[00:00] Radu Palamariu:
Hello and welcome to the Leaders in Supply Chain and Logistics Podcast. I am your host Radu Palamariu, Managing Director of Alcott Global. Our mission is to connect the supply chain ecosystem globally by bringing forward the most interesting leaders in the industry.
[00:14] Radu Palamariu:
It’s my pleasure to have you with us today. Christian Lanng, who is the CEO of Tradeshift. Tradeshift drive supply chain innovation for the digitally connected economy. They raised about 400 million USD and are currently valuation at one point of 1.1 billion, and they are one of the leaders in supply chain payments in marketplaces by helping buyers and suppliers digitize all their trade transactions, collaborate on every process and connect with any supply chain, and they currently have more than 1.5 million companies across 190 countries that use their platform to process over half a trillion U.S. dollars in transactional value making it actually the largest global business net of people buying and selling.
[01:01] Radu Palamariu
Christian is the CEO, Co-founder and Chairman, and he has a very interesting story. He started his first technology company at age 19 and was the youngest head of division in the Danish government on the National I.T. and telecom agency where he co-founded and led the Danish Nemhandel Project, easyTrade which was the first open-source yet to be a tech platform. So, Christian pleasure to have you with us today and thanks for taking the time.
[01:30] Christian Lanng:
It’s awesome to be here and thank you so much for having me.
[01:32] Radu Palamariu:
Super and I’ll actually start with your, I forgot about this part of your history, at the age 19 you started an easyTrade peer-to-peer trade platform as part of the Danish government. Tell us a little bit about that.
[01:48] Christian Lanng:
I know. It is actually two different moments. So, maybe I had to start by separating it. I did start my first company when I was 19, but we did. We worked at a very different phase, we worked on the first version of mobile browsers. We’re happy to have at that time some pretty big customers you know in 99 when the first version of mobile Internet was all the rage in Europe but it was a the later part of my life, I was a little bit older when we started easyTrade. easyTrade was the Danish government’s trade platform and that was probably the very first purely internet-based protocol for trade and open-source everybody could download it and just join in, and that was around, I think I was 27, so around 10 years later from my first company, but they’re both really interesting projects back in the day.
[02:48] Radu Palamariu:
No, absolutely. And I mean I’m guessing that from easytrade we kind of helped you jump and start tradeshift. So, maybe tell us a little about the story of tradeshift, how you created it and how it evolved? I know that you are sharing the story of starting it in your own garage which is a fairly cold place to be in Denmark in the winter time and in spring and autumn, I guess, I think in Europe all-year-round, but tell us a little about that phase and how you’ve started.
[03:20] Christian Lanng:
I think the general advice about starting a company in a garage is a great idea to live in California, less so when you live in Denmark, but we did it anyway and I think it may have motivated us to work really fast because we’re all in an agreement that getting an office was a great idea so we could get some heat. I think, I belong to the Internet generation in many ways we’re very lucky. We’ve got world wide web while I was in high school and you know we got to play around with the stuff very early and what was very clear to me, like if you are innate of the internet was there was so much potential in getting and connecting people and connecting things and when we started easyTrade back in 2004, we had a very similar vision which was the easier for companies to connect and do business together
[04:14] Christian Lanng:
the less friction that would be in that process the better it would be for the economy and it was actually a fairly provocative thing in 2004. With EDI networks and what they have been doing for many different years and fairly high complexity in connecting companies and running trade across different supply chains. So, in a way easyTrade was a real sort of pioneer platform. We managed to connect almost 90% of the companies in Denmark to the platform. It was open source companies like Microsoft, Oracle, etc. all adopted the protocols and the standards and it became the foundation for the union project Keppel which some listeners might have heard about which is a sort of the yuppie level version of easyTrade which is also a project to standardize trade and invoicing across all of the European borders.
