sequoia CapitalNiklas gave me a fantastic gift: in my youth, I was always convinced that I was right, while Niklas was always able to show me when I was wrong. He was this amazingly patient, focused, solid person, while I could be quite emotionally all over the place.
Every account of the two men describes them the same way. A Swedish book on the country's new billionaires presents Siemiatkowski as an uncompromising workaholic with sky-high demands on himself and everyone near him, and Adalberth as calmer and more balanced. Siemiatkowski came from modest circumstances and Adalberth did not. The book treats this as a difference in temperament, but it is probably also a difference in what each could afford to lose.
After Burger King came a series of jobs that read like a deliberate tour of the lower-paid parts of the Swedish service economy. He cared for people with dementia. He taught school. A CV printed in King lists Djuice, a mobile brand, which is roughly where telemarketing happened. He sold internet subscriptions over the phone, and he loved it.
"Sales is typically seen as this kind of sleazy, lowlife thing, but I find it beautiful," he said. "I always loved polishing and refining my sales script; eventually I knew I got it perfect one day when I closed 16 calls in a row. This kind of thing — the art of convincing — it's just a fascinating skill."
Sixteen in a row. The number is precise in the way of someone who kept count. The approach is the same as the Burger King one: take an activity that looks like improvisation and charm, and find the repeatable system inside it.
His father had wanted him to become a doctor. When Sebastian said he had applied to the Stockholm School of Economics, his father asked what you learn there. Sebastian had no idea. This was before Google, but he dug up the course list and found that the first course was microeconomics, which seemed to concern pricing. His father liked that. He had always wondered why a tube of Colgate cost what it did at ICA, the Swedish supermarket chain. So the son of a taxi-driving agronomist entered Sweden's most elite business school on the strength of a question about toothpaste, which is a fair description of what microeconomics is about anyway.
He was not a star student. Two years in, he left.
The Last Ship Out of Sydney
The gap year he took with Adalberth started as a series of failed attempts at ordinary work. They tried bartending. They tried to work on a cruise ship out of Florida and did not succeed. They waited tables at a Swiss ski resort. Then they decided to go around the world without flying, on almost no money. They hitchhiked, rode cargo ships, jumped trains, hitchhiked again, and at times begged for food.
In 2002, crossing the United States from Los Angeles to New York by thumb, Siemiatkowski slept on the street and washed at highway rest stops. In Sydney they missed the last monthly cargo ship to Los Angeles and were stranded for a month.
"[It] really taught us the value of resilience," he later told Sequoia. "We had to spend a full month in a foreign city, unsure what we would do or how we would support ourselves. We eventually found cheap hostel beds and jobs as furniture movers. We proved to ourselves that we could be resourceful. No matter how bad things looked, we proved to ourselves that we could find a way to survive."
It is easy to roll your eyes at the moral, since every founder has a hardship story and it always ends in resilience. The details resist that reading, though. Two Swedish students moved other people's sofas in Sydney because a boat left without them. The real lesson was narrower and more useful than "resilience." The schedule is fixed, missing it costs you a month, and you can absorb that cost if you have to.
They made it all the way around. After 143 days they were back where they started, in St. Moritz.
The worse problem came when they got home. They had missed the deadline to re-enroll at the school. "This left a full year entirely blank," he said. "Here I was, thin and poor after a year's travel, no job, no school, no support whatsoever."
He went on welfare. Then he took a job on commission at a company called Acme, a factoring and collections business in an industrial area of Uppsala. Swedish journalists have described it, without much elaboration, as controversial. Factoring firms buy small businesses' unpaid invoices and collect on them. The job sounds as unpromising as a job can, and it turned out to be the key to everything that followed.
The idea came out of the details of the work. In the early 2000s Swedes rarely used credit cards online. The domestic habit was the invoice: you get the item, and the bill comes a few days later. Swedish consumers were cautious with money, and the word skuld, debt, carried a real stigma. E-merchants still had to sell through postförskott, cash on delivery, which meant a customer collecting a parcel at the post office and paying for it there. While cold-calling, Siemiatkowski noticed something about the fast-growing online shops. They didn't need the cash advance a factoring company offered. What they wanted was to avoid the administrative work of invoicing and the risk of not getting paid. If someone would take on both, the merchant could offer the invoice model Swedes already trusted and keep its focus on selling.
"It was pure chance that I started working with invoices and payments," he told Upsala Nya Tidning in 2015, "and they are pretty boring things."
The company's first name was Kreditor. It was a plain name for a plain idea.
Without Erlang, No Klarna
After the jury rejected them, they went looking for anyone who would say yes. Siemiatkowski, Adalberth, and a third classmate, Victor Jacobsson, pitched more than twenty investors. None were interested. The school's incubator, SSE Business Lab, took them in. (Years later Adalberth said flatly that there would have been no Klarna without it.)
The yes came from Jane Walerud, a former sales manager at Erlang Systems, the Ericsson spin-off built around a programming language designed for telephone switches that could not be allowed to fail. After hearing the idea, she offered SEK 600,000 for ten percent of the company. That was a little over half a million kronor, about the price of a modest car, for a tenth of what would later be valued at roughly 430 billion kronor. Her money mattered less than her contacts. Walerud connected the three founders with developers she knew from the Erlang world, and Kreditor was built on Erlang. Years later Dagens industri ran an interview with her under a headline in her own words: Utan Erlang, inget Klarna. Without Erlang, no Klarna.
The founders could not code, and this mattered. On The Diary of a CEO, Siemiatkowski talked about the early confusion: misunderstandings with the engineers over who was responsible for what, and the difficulty of hiring and managing technical people when you cannot judge their work yourself. In 2026, after twenty years and with a fortune made and partly lost, he told Newsweek: "The only thing I kind of regret in my life is not learning to code and be an engineer. Sorry, that's what it is."
The three founders split the work by temperament. Adalberth was the steady one. Jacobsson was, in one critic's phrase, the numbers man. Siemiatkowski was the salesman and the source of energy, and also the one with the temper. They worked out early that they were not putting in equal effort, and they dealt with it in a very Burger King way. They turned their desks so each could see the others' screens, and they started logging their hours. Siemiatkowski later compared it to a personal trainer watching you lift: when someone is watching, you do the extra rep.
