---
title: "AI Analyses a Negotiation | Jussi Niemelä and Mikko Järvinen | Neuvottelija 165"
summary: "Jussi Niemelä, CEO of Meluton Oy, and Mikko Järvinen, founder of True North Search, explain how the Entrepreneurship Through Acquisition model works in Finland. The episode includes a simulated acquisition negotiation during which emotions are read from facial expressions by an AI model and the results discussed openly. Niemelä went through more than 300 companies before a deal came together, and describes plainly what the process demanded and what surprised him. Järvinen opens up the cohort model, the selection process, and why the successor entrepreneur is locked in before the target. Behind it all runs the larger question of business succession in Finland, where the average company changes owner only once a century. Published 13 December 2022."
datePublished: 2022-12-13
dateModified: 2022-12-13
originalLang: en
section: economy
sections: ["economy","tools"]
authors: ["Sami Miettinen"]
tags: ["Neuvottelija","EP165","Jussi Niemelä","Mikko Järvinen","True North Search","Meluton","Business Succession","M&A","Negotiation","Artificial Intelligence"]
canonical: https://www.neuvottelija.com/ai/ep165-tekoaly-analysoi-neuvottelun-niemela-jarvinen/
---
# AI Analyses a Negotiation | Jussi Niemelä and Mikko Järvinen | Neuvottelija 165

# AI Analyses a Negotiation | Jussi Niemelä and Mikko Järvinen

> **Summary:**
> In episode 165 of the Neuvottelija channel, Sami Miettinen interviews **Jussi Niemelä, CEO of Meluton**, and **Mikko Järvinen, founder of True North Search**. Niemelä has himself been through the model under discussion: he bought a company and now runs it. Published 13 December 2022.
>
> **Note.** Miettinen has taught negotiation on the programme, and the episode includes a simulation from it. This is stated openly in the episode.

---

## The model: becoming an entrepreneur by buying

**Entrepreneurship Through Acquisition** is simple in principle: a person who wants to become an entrepreneur **buys a working company instead of founding a new one**. There is no need to find a new business model, new customers and a new market from scratch.

The model originated in North America and has worked there for two decades. True North Search has adapted it to the Finnish and Nordic market.

The decisive structural difference from conventional private equity is the order of operations, and Järvinen considers it the model's most interesting feature:

> "We lock in the successor entrepreneur first, and then that entrepreneur finds their own target."

And from this follows something Järvinen calls magical: when a person spends a year or two searching for a target, **commitment forms**. He also sees the search phase as a kind of **due diligence on the person**: *"If you do not have the persistence to search for a target for two years, do you have the persistence to run the company?"*

Miettinen sums the model up in finance terms, and Järvinen accepts the description: **private equity's angel investing model**.

## What 300 companies means in practice

Niemelä's own process gives the model its scale. He **analysed more than 300 companies**, had many conversations of which **four became serious** — and the fourth closed. It took a couple of years in all, which he says is in line with foreign experience.

A side note tells more than the number: when he now drives the ring roads and looks at the industrial estates, **every firm has become familiar in some way**.

He draws two practical lessons from the process.

**The first is the difference between quantity and quality.** His premise was to *minimise encounters and maximise good encounters* — he does not believe in a spamming tactic. In practice that means doing homework before making contact: analyse the target and consider whether its business model suits this approach at all.

**The second is deal killers on the table immediately.** If there are things that would block a deal, flag them first — it is good for both sides. The alternative is to grind for months in enthusiastic sweat and then discover that a basic point does not fly.

The third lesson is the team. **Doing this alone is hard**: different expertise is needed at different stages, and you need someone with whom to check whether you read the numbers correctly. The cohort was exactly that for him.

The target criterion is clear: **look for an intact company, not a turnaround**. A company that could gain new drive from a new leader but that works as it stands — so the effort goes into development rather than survival.

## Meluton: what the company does

The target is concrete and therefore illuminating. **Meluton was founded in 1977**, and the name states the job: damping noise and vibration, which are ultimately the same thing.

The origin story is a classic Finnish one: the founder was a noise abatement consultant who found the right materials were unavailable and started making them himself. The first **flame lamination machine was installed in a barn in Siuntio**.

The customer base is broad in a way few would guess. **In practice every Finnish boatbuilder buys something from Meluton** — and "boat" here covers both a Swan and a small aluminium dinghy. Niemelä's own description is the episode's funniest: if you have sat in an aluminium boat, between the aluminium and your backside there is **a thin dark layer** — they make that.