[05:07] Christian Lanng:
So, I think when we started Tradeshift, it actually came from all of those lessons but also I think that pretty strong vision and even idealism if you want which is there shouldn’t be any friction for companies to connect and do business together it should be as easy as to connecting on LinkedIn and while for easyTrade and for people focused a lot on the technical standards where we build Tradeshift, we said, “okay” now we can take all of those lessons that we have from those projects but apply a different mindset of really just having one platform where everything just works out of the box. You don’t need to be a technical genius to figure it out. What if you have a company somewhere let’s say in Southeast India needs to do business with the North American with 500 companies? Can you make that as easy as clicking three times in the mouse and saying yes?
[05:09] Christian Laang:
If we can do that, and we can take out most of the cost of that system we’re going to be building a very last network of trade. So, that was the starting point and that’s where we started out with Tradeshift as well and our thesis proves correct. So, within six months of starting Tradeshift it had spread to 100 countries and really it was the job of all of the amazing sellers who joined the platform and with the advice of their customers that their sales to the platform we just grew organically out of the box.
[06:27] Radu Palamariu:
So, in three months you said you reached 100 countries? Six months rather.
[06:36] Christian Lanng:
We were sitting with Google Translate tried to figure out what to look for these traits of beliefs because we had no idea.
[06:44] Radu Palamariu:
That’s incredible numbers and I mean I guess there’s the viability of invoicing. I mean you need to issue invoices and you know everybody has different providers and different suppliers worldwide. I want to get the profile of your plus customers right so, I’m on the executive search business, consulting business and we have 15-20 people on our payroll and to suppliers and then you also work with really large actual logistics or manufacturing companies that have thousands and thousands of people. Can we all access your platform? Is there a limit? Tell us a little bit about the proposed plans and how you help them.
[07:24] Christian Lanng:
Yes. So, our goal actually I mean if you think about historically software especially business software has always been made to a certain size of a company like Oracle and SAP, sell to the big guys and quick books sell to the smaller guys and the players in-between don’t want that. So, it’s all been segmented by size and that makes a lot of sense when you think about software that’s running inside the firewall of that company. When we start talking about trade it doesn’t make a lot of sense because trade networks are sort of across all sizes of companies. If you’re a huge fortune 500 company it’s only to have 10 to 50,000 suppliers of all sizes from the guy that cuts the grass on your campus somewhere in Asia to the P.C. manufacturer that leverages the core proximity pieces that you’re using inside your offices.
[08:15] Christian Lanng:
So, in a way, a truly successful supply chain network needs to be able to seamlessly connect and do business for companies of all sizes and that’s a super interesting challenge. Because the software and what we found, if we make the software easy enough, simple and fast enough to understand for the guy who cleans your windows or cut your grass that actually all the benefits the enterprise user and inside the big enterprise. So, this notion that you need complexity to serve the big guys. I actually think mostly is wrong the simpler and easier you can make things, the easy and better the software will work in almost all cases.
[08:56] Radu Palamariu:
So, let’s take some examples let’s maybe give us. I don’t know if you want to segregate that but give us some examples of some kind that you’re working with you can specify names if you can and how specifically did you cut their time complexity maybe if you have some tangible metrics that you saw improved after they started using Tradeshift.
[09:17] Christian Lanng:
No, I mean a sort of 30 days right we built the Tradeshift network that was the first big tool we built and it looks and feels a lot like LinkedIn anybody can join. You can go jogging with your business tomorrow create a profile for your company, start doing business with your customers to the platform all for free. But then you know a year off when we launched, we started getting inbound leads from some of the largest companies in the world that says we keep getting suppliers pinging us if we could do business in tradeshift. Do you guys have any enterprise tools? Because we have thousands and thousands of studies that we need to manage and you know being great entrepreneurs they obviously said yes, showed up and start talking to them about what their use cases that will be quickly found out was for them it was really about managing the whole enterprise payment process end to end.