He also shouted. In a 2015 interview on Dagens industri's leadership podcast he described how his two co-founders sat him down to talk about his moods. "In Sweden people think it's strange for someone to stand and yell at work, but not when AIK misses a penalty," he said, naming the Stockholm football club. "But for me, when we miss a penalty at Klarna, I get as upset as a supporter, and I've tended to forget that you can't start screaming." He went to a psychologist. Cognitive behavioral therapy, he said, "has been very effective." By then he was calmer. In the same interview he said: "I've made every mistake you can make as a boss. Because I was inexperienced I didn't know how to lead a team or how to divide up responsibilities clearly. All the things that are really basic hygiene for a manager."
The business grew. Investment AB Öresund invested in 2007. Kreditor moved into Norway, Finland, and Denmark, and in 2009 changed its name to Klarna, from the Swedish word for clear, a name meant to say something about how financial services should work. The founders' own surnames remained hard to spell. Germany and the Netherlands came next.
Sometime in those years, Siemiatkowski said in 2019, "Someone told me there was some place called Silicon Valley, and I looked at it on Google Streetview, which had just launched back then." While virtually walking the streets of Menlo Park, he found the building of Sequoia Capital. In May 2010 Sequoia invested in Klarna, through a partner named Andrew Reed, and Klarna became one of the firm's first European bets. That year revenue rose more than 80 percent to $54 million. By 2011 about 40 percent of all e-commerce in Sweden went through Klarna. The Daily Telegraph put it on its list of Europe's hundred most promising young tech companies. In May 2011 it bought Analyzd, an Israeli fraud and risk firm founded by former PayPal employees. In December 2011 General Atlantic led a $155 million round alongside Yuri Milner's DST Global, and General Atlantic's Anton Levy joined the board.
In 2013 Klarna acquired SOFORT AG, the German company behind Sofortüberweisung, for about $150 million. SOFORT had done something the German banks resented: it let customers authorize bank transfers by logging into their own online banking, with the software filling in the bank's interface for them. The banks sued. Siemiatkowski later said the litigation helped produce the European framework now known as open banking, a framework he eventually called a failure. More than a decade later, when OpenAI released an agent that could operate web interfaces on a user's behalf, he pointed out on X that using such a tool to access your own bank account was effectively illegal in the EU, because the regulators who settled the SOFORT dispute had required the banks' APIs instead. He wrote that those APIs "continue to be broken, lack functionality, and banks add as much friction as they can."
In autumn 2015 Niklas Adalberth stepped down as deputy CEO. He went on to found Norrsken, a foundation and impact investor. Victor Jacobsson had already left operations. "It's a step," Siemiatkowski said, and the sentence trailed off. He was now the only founder still running the company.
We Copied the Banks
In spring 2014, Svenska Dagbladet published a series of articles about Klarna. The reporting showed that large numbers of customers had been charged reminder fees and sent debt-collection letters even though Klarna's first invoice had never reached them or had arrived late. The Swedish Consumer Agency got involved and began examining the credit fees attached to Klarna's part-payment offers. The trade magazine Chef reported the most serious allegation: that Klarna deliberately made paying harder in order to keep its collections subsidiary, Segoria, busy.
The boy whose parents were hounded by debt collectors now ran a company accused of producing debt to collect. Siemiatkowski did not accept that description, and his response is revealing in what it gave away.
He wrote a long op-ed in Dagens industri. He called the insinuations that Klarna had systematically tried to earn "an extra short-term penny at the expense of the enormous value and trust we have built up" offensive and absurd on their face. He noted that five million Swedes had tried Klarna, and with numbers that large some customers would be unhappy. Then he made a striking admission:
"We can willingly admit that we copied the design of these offers from the banks, which had them for decades before Klarna even existed."
He was explicit that Klarna had taken everything except the technology from older companies: "When it came to interest rates, fees, structures and other parts of the business model, we took inspiration from industry colleagues around us and made sure our arrangements were in line with the established players." The headline was Bankerna gör precis som vi. The banks do exactly what we do.
As a legal defense it was reasonable. As a self-portrait it was harsh. The outsider who had promised to clarify finance was saying he had built a cleaner front end and placed it on top of the incumbents' fee structure. He promised to change the offers if regulators required it, and added that "it is unfortunate when all players are not judged by the same parameters."
Chef reported what happened next. At first Siemiatkowski answered the criticism stiffly. Over time he became more factual and more humble. Someone close to him during the crisis said that for two weeks he personally replied to critical comments online. "It's unusual to do that; normally you bring in consultants to handle such things," the source said. "He kept his calm, despite it being an incredibly stressful situation."
That pattern repeats throughout his career. He first defends hard, then gets pulled toward a more honest account, and the honest account is usually more interesting than the defense.
In June 2017 Klarna received a full banking license from Finansinspektionen, the Swedish financial regulator. Klarna announced it as "Europe's Newest Bank." A year later Siemiatkowski wrote another Dagens industri op-ed, this time on the attack. Swedish banks, he wrote, earned on average SEK 10,000 a year from every Swede, and not because of any excellent service. They earned it because people would not keep cash under the mattress and could not buy a home without expensive loans. After a series of banking scandals, he warned, the big banks had nearly emptied their förtroendekonto, their trust account. "If, like us, you have only been active for 13 years, you need to work hard to fill up the trust account. If, like the big Swedish banks, you have been active for 150 years, you apparently need to be reminded that the trust account will soon be empty." Further down the same piece he wrote, with some candor: "Unfortunately, trust in Klarna also varies."
Over the following years the record filled in. In May 2019 he was called to a government meeting about identity theft and consumer debt. In 2022 a district court in Bremerhaven ruled that Klarna could not charge a flat €1.20 for an email reminder without showing it cost that much. The same year Sweden's privacy authority fined Klarna Bank SEK 7.5 million over shortcomings in its privacy information, and the fine was upheld on appeal in 2024. In December 2024 Finansinspektionen issued a SEK 500 million penalty for anti-money-laundering failures in risk assessment and customer due diligence. For all its talk about trust accounts, the company had a fairly unremarkable record with regulators.
