“Many entrepreneurs say they want to be global from day one, we wanted to build a sustainable business from day one.” Lauri Lehtovuori, the young co-founder of ProPlaza, looks relaxed as he jokes about start up life but his comment reveals an understanding of one of the biggest pitfalls start ups face. Without a credible plan for how they will make money many start ups fall before their great ideas have found a market. Together with three friends Lauri is intent on building a company that will not just survive but also blossom, and they’ve started well. Revenue began coming in on day two. "We began by building a sustainable business model and solving a problem we saw on the market. It seems like a good start for us and we are really happy there is value in what we are doing."
ProPlaza is a business to business service that helps entrepreneurs and C-Level executives in larger corporations find accountants, auditors or lawyers. It’s part of the boring back office work that no one talks about, but is legally required of every company. Each contract needs a lawyer, every business must be audited, and no one can escape the tax man. The thing is, if you don’t know where to find good, trustworthy people to do these things, how do you find them?
Lauri and his co-founders noticed that friends of theirs who were entrepreneurs would take to Facebook to ask for a good accountant, auditor or lawyer. The same questions would pop up from time to time on their newsfeeds and it got them thinking that perhaps these were not isolated incidents. Since he and his team have a background in management services they realised that this was a problem they were well qualified to solve.
In January they bought a domain and created a landing page for management service providers to sign up to. The concept is very simple. Service providers register themselves and select which areas they work in. Right now the options available are accounting, auditing and tax, law will be added soon. When entrepreneurs are looking for a specific management service they fill in a tender and ProPlaza automatically notifies the service providers in the relevant field.
The email only shows the headline of the service, the size of company, and which industry it is in. That information is free and it is then up to the service provider to evaluate and decide whether they want to pursue this potential client. Should they decide to do so they click a link in the email, see the whole tender and it is only at this point that ProPlaza charge a 9.90€ fee.
Once the landing page was built and a description of the service was available for providers to read they began the long process on personally contacting all the accounting and auditing companies they could find in Finland. One simple reason for beginning in Finland is that all the founders are Finnish, and their strongest networks are here for them to leverage. There was also another, more sneaky reason too.
Beginning in Finland meant that they could build their whole service in Finnish. Researching the market they were surprised to discover that they could find no competitors. They realised that once they publicly launched their service it wouldn’t take long for others to step into the space, so they wanted to make sure that their platform was running well and included all the features both service providers and entrepreneurs would want.
Testing and iteration is an important principle for Lauri. “Will this idea work?”, “Is anyone interested?”, “What have we forgotten?” With everything only in Finnish they could reach out to Finnish companies, get the ball rolling, find out what they needed to fix, add or remove, and all without the rest of the world discovering what they were doing before they were ready.
At first the registrations trickled in, enthusiasm was infectious amongst the team as they sat watching the website’s analytics page. They would follow an IP address and the unknown person behind it as he or she worked their way around the website, unaware that the founders of the website were vocally encouraging them to register. Soon they were counting dozens, and when I spoke to Lauri they had over 600 Finnish companies registered to provide accounting, auditing or tax services.
They’ve been able to gather a lot of important feedback from this phase, but to call it simply a test or beta would be doing it a disservice. As I said in the opening, this is a fully working website, their first revenue arrived the day after they launched the website. It is already in use, and entrepreneurs have been found the services they need, and the service providers have been able to win new work they might have never otherwise known about.
“We’d love to build this into a global service”, said Lauri. He and his co-founders are already looking to the future, near and far. The English version of the service has just launched and through contacts in Brazil they are preparing their next moves already. Once that is set up they’ll then be turning their focus back to Europe, and in particular Germany and Sweden.
It’s only sensible to look to break out of the Finnish market and expand globally. Lauri explained that there are roughly 350,000 companies in Finland, so it’s not difficult to calculate how much you can make in Finland alone, when you charge a flat rate for each tender viewing. He was of the opinion that they would be “lucky if you make €1.5m, super lucky over that!” That’s why you need to look to other markets, staying in one, you hit a ceiling on what you can make as a business. Expanding into growing markets like Brazil, and healthy established ones like Germany, is the logical next step.
There’s also a sense of urgency to the expansion plans because in some ways they feel like they are working against the clock. Lauri looked very serious and reflective when he predicted that, “There is going to be a huge turmoil in the management service provider market. Everything will be digital in 5 years and we want to be part of that.”
They want to move rapidly because right now they believe they have no direct competition, however Lauri sees a future fast approaching when all companies will have their accounts completely digitized. Then the provision of tax and auditing services could theoretically be provided by anyone, anywhere who was qualified. ProPlaza want to position themselves in such a way that when this becomes normal, they will be the services through which companies such as these do their business.
Lauri has big dreams, and Finland might have a new market leader in their back pocket that they didn’t even know they had. We’ll be keeping tabs on them as the year progresses and see how both their vision for the market, and their expansion plans work out.