[10:06] Christian Lanng:
Like everything from KYC of onboarding a seller making sure that the levels complied within the countries that were doing business than running any kind of transaction between the buyer and the seller. That could be a purchase order both payment and logistics message and making sure those were compliant. Maybe you live in Holland or your company is headquartered in Holland but just shipping from Germany and you’re sending the goods to France but during invoicing to Holland, there are actually rules when you’re invoicing from Germany and so it is a big complicated problem if you have 50 thousand suppliers and a Fortune 500 company. And then all the way out to the working capsule payment and pay out and what we thought when we started that was that across 10 to 15 different tools you add a special software for KYC and massive data management you would have software for compliance and tax you would have software for approvals, workflow your software for analytic, insights, and you would have different platforms for the working capital.
[11:06] Christian Lanng:
But it was all connected to the same problem which was really managing your enterprise payment flow on a global level. So, when we built the Tradeshift pay platform it was on top of our network we’re the first I think in the industry to sort of correct all of the dots between these many different sorts of separate processes and that became our first enterprise-grade product. If you look at the general product we have problems of all sizes using that all over the world. If you look at tradeshift pay they have more than six hunders plus customers and Fortune 500 customers in that platform, and they’re pretty much within every single industry you can imagine logistics, retail, manufacturing, finance, professional services. It really doesn’t matter. We have customers both in all of these industries but also with a global reach. Today, we serve customers in more than 190 markets from theTradeshift pay platform so, we comply. Pretty much everything country you can imagine the world and that’s a sort of a big problem solver for the CFO because they don’t need to go to 50 different tools to solve this problem on a global level.
[12:17] Radu Palamariu:
Absolutely. It’s a major help and I need I want to ask you the million-dollar question because you mentioned that just suddenly from a free model you attracted lots of smaller enterprises that you ended up selling to the bigger boys because they were knocking on your doors and they have incredible good problems. How do you make money? How do you monetize or is it monetize as normal software, I mean how do Tradeshift make money?
[12:49] Christian Lanng:
Yes. So, first off you know just let it go on the whole the big guys knocking on the door. I think when you’re a small startup you always wish “oh my God I wish I had three Fortune 500 companies as customer” and that’s my biggest dream and then you get three four and five on a company and customers and go like “oh my God I wish I didn’t have them.” So, you must be proud of them but I think we were a small 70 people company, it almost killed the company right. So, you’re really, there are a lot of things you have to solve and need to solve it a whole different scale when you search for these guys. But today, obviously it’s super proud of these guys but it was built out of growing pains. That’s for sure.
[13:30] Christian Lanng:
So, back to your question and business model right. I pretty much and I’m probably a little provocative here. I pretty much think the industry has gotten it completely bold over the last 25 years. So, the nexus of almost every single business model in this industry has been you pay per transaction and the sellers pay. So, if you take something like that happen at work you pay 5 to 10 thousand dollars to join then you pay 15 to 20 basis points for every single transaction and the buyer obviously also pays something but if you look at the total revenues it’s a fraction compared to what the sellers are paying over. And I think that generates some deep problems because if I go to my customer and say “Hey of course you’re my customer but I’m earning more money on your suppliers”, but who’s really the customer and what’s the alignment.
[14:26] Christian Lanng:
From a vendor perspective, I’ll tell you. OK, I’ll long have wanted 10 percent of the largest supply because that’s aligned with me right. They have 50 percent of their transactions and so there’s some obscure volume no game that’s going to solve the most acute transactions you’re going to be happy. But in reality, that’s not really how it works. It takes some of my large customers and we analyze various acts of the cost from the supply base. It might be that the 10 percent lots of suppliers are 50 percent of your transactions but they’re certainly not 50 percent of your costs because they know what they’re doing they know how to invoice correctly, send PO, all of these things. But, if you look at the tail-end you know thousands and thousands of suppliers that will call to ask about the invoice to make mistakes the main invoices are the transactions who have an issue.