Pink in a Field of Blue
Klarna launched in the United States in September 2015. Siemiatkowski had long assumed America was out of reach, a credit-card country that would never want what Klarna sold. Then he looked at the data. After 2008, regulation squeezed credit card growth. One example he likes to cite is the ban on credit card marketing on university campuses. Between 2010 and 2020, he later said, US debit card volume grew about tenfold while credit grew about twofold. American consumers were becoming more like Swedes: wary of revolving debt and willing to pay for the convenience of not having it. Overstock was the first major US partner. In the first months after going live, its online customers' conversion rose 2 percent, and within a year about a fifth of its monthly orders went through Klarna.
In 2016 Politico asked him how Americans would ever notice a Swedish payments company. The reporter observed that apart from ABBA, Björn Borg, IKEA, and Ericsson, few Swedes had made much of an impression on the American public. Klarna was then valued at $2.25 billion, said to be profitable since founding, operating in 17 European countries, and handling about 10 percent of European e-commerce payments for about 60,000 merchants. Siemiatkowski described its underwriting, which he called its "special sauce," as a model that approved or declined a purchase from very little information, such as an email address and a postal code, plus behavioral signals like the type of product and the time of the order. Approval ran at about 80 percent. He also voiced a worry that would shape the next decade: "Because I believe so much in increased specialization within the digital market, I'm always worried that we take on too wide an area of functionality and features, that we try to take on too many things."
The answer to the visibility problem was pink.
"We looked at all the other fintech companies and every one of them had a blue logo," he told TheIndustry.fashion, "so we decided we wanted to be different." His wife, Nina, a marketing executive he met at Handels and married in 2014, helped find the agency that created the brand. The rest followed from there. Klarna added a third "o" to smooth and made Smoooth its slogan. In 2018 Snoop Dogg took a stake and started appearing in the ads, in one of them wearing an ankle-length fur and attended by servants in pink caftans. The company's UK agency set up a Klarna display with a rail of pink silk robes, a pyramid of gold-wrapped toilet rolls, and rows of golden jars of peanut butter, chosen because peanut butter is smooth.
The founder did not look the part. The interviewer from TheIndustry.fashion found him in jeans and a jumper, late because his taxi had been stuck in the rain, scolding himself for not taking the Tube, and eating a very ordinary sandwich after three in the afternoon because he had missed lunch. Another journalist, from British Elle, was more taken with him. She described a 6-foot-2 Swede with an accent "part-Arnold Schwarzenegger, part-Yogi Bear," who arrived flushed from the February cold carrying a paper bag and then took out, one item at a time, an expensive apple juice, a large croissant, a jar of what looked like cloudberry jam, and an egg roll. She had already eaten. Watching him, she wanted a second breakfast. Siemiatkowski, she wrote, "has an uncanny ability to create desire."
That is a compliment, and it is also the case critics make against the whole industry.
In December 2020, during lockdown, Britain's Advertising Standards Authority banned a Klarna Instagram influencer campaign, ruling that it had irresponsibly encouraged using deferred payment to lift people's mood. Ramit Sethi, the personal finance writer, later called buy-now-pay-later "a huge hazard specifically targeted at young people," whose users "are basically prey." Klarna's own figures pushed back. The company says fewer than 1 percent of its customers default, more than 90 percent pay no interest, and the average purchase is about $100, compared with average US credit card balances of about $6,500 at 17 to more than 30 percent interest. For a while his Twitter bio read, "Trying my best to be the nightmare of the bank establishment worldwide!" Both views can be true at the same time, which is exactly why the subject is hard.
The financial journalist Jonas Malmborg later wrote a book about the company, Den stora kreditfesten: Historien om Klarna, The Big Credit Party. Its cover shows a pink room after a party is over.
The Party and the Morning After
The party was huge while it lasted.
In August 2019 Klarna raised $460 million at a $5.5 billion valuation, which made it the most valuable fintech startup in Europe. In March 2020 Ant Financial, Alibaba's payments affiliate, took a minority stake. Then the pandemic closed stores worldwide and pushed shopping online. Siemiatkowski said in 2020 that COVID would "permanently change the way we shop." Investors agreed. The valuation went from $5 billion to $10 billion, then to about $31 billion, and in June 2021 a round led by SoftBank's Vision Fund 2 valued Klarna at $45.6 billion. It was briefly the most valuable private technology company in Europe. Forbes made Siemiatkowski a billionaire, and by 2022 estimated his net worth at $3.2 billion. The boy who wanted lots of toys and a big house had the house. WSJ Magazine ran a feature on his striking home in Stockholm.
Klarna was also, by his own later account, burning about $100 million a month. "The rapid valuation growth outpaced their actual business performance," a summary of one of his later interviews says, and Siemiatkowski has acknowledged getting caught up in the market's exuberance. Klarna lost $487 million in 2021. In his own later telling, the losses approached a billion dollars in 2022. He told Semafor that he had over-hired.
Then rates went up. On May 23, 2022, Klarna said it would lay off about 10 percent of its staff, citing inflation and the war in Ukraine. One week later, on May 30, Siemiatkowski posted on LinkedIn.
The post linked to a Google spreadsheet of hundreds of laid-off employees, with names, roles, and at first email addresses, intended to bring them to the attention of recruiters. A remaining employee, J. Tyler Wilson, had built it, and those listed had opted in. Siemiatkowski wrote that he had "mixed feelings about this document," calling it "a tangible symbol of a very hard decision that saddens me deeply and will stay with me for a long period of time."
The response split sharply. Some called it "tone deaf." One reply suggested Klarna "consider new leadership, not letting go of talented staff." Recruiters thanked him. People questioned publishing the email addresses, and Wilson removed that column. On June 1, Siemiatkowski tweeted: "Just to be super clear: this list is created by employees themselves, voluntarily, in a great attempt to increase their own visibility towards recruiters. I am simply sharing something they started." Finansförbundet, the largest union in Swedish finance, said it had not been consulted. Its chair, Ulrika Boethius, said the union "expected information from the company at an early stage and not to have to read about the process in the media." A union of software workers later sued.
