How with no VC funding this CFO launched Konsolidator a cloud based consolidation tool now listed on NASDAQ
How this CFO quit his job and seized a rare opportuity when cloud computing gained traction around 2015, launching Konsolidator, an innovative SaaS consolidation software.
- Having been in the finance industry for over 20 years, Claus Finderup Grove knew how time-consuming financial consolidations could be.
- When cloud computing gained traction around 2015, he and his colleagues seized a rare opportunity and developed Konsolidator, an innovative SaaS consolidation software.
- Today, he shares how he moved from his CFO role and co-founded Konsolidator which grew rapidly into a well-established NASDAQ-listed company.
Discovering a gap in the market for a consolidation tool
Finance has always fascinated me and that is why I decided to study Economics at the University of Copenhagen.
After university in 1997, I got an opportunity with a big shipping company Maersk - AP Moller Group. That is where I gained first-hand practical experience in Finance.
In my seven years at the Maersk Group, apart from various financial responsibilities I was also responsible for the implementation of a financial consolidation system.
For that, I used the popular American consolidation tool called Hyperion (now called Oracle Hyperion).
Over time, I seized CFO opportunities in smaller companies.
Again, we needed a consolidation tool and I went back to Hyperion, only to realise it was overly expensive for small businesses!
It was almost impossible to find a financial consolidation product that was both affordable and user-friendly.
After extensive research on the market, I discovered a gap for such a product. I also realized how big the market could be for such a product. However, I was not ready to launch a software company back in 2007, so I kept the idea on hold.
Revisited the idea: CFO turned Startup founder
Years went by however in 2014 as cloud technology gained traction, I thought there was a way to solve the problem.
I was confident the need for a Consolidation tool for small businesses still existed and coming from a finance background I could easily build a product around it on the Cloud.
Although I am not naturally an entrepreneur, I was prepared to take the plunge and launch a consolidation tool. It was not a difficult decision, as I knew the idea would work as there was a need.
But then came the big question - I do not have a technical background, and to build a Software-as-a-Service (SaaS) product one needs to have some knowledge in programming.
How do I go about it?
I decided to build a team and get a developer onboard.
Lars Højer Paaske (software architect) and Jack Skov (a like-minded auditor from Deloitte) joined me.
With over 20 years’ worth of industry experience, I knew that many finance professionals used Excel for every task, even if it is complex.
Jack and I realised that we needed to develop a standardized software where finance professionals could perform complex tasks quickly and with ease.
That is how we came together to work on our consolidation software, Konsolidator.
Growing a startup rapidly into a NASDAQ-listed company
Like most startups, our venture also started in a basement! As risk-averse professionals, we needed funds, so we raised a small amount of money in the early days.
We put our heads together and worked around the clock to develop the software. Then came a time to test the product.
Jack and I tested the accuracy of our product by using our previous companies’ financials. Thereafter, we were confident in our software, so we were ready to launch.
One of the advantages of a SaaS product is that customers can release and test it quickly.
It is true that a product cannot be 100% perfect. We then depended on feedback from our customers. After a week or two, we further refined it.
The problem we were addressing was real, so we were both excited and anxious at the same time.
Fortunately, everything worked out extremely well and there has been no turning back.
In 2019, we listed Konsolidator on the NASDAQ Stock Market. It feels nice to say that we have grown from a team of 3 to 40.
Unlike the typical PI System Management Tools, we used the net framework to develop Konsolidator.
Choosing to list on NASDAQ instead of Venture Capital money?
Instead of raising venture capitalist funds, we chose to list on NASDAQ
We also considered venture capitalists (VC) for funds, but we chose a stock exchange because we sell to CFOs and account managers who know about NASDAQ.
The stock market offered us a wider international reach, so we decided to choose it over VC funds. The other reason is that the NASDAQ has a proper communication platform. This meant that we could easily share the news with our customers on the platform.
Aiming beyond Denmark
Denmark is a small country, so you cannot make Konsolidator profitable from just one country alone. For this reason, we had a global mindset from day one.
The principle behind consolidation is the same throughout the world. That is the reason why CFOs can use our products all over the world. Whether we have a customer in Denmark or India, they can use it without any difficulty, so it is scalable.
We test our product daily to improve the customer experience. Additionally, because of our pay-as-you-go business model, customers can come to our website and pay a €300 or €700 monthly fee depending on their business revenue.
If they no longer like our product, they can easily terminate their subscription on short notice. That is what we call a true SaaS product.
When your product is quite reasonable, the customer acquisition cost has to be low. We wondered how we could market ourselves. Platforms like LinkedIn, Facebook and search engine optimization are here for that.
We used them to acquire new clients. Now, even PwC and KPMG use our product. That ought to be a huge milestone for us.
For all finance professionals who consider starting out on their own
With the advent of cloud service providers, it has become much easier to build SaaS products nowadays, and so is digital marketing.
Hence, there is no doubt that it is much easier today than it was 10 years ago, especially when you are building a business-to-business (B2B) product.
With over 20 years’ worth of finance industry experience, I easily convinced many people to try our product.
Despite the high quality, it becomes a little difficult to market your product as a 22-year-old from university. Having said this, young people can still make it in the industry… They just need determination.
When building Konsolidator, Hyperion highly inspired us. This proves that it is possible to build software that was previously only possible for bigger companies.
For starters, you can look at the kind of software large companies are making, including its special features. Then take inspiration from them to make a much cheaper and simpler SaaS product.
If you have an idea, go ahead and test it as soon as possible to see if it is a good business idea.
As I said before, there is a notable difference between a good idea and a good business idea.