[15:11] Christian Lanng:
It should be cost far more than the last guys. But, the incentive loans are not aligned in the classical business model. It’s the sellers you pay and per transaction. So, we’ve done something very different. We tell our customers one, it’s completely free for sellers because that’s in your interest. That way we can maximize that to the station of the supply chain which is what you should wish for. We want to make every single cell in your supply chain as digital as possible. And number two, our business case is performance-based but enterprise customer. So, we say if we can you know we’ll guarantee that we can hit a certain titration degree at your supply chain and you will pay us a flat rate over three to four years if we hit that target. So, I think really more than be disruptive on the technology there when we actually have to disrupt the commercial model by keeping completely free to sellers and making the pricing better very transparent and performance are aimed at the buyers.
[16:11] Christian Lanng:
It’s clear if you’re a CFO. Okay, this is the value and you don’t. From an ongoing perspective, you don’t create that friction in onboarding the traditional solution. If you’re using a sort of traditional solution from one of our competing providers. I mean every single roll out. Got to stop with a call to the supply and says we have bad news, and we have bad news. The bad news is we’re going to switch over to electronic business and another bad news is you’re not going to be paying a lot of money just for telling a customer that they owe you money versus a call from the customer salon platform which is bad news and good news the bad news is going to switch over to digital and that could be a little troublesome if you’re not used to before but the good news is that it’s completely free.
[16:58] Christian Lanng:
We take care of the migration; we take care of the intigration, you don’t have to think about the pain points and the reason that this worked at scale is obviously that we are two or three generations ahead of technology solutions that started out. It’s not through some kind of classic where you want it to be necessary that a lot of this network, they charge. If you’re technology platform is 15-20 years old but it cost a lot to operate all of these transactions that cost a lot to operate all of this support you have around the brands we have automated most of the setup process automate most of the integration process for the suppliers, and we are on a modern sort of very next-generation cloud since the transaction. It’s not the biggest part of our cost. So, we’ve been able to take away most of that cost that was part of that process and that really creates a much more frictionless onboarding. So, that’s the basis for my business my line.
[17:42] Christian Lanng:
I’m sorry I’m going to break here, this something I’m incredibly passionate about so can probably hear and I’ll let you follow up.
[17:59] Radu Palamariu:
I can definitely feel the passion in your voice and also I’m processing the information as I used to work for a big software company and it is true that the models have been fairly standard like even in my question asked you to like the general efforts of a softwarwe company. So, intrigued and I would look further into the model because it makes a lot of sense right charge per value and also the fact that all the sellers are not charged makes it much easier for that onboarding which brings me to the point of asking you point-blank if you may. SAP Ariba, probably one of your biggest competitors or frenemies or whatever you want to call it.
[18:41] Christian Lanng:
We’ve heard about them.
[18:42] Radu Palamariu:
You heard about them. I also heard about them in passing. What’s the difference between Tradeshift and SAP Ariba.
[18:51] Christian Lanng:
So, I once did an interview where I said again may be brought to me that SAP Ariba, they don’t have customers they have prisoners. That’s not entirely true. But I think look a rebate is a great solution. It’s a really great spent management platform. If, you want to mention procurement and spend you know you’d probably come down to two platforms. I mean that’s fine. I mean they’re great tools for what they do. But Tradeshift is a very different animal, and we often get boxed in with these guys. In a way you can say if you buy Ariba or some other competing solution what you get is a tool that could be a one really great in your supply chain. So, now you have a solution for running a RP or doing a PO, mending contract and that’s it and if you want to do something else you’re rolling out a different tool.
[19:44] Christian Lanng:
We got a big customer within packed goods and we talked to the suppliers we ordered that the suppliers as “how many tools and processes and spreadsheets and PDF and faxes are you dealing with to do business with this customer?” And the answer of the supplier was 24, 24 different tools and processes just to do business with one customer where the procurement part was only one of those twenty-four? Then, the sourcing department, they owns responsible sourcing app, finance, treasury, quality management like it just went on and on. And what’s really neat about the Tradeshift platform is it’s a platform. You roll out the Tradeshift network to supply chain, you pick a product, Tradeshift pay and of course, that becomes an enabling process. But then we have more than 150 third party apps in the platform that takes the care of everything from direct materials, logistics, responsible sourcing, carbon footprint, anti-slavery.