The list is a useful example because Siemiatkowski's best and worst instincts both produced it. He believes in transparency and in treating employees as adults who can handle hard information, and here he made something private very public. He saw the list as an asset for the people on it, while many readers saw a CEO turning a layoff into content. Both readings were correct, and neither side could understand how the other saw it.
On July 11, 2022, Klarna announced it had raised $800 million at a $6.7 billion valuation, about 85 percent below the year before. In 2024, a board director tied to Victor Jacobsson would claim that his and Jacobsson's efforts had helped rescue that round. By 2025 Siemiatkowski was no longer a billionaire.
Some Animals Are More Equal
In autumn 2023 the Swedish labor movement came to Sveavägen 46. The unions Unionen and Sveriges Ingenjörer announced strike action at Klarna's headquarters over the company's refusal to sign a collective bargaining agreement, which in Sweden's labor model is about as close to a sacred institution as a secular country gets. Klarna gave in. It agreed to join the financial-sector employers' organization BAO and to be covered by a collective agreement from January 1, 2024. In public Siemiatkowski said: "Klarna now even better with a collective agreement!"
On November 8, 2023, he spoke for over an hour at an all-hands meeting of about 1,500 employees. Someone recorded it, and the labor papers Arbetet and Arbetsvärlden obtained the recording. He told them the plot of George Orwell's Animal Farm: the animals decide the farmer is evil and revolt against the "capitalist swine," and then the pigs decide they are slightly more equal than everyone else. At the end, he said, the pigs and the humans eat a fancy dinner together while the other animals look in through the window. "The animals look in at them and can no longer see the difference between who are pigs and who are humans. Unfortunately, I've come to think of this story a few times these last weeks." The papers reported that his pigs were the unions and the employers' confederation Svenskt Näringsliv together, the establishment on both sides of the table, with the outsider left outside the window.
He also spoke about growing up as the child of people from communist Poland and about his father's Christian values. He described three zones of work: comfortable, stretch, and panic. Klarnauts, as the company calls its employees, should usually be in the stretch zone. Comfort was boring. A bit of panic now and then was fine. Panik är okej.
He has a parenting theory to match. On 20VC he talked about his children's swim teacher, Petra. "She has this ability of taking my children in the pool and pushing them to that exact point where they are almost, almost giving up, and they're learning at such a pace. And if I can recreate such an environment in Klarna…" With Steven Bartlett he described telling other parents that he wanted his children to face some difficulty growing up. "I want some resistance. And the funny thing is I'm telling this to the other parents and they're all looking at me like, is he stupid? Is he wacko? Like, what's wrong with him?" He has said he does not plan to leave his fortune to his three children, which he concedes is "a little bit provocative" in Sweden for someone with money. "I'm not saying I don't believe in welfare," he added. "I'm only talking about my kids." He grew up on welfare, and he wants his children to have resistance he can no longer provide for them.
The boardroom had plenty of resistance. Victor Jacobsson, once the numbers man, had become, in Fortune's words, an "estranged co-founder" who continued "to clash on key governance decisions," including how Klarna would go public and how much control its CEO would keep afterward. In 2024 the dispute spilled into the open. Sequoia's Matthew Miller, after failing to get Mike Moritz removed as chairman, was himself replaced on the board. Moritz had joined Klarna's board after Sequoia's 2010 investment and was the most important outside voice in Siemiatkowski's career. Then Mikael Walther, the director who had long represented Jacobsson's interests, was voted off after an investigation by the law firm Freshfields Bruckhaus Deringer into his conduct during the 2022 fundraising. In a letter to shareholders Walther said the investigation was retaliation. He and Jacobsson, who between them held about 9 percent of the company, had objected to a proposed CEO bonus that Walther said could cost Klarna $2 billion directly and be worth up to $35 billion over time. They had also objected to giving Siemiatkowski super-voting shares. "This investigation is being used as a tactic in an ongoing disagreement over the right long-term governance structure for Klarna," Walther said. "I categorically reject its unsubstantiated accusations." Moritz's letter said the board had lost confidence in Walther after he threatened to veto or delay important decisions, including setting up the UK holding company, completed in May 2024, that gave Klarna flexibility on where to list.
Asked about it later, Siemiatkowski used the obvious comparison, Succession, and an interviewer who met him at the New York Stock Exchange the week of the IPO put the HBO show's name in his headline. Swedish commentators reached for a local comparison. Svenska Dagbladet compared him to Jan Stenbeck, the swashbuckling founder of Kinnevik and Tele2, who fought the Swedish establishment for decades. SvD noted the obvious difference: Stenbeck had grown up in a 14-room apartment in Östermalm with a rich father, and Siemiatkowski had not. The similarities were the total commitment to the work, the will to go against the establishment, and an unusual ability to push an organization forward. Swedes do not generally mean a comparison to Stenbeck as a pure compliment.
Favourite Guinea Pig
After ChatGPT launched in November 2022, Siemiatkowski moved quickly. Klarna went after OpenAI with a request that amounted to letting it be the test subject. "We wanted to be [OpenAI's] favourite guinea pig," he said. The companies ended up sharing a Slack channel. He became friendly with Sam Altman and had dinner at his house. In September 2023, he said, Klarna more or less stopped hiring.
In February 2024 Klarna announced that its OpenAI-powered customer service assistant had handled two-thirds of customer service chats in its first month, the equivalent of 700 full-time agents, with estimated annual savings of about $40 million. Shares of Teleperformance, the French call-center outsourcing company, dropped sharply on the news. Sequoia's podcast reported that every company it spoke to afterward wanted to know how to get "the Klarna customer support thing."
Siemiatkowski said things other CEOs would not. "I am of the opinion that AI can already do all of the jobs that we, as humans, do," he told Bloomberg. In December 2024 he said Klarna would not increase headcount for that reason. When people told him new jobs would appear, he pointed to translators. He told Semafor he checked other CEOs' LinkedIn headcounts as a "bullsh*t detector" for how serious they were about automation, and that executives who reassured audiences in public told him privately, Oh my God, the jobs are gone. "I feel that is dishonest," he said.
