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April 21, 2023

In the Hot Seat – CostPocket

Thank you for taking our HotSeat, CEO of CostPocket, Martin Sookael.

How did the last year turn out for your company?

Over 7000 companies joined CostPocket in 2022, so we’ve been busy.

It was a successful year for sure, but I’d like to quote Kiyosaki here and say it was a year of learning. If you are unfamiliar with the quote, he said, “Sometimes you win, and sometimes you learn.” 

What was the main challenge of the year?

Export markets. In plural. Finland, Poland and Latvia. It is a challenge to challenge the status quo in several countries at the same time.

Have the events in the world significantly impacted your company, and how?

Serving about 7% of economically active organisations in Estonia definitely leaves us exposed to the broader economy, and we keep on feeling it.

Typically it happens like this – we make a little but significant breakthrough in growth, but at the same time also, something else happens in the world, affecting the economy. And summa summarum we have still grown only 4% month over month. 

One example was a few years ago at the beginning of the pandemic when within a month, 30% of our customers ceased having operations (and also operations costs, which drove our revenue). 

At the same time, many new companies joined because of the pandemic- about 34% of new companies billed this month. 

So in total – about 4% growth.

Did your company manage to receive the expected results?

We definitely planned to have more revenue. We don’t publish our expectations, but of course, we internally run them and measure ourselves against plans.

What is the outlook for your sector for this year?

E-invoicing is still a big topic, especially in Latvia and Poland. Obviously, automatisation through digitisation is happening everywhere. Also, AI plays its part in automated text recognition and has been playing for a long time.

Open Banking API provides easier data exchange between historically separate data pools. There will continue to be a lot of innovation in the coming years, with previously unobtainable data becoming available over this API. A lot of older-generation on-premise software is perishing, and cloud-based ones are rising. As the accounting software market is pretty fragmented in each separate country and reluctant to change, this process is still happening in the industry in a rather slow way, but the new winners and losers are pretty clearly visible. The faster you get cloud-based, the faster you win.

There is actually an interesting reason why this specific process is taking so long for the accounting industry – historically, accounting software has been built as private as possible, going in several cases even as far as inventing a programming language just for this accounting software. As it’s built as private as possible, bringing it to the cloud has been a “little bit of a challenge”.

What are the goals for 2023 so you would look back on December 31st and say, “It truly went as expected”?

Poland. A lot of our focus, both for Q1 and 2023, is in Poland. It’s a big enough market, and we are in a good position to start growing faster there.

What companies or leaders have been your “personal heroes” this year?

Ivar Siimar, but also the wider Estonian startup community turning its focus to helping Ukraine. Both the decision and capability to work with it are at a very high level.

But why Ivar specifically is that once I was driving to a meeting in Tartu, and I had taken a wrong turn, and I was late for a meeting.

And while I was there in trouble, driving in the periphery of Tartu, I saw a bunch of military-coloured cars parked, and Ivar was working there under the hood of one of these cars.

In Funderbeam, I have a lot of respect for Ampler, Huum, Xolo. And Actual Report seems always to be a couple of steps ahead of us.

I definitely try to learn from Funderbeam as much as I can. Fun example – CostPocket went from weekly meetings with Country Managers to daily meetings because UpSteam wrote about how well it worked for them a couple of years ago. 

What are the three most used applications on your mobile phone, and which one you “couldn’t live without”?

Gmail + Calendar + Hangouts

Photo credit: Joanna Jõhvikas

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