[20:52] Christian Lanng:
And those are just apps that you activate and now they are available on the digital platform you just roll out all of your suppliers. So you are not paying for that cost over all over again. So, if you really want to look at that comparison, it’s really the question of how do a solution like salesforce today compared to the last generation of CRM products that could only do one thing. If you’re buying self-taught you’re not just buying a CRM you’re buying the whole sales ecosystem and its same with tradeshift. When you’re buying tradeshift you’re not just buying a solution for your payment process or AP automation or marketplaces you’re buying a supply chain ecosystem and the most expensive pattern supply chain is not really the software cost, it’s the change management cost. What cost is going up to 40,000 to 50,000 suppliers and get them to do something else.
[21:45] Christian Lanng:
So, if you can put a platform like tradeshift then the future course of change management pretty much goes to zero and every new process you want to switch off to the suppliers or chain rights of the change costs goes down dramatically and I think to surround that whole thing off on what’s the difference here. With a rebound or somebody else you can bring down your transaction costs but you’re increasing your cost of change because it gets even harder to change something because now you have one solution it can only do what you want to do it’s like the old market feature phone if you want a new feature you’ve got to wait for not going to release a new version of the software. And Tradeshift is like a smartphone, you’re running a smartphone out in your supply chain that you’ve got a new app it’s just like activate an app on your phone and you can have a new process the part of a supply chain overnight so, that’s a big difference.
[22:31] Radu Palamariu:
Huge difference and like your provocation with the prison metaphor, I mean I think it’s quite commom that you hear such roll outs and new things and the change management process to take easily between one if you’re optimistic two to three, four years if you’re realistic and by the time you’re finished doing it things have changed so much that sometimes you kind of wonder why you did it in the first place. So, I think that’s a major issue that a lot of company space. I looked at the numbers so, I was reading and I hope it’s accurate that right now there’s a tradeflow so the big number was half a trillion USD just to make it more practical for our listeners. That’s about three times the size of what Amazon has which is maybe makes it more real and easy to comprehend so it’s huge basically. What’s the plan from here? I mean what’s your future one, two, three year down the line where do you think you’re going to go?
[23:42] Christian Lanng:
So, first off I think you know that’s a number that you know on the business side we love and we are poud of every day and on the technical side people they get a wonderful challenge every day right. It’s a huge number. But it’s also, I mean it’s growing you know easily 40 to 50 percent year over year. So, it’s a continuous challenge. This doesn’t stop tomorrow but I think if you look at the future, we think the next generation of B2B networks are going to be a hundred to a thousand times larger than what you’ve seen in the past. If you think about it on the consumer side, all software today as consumers is connected you’re not having a single app on your iPhone or Android that is not connected to some kind of network that network could be Facebook, Twitter, LinkedIn.
[24:26] Christian Lanng:
It could be the app store from Apple but it’s connected and it has the ability to share, transact, to collaborate, building from day one. That’s essentially consumer software is about today in B2B software we’re still discussing the route from a premise to cloud. But, we haven’t really started discussing we move from cloud to network and consumer we already finalized that move. Nobody would dream of using a stay Malone cloud business as a consumer anymore. It’s all about how these connected how we use them in our everyday lives to engage with others network has become the default as consumers but it hasn’t become the default get us as B2B so, I think when you start thinking about that future you’ve got to think about what it totally network, future for B2B look like what would B2B software look like when the future is totally network.