The record was messier than the headlines. In The New York Times, Noam Scheiber noted that under questioning Siemiatkowski had conceded that Klarna was still using humans for tasks other companies had automated long before generative AI, such as telling a customer where in the app to delay a payment. That meant Klarna had more easy work to automate than most. TechCrunch, searching Klarna's job listings more than a year after the supposed hiring freeze, found more than fifty openings. Scheiber's question was why a CEO would talk so openly about automation, and possibly overstate it, at a time when office workers were already scared. Part of the answer is that the overstatement was itself a sales pitch, and Siemiatkowski has always enjoyed a good pitch.
The numbers were real, though. According to The Guardian, Klarna's workforce went from 5,527 in 2022 to 2,907, mostly through attrition and replacing tasks with technology, not through layoffs. In June 2025 he said the company was still shrinking by 10 to 15 people a week. Revenue per employee rose from about $400,000 to nearly $1.4 million by early 2026. He said savings were used to raise pay for the people who stayed. Klarna dropped more than 1,500 SaaS vendors, including Salesforce and Workday, and consolidated its data into a single internal layer that language models could read. He began arguing publicly that SaaS was dead, because "the cost of creating software is going down to zero."
Then, in May 2025, at Klarna's Stockholm headquarters, he said something few CEOs say about their signature initiative.
— Sebastian Siemiatkowski, to Bloomberg, May 2025As cost unfortunately seems to have been a too predominant evaluation factor when organising this, what you end up having is lower quality.
"Really investing in the quality of the human support is the way of the future for us," he said. Klarna began hiring human agents again, experimenting with an on-demand model like Uber's in which students or people in rural areas could log in and take customer calls. At the time two people were in the pilot. He predicted that a human at the other end of the line would become "a VIP thing" that customers might pay extra for. "Obviously, AI today can pretend to be empathetic and express emotions and stuff, but at the core, people crave human connection."
So he bet very publicly, admitted very publicly that the bet had partly gone wrong, and kept most of the gains. Sequoia's write-up of his AI approach praised the "experimental mindset." It was really the 2014 pattern again: a hard defense, followed by a more honest account.
He handed Klarna's quarterly results presentation to an AI-generated avatar of himself. "Sorry if I'm being blunt," he told Semafor, "but I have yet to meet a CEO that's excited about the quarterly earnings reports and calls with investors." And then he added: "It is definitely easier to replace the CEO than it is to replace a nurse."
Newsweek met him the morning after he had been up late "vibe coding," building software by describing it to a model. He wore jeans, a navy button-down over a T-shirt, and white sneakers from Céline. He has spoken about coding at night in Cursor. The founder who couldn't judge his Erlang engineers in 2005 can now write software, though he does it by explaining to a machine what he wants, which is close to how he has always worked. On the Sequoia podcast he made one exception to his enthusiasm. In writing, he said, the models disappointed him, because "they work towards the average, so they are trained towards the average. And creativity is not the average."
The Bell and the Grave
Klarna filed publicly for a US IPO on March 14, 2025. On April 4 it postponed the offering along with StubHub after new tariffs unsettled the markets. It restarted in September. On September 10, 2025, Klarna Group plc, incorporated in England and Wales with a registered office at 10 York Road, London, and headquartered on Sveavägen, began trading on the New York Stock Exchange. The offering was 34,311,274 shares at $40. Klarna sold 5,000,000 of them and existing shareholders sold the rest, raising about $1.4 billion. The stock rose about 15 percent on its first day. The BBC put the debut valuation at $19 billion, and Renaissance Capital called it the year's largest IPO to that point. Fortune reported that it had made about forty employees into millionaires.
He stood on the podium and rang the bell. At home in Sweden, a debate had flared over whether a company this Swedish could really be Swedish if it was incorporated in London and listed in New York. He told the Swedish wire service TT that he didn't care much for flag-waving, but that what he called svenskhet, Swedishness, was "a huge asset" for a Swedish CEO of a global company. The son of Polish immigrants, whose father's surname cost him job interviews, was explaining to Swedes what was valuable about being Swedish.
It is hard to fit his answer in New York that week into the usual IPO story:
"People ask me about the IPO and ringing the bell. I'm sure all of that's going to be really cool and a fantastic experience. But for me personally, emotionally, after being this kid from this small city north of Stockholm, to actually stand in Bentonville at Sam Walton's grave — and to realize that I will now have the opportunity to work with the biggest retailer in the world, that I've always been the biggest fan of — that to me is emotional on a different level."
Walton ran five-and-dimes in Arkansas, and Klarna now handled payments for Walmart. In Siemiatkowski's private canon, Walton belongs with Kamprad, Branson, and Leahy, all of them merchants who got rich on thin margins and high volume, and none of them bankers. He did not cry at the stock exchange that the Wallenbergs' world revolves around. He was moved at the grave of a shopkeeper.
— Sebastian Siemiatkowski, to CNBC, October 2024I still am crazy enough to think that's achievable.
He meant becoming the size of Google, "hundreds of billions dollar market company, or a trillion dollars." He had said nearly the same thing in 2019, in a book on Sweden's new billionaires by Erik Wisterberg and Jon Mauno Pettersson, Sveriges nya miljardärer: "I really believe Klarna can become a Google, in size and significance."
The stock did not cooperate. By early 2026 it had fallen to about half its IPO price, which hurt him, his investment company Flat Capital, and tens of thousands of shareholders. Dagens industri called the listing his noteringsfiasko, his IPO fiasco, and said he now had to prove himself. The business kept growing anyway. In fiscal 2025 it processed $127.9 billion in volume, reported $3.5 billion in revenue and an adjusted operating profit of $65 million, and served 118 million active consumers. In November 2025 it announced KlarnaUSD, a dollar-backed stablecoin. He had long been a crypto skeptic and had judged it by one question: did it make his mother's life better? In early 2026 the Klarna Card reached five million active users. On July 1, 2026, a Swedish court ordered Google to pay Klarna's PriceRunner unit $1.97 billion in an antitrust case. The same month Klarna applied for an FDIC-insured bank charter in Utah and was named the financing partner for Apple's new device-leasing program, Apple Upgrade. On July 15, 2026, Britain's buy-now-pay-later products came under the Financial Conduct Authority's rules, which put the bank establishment's nightmare in the same regulatory category as the banks.
