The 5: The First Five Years of Running a Company – A Review of Tomasz Karwatka's Book

"The 5" (Polish title: Pierwsze pięć lat prowadzenia firmy) is one of the most practical Polish business books I've read. It's a great read, and its most important lesson is simple: in business, relationships with people are worth more than the best business plan. It has two flaws, though: too much English jargon, and it keeps coming back to selling the company. I read the Polish edition.

An Author Who Knows What He's Talking About

Tomasz Karwatka started out as a salesperson who didn't sell anything in his first six months on the job. Later, together with his brother Piotr, he built Divante and, after 13 years, sold it to the Cloudflight group in a deal worth up to PLN 260 million (about PLN 175 million upfront and up to PLN 85 million depending on results). He also co-founded Vue Storefront (now Alokai), Open Loyalty, and Callstack, and has supported more than 30 tech companies in total, including through Catch The Tornado, which invested in ElevenLabs.

That matters, because the author isn't building on one lucky success. He makes a point of writing only about things he has seen more than once. The book also has a clear goal. The author reminds us that, according to frequently cited figures, most companies – as many as 80% – don't survive their first five years, and he wants to help at least a hundred entrepreneurs make it through that period.

One thing should be said upfront: this is a book about technology companies. The author openly says he focuses on this industry because technology scales globally, while you can't grow a restaurant a hundredfold. Almost all the examples come from IT, e-commerce, and software houses.

What's Inside

The book has five chapters that roughly follow the stages of a company's life. The most extensive is the third, on growing the company, which takes up about half of the text.

Chapter	What it covers	Most practical parts
1. Entrepreneurship	The author's story, his mistakes, and the goal of a "PLN 100 million company"	The list of the author's mistakes, i.e. what not to do
2. Starting a company	Idea, validation, first customers, legal form, USP	When to quit your job, which legal form to choose, the first 10 customers
3. Growing the company	Funding, product, pricing, team, strategy, marketing, sales	Pricing, marketing on a small budget, the ladder of first customers
4. Hard times	Emotions, crises, difficult clients, co-founder conflicts, deep work	Getting out of a crisis step by step, AI as a personal advisor
5. Success and what's next	The founder's finances, valuation and sale of the company, succession, investing	How valuations are formed and why you shouldn't sell your company when you're exhausted

The Strongest Business Lessons

Catch Your Tornado

This is the central idea of the book, borrowed from Geoffrey Moore's "Inside the Tornado". A tornado is a short period when the whole market starts buying a new technology at once. Demand is so high that even a small company can become a leader, and the market forgives it a lot of mistakes.

The best illustration is the author's own story. As a young salesperson he wrote a blog about usability and published a free e-book. Someone from ING Bank downloaded it and ordered an audit, and after the press release other banks didn't want to be left behind. That's how a market was born in which Karwatka's company was one of the first players. According to the author, companies built on a tornado have ten times better chances of success, and today's tornado is generative AI.

A USP Backed by Facts, Not Price

The unique selling proposition (USP) comes back in the book like a mantra. In Poland, Divante won tenders as a leader in Magento implementations. But at its first conference in the Netherlands, it turned out there were twenty such companies there. The marketing the company had invested heavily in was, in practice, promoting its mediocrity.

The author's conclusion: a USP has to be backed by facts. "The highest quality" means nothing; "we're a supplier to CERN" does. A strong differentiator usually comes from narrowing the offer – finding a "niche within a niche". Divante went from doing "everything" to R&D for e-commerce, and that's how it grew from 100 to almost 400 people.

Sales Is Market Research

In my opinion, this is the most valuable practical part for someone who's just starting out. The author describes a ladder of first customers:

1. The first customer is the hardest, because you have to test your offer from scratch.
2. The second is hard too. Anyone who stops there effectively becomes a freelancer dependent on a single client.
3. The third is the breakthrough, because it usually comes from outside your circle of acquaintances. The offer turns out to be repeatable.
4. From the third to the tenth, the success rate can drop from 80% to 20%. You have to learn that "we'll call you next week" means "no".
5. After the tenth, you need a clear USP and a sales system.