[25:17] Christian Lanng:
Do we really need to do most of the general letter inside the enterprise can be calculated on the network on the fly off things are coming in? Do we need to wait till we have all of the data in the API before we run analytics and cost savings numbers are could we actually also get that from a network level? How do you think about benchmarking do we want to optimize just by single enterprise and optimize the whole value chain? So, some pretty big questions about fundamentally how software works and in a way I think you can see all of the hype around blockchain as a method for this. Now, Blockchain has a lot of takes up the challenges as a technology. I think we’re pretty far away from that particular implementation of networks to be the most important one. But I don’t think we are there far away from catching intimidation but what it means when everything becomes network and I think from trenches side you know we care less about the technology we think the technology is a little bit of a distraction this a discussion, but we think what’s the most important discussion is what’s the future B2B software when it’s that work, and we think that so many super exciting use cases we haven’t even explored yet and which is emerging.
[26:28] Radu Palamariu:
I’m trying to comprehend that I was there explaining the enormity of it really it’s like link – B2B- link to where you guys are a very specific on the trade invoicing all the flows that come to those companies supply chain.
[26:49] Radu Palamariu:
But indeed if you manage to do it from a network perspective through an algorithm see the data analyze the data in real time then it’s mind blowing the type of power that you would have given the fact it’s increased in global scale so fast again you can do it on the global level it’s not going to be big enough for country a bunch of implications.
[27:18] Christian Lanng:
Just to give you two examples actually maybe to make it really sort of practically relevant because this of course is a big mind blowing mission. But two sort of super practical real world examples. So, one is collaboration around the process right on Tradeshift network. If I sent you an invoice and doesn’t answer with that invoice in the old in the past what would happen is that it was just what you paid, then two to four weeks later I would give you a call I ask hey where’s my money. You would tell me hey there was an issue with invoice that we haven’t paid yet. You would go back you would have to pay an exception the new invoice a credit note be created new invoice. But maybe if you’re lucky you would eventually get paid like and basis a bunch of energy, a lot of time, bunch of people on both sides that are involved in resolving this problem.
[28:05] Christian Lanng:
On the Tradeshift platform, if I sent an invoice and an issue with a line. The guy that’s receiving the invoice you can just knock that line and say hey we have an issue here. It opens up a collaboration with the sender. A little bit like Google Docs are both looking at the same document. And that’s a common but little bit like you know comments in Google Docs or somewhere else and says “hey this line has an issue”. You can drill time together in the software on the document, collaborates resolve the issue if it can be resolved straight away and click OK and now it’s resolved. That’s one example which is what we call shadow collaborative workflow well instead of thinking about the workflow just inside the receiving site. What if we can resolve the issue with the facts before it even gets it? So, are you happy, and we have an exception, and we have to go through all of this pain.
[28:47] Christian Lanng:
All right so that’s one example of where having a network mindset when you build workflow collaboration, exception handling is valuably massive. The dollar example is it’s on their A.I. machine learning. So, you know that sort of traditionally whenever you receive a transaction you try to match it so you can do straight through processing and not have humans touch it. So, you might match to a number. No. You might match it to a contract. All of these things but it’s sort of very primitive way of thinking about matching stuff. I mean the chance that an invoice is going to break when it gets the max to is actually fairly high. It can just be system differences. It can be how we name things. It can be small variances but it’s actually still a good invoice. So, what we do instead is we use all of the network data we have on a global level.
[29:40] Christian Lanng:
We look at all of the invoices of the suppliers. But sending out all of the invoices despite receiving and then using A.I and machine learning on that particular transaction we’re looking at four to five thousand data points for every single transaction, and we say OK, if we think like a human should be approval should we not approve this transaction. And then we see what the humans do in between the algorithms based on the human input see what they do, you call the system ATA. It’s our machine learning system for decisions and right now ATA is working 15 to 20 percent better than humans on approvals. So, what we’re now starting to tell our customers is you can turn off approvals for the majority of the organization only run approvals in 5 to 10 percent of your users. Think about that as a random sample and the rest will just be fully automated using ATA up to maybe a certain size because we oppose our prospects over to people. You still want to take certain transactions out and make sure humans will get them. And both are cases that are possible because we have a true network, and we could build true network business processes. It’s not just an enterprise application.
