Articles and success stories
Pipedrive – an Estonian company in Shaq O’Neal’s investment portfolio
The Estonian company, Pipedrive, has developed valued customer management software, which provides wise and practical help to any salesman. Recently, the Silicon Valley technology guru, Vivek Ranadive, and the former star basketball player, Shaquille O’Neal, invested in the company.
Pipedrive is another example of a successful Estonian start-up which has the potential to conquer the world. Founded in 2010 without much fuss (or advertising), it has managed to stand out in the vast ocean of customer relations management (CRM) tools, where each “drop” claims to be the best in the world.
The facts speak for themselves: the company has almost 10,000 paying customers (and 50,000 users) in over a hundred countries. It makes millions of euros in sales revenue, while claiming that everything – even the product itself – is still in the early phase of development.
One of the founders of Pipedrive, Urmas Purde, says that, typically for many remarkable inventions, the idea for the product grew out of the frustration of the founders themselves. Purde and Timo Rein worked as trainers and salesmen with one of the most famous Estonian training gurus, Peep Vain.
“We had to manage the sales of our own training sessions. We had invested a lot of money in three different CRMs in a row but none of them were suitable for sales people. We asked ourselves, how we could fail with customer management software three times in a row. And we were still keeping an overview of our sales activity as post-its on the wall,” says Purde.
Five years ago, while giving a training session to a start-up company, Purde was sketching some principles of sales pipeline management on a whiteboard when someone from the audience asked: isn’t there software for that? The idea was born and the group of founders – Rein, Purde, Ragnar Sass, Martin Henk and Martin Tajur – came together to develop Pipedrive. The first seed money came from Peep Vain.
Why is Pipedrive such a high-flyer? Whereas most customer management software is meant for supervisors and focuses on providing them with an objective overview of sales activity and the working sales people only tick boxes in each stage, Pipedrive has kind of turned it upside down: it starts from the needs of the sales person who is working on developing customer relations. It aims to provide feedback on the effectiveness of sales activity in the “sales-pipe”. This new logic quickly won over the first users, who started to use the product’s beta-version in autumn 2010. The following spring the company was established enough to start charging its customers.
Pipedrive helps sales people to maintain focus. Purde explains that sales involve many external impulses and demands: email, meetings, calls and requests from supervisors and colleagues. It is therefore difficult to keep up the pace of work.
“Doesn’t this sound familiar: you work like crazy for a week, making loads of calls, sending tons of emails, but you do not achieve what you set out to do? Pipedrive is here to help. It gives you a clear answer on what you have to do in order to get the best results. What is holding your money up? You maintain the pace and do the right things at the right time,” Purde explains.
Pipedrive has generally received positive media reviews and feedback from clients. Customers include those who have never used customer management software before and have used Excel, notepaper etc, and those who have experience with Salesforce, for example.
Pipedrive can be used to sell anything, from advertising and trucks to journalism. The company targets both small and large customers, and most have found the products without any advertising. They just heard about it from other users. The product sells itself. It may be ironic that Pipedrive, a company selling sales software, has no sales team of its own. Purde says a third of the company’s customers come from Europe, a third from the US and a third from the rest of the world.
In order to use Pipedrive, it does not matter whether a sales company has five or five thousand staff, Purde says. At first the company thought of focussing on bigger customers who made tempting offers to help the company fine-tune the product to their needs. But the founders of Pipedrive stayed true to themselves, believing that this was not the way to reach the masses.
Starting a start-up often provides many lessons. Purde says that they have not just learned a lesson about celebrating success. Estonians are modest in this regard.
When the first customers came on board, they thought this was not a cause to celebrate. Customers began to pay for the service and they still did not think it was worth shouting about. The number of customers grew to ten, then a hundred and then a thousand. It was only with the thousandth client that the founders celebrated in a restaurant. The second big celebration was the opening of the new office in Tallinn.
Pipedrive has now attracted nearly USD3.5 million in investments, including support from two business angels of the Estonian start-up community, former Skype employees Ott Kaukver and Taavet Hinrikus. The company is a graduate of the AngelPad incubator.
Last autumn, without much attention, the former NBA superstar, Shaquille O’Neal, and his multimillionaire business partner, Vivek Ranadivé, invested in Pipedrive. “They were the ones who called us, looking for a partner to serve a couple of customers,” Purde says. “We met and seemed to understand each other. The proposal to invest came from Vivek. We understood that we had a lot to learn from him, especially with regard to building a company like an organisation. If we want everyone to use Pipedrive in the future, we have to integrate with many systems. And this is exactly Vivek’s speciality.”