That summer Siemiatkowski gave a Sommar i P1 talk on Sveriges Radio, the long personal monologue that Swedes treat as a kind of national confessional. The Stockholm School of Economics, which had once been home to the jury that turned him down, promoted the episode on LinkedIn. The school said he talked about growing up in Uppsala, about watching someone he loves slowly fade away, and about the curiosity that kept him looking beyond the next hill.
In 2019 he had told Dagens Nyheter in a headline quote: Jag kunde inte hantera alkoholen. I couldn't handle alcohol. He stopped drinking, and he connects that decision directly to his father, to the sick man and the true father, the one who walked with him in the forest outside Uppsala pretending they were explorers bound for other planets.
His bluntness has a softer counterpart. He tends to believe that the version of a person he knew earliest is the real one. Klarna, by that logic, is still a company that lets you take the parcel home and pay when you're ready. Siemiatkowski is still the 23-year-old in the aula who is hearing schoolyard insults and making a quiet promise.
One more image belongs here, and it comes from before the company had a name. In 2002 or so, two young men from Uppsala who had started out together frying Whoppers set out to circle the world without getting on a plane. They had very little money. They begged food, slept on American sidewalks, and spent a month moving furniture in Sydney because a ship left without them. After 143 days they came back to the place they had started, in St. Moritz, where before they left they had dug a hole and buried a bottle of champagne.
Part IIThe Playbook
These principles come from Siemiatkowski's record, including the parts that went wrong. Some come from what he did right repeatedly. Others come from mistakes he made, corrected, and turned into method. Taken together they describe a particular kind of operator: an outsider who studied thin-margin systems, treated public humiliation as motivation, and held unusually firm beliefs while being unusually willing to admit specific errors.
The principles
- 1.Export the local anomaly.
- 2.Take the risk nobody wants to hold, and charge for holding it.
- 3.Study the businesses with no margin for error.
- 4.Convert humiliation into a deferred invoice.
- 5.Keep a co-founder whose job is to prove you wrong.
- 6.Engineer the stretch zone, not the comfort zone.
- 7.Own the balance sheet before you need it.
- 8.Be different where it is cheap to be different.
- 9.Overcommit in public, then publish the correction.
- 10.Shrink by not refilling.
- 11.Tell employees the threatening truth.
- 12.Settle the founding war before the public market does.
Principle 1
Export the local anomaly
Klarna did not start with a global insight. It started with a Swedish habit. In 2005 Swedes paid by invoice after delivery, distrusted credit cards, and treated debt as shameful. Most of the world looked different. Siemiatkowski's advantage was seeing that this habit was not simply backward. It anticipated where consumers elsewhere might go once trust in revolving credit broke down.
The American bet shows this most clearly. For years he assumed the US was off-limits because it was a credit-card society. Then the 2008 crisis and the regulation that followed changed the numbers. Debit grew about tenfold from 2010 to 2020 while credit roughly doubled. The US was moving toward the market Klarna was already built for. He did not need to change American behavior. He needed to arrive with a finished product when American behavior came around to it.
The general lesson is to treat odd local customs as possible early signals instead of embarrassing quirks. The important question is whether the conditions that produced the habit are starting to appear elsewhere, more than whether the habit could work elsewhere today.
Tactic: List three things your home market does that sophisticated outsiders consider backward, and for each one name the macro shift that would make the rest of the world act the same way.
Principle 2
Take the risk nobody wants to hold, and charge for holding it
The insight from Acme was not about lending. The online merchants Siemiatkowski called did not need cash. They needed someone else to handle the invoicing, chase late payers, and absorb fraud. Klarna took on credit and fraud risk for the merchant, paid the merchant on schedule whether or not the customer paid, and charged a few percent for doing so.
That clarified what Klarna's actual product was. The technology mattered, but the core offering was a guarantee: carrying risk on someone's behalf. Twenty years later Klarna described its credit discipline in those terms, saying it had underwritten about half a trillion dollars, using short loan durations and re-underwriting each transaction in real time, with credit losses of 0.55 percent of volume in the first quarter of 2026. The model only works if you are better at pricing the risk than the party that gave it to you, which is why the "special sauce" approval model, which decided on very little information, was the real asset.
Look for the cost your customer resents more than the cost they can see. Merchants were not trying to save the price of a factoring advance. They wanted to be rid of the worry and the paperwork.
Tactic: Ask your best customers which risk they would most gladly hand off, then work out whether your data would let you price that risk better than they can.
Principle 3
Study the businesses with no margin for error
Siemiatkowski's role models are surprising for a fintech founder: Burger King's kitchen, Toyota's production system, Sam Walton, Ingvar Kamprad, Terry Leahy at Tesco. What links them is that each business had thin margins and a lot of volume, which made operational discipline necessary for survival. "They don't have the advantages of a software firm," he said of fast-food chains. "They are thin-margin businesses that are always squeezed."
This affected how he built the company. From Toyota he took the idea of teams that "participate in the development improvement process on a daily basis." That approach showed up again in the AI rollout, when Klarna brought 200 staff at a time onto video calls to find inefficiencies so that, as he put it, "the team members saw it themselves." From retail he took the habit of checking unit economics. Software companies with 80 percent gross margins can survive sloppiness for a long time. A payments company earning a few percent per transaction cannot.
The point goes beyond admiring retailers. Your role models shape which mistakes you can see. Founders who copy only other software companies inherit their tolerance for waste.
Tactic: Pick one operator from an industry with single-digit margins, study their process documentation as closely as you would a competitor's product, and adopt one of their practices this quarter.
Principle 4
Convert humiliation into a deferred invoice
When the Partnerstämman jury called his idea naive and unworkable, Siemiatkowski said he was "emotionally transported back to the schoolyard," where he was mocked for being Polish. His reaction was a promise: Vänta ni bara, just you wait. He went home intending, in his words, to work himself to death.