[30:48] Radu Palamariu:
That brings me to a question that several of our listeners had and coming back to the point where you said that there is the bad news and the good news and the bad news you know you’ve got to go digital. The sellers have to go digital. How do you solve it? How do you apart from this zero cost to them which definitely is a big help when you have industries like and we work with major logistics companies and this company and logistics are an industry in shipping and trade and a lot of things like customs and ports and all of that and other industries as are heavily paper based. The traditional paper-based working through that. How do you kind of doing that change managers and change management maybe with sellers and suppliers and help them digitize?
[31:32] Christian Lanng:
So, I think you know I would love to say that we were super smart and strategic when we arrive at the solution to this we were. It was sort of out of necessity. You started with tell us first. We didn’t stop that bias. So, that meant my first customers even though I was a straight with them was sellers all over the world just signing up to buy some parts and do business with the big customers. And that meant we couldn’t really just rely on a big guy forcing them to do something you really have to make sure that there was enough value. So, the answer is actually incredibly simple to say but very hard to do in practice and the answer is you just got to make sure that there’s enough value for those they need to change. It’s as easy as that.
[32:15] Christian Laang:
And most solutions in this phase have not tried to build enough value for the seller. They have relied on the push from the buyer and that creates massive resistance even though you technically the CFO of a big company can tell you got to use this to get paid. You might kind of doing it but you’re not really going to do it. And if your resistance you can get all of these things but if there’s no value and be call up the seller’s and say “look we need you to get on this back but here’s all of the value you’re going to get. You’re going to get prepayment status you know exactly where your payment is. You can resolve any issue much faster. We can integrate your banking system so you don’t have to stop typing. You got access to get paid earlier than your invoice terms just using me building financing solutions on the network.” Then, most sellers are like this is super interesting and you’re not chatting. So, the answer is very simple build more value for the seller. So, there’s no value in changing your behavior and that’s the character. But doing that in practice requires a lot of iteration a lot of practice in actually just selling to sellers without relying on the stick to the bottom.
[33:26] Radu Palamariu:
In terms of growing very fast and I want to bring the topic of discussion now to its incredible the journey that you’ve had in terms of getting to know your 800 employees right both countries. I was reading
[33:41] Christian Lanng:
We actually eleven hundred
[33:42] Radu Palamariu:
Eleven hundred now, so this must be from three months ago or six months and you’re growing very fast. It’s a flip question but I like I liked it and I will ask you what were the three top learnings not to be repeated from building the startup.
[34:08] Christian Lanng:
Don’t ever do big thing. You mean you sometimes get these ideas, we need to do a massive change. Let’s do a big bang across our whole company. Whenever we’ve done that it’s been hard and it killed a lot of autonomy and empowerment and because it needed to be centrally coordinated and you get tied up in democracy. So, I would say whenever we have leaned on our teams leaned on the parliament, giving the teams the freedom to set their records and run. We’ve been doing extremely well and whenever we move to another direction it’s been it’s been way more painful right. So, I said that’s one, another big one is don’t go single market. I think especially European startups have a tendency just to look inwards. Look at one countries, two countries, most businesses trade global and require global solutions.
[35:03] Christian Lanng:
So, at the moment we went global it cost more, but it helped our commercially successful a lot faster. And then finally I would say you have got to feel that there’s something wrong with an account or you should talk to a customer, you should do it as fast as possible. Like whenever you have that costume in your stomach listen to it because it’s a lot smarter than your brain is in many ways, and it knows what’s the wrong way before you do it. And the amount of times that you help us just to reach out and talk to people to say hey is there an issue here? You know it’s something that’s maybe not aligned but we’re not creating value the way we thought we were. That has helped us every single time, and we haven’t really lost a lot of customers to date, so I believe that helps us a lot.