Whereas the charismatic basketballer O’Neal may be a more familiar name, Ranadivé is no less colourful a character. Growing up in a small village in India, he built up the successful stock-exchange listed IT-services company TIBCO. Ranadivé also “wired up” Wall Street in the 1980s. Since last year, Ranadivé and O’Neal have been the owners of the Sacramento Kings basketball team.
Pipedrive continues to grow and is about to reach puberty. Now it needs to be clever in order to allow the inner life of the company, customer relations and the office side to grow in parallel.
Currently, nearly 40 people work in the two offices of Pipedrive in Tallinn and Silicon Valley.
Purde says: “We are going to reach a 10 million annual revenue run-rate by the end of this year or the beginning of the next. Some smart guys say things get a bit easier as a management team grows with the company. Until then, as is normal for start-ups, we have to deal with all questions fast and at the same time. We have to maintain focus and not get tired.”
Source: Life in Estonia magazine
French household goods retail chain cooperating with Estonian companies
by Maarit Koobas, Enterprise Estonia
GIFI is a French household goods retail chain with a turnover of € 900 million. The company was founded 32 years ago when Philippe Ginestet opened his first shop in Villeneuve-sur-Lot in the south-west of France. Due to customers’ big demand a second store was opened a few weeks later. Today, the number of stores reaches 405 - 377 of them are located in France, in addition there are shops in Morocco, Italy, and Spain. 70% of the company’s goods are acquired from Asia and 30% from Europe. European suppliers include France, Germany, Poland, Lithuania, Italy, the Netherlands and now also Estonian companies.
The cooperation project of GIFI and Estonian companies started when Estonian ambassador met with Philippe Ginestet, the President of Gifi Group, who was interested to find out whether he can find products that are suitable for the profile of his goods in Estonia. While the company acquires its goods generally from big fairs in China and Germany, Estonia represented for them, so to speak, a special project — as they wished to test if such a state-based cooperation would be possible and effective in the first place.
GIFI business model requires that 80% of goods should cost less than 5 euros in shops. Thus, on the one hand, they were looking for products with a cost price about 1-2 euros, but at the same time they were very interested in expanding the assortment of their goods and also in products with higher price. As to products acquired from Estonia, however, the most important criterion was not a favorable price, but companies had to have previous export experience.
In October 2012, Estonian Ambassador to France turned to the Enterprise Estonia (EAS) to find Estonian producers of commodity groups proposed by GIFI who might be interested in selling their products in the GIFI chain stores.
In June 2013, 8 companies chosen by EAS went to France to visit GIFI stores and meet individually purchasing managers of respective commodity groups. In September 2013, under the leadership of EAS, GIFI, in turn, visited Estonian companies and made the final choice of the companies for cooperation there. At the moment goods are supplied from two Estonian companies: Wendre and Mivar-Viva.
Marianne Lehodey, purchasing manager of GIFI interior design goods said that Estonian companies are so far among the strongest and best suppliers of blankets. Until now Wendre has been supplying circa 4000 - 5000 blankets per month to GIFI.
Jane Jaakson, account manager at Wendre said that they hope to expand the range of products sold to GIFI in the fall, during the high season. She added that so far, their cooperation had been smooth.
Estonia: Big Lessons From A Small Country
At the 2014 State of the Province dinner held in Fredericton January 30, New Brunswick Premier David Alward announced the creation of the Brilliant Labs project. Funded by both the government and private sectors, it will provide grants to students and teachers so they can create projects through coding, robotics, and the arts. The plan is to stimulate creativity in schools and to grow entrepreneurship in the province, he said.
The program builds on a previous project. Coding Kids is a pilot project that teaches computer programming to students across the province and is led by David Alston, CMO of Introhive.
The Brilliant Labs project is a smart first step. It will put some badly needed money in the hands of both teachers and students, and it will start to prepare students for the future.
But it is just that – a first step. New Brunswick needs more than just this one project if we are going to stem our economic decline and turn the province around. We need a change in culture and we should be looking towards a tiny Baltic nation for inspiration.
Estonia is home to just 1.3 million people yet it is considered a world leader in the use of technology. Internet access is considered a human right, the country enjoys one of the world’s fastest broadband speeds, and medical records are stored online. People pay for parking spaces via their cell phones, file their taxes in less than five minutes online, and register businesses through a government website.
