The CEO of Finnish e-invoicing automation provider Heeros is perhaps better known for his accomplishments as a judoka than for his business career. But he is working on it and Heeros is getting there, spearheading the Netherlands.
From 1996 on, Matti Lattu won the Finnish judo championship five years in a row. He also won a bronze medal at the World University Championships of 1996 in Jonquière, Canada, and a gold medal at the Finnish Open international tournament in Helsinki in 1998.
Compact, well-dressed, wearing his auricular hematoma with pride and charm, Matti says that he still benefits from his judo career: “It is actually a way to connect to the Dutch. In the Netherlands you have to be able to do a little bit of small talk. It’s great if you can share something about your own background.”
Heeros offers fully automated solutions for purchase invoice workflow, invoice OCR processing, e-invoicing, e-archiving, SEPA payments, payable and receivable ledgers, general ledger accounting and mobile applications. More than 11,000 organisations in 11 different countries use Heeros’ solutions.
In November 2016, the company was listed on the First North Finland marketplace maintained by Nasdaq Helsinki Oy with the trading symbol HEEROS. Heeros group turnover during the fiscal year 2017 amounted to 7.3 million euros. The group has subsidiaries in Sweden and the Netherlands, but it focuses its internationalisation efforts on Heeros Nederland B.V.
In talking with Matti, it seems that in a nutshell, to successfully land a Finnish business in the Netherlands demands adherence to three rules:
- Get a grasp of Dutch small talk;
- Raise a warchest of at least a million euros;
- Don’t send off no lonesome cowboy.
“I was a bit shy in school,” Matti tells me. “Although I wasn’t super-talented at judo, I realised that if I train hard, I get better at what I do. That I could set a goal and reach it if I put in the effort.”
He started practicing judo at the age of 12, which nowadays would be relatively late for a serious sports career. “A few years in, there was one guy who always beat me. Then, one summer, I decided to keep training, working on my technique while he had a three-months’ break. When he came back, I was able to take him on.
“Judo has taught me how to handle pressure and overcome disappointment. Everyone will lose eventually. What counts is how to stay focused on your target. This has given me self-confidence and still helps me in business life today.
“Everybody in the Netherlands knows something about judo,” says Matti. “People talk about Anton Geesink [the first non-Japanese judoka to win gold at the World Judo Championship in 1961 and Olympic gold medallist of 1964 – JS] in the same way we Finns talk about famous runners like Paavo Nurmi or Lasse Virén.
Something to talk about
“Whether you connect through judo, football or something else, I believe that in life in general, one should be interested in a lot of things. Actually, you should know a little bit of everything. Read books and magazines, be interested in politics, culture, entertainment. Be interested in people!”
Matti has a degree in material engineering and has been programming computer software since he was a teenager. Three years after Pekka Räisänen had founded the company, Matti started working for Heeros as a programmer in 2003.
“I was okay as a programmer but not a superstar. So it was quite natural for me to grow into a more generalistic role, as a project manager and in sales support.” Then, in 2007, Matti became the CEO of Heeros Oyj and has been the CEO of Heeros Nederland B.V. since the beginning of their Dutch adventure in 2015.
Are you a superstar CEO?
Laughing: “No, I don’t feel that I’m a superstar at all. But I realized that I can help Heeros and our customers better by leading the company and letting others do the programming.”
Getting by with English
He considers himself to be “more of a hands-on guy than a big strategist”, so he does get involved in sales work and building relationships with customers. However, even though the Dutch generally speak English just as well as the Finns, part of the customer relationship has to be taken care of in Dutch.
Matti: “If you sell to Heineken, English might be sufficient. But our customers are bookkeepers and financial managers. If you’re dealing with a small accounting office in an outskirt of Rotterdam and you’re really trying to close an agreement or a customer’s problem needs to be solved, then you need local salespeople and customer support in the local language.”
About five years ago, the management of Heeros found themselves at a crossroads. In Finland, the low-hanging fruit in e-invoicing had been picked by then and competition was getting harder.
“From our first foreign customers in Sweden and Estonia we knew that our software worked outside of Finland,” says Matti. “We also saw that e-invoicing was starting to become popular in Europe.
“When we looked closer at Sweden and Estonia we realised that those two markets were not ideal. In Estonia, the price level is lower than in Finland. Having your development costs in Finland puts pressure on your margins when you sell in Estonia. In Sweden, the different currency is a disadvantage. Next to that, Swedes seem to look at Finland as a smaller brother, which doesn’t help.”
A bit like Scandinavian
Roland van de Graaf’s consultancy IMC introduced Heeros to the Dutch opportunity, with a market three times the size of Finland, packed in a much smaller area. Says Matti: “We learned that introductions could be done in English and that Finnish software enjoys a good reputation in the Netherlands. Also, Dutch culture and people’s mindsets felt a bit like Scandinavian.”
He tells that Heeros initially tried to run its Dutch operation entirely out of Finland, an episode that has since been filed under ‘lessons learned’. “Then we hired one person in Barendrecht to handle everything. That didn’t work either. If he had a sick day or went on vacation, nothing happened. One customer visit would take him a whole day, during which everything else was on hold. And our customer support out of Finland was… well, Finnish.”
Much of that has changed as Heeros Nederland B.V. now has a team of eight people. Through some 40 customers – typically accounting offices who offer the solution to their customers -, approximately 200 companies in the Netherlands are using Heeros’ software.
And yet, the funding of Heeros’ Dutch operation still depends on revenue in its home market, Finland, Matti explains: “Our first goal is to break even in the Netherlands, then expand the operation and perhaps move into new markets.” His advice: “Don’t expect to get a foothold in the Netherlands overnight or for less than a million euros.”
Educating the customer
What do you consider to be Heeros’ competitive advantage in the Dutch market?
“We make sure that our customers get their invoices in electronic format, even if we have to scan those ourselves. We guide them through the world of e-invoicing. Compared to Finland, we still have to educate customers a lot about this new way of handling invoices.
“In Finland, a request for an offer usually describes the requirements in minute detail, and then it’s a matter of comparing features and price levels. In Holland the situation is often such that we explain to the customer that they could do their invoices also in this new way. As a result, we have much longer sales cycles and onboarding takes more time in the Netherlands.”
Learning to understand how small talk works in Holland actually turned out to be incredibly important for Heeros. “It’s one of the mines we stepped on,” Matti tells. “The Finnish engineer is a different animal. As a potential buyer, if you are not interested you say, ‘I’m not interested’. In Holland, the prospect is more polite. If they are not interested, they’ll say, ‘Interesting, we’ll check it out later!’
“In Finland, it’s quite common to fire up a demo of the software in the first meeting. In the Netherlands, that’s usually not a good idea even in the second or third meeting. You really need to take the time for proper introductions, to talk about how your solution could benefit the customer, and how it would fit into their systems and processes.
Benefits over features
“It sounds like a cliché that when going abroad, Finnish companies need to talk more about benefits and less about features. We’ve heard this a thousand times from consultants, people at Chambers of Commerce, employer organisations… and yet, I’m not sure we’ve quite learned our lesson.”
Final question: Is there a book or other information resource you would recommend?
Matti: “I am looking forward to reading ‘Growth and Scaleup Enablers for SMEs’ by Veijo Komulainen. It was a bestseller in Finnish and now it’s come out in English. I’ve ordered it and it should arrive any time now.”