[35:49] Radu Palamariu:
And in terms of building global teams because I know you have a number of offices and I also saw professional license executive search and recruitment. I looked at some of the jobs that you have which are remote. I think you actually advertise on the Website that are globally anywhere. The person is there a secret recipes for building global teams actually to go to this mosque. Is there a special Danish approach?
[36:22] Radu Palamariu:
Danish butter cookies.
[36:28] Christian Lanng:
I know we became global by very early on we were 70 people and I thought some of the very big lessons is always just video whenever you can look people face. I mean nice voice is very different than video. I mean this sounds trivial but it’s a massive difference. It’s the difference between feeling like you’re there and working with people and you know there’s so many great digital platforms today but that’s not really an issue. I think teams that need to collaborate bring them together early in the beginning. So, you do the team built early, and then they can easily go remote and be separated off. But that early DNA and team goal is super important in creating that cultural connection. And then I think you know as a company right we are a global network. Our thesis is that business software is network that everybody is going to get connected. We can probably sort of doing all of that and then advertise that we don’t want our employees to be a network either. So, I think it’s just in our DNA to think the networks. And I think the more organizations in the future while thinking networks the more remote work is also just going to be a natural part of that landscape.
[37:35] Radu Palamariu:
How about your biggest mistakes in terms of hiring?
[37:38] Christian Lanng:
Look, there’s been situations where I would say you hire a little bit too far ahead of the curve. You hire some big shot from a big company and you think you know they have all the answers. And what you often find is that you sometimes know you’ve got to be a little careful even if it’s a big title and a big CV because just because you know how to solve things at you know one hundred thousand people company you might not know how to solve them at a thousand people companies. I think that’s one of the biggest ones I would touch on and then another one is again and again you know the people have proven track records in solving difficult problems even if they didn’t succeed viscerally to be always the people who keep surprising us and keep surprising me over and over and how much value that.
[38:29] Radu Palamariu:
And final question, there’s an aspiring entrepreneurs listening to this podcast as well as corporate people that maybe wants to step into the entrepreneurial life at some point. What would be one or two pieces of advice that you would give as a successful entrepreneur we can say with confidence right to know what would you share to somebody that would embark on this entrepreneur journey?
[38:57] Christian Lanng:
Look, it’s about grit. You’d be surprised how many of our competitors we’ve killed off over time despite being more stubborn and lasting longer so, the ones who have the most sacred thing can last the longest often end up being the winner of the category. And I think that’s more important than the thing and then as a budding entrepreneurs are it’s a marathon not a sprint.
[39:22] Christian Lanng:
I see a lot of young people who are getting themselves burned out within the first year of being an entrepreneur. We’ve been doing this for 10 years now and it looks at me for a tradeshift and you know I’ve been doing startups since I was 19 so my whole life. And I think in the early days we ran like there was no tomorrow and that’s great and that’s a lot of like you know startup blocks and also about us having that approach. But we’ve got to be sustainable because most companies these days are going to take 10 to 15 years to be built to scale. So, pace yourself with that for that time make them not just the twelve months.
[39:54] Radu Palamariu:
Excellent advice. Well Christian been a pleasure really enjoyed the conversation. Great examples practical studies and I wish you all the best and all the success with Tradeshift.
[40:08] Christian Lanng:
Excellent thank you so much. It was great to be here.
[40:11] Radu Palamariu:
Thank you for listening to our podcast. If you like what you heard, we should go to www.alcottglobal.com and click the podcast button for all the show notes of the interview. Please subscribe to our mailing list to get our latest updates first. If you’re listening through a streaming platform like iTunes, Spotify, or Stitcher, we would appreciate a kind of review. Five stars work best to keep us going and our production team happy and of course, share it with your friends. I’m most active on LinkedIn, so feel free to follow me. If you have any suggestions on what to do and who to invite next, don’t hesitate to drop me a note, and if you’re looking to hire top executives in supply chain or transform your business, of course, contact us as well to find out how we can help.