In its push for international expansion, event management solution provider Lyyti Oy of Turku, Finland, appears to be in something of a ‘perfect storm’, riding three current megatrends: Software as a Service (SaaS), franchising, and marketing & sales automation.

While its global sales and support team serves customers on every continent, the company has also established a local presence through franchise partners in France and the Netherlands. In Sweden and Finland, the company operates with its own sales & marketing teams. Lyyti’s turnover grew more than 20 percent during each of the past ten years, outperforming the growth rate of the European event management market. With the intention of claiming a significant market share in Europe, private equity firm Vaaka Partners took a majority stake in the company in June 2019.

CEO Petri Hollmén, who founded Lyyti in 2006 together with CFO Rami Peltonen, is convinced that its growth could be replicated by many other companies at home.

“Any company in Finland working with a subscription-based business model has an opportunity to convert potential partner companies into SaaS businesses. What I see is that companies who haven’t yet adopted a subscription model are all thinking: ‘How the hell can we get there?’ So, if you know how to do that, the world is wide open.”

The intrinsic advantages of providing software solutions as online subscriptions, rather than selling software packages that need to be locally installed and maintained, have become more than obvious over the past decade. A SaaS solution provider can serve a global audience immediately with every new version and feature, with the exact same brand and user experience, while physical logistics are kept to a minimum. Most of all, it allows for the flexibility to let customers choose exactly what functionality and how much of it they wish to use, and be billed accordingly.

An itch to scratch

In 2018, Petri Hollmén received the Finnish Event Industry’s Evento magazine’s Influencer Award. Also that year, Lyyti Oy and its founders Hollmén and Peltonen received the Entrepreneur of the Year Award by the Federation of Finnish Enterprises.

As with many successful startups, Lyyti was born when its founder had an itch to scratch. In 2006 Petri Hollmén was working as Head of Marketing at Herrankukkaro, a conference and recreational center in the Finnish archipelago, sending printed brochures by snail mail and handing out flyers at trade fairs to interest people in an upcoming customer event.

“With less than a week left before the event and only 10 percent of capacity filled, I decided to try out an email invitation to all our contacts,” Petri recalls. “The response was overwhelming – we got fully booked in no time. Actually, we got 2000 registrations to an event for 50 people. But so was the overhead: copy-pasting contact information and people’s individual preferences from and to Excel sheets, manually replying to all emails… It took me weeks to get back to everybody.”

There had to be a better way.

The few event management software companies Petri found online were American and had no localisation for European currencies, time and date formats, or languages. He also found a couple of Finnish companies selling event registration software on CD-ROMs for 20,000 euros a pop plus 5,000 euros per yearly update. That price level was out of the question.

B2B business-critical

“The world was different back then,” he says. “The business model was different. Software companies had to get the money up-front, because there was no continuing revenue stream; no monthly subscriptions or pay-per-use. You needed a massive event and a huge amount of participants for the price to make sense. It was only for big companies who could afford to pay for saving time.

“And in some cases it was a project business. If the customer wanted some specific features, for example different data fields for attendees or integrations to their own database, those would have to be tailor-made.”

One of the best-known services that Lyyti is often compared to is Eventbrite, although it has a different revenue model, as it focuses on online ticketing for events of any kind, taking a share of the ticket price.

“Our ambition is to be a business-critical tool for B2B events,” Petri says. “The average size of events on Lyyti is 30 to 40 people. Most are actually smaller and some are really big with tens of thousands of participants.”

Most people are no ‘event manager’

So, when should I use Lyyti instead of, say, Google Calendar?

Petri: “Personally I use Google Calendar invitations when we have some internal meeting and I don’t need to know anything about the attendees other than “yes” or “no”. If I have to know whether they are joining the morning or afternoon session, whether they join for lunch and/or the evening programme, then Google Calendar is not an option.

“If you organise one event for six people three times a year? No, you shouldn’t pay 3,000 euros to us to help you manage that. But if you already have the license, it’s so easy to use that you dont’t want to use anything else.

“One thing that’s really important to us,” he continues, “is that, even though we are a technology company, we position ourselves as a service company. We decided from the get-go that that should be our differentiator.

“There is a huge amount of people out there whose job title is not ‘event manager’ and who are basically forced to organise a bunch of events with their left hand. Think, for example, about HR people organising internal trainings. For us this means that we invest a lot into making those people succeed with our tool through tutorials, videos, and portals for individual support.

“Half of the support questions we get are consultative. ‘Hey, we are planning to organise an event in the States next year. It will be on a cruise ship, with 10 different cabin categories and 4 participant categories. It’s group registration and we need a payment gateway. How would you do that?’ So then we might say, let’s workshop on that. And some of those cases turn into separate consulting projects.”