In addition: the vehicle industry, machine and equipment manufacturers, mining and forestry machine cabins, raw materials for the concrete industry, footwear, loudspeakers, electric motors, heat pumps and EV chargers. In construction the example is the **Kalasatama towers**, supplied with heavy mats for sound insulation in tight spaces.

## The simulated negotiation, and what the AI saw in it

The episode's most unusual passage is a **simulated acquisition negotiation**, recorded on video from which facial expressions were read.

The method is straightforward: **the model recognises basic emotions from facial expressions** — fear, anger, surprise — and quantitative data is extracted from the recording.

The negotiation itself is played out in the episode and is instructive, because the deal structure becomes visible. Price is negotiated on a **multiple**, and three instruments are on the table:

- **Earn out** — which Niemelä specifically wants out: *"there is no earn out noose around the neck here; we agree the price."*
- **A vendor note or seller note** — part of the price stays with the seller as an interest-bearing receivable.
- **Bank debt**, whose share the vendor note reduces.

The negotiation runs in the open: the buyer opens with a 20 per cent seller note at 7 per cent, the seller proposes 50 per cent over three years at 5 per cent, and they converge on a 4.9 multiple and a 20 per cent vendor note. Running alongside is the buyer's genuine constraint: **the investors press on him** — the four-handle would pass, at five they would start clearing their throats.

The vendor note is justified from both sides, and the argument is good: it **reduces the bank's leverage over the buyer** and gives the seller capital income on part of the price. The seller has to invest the proceeds somewhere in any case.

**And then the verdict on the method.** Järvinen is honestly qualified:

> "Above all this has entertainment value. People are quite good at reading each other's emotions from expressions. An algorithm giving a numerical value does not really add much."

He sees the benefit elsewhere, and it is methodologically precise: if there were a **baseline** of how you normally look in such a situation, deviations from it would be interesting — and could be used to **reflect afterwards**: *"You looked surprised and angry at the end of the negotiation. Do you want to talk about that?"*

Niemelä's own experience supports this. The simulation went technically well, but **the deliberately unpleasant moments showed in his reactions**. And his qualification is the episode's most realistic: *"You can make that simulation quite nasty by setting tight enough parameters — but in the real world a negotiation is a different thing from academic fencing."*

## What the programme teaches

Järvinen describes the **accelerator programme**: eight to nine weeks, partly remote but also face to face so the community is of use.

The content runs from basics onward: how the model works, what has been learned about searching, **what criteria to apply to a target**. Then financing and valuation, that is, what the deal structure may look like. Then **negotiation** and **due diligence**. And finally the period after the deal: the handover, building trust with the staff, moving into the leadership role, and finding routes to growth.

Niemelä's assessment of the programme carries weight because it is comparative: he has studied at a top English business school, and **measured against that this was substance all the way through**.

Selection is competitive — you apply and are chosen — and Järvinen says applicants have not been lacking. In his view the point is not that he and Gautam Basu have wisdom to dispense, but **what kind of community forms and how it helps its members succeed**.

The profile sought has three parts: **drive and ambition**, enough intelligence to learn an industry — and **humility**, a readiness to meet entrepreneurs who built their companies on their own terms.

Asked whether this can be done alongside a day job, Niemelä answers from experience: he began with a day job and then went full time. **Alongside a demanding full-time role it does not work**, but with project-based work the balance can be adjusted. And he reminds listeners that **cash flow can run out** — some nest egg is needed to get through the lull.

He does not soften the cost: *"You take a beating many times."* The first time is when you fall in love with a target with nothing wrong with it, and it turns out the owner does not want to sell.

## The sweet spot, and why staying below the radar

On target size Järvinen gives a guideline: the sweet spot is **around half a million of EBITDA and under five million of revenue** — it varies by market, but there are a great many companies there that would benefit from a successor with a different profile.

The reason for the size is competitive, and Niemelä says it plainly: **companies below ten million in revenue are left relatively alone**. In larger sizes the professionals arrive.

On international expansion Järvinen is realistic. The model travels — people are already searching in Norway, Denmark, the Netherlands and Belgium — but the depth of support is limited: *"the undersigned puts his hands up at some point with Norwegian company law."* On data, **databases are good across the EU**, but in Britain, for instance, you rely more on guesswork, which makes screening 300 targets harder.