This is risky fuel, and he knows it. The same energy produced the shouting that his co-founders confronted him about and that he later treated with cognitive behavioral therapy. Still, the record shows that a specific, named humiliation can drive someone for a very long time, longer than abstract ambition does. The useful version of this is turning the sting into a debt that can be repaid by proving something specific over a set period, and getting rid of the anger once the work has started.
His later comments show he understood the limits. On 20VC he said that people who keep re-arguing whose fault things were learn more slowly. Revenge can start the work, but responsibility has to carry it forward.
Tactic: Write down the exact words of your most humiliating professional rejection, keep them somewhere private, and pair them with a measurable outcome that would prove them wrong.
Principle 5
Keep a co-founder whose job is to prove you wrong
"In my youth, I was always convinced that I was right," Siemiatkowski said, "while Niklas was always able to show me when I was wrong." The partnership worked because the two men had opposite temperaments, one volatile and one steady. When Adalberth left in 2015, Siemiatkowski was the only founder in the building, and much of what happened afterward, including the over-hiring, the layoff list, and the fighting with his other co-founder, looks like what happens when nobody is assigned that role.
To his credit, he kept looking for substitutes. He went to a psychologist. He kept Mike Moritz, an experienced and independent investor, as chairman through years of conflict. He set up the early desks so the founders could watch each other's screens. All of these are versions of the same thing: arrangements that make it hard to keep fooling yourself.
The lesson is structural. A founder with strong convictions needs someone close by who has both the standing and the temperament to say no, and needs to protect that person's position.
Tactic: Name the one person who has most reliably and correctly told you that you were wrong, and give them a standing, formal place in your decision process.
Principle 6
Engineer the stretch zone, not the comfort zone
Siemiatkowski's whole theory of management fits in his description of the swim teacher Petra, who pushed his children "to that exact point where they are almost, almost giving up." He divides work into comfort, stretch, and panic, wants Klarnauts mostly in the stretch zone, and accepts occasional panic. He applies the same approach to his own children, from deliberately adding "some resistance" to refusing to leave them his fortune.
The table below sets the philosophy against common practice and notes where it has worked for Klarna and where it has cost them.
K
The Stretch-Zone Operating Model
How Siemiatkowski's management philosophy compares with conventional practice, and where it has paid off or backfired.
| Conventional practice | Siemiatkowski's approach | Outcome |
|---|---|---|
| Protect employees from bad news. | "Trust my employees to be grown-ups who can deal with complex, threatening information." | Scaled Survived AI transition without mass layoffs. |
| Comfort and perks drive retention. | Stretch is the default; panic is "okay" in doses. | Mixed Perks like free Coca-Cola reportedly fell flat. |
| Hide founder temperament. | Acknowledged rage; treated it with CBT. | Scaled Calmer leadership by 2015. |
| Consult unions before cuts. | Moved fast, published the list. | Risk Lawsuit, strike threat, reputational damage. |
| Small autonomous teams as the end state. | Adopted Amazon-style teams, then reintroduced standardization. | Revised Agility gains offset by incoherence. |
The weakness is that stretch can become panic without anyone noticing, and Sweden's labor institutions were built to resist exactly that. The 2023 strike was a society pushing back on a stretch-zone CEO.
Tactic: Ask each team lead to name, privately, which zone their team is in this month, and treat "comfort" for two consecutive months as a management failure equal to "panic."
Principle 7
Own the balance sheet before you need it
Klarna's full Swedish banking license, granted in June 2017, did not look exciting at the time. It brought regulators, capital requirements, and paperwork, which is everything a fast fintech usually tries to avoid. Siemiatkowski later said its value was not the cheap deposit funding, which he admits Klarna underused. The value was resilience. Many fintech lenders passed their credit risk to third parties, and that worked until their models failed and the counterparties pushed the losses back. Klarna, funded by insured deposits and capitalized as a bank, did not depend on wholesale markets that could close.
"Even if our losses go up and down," he said, "it doesn't change the sentiment of our balance sheet." That stability is part of why Klarna got through an 85 percent drop in valuation that destroyed weaker competitors. The 2026 Utah charter application continues the same strategy in the US, reducing, in CNBC's words, "its dependence on third-party banking partners."
Regulatory burden protects you as well as constraining you. The constraint you accept during good years can be what keeps you alive in bad ones.
Tactic: Identify the single third-party dependency that would end your company if it disappeared during a downturn, and start the slow, boring process of bringing it in-house now.
Principle 8
Be different where it is cheap to be different
"Every one of them had a blue logo, so we decided we wanted to be different." The pink brand, the extra "o," Snoop Dogg in a fur, and the jars of peanut butter cost very little next to the attention they bought. When Politico noted in 2016 that Americans knew few Swedes besides ABBA and Björn Borg, the problem was awareness. Siemiatkowski solved it with personality instead of spending.
The discipline is in what Klarna did not experiment with. Underwriting, licensing, and balance-sheet structure were deliberately conservative. In 2014 he openly admitted that Klarna had copied the banks' fee and interest structures. He concentrated the experimentation in branding and kept the money machinery conventional, so the company looked unusual while operating like a bank.
There is a cost, and Britain's Advertising Standards Authority pointed to it in 2020: playful marketing for a credit product can look like encouraging people to borrow. The brand should be different without hiding the fact that a debt is involved.
Tactic: Map every visible dimension of your category's branding, find the one where every competitor makes the same choice, and pick its opposite.
Principle 9
Overcommit in public, then publish the correction
Siemiatkowski's most distinctive habit is a two-step he has used repeatedly. First he makes a bold public claim: we copied the banks and that's fine, AI can do all of the jobs, we will be OpenAI's favourite guinea pig. Then, when reality pushes back, he publicly corrects himself: cost "was a too predominant evaluation factor," and "really investing in the quality of the human support is the way of the future for us."
Most executives avoid the first step to protect themselves from the second. Siemiatkowski accepts the embarrassment because the bold claim gets him something: speed, attention, and first access to new technology. The AI claim made Klarna the case study every company asked about and contributed to a sharp drop in Teleperformance's stock. The correction cost him far less than the claim had earned.