Different business models

Through the years, Lyyti has experimented with various sales models. Petri: “Next to our global sales work out of Finland, we’ve had our own local salespeople in Stockholm and outsourced sales reps in Berlin. After some trial and error I started thinking about the different qualities we need to have in order to succeed in different markets.

“In the Netherlands, for example, to become profitable you need 100 to 200 customers. Everybody in the event industry knows each other. So you need to be part of the network, and have knowledge of the local market, culture and language in order to sell. And local customers want local customer support.”

When looking at France a few years ago, to establish such a local presence Lyyti decided to try a franchise model: “Hiring the right kind of people ourselves in that market would be very hard. But I knew there had to be an entrepreneurial team in the country who could make our product successful. That’s how Lyyti France came about in March 2017.

“In the Netherlands the franchise taker actually found us,” Petri continues. “For Marcel Eilering, the current owner of Lyyti Nederland BV, franchising was not his initial intent; he was rather looking to source a new technology or platform for his event management services business. The company, Event Assist.nl, had been around for some ten years and in exactly the same business we are in.

“But they were running it like a project business. The customers for whom they managed events would never see the software. That software was ageing, they had no resources for the necessary overhaul, and with GDPR coming along it all seemed quite a challenge.”

“Look, if you really want to grow…”

“So Marcel’s idea was to buy a license for our software and continue their business as usual. But instead we said, look, if you really want to grow, you have to make it a SaaS business.”

With Lyyti France as a reference, Eilering was soon convinced it was the right thing to do. The Dutch franchise was operational within ten months, signed up their first customer after two months of operation, and aims at 500 customers in five years.

Petri: “Lyyti has about 850 customers globally. It took us 12 years, but the first years we were just developing the product and starting with zero marketing budget.

“So, we don’t own Lyyti France or Lyyti Nederland. The companies are owned by the franchise takers. They take care of their local marketing, sales, and customer support. We take care of the brand, the technology, and process development. We license our concept to them and receive a share of their recurring revenue.”

The Netherlands is sometimes regarded as a natural destination for Finnish companies that wish to establish a foothold in Western Europe. Finnish technology is appreciated in Holland, the market is conveniently larger, the legal framework is similar and the business culture appears to be compatible.

Getting straight to business

Says Petri: “In Sweden, if you want to close a deal, you have to get six or seven people in the company to say yes. They all have to have a like-minded opinion about it. They are so polite that they never refuse to book a meeting. What’s happened to us is that we’ve had several meetings in vain.

“In Germany, big companies are very hierarchical. There are lots of gatekeepers. Usually you need to convince the secretary first because they control the boss’s calendar. It’s very time-consuming.

“And in France, if you write a one-page business letter, the first two-thirds are just compliments so only at the end do you get to address the business itself.

“So, it’s quite strange. Of Germany, Sweden and France I can immediately tell what the challenges are. But I struggle to find real differences between Finland and the Netherlands.

“In my experience, the Dutch culture and people are very straightforward. You can speak purely about the business. You don’t need 20 minutes of sweet talk to warm up the discussion. And I think you can be very open and transparent about your goals. It feels very familiar; similar to doing business in Finland.

“There are so many global brands and big players in Holland, so decision makers get a lot of phone calls and emails. That means that, perhaps compared to Finland, you need to follow up and follow through even more persistently. But we’ve always done that and I think it’s part of why we have been able to grow.”

Flipping the marketing automation threat

And then there is the marketing automation megatrend that Lyyti is currently riding on. Whereas CRM and inbound marketing software initially seemed to pose some competitive pressure to Lyyti, Hollmén and his team actually managed to flip it around into an opportunity.

“Admittedly, companies like HubSpot, Pardot and Eloqua did take some customers away from us at first. Those customers thought they could get by doing event management with marketing automation software, but in several cases, when we called them after six months, they said it wasn’t quite as easy as they had expected and they wanted to come back to us.

“Marketing automation tools are very good at bringing the online activities of customers, prospects and leads into the timeline. And we are really good at bringing in the offline activities.

“I see that synergy as a huge opportunity as marketing and sales automation will just keep growing over the next several years. So we have built our own turn-key integrations to those systems. As a result, data flows very nicely between our and their platforms, which actually brings value to both sides.”

Petri adds that Lyyti was among HubSpot’s first Finnish customers six years ago. Now, Lyyti’s event management integration solution for HubSpot is the first of its kind on HubSpot’s market place.

Final question: Is there a good book or another content resource – classic or contemporary – that you think should be in every Chief Growth Officer’s library?

Petri: “Well, if you’re looking into the subscription business, there’s this book called ‘Customer Success’ by Lincoln Murphy, Nick Mehta, and Dan Steinman. We have been following the principles in that book when transforming our support services from reactive to proactive. It offers a very clear and understandable framework that you can build on. You don’t have to follow the whole book; you can take bits and pieces from here and there. But I think there is a lot of very useful knowledge in that book. It should be your bible if you want to run a SaaS business.”