For many startups, the creed is usually to dream big and shoot for the moon. But how do you go from local to international? Klippa co-founder and COO Robert-Jan Verheggen talks about the first steps abroad, the challenges and future plans.
Founded in 2015, Klippa develops software solutions to digitize & automate administrative processes. The company helps clients enhance the effectiveness of their organization by using machine learning and OCR (optical character recognition). Klippa currently has an international team of 35 people, with offices in Groningen and Amsterdam. In March 2020, the company received a pretty sizable investment to take things abroad and has been growing a steady base of big, international clients ever since, all over Europe, in the US and South America.
For a lot of entrepreneurs, going international may feel like a dream, but actually taking that step can feel pretty daunting. What was the decision process like for Klippa?
“It wasn’t so much a conscious decision, actually. At least, not at first. For us, it started as a series of small, organic steps, where you just try different things. We have some capable marketeers in our founding team and our online presence and visibility have always been the key to our growth as a company. If we can get people to find us on Google and go to our website, we can turn them into customers. When we started out, that was for a single product and a single language, and it just made sense to build on that.”
And that made you decide to look for an investor?
“Well, we already hired the first international additions to our team in 2019. They were recent business graduates living in Groningen, originally from Greece, Spain and Germany. They didn’t have a lot of experience, but neither did we, haha. We just wanted to see what would happen if they worked for us for a year, just to test the waters really and see what comes out of it.”
“It worked out pretty well and we decided to invest some of our own money first to build on that, such as translating all our content in different languages. We got a steady flow of interest and by the end of that year, we decided to take the next step, which meant hiring new colleagues for sales and legal things. And fortunately, we were able to find an investment partner who also believed in our vision.”
How do you choose which countries to focus on?
“Like I said, it’s testing the water a little. You start with search engine optimization and look at the leads you get. What types of companies are interested. Are they big or small? What sort of tools would they need? Things like that. If we see a lot of interest in a certain country, and these companies are also interesting for us to do business with, we’ll start focusing on that and build from there. But optimizing things for Google isn’t enough of course, we also actively try and find new customers.”
What about the cultural differences?
“That’s actually the part I love most about my job. Even in Europe, there’s a world of difference in how people do business and communicate. I think being Dutch, we have most in common with Scandinavian countries, Germans and Swiss, in terms of both doing business and talking business. We tend to get straight to the point and discuss pleasantries afterwards. In France, it’s the other way around. They want to know about you and your family first for example, before they get down to business. The Americans communicate so easily, but they’re very self-oriented and they expect you to come up with big words and achievements.”
And it probably involves a lot of video conferencing, since travel isn’t really an option these days. Is that challenging?
“It can be. There are also a lot of cultural differences when it comes to video conferencing. Germans are very punctual for example, down to the second haha. And that’s different from Southern European countries, where punctuality is less important, haha. And sometimes it can be challenging when you’ve scheduled, say an hour or half an hour, and you can’t really get straight down to business and talk about your family first, haha.”
“And also something I’ve noticed, a lot of people from the UK turn their screen off, so it’s just audio. British culture is of course very polite. They’ll never outright disagree with you or tell you if they don’t like something. And when you can’t see their face, it’s really difficult to gauge if they’re actually interested in our software or if they’re just politely agreeing to the things I say and I’m sort of wasting my time.”
Would hiring someone to work remotely help solve some challenges? You know, to have boots on the ground?
“I don’t think so, no. If we get to the point where we would actually need a physical office in another country, someone from our own organization would be responsible, rather than hiring someone from the outside. It would be someone from our team or founders. I wouldn’t feel comfortable letting someone else do that.”
“It’s actually interesting, because early on, that was also something our investors were initially a little worried about. If we’re doing business in Germany, shouldn’t we set up a German company structure there, along with an office and German salespeople? We didn’t want to do that. We wanted to stay in Groningen, work with people close to us, who know what they’re doing and don’t sell things or make promises we can’t deliver on.
Different countries have different regulations, administration processes, tax systems etc. How do you tailor your software tools to that?
“That does take some work, yeah. If you look at our invoicing tool for example, a Dutch invoice is formatted a certain way, with certain specific terms used and you train the software to recognize all of these things. German invoices are different for example, so we needed to tweak some things to get it up to standard.”
“But on the other hand, the quality standard is also very high in the Netherlands, which is also something you need to take into account when you decide whether or not to sell your product in another country. If the quality standard in another country is a little lower and our tools work just fine, without needing to be retailored, and in fact already perform better than the competition, why not sell it there? You can always perfect things later on if need be, but for now, you already have a good product.”
What’s the coolest experience so far?
“We’re currently working with Madison Square Garden in the US, which is really cool. It’s the company behind the stadium in New York and they also work in Las Vegas. They build event halls all over the world, in fact. And working with construction companies in many different countries, is, as you can probably imagine, not easy when it comes to processing all those different types of invoices. So they wanted a tool that could process all the invoices from different countries. They couldn’t find a US company that could do that, because most of these companies focus solely on the US, simply because that market is big enough and there’s no need to expand. So they found us, which is really exciting.
Ideally, what will the next few years bring?
“Steady growth hopefully, being able to carry on and go down this road further. We’re now in the process of figuring out how to ideally manage this sort of growth. Like expanding to more countries, more products, more marketing, more salespeople, that sort of stuff. They’re all different dials or buttons you can turn up or down for growth, so we’re trying to find the perfect combination. We currently have offices in Groningen and Amsterdam, but like I said earlier, if we get to the point where we might have to open a new office abroad, that’s also something to think about.