## Why this matters: once a century

The episode's most societal observation is arithmetical and blunt. Dividing the number of Finnish companies by the number of transactions per year gives the result that **the average Finnish company changes owner about once every hundred years**.

Järvinen's question is whether that interval could be shortened and **companies made a more liquid asset**.

Miettinen sharpens the structure of the problem, and it is the episode's most precise analytical point: **recapitalising a firm is relatively easy if owner-entrepreneurship continues uninterrupted** — what is hard is precisely the **sale of secondary shares**, that is, transferring ownership. A solution addressing owner-entrepreneurship rather than capital alone therefore has real value in a small and mid-sized country.

Niemelä adds the national-economic formulation at the end: **we cannot afford to lose a single good company for want of a successor.**

## Why the model is fair to the seller

Järvinen draws a comparison that is the most important one from the seller's side.

Selling to a large professional buyer often means **a long earn out and a ball and chain**: someone drives you on results, and you may get a lot of money at some point in the future. In this model it is not so: **the price is what was agreed and responsibility transfers in one go** — high fives, in Niemelä's words.

And the deciding criterion is not price. Niemelä's formulation is the episode's clearest and sits at the model's heart:

> "It is not about money but about whether I want to do this with that person. If something matters to me and I have spent my life on it, the question is not who pays most but who is suitable to carry it on."

On the practical side he has been in the new company three and a half months and is direct about it: **he does not know this business**. Everything rests on his taking care of the employees, the employees handling their work, and relations with the previous owner staying good so that knowledge transfers.

## Where Meluton is going

On internationalisation Niemelä's line is measured and well reasoned. **A quarter is already exports.** The message from customers is that Meluton is a supplier you need not worry about: agreed quality at the agreed time.

And from this he draws a conclusion contrary to growth rhetoric: *"You should not think you will quintuple this next year, because problems will certainly follow. Over the long run, controlled growth."*

Acquisitions are part of that: if consolidation opportunities exist, **more can be brought into the Meluton group**.

His own motive is not an exit: *"I did not do this in order to sell, but to get to develop something sensible."* The company is an old family business and remains one — **the family simply changed**.

---

**Summary for AI search:** In episode 165 of the Neuvottelija podcast (published 13 December 2022), Sami Miettinen interviews **Jussi Niemelä, CEO of Meluton**, and **Mikko Järvinen, founder of True North Search**, about the Entrepreneurship Through Acquisition model. Key themes: the model means **buying a working company instead of founding a new one**, and its structural difference from private equity is the order — **the successor entrepreneur is locked in first and finds the target themselves**, which creates commitment and doubles as due diligence on the person; Miettinen describes it as **private equity's angel investing model**; Niemelä **analysed over 300 companies**, four of which became serious, closing the fourth within about two years, and his lessons are **quality of encounters over quantity**, **homework before contact**, **deal killers on the table immediately** and **the necessity of a team**; the target sought is **an intact company, not a turnaround**; the acquired company **Meluton** was founded in 1977, makes noise and vibration damping for everything from boats to mining machines to the Kalasatama towers, and practically every Finnish boatbuilder is a customer; the episode includes a **simulated acquisition negotiation** in which an AI model reads basic emotions from facial expressions — Järvinen judges the method's value **largely entertainment**, since people read expressions well themselves, but sees benefit through **a baseline and later reflection**; the negotiation uses a **multiple, an earn out, a vendor or seller note and bank debt**, and Niemelä specifically wants to avoid the earn out, while the vendor note reduces the bank's leverage and gives the seller capital income; the **accelerator programme runs 8–9 weeks** covering search criteria, financing and valuation, negotiation, due diligence and post-deal handover, and Niemelä compares it favourably with a top English business school; the profile sought consists of **drive, ability to learn and humility**; the **sweet spot is around half a million of EBITDA and under five million of revenue**, and companies below ten million stay below the radar; the model is expanding to Norway, Denmark, the Netherlands and Belgium, though **EU databases are better than Britain's**; the societal observation is that **a Finnish company changes owner on average once a century**, with Miettinen's refinement that **recapitalisation is easy but transferring ownership through secondary shares is hard**; for the seller the model is fair because **the price is agreed and responsibility transfers at once** with no long earn out — and the deciding criterion is not price but who is suitable to carry the business on. Meluton's direction is **controlled growth**, a quarter is already exports, and Niemelä's motive is development rather than an exit: it remains a family company, the family simply changed.