Collaboration to Growth: Deeper financial understanding for startups1.4.2019
Collaboration to Growth – agile experiments: 11 startups were provided access and guidance to EY Finance Navigator together with some financial advice. Middle Market Financial Services Manager Jussi Reijonen of EY and COO Kristiina Aatsinki of Applicado will share their observations.
1: Why did you join the Startup Tampere agile experiments?
EY is a global leader in assurance, tax, transaction and advisory services. An agile experiment in Tampere offered EY a fine opportunity to network and increase the company’s presence within the local startup scene.
My work revolves around funding, and I’ve seen that understanding finances is usually the weakest point in startups. This is often explicit in their investor decks, i.e. presentations that should convince investors, says Jussi Reijonen.
One of the participating startups is Applicado, a company known for their pregnancy mobile app Layette. Life is busy in a startup, but still the Applicado team found the time to join what seemed like an interesting experiment. Applicado’s funding round is currently open and financial numbers are worked with every single day. When financial statements are needed, the team usually rings CTO Sampo Pihl and he will ”sort out the Excel stuff”.
– CEO Sini Havukainen and I wanted to deepen our own financial expertise and gain new tools for our entire team to understand the numbers, tells Kristiina Aatsinki.
2: What happened in your experiment?
The participating startups were given access to EY Finance Navigator, a financial planning software that helps build financial plans and projections quickly and easily. Using EY Finance Navigator does not require financial background – there is an AI guiding the user and referencing the financial data of 40 000 companies.
– If you know your business idea and your numbers well, it’ll take a couple of hours to fill them into EY Finance Navigator. And if you are not that familiar with financial concepts, two days should still be sufficient, Reijonen says.
The participants were first served a good dose of information on the subject, then they started to fill their numbers in the EY Finance Navigator and deepen their understanding of financial metrics. Within the framework of the experiment, they can continue using the software for a year.
3: Results and things learned from the experiment?
Jussi Reijonen of EY highlights the fact that the results will really surface in the years to come when the startups grow and evolve. Some of the participating startups were already well acquainted with their numbers, some benefited from benchmarking and the EY Finance Navigator itself seemed to be useful tool for all participants.
– Further to that, lots of great discussions and mutual sparring arose during our sessions together. It is always beneficial to share experiences, Reijonen says.
Aatsinki of Applicado notes that the experiment gave their team more confidence with finances. In the future, a ring to CTO may not be necessary since it is easy to share the numbers from the EY Finance Navigator.
– It also clarifies how things depend on each other in a financial plan. We know it and can see it in the traditional spreadsheets, but the software makes it really visible, Aatsinki says.
4: Your best advice to share?
The whole team must be aware of the startup’s finances: what is going on and why. Aatsinki states that the team has to understand the financial realities, and this is especially important in the first phases of a startup.
To keep the financial touch, the team should meet and discuss the numbers regularly – once a month, Reijonen suggests. When the startup pivots, the changes in strategy and business should make their way just as diligently into the numbers.
If, and when, the startup is seeking international growth, it makes sense to choose English as an administrative language from the very beginning. It may take some effort first, but later it is easier to talk with investors. EY Finance Navigator is in English and helps its users to gain good command of the terminology.
Taking the Finance Navigator to use
EY Finance Navigator is an online financial planning software designed for startups and scale-ups. It guides the user through typical startup financial challenges: building a financial plan, managing cash flow and providing information that investors need.
Updates from businesses: What’s up?
Applicado was founded in 2015 and their pregnancy app Layette has been available in Finland for a year. The company is aiming to spread the Finnish maternity and child care knowledge worldwide, and they are just about to make it into Japan. The effort was boosted in February when the app won NTT DATA’s regional innovation contest and will go to Tokyo for the grand finale.
– The Japanese are interested in the perspectives that Finnish maternity and child care system can open for them, especially how the entire family is supported during pregnancy and parenthood, Aatsinki tells.
Aatsinki says the local startup scene in the Tampere Region is a very good starting point for Applicado. Reijonen states that EY is eager to help build a more dynamic and vibrant Tampere Region, and Finland as well.
The startups in this region are many and various. I’m pleasantly surprised by their creativity every day, Reijonen says.
Agile experimenting is part of 6Aika: Ecosystems of Growth -project
The project aims to generate new business activities in city regions and support growth oriented companies to better
access networks and innovation ecosystems that support their needs. Project is a joint effort by the six largest cities in
Finland: Helsinki, Espoo, Tampere, Vantaa, Turku and Oulu, together with the Council of Tampere Region. The idea of
cities having a significant role in developing and activating networks to support innovation in companies, guides project