Computer programming – a basic skill in this new age – is taught alongside math and history and children as young as seven are being introduced to the basics thanks to a program called ProgeTiiger or Programming Tiger.
Huh. Children in the first grade are being taught to create games and to write computer code. Hmmm…
Last December, Estonian President Toomas Hendrik Ilves, who once lived in Vancouver, BC, spoke with CNN’s Isa Soares. He credited the country’s success with starting from nothing. Quoting from the interview:
“We did, in the 1990s, look around us and see a lot of things that we needed to do in the world,” he said. “We were behind in many areas. When it came to IT… we were starting more or less at the same base as everyone else. We started with a tabula rasa, a clean slate,” he told CNN.
Estonia now generates one per cent of its Gross Domestic Product from IT solutions, Ilves said.
All of this success adds up to three advantages for Estonia – a civil service that is lean and agile saving taxpayers money; citizens who have the tools needed to take advantage of a robust economy; and a business climate that attracts and fosters investment and growth.
Consider a small sample of the data. In 2013, 19,166 new businesses were created in the country, a three per cent increase over 2012, according to data released by Estonia Statistics and published in Baltic Business News. And 2200 of those businesses were self-employed. Tehnopol, a business hub in the capital city Tallinn, has more than 150 tech companies.
Still not convinced? Consider this accomplishment. Estonian programmers developed Skype, the internet-telephone that is now used by corporations worldwide. In 2005, it was sold to eBay for $2.6-billion.
In New Brunswick, it is a different world as presented in two publications. Last year, the province’s unemployment rate was 9.7 per cent, as published in the Labour Force Survey December 2013 by Statistics Canada.
And in November, the Atlantic Provinces Economic Council, a think-tank dedicated to studying the region’s economics, released its annual report. The APEC does not have much good news. New Brunswick’s real GDP growth is expected to grow by 0.9 per cent in 2014 and we don’t have any major projects scheduled for the year.
Estonia? The country’s economy is predicted to grow by three per cent in 2014, better than both Germany and France.
None of these ideas changed Estonia over night; it took a decade of solid change before the country began to see success and the drive towards prosperity is still happening in the Baltic nation.
And change will not happen in New Brunswick overnight. It will take time and effort by politicians, teachers, and citizens.
But East Coast people are no strangers to hard work. In the past, we built the province from a rural economy to a world leader in shipbuilding and other technologies. We can have it again. We only need to answer one question.
Do we want success?
Lampserve - Internet based on light
Värska Vesi establishes subsidiary and opens foreign representation in Shenyang, China
The representation began operating at the start of this year, the company announced. The first 60,000 litres of Värska Originaal mineral water arrived in China on 31 December. Jiang Tao was named managing director of the representation. The company hopes to significantly increase its export volumes with the help of the representation.
The company's turnover in 2012 was 6.1 million euros and net profit 1.3 million euros. 10.8 per cent of sales revenue came from export. The company's biggest export market is Latvia.
Below is a short interview with the company's CEO, Urmas Jõgeva.
Why did you choose China as the location for your foreign representation?
Our partner in China used to import mineral water. We met at a trade fair in China in 2010. We then sent them samples. They liked our Värska Originaal and Värska Joogivesi mineral waters. The interest was mutual. The Chinese market is big and growing.
How much time and money did you invest in the opening of the new representation?
We took the first steps two-and-a-half years ago. I don't know the exact amount of the investment at the moment.
How much do you expect your exports to grow this year?
We don't export much to countries outside the European Union. According to our forecasts, exports should increase to 25%.
What are the quantities of the products you will send from Estonia to China in 2014?
We've dispatched the first four shipping containers. Now, a lot depends on how the goods are received by the end consumers. Asia has historically not been a big consumer of mineral water, but that trend's changing. We plan to sell six shipping containers per month at first, but we're ready to supply larger quantities if necessary.
How tough is competition in the mineral water segment on the Chinese market and what do you see as your competitive advantages?
We do have competitors there. There are local bottled products that are cheaper than imported water. However, their quality is not the best. The imported water sold in China is expensive, even more expensive than in Europe. Almost all of the brands known around the world are sold in China. Our partner and managing director have a lot of experience selling soft drinks. The lower price and higher quality of our products are our competitive advantages. Both sides are interested in the project and there are local specialists on our team who know the market.
Are you planning to open other foreign representations in the future?
We're not planning any more at the moment.
Do the Chinese like the products of Värska Vesi products?
We've held some tasting sessions there and the feedback has always been positive. The Chinese visited us with their