This leads to the most important piece of advice: don't hire a salesperson until you've won ten customers yourself. Otherwise you hand over to an outsider the decision about what your company should be.

Price Is a Message

A low price tells the customer: "choose me if you can't afford the better ones". The author warns against the trap of "we're from Poland, we'll be cheaper", because it attracts customers who will leave for someone €5 cheaper.

The specific advice here is very practical. The authors advised the company Rigby to raise prices by 20% and keep raising them until it started losing projects because of price. The rate went up by almost 40% without hurting the business. It's worth talking about money at the very first meeting, so you don't waste weeks on a client with a budget ten times smaller than you need. There are also reference points for IT services companies: gross margin from 50%, operating margin from 15%, net margin from 10%.

Global Market from Day One

Karwatka considers starting in Poland one of his most expensive mistakes. While Divante was growing in the local market, the whole company – processes, culture, and the sales department – was tailored to Polish clients. When it went abroad, the sales department had to be dismantled and built again from scratch. Callstack, built globally from the start, had better results after seven years than Divante after thirteen.

The story of Open Loyalty shows this well. The first Polish customers bought the product because they liked its creators, and over time they gave it up. When the authors banned selling to acquaintances and released the product as open source, the first customers were companies from Vietnam, Malaysia, and Indonesia. Nobody on the team had foreseen such a use case.

Money Isn't Always the Answer

The chapter on funding cools down the startup fever. Before you look for an investor, the author tells you to ask yourself a few questions. Do you have a repeatable way of acquiring customers? Is your offer scalable? Aren't you yourself the bottleneck? Most companies are built without external funding, and the first source of capital is customers. One piece of advice seems particularly worth remembering to me: don't lend your own company private money if neither a bank nor an investor is willing to.

Crisis: First, Admit It to Yourself

The author doesn't hide that in 2016–2017 Divante was close to bankruptcy and that he couldn't sleep for half a year. His recipe for getting out of a crisis is concrete. You have to name the problem in numbers, e.g. "we're losing PLN 100,000 a month, and we should be making PLN 100,000 in profit". Then you choose the daily actions that affect that result and regularly report on them to the team. It's a simplified version of the 4DX method, described in a way you can implement without a consultant.

Connections: The Most Important Lesson of This Book

What stayed with me most is how much of the author's story depended on the people he knew. This idea isn't collected in a single chapter. It runs through the whole book, from his first job to the last sale of a company.

A few examples:

• Callstack was created because the Karwatka brothers connected two of their employees who hadn't known each other before. In 2025, the sale of shares in this company to Viking Global's funds was the largest transaction of the author's career.
• The first big client came because someone from ING downloaded a free e-book about usability. It's a reminder that you also build a network by sharing knowledge.
• Key employees were hired after student meetups. One of them organized an event better than many commercial conferences. Another called the next day with a specific question.
• The investment in ElevenLabs was possible thanks to a syndicate run by an investor he knew.
• Board members and advisors. The author admits that he found the best candidates for executive roles through an informal supervisory board and communities of entrepreneurs. He paid a good advisor several thousand euros a month and considers it money well spent.

What's valuable is that the book teaches how to build such a network. Rule one: before you start setting up meetings, build something worth getting in touch about. Rule two: don't mix networking with selling, because that's how you waste relationships.

The most practical part is his approach to conferences. Before the trip, the author messages speakers and interesting companies in that city on LinkedIn, suggesting a coffee. If three or four people reply, he doesn't buy a ticket – he meets them in a café nearby instead. If nobody replies, he saves money. At the event itself, he spends at least half of his time on meetings arranged in advance. After all, you can watch the talks on YouTube later.

For the owner of a young company, this is probably the most universal lesson of the whole book, regardless of the industry.

What Bothered Me

English on Every Page

The book is written in the language of the Polish IT industry, where English words are bent into Polish grammar. Founders "hustle", teams need "doers", managers have "fuck-ups", and business angels buy "tickets". Many Polish equivalents would be just as clear. There are also whole English sentences without translation, one of which describes the tornado idea that's central to the whole book.