↺
The Claim-and-Correction Cycle
Each major public position, and the revision that followed.
2014
Defends fees: "We copied the design of these offers from the banks." Later answers critics personally for two weeks.
2015
Admits on a podcast: "I've made every mistake you can make as a boss."
2021
Raises at $45.6 billion; later acknowledges valuation outran performance.
2022
Posts the layoff list; clarifies the next day it was employee-created.
2024
AI assistant does "the work of 700"; "AI can do all of the jobs."
2025
"What you end up having is lower quality." Rehires human agents.
This approach depends on believability, and believability runs out. The NYT and TechCrunch reports that his hiring claims were overstated show the limit. Correcting yourself is only valuable if your claims were honest to begin with.
Tactic: When you commit publicly to a bold position, write down in advance the specific evidence that would make you reverse it, and set a date to check.
Principle 10
Shrink by not refilling
Klarna went from 5,527 employees in 2022 to 2,907 without making mass layoffs the main tool. It stopped replacing people who left, let attrition run at 10 to 15 departures a week, and pushed AI into the gaps. Revenue per employee rose from about $400,000 to nearly $1.4 million. Payroll savings went partly to higher pay for those who stayed.
The contrast with May 2022 is the lesson. The layoff that year, a fast cut followed by a public list, produced a union lawsuit, criticism of the CEO as "tone deaf," and lasting damage to Klarna's reputation in Sweden. The attrition approach removed far more roles and produced complaints but nothing like that crisis. It depends on patience and a reasonably high natural turnover rate, and it moves headcount into a planned, gradual process instead of a single event.
This also requires an exception. Siemiatkowski's admission that quality fell in customer service shows attrition can cut too deep in roles where human judgment is the product. Shrinking by not refilling works only if you watch which empty seats actually hurt.
Tactic: Freeze automatic backfills for a quarter, require every replacement hire to be justified against an automation alternative, and track quality metrics in each affected function weekly.
Principle 11
Tell employees the threatening truth
"We think we're protecting them," Siemiatkowski said of managers who hide coming changes. "But over time, you realize that it generally leads to bad outcomes and lack of trust. I've learned that it's better to be honest and transparent, and trust my employees to be grown-ups who can deal with complex, threatening information."
This is the most attractive of his principles and the one that has caused him the most damage. Telling employees that AI will shrink the company is honest. Comparing unions to Orwell's pigs at an all-hands meeting, and having it leak to the labor press, is honest in a way that cost him. Publishing a layoff list was, in his mind, transparency, and to many observers it was exposure.
The underlying point holds, though, and he backs it with a public challenge to other CEOs: that they reassure employees in public and admit "the jobs are gone" in private. Calling that "dishonest," and using LinkedIn headcounts as a "bullsh*t detector," holds peers to his own standard. Transparency builds trust when it is aimed at the people affected. It loses trust when it comes across as a performance.
Tactic: Before your next major change, tell the affected team what you expect to happen to their roles, then ask them, in the Toyota fashion, where they themselves see the inefficiency.
Principle 12
Settle the founding war before the public market does
Klarna's path to its listing was nearly derailed by a dispute among the original founders. Victor Jacobsson, estranged from Siemiatkowski, opposed the proposed CEO bonus and super-voting shares. His board representative, Mikael Walther, was investigated and removed. A Sequoia partner who tried to oust the chairman was himself replaced. The board fight that played out in Bloomberg and Breakit raised the most obvious question about any founder-led IPO: who will control this company once outsiders own it?
Siemiatkowski came out ahead, with Moritz's backing, a new UK holding company, and an IPO structure that let Klarna choose where to list. It cost him a co-founder relationship and two years of bad press. Questions about control that are put off in the early years, when everyone is friends and the equity is worth nothing, tend to come back at the worst time, when the equity is worth billions and the founders no longer speak.
Tactic: Write your governance and control terms, including voting rights, founder compensation frameworks, and exit procedures, while the company is small enough that the conversation is cheap.
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Part IIIQuotes and Maxims
In their words
— Sebastian Siemiatkowski, to Sequoia CapitalSales is typically seen as this kind of sleazy, lowlife thing, but I find it beautiful. I always loved polishing and refining my sales script; eventually I knew I got it perfect one day when I closed 16 calls in a row.
— Sebastian Siemiatkowski, to Computer Sweden (translated from Swedish)I didn't consider for a moment giving up. I became even more determined to show how wrong they were. I decided to go home and work myself to death. Just you wait.
— Sebastian Siemiatkowski, LinkedIn, May 30, 2022I have mixed feelings about this document. It is a tangible symbol of a very hard decision that saddens me deeply and will stay with me for a long period of time.
— Sebastian Siemiatkowski, to Semafor, June 2025I've learned that it's better to be honest and transparent, and trust my employees to be grown-ups who can deal with complex, threatening information.
— Sebastian Siemiatkowski, to NewsweekThe only thing I kind of regret in my life is not learning to code and be an engineer. Sorry, that's what it is.
Maxims
- Backward is sometimes early. A local habit the world dismisses may be the world's future once its conditions spread.
- Sell the relief, not the loan. Merchants did not need cash; they needed someone else to carry the worry.
- Learn from the squeezed. Thin-margin operators like Burger King, Toyota, and Walmart have engineered what software companies can afford to ignore.
- Keep the receipt from your humiliation. A named rejection can drive two decades of work, as long as anger gives way to responsibility.
- Appoint someone to prove you wrong. Conviction without a check on it eventually wins the argument and loses the company.
- Push people to almost, not entirely. The fastest learning happens just short of giving up, and right after that comes panic.
- Take the constraint in good years. A bank license feels like a burden until the market collapses and keeps you funded.
- Spend boldness on what is cheap. Make the logo pink and keep the underwriting dull.
- Claim loudly, correct loudly. A public reversal costs less than the advantage the original bet bought, provided the bet was honest.
- Settle control while equity is cheap. The governance fight you postpone comes back right before the IPO, with lawyers.
