The Story behind the hottest Productivity Tool in Accounting
In business the disconnect between the digital and offline paper world is frustrating. It requires fractions of our time and focus, taken away from what really matters and creates value. Every time we send an invoice to our accountants, they must somehow transfer its data into accounting software. Until recently, they had only two options – (1) to retype everything or (2) hire a company to do that for them.
The Slovenian startup Algoritmik introduced a third option called typless, where artificial intelligence (AI) automatically recognizes and extracts all relevant information from the invoices. Their product doesn’t make much sense as a standalone software, but it’s an API that can be plugged into existing accounting or document management software, resulting in significant productivity boosts. Over coffee with the CEO Rihard Jarc, we discussed their progress and growth targets since our first encounter on Business Angels April 2019 Demo Day.
Go big or go home
A dream team of business- and development-skilled individuals never intended to build their company with the help of venture capital investors, but their growth and speed objectives forced them to implement the “go big or go home” way of doing business. Looking back, this decision was smart. They raised EUR 165k investment, which is a small amount according to Silicon Valleys’ standards, but with this injection of funds they were able to test two different go to market strategies, choose one of them and finally almost triple the startups’ valuation. “The fact that the availability of capital in Slovenia is much lower than in the USA, forced us to pay close attention to our business model and its profitability from day one”, says Rihard. This led to much more realistic growth targets which were periodically met since their first fundraising round.
The value of social network
A large part of typless success was the team members’ network. Rihard gave similar answers to two of our questions - how they landed their first big customer and how they convinced their first investor. “Slovenia is a small market, and everyone has this one schoolmate who works in an interesting company”, says Rihard. The meeting with the management of Slovenian market leader in accounting Unija, took place as a result of a discussion over coffee. “We only had 5 % of what we have today when we pitched them our idea, but they were in. Unija is one of the rare companies in their industry that understand the future of their profession and the role of technology in it."
In 2019 in terms of sales Algoritmik reached two milestones. First being the September 2019 hire of a full-time salesperson, and second active participation at the National Congress of Accounting Services in Slovenia. “To excite the market, we pitched the product to the end user - the accountants. These in turn went to their software providers and asked for such a service, that their software couldn’t yet deliver”, says Rihard. As a result, typless had it much easier to land sales meetings with the various software providers.
In mid-February 2020, typless launched their service internationally. They focus on software providers or document management systems (DMS) that do not have in-house AI development teams or resources to develop top notch typless-similar solutions themselves. It is Algoritmiks’ mission to demonstrate the power of typless API to these developers and to encourage them to implement it and offer their clients this tool to save time. Rihard is also counting on the network effect within the developer community: “Developers like to help each other. When they find a useful tool, they share it with their Slack community. Such organic growth is the best growth.”
Algoritmik discovered the industry painpoint and the team receives weekly requests about possibilities to extract data from other offline documents as well. Rihard and the team are consequently already working on extending their API usability. They are setting up a platform for extracting data from any kind of document.
The growth in customer numbers will soon require a full-time customer support manager and the team can also proudly report that sales efforts of six months ago are finally being monetized at a rapid pace. “The adoption timeline of our service is quite long. A customer first tests typless and later includes it into their list of services”, says Rihard. However, typless is lucky – increasing workplace productivity is always on the agenda of managers and fast extraction of data is trendy. Trends always sell well.