The author knows this criticism and addresses it directly. He quotes comments along the lines of "interesting, but can't you say it in Polish?" and writes that readers come for the content, so they'll put up with an unprofessional form. Still, the form tired me. At times I felt like I was in a corporate meeting rather than reading a book.

All Roads Lead to Selling the Company

Selling the company comes up in the book very often. It appears in every chapter, from the goal of a "PLN 100 million company", through the "Built to Sell" concept, to a whole chapter on valuations, EBITDA multiples, and the auction process. Divante, Callstack, and Vue Storefront are described mainly through the lens of their transactions.

In fairness, the author has a good argument for this. In his view, building a company as if you were going to sell it forces discipline: order in your finances, independence from the owner, and a diversified client base. He calls this "PE Yourself" and stresses that it's worth thinking this way even if you never plan to sell. I understand that, but many entrepreneurs simply want to build a stable business that gives them a living and satisfaction. That path gets little space in this book.

Far from the Reality of a Small Company

As the owner of a young company, I was looking for an answer to a simple question: what should I do right now to succeed? To be fair, the book does have concrete tools for beginners. It has the ladder of first customers, design partners (early clients who help shape the product), prototypes without coding, and pricing principles. But these parts are scattered across five chapters and mixed with topics that concern companies with several hundred people.

The scale that comes up often also feels very distant. Full management reporting is a "must" from PLN 10 million in revenue, serious buyers appear from PLN 10 million in EBITDA, and a good advisor costs several thousand euros a month. That's valuable information, but it doesn't help someone who has two clients and is wondering where to find a third. After reading it, I had a lot of inspiration, but no ready-made plan. I had to put it together myself.

What to Implement in a Young Company Right Away

Since the book doesn't provide a ready-made plan, I've collected the advice that can be applied in a small company without investors and without a team. All of it is cheap, and none of it requires scale.

1. Sell to your first ten customers yourself. Every sales conversation is also market research. Don't hand it over to a salesperson or an intermediary.
2. Don't count customers who buy out of courtesy. Friends will buy because they like you. The real signal comes only from a customer who owes you nothing.
3. Narrow your offer to a niche within a niche and describe your USP with facts that can be checked, not adjectives.
4. Raise your prices and talk about budget at the very first meeting.
5. Build a prototype without code (a landing page, a mockup, a service delivered manually) and find a design partner who will help you refine it in exchange for better terms.
6. Share knowledge publicly. The author has written a blog throughout his career, and 2–3 LinkedIn posts a week are his best-performing channel.
7. Treat networking as an investment. Arrange meetings before every conference, and don't pester people with sales on first contact.
8. Don't fool yourself. When something isn't working, name the problem with a number and choose the daily actions that change it.

Who This Book Is For

Founders of B2B technology companies will get the most out of it: software houses, e-commerce agencies, and SaaS companies that want to grow fast and in foreign markets. It will also work well for owners of companies that already have dozens of employees and are thinking about a management board, succession, or a sale. For them, the chapters on valuations, ESOPs, and building a "self-running company" may be worth more than many a training course.

Someone who runs a local service or retail business and has no plans to expand will benefit less. The same goes for someone looking for a step-by-step guide to their first year in business. Such a reader will find valuable ideas in it, but will have to translate them to their own scale.

Verdict

"The 5" is an interesting, very well-written book by a practitioner who has built several large companies and isn't ashamed to talk about his mistakes. Its greatest value lies in concrete stories and numbers: from the ladder of first customers, through the advice on raising prices, to the approach to conferences. Above all, though, it convincingly shows that relationships with people are as important in business as product or money.

The English insertions, the constant circling around selling the company, and the scale that feels very distant to the owner of a small company bothered me. Even so, I recommend it to anyone starting their own business in the tech industry. It's worth reading with a notebook in hand and writing down straight away what you can apply in your own company, because the author doesn't give you a ready-made plan.