Rowan and Birch are both trees common in Scotland and the forests of Estonia. Estonians use these resources as a food source. Birch sap is a popular drink. Rowan berry schnapps a complex delicacy. No-one in Scotland does more than look at either tree. I have never heard of these species being used for food or anything else.
I learned about the potential of Rowan and Birch on a recent visit to Tallinn. Estonia is a little country of 1.3 million people. Our purpose was to find out what makes it one of the most talked about places in tech. Innovative use of resources is at the heart of the story.
Digital ID - The star of the show
The main character in that story is the Estonian Digital ID. Every citizen has a virtual avatar. It allows them to use public services, banking, health care and much more. Everything except marriage, divorce and buying a house can be digital.
Your digital ID is also your signature on any legal document. The digital version of a contract or agreement is regarded as the original. Anything printed and signed is treated as a copy. A total inversion of the way lawyer driven cultures like the US and UK operate.
This virtual self does not need to live in Estonia. You can create your own digital ID through the Estonia e-residency programme for only €100.
Ownership and openness - Two profound principles
It all works because of some fundamental principles. Two in particular struck me. First the citizen owns the data. And everything is open and transparent.
Citizen ownership is not an aspiration or a policy. It is a hard reality that changes the way the whole system works. In our culture security is a tool to build moats or fences or walls. The defences of corporations, banks and entire nations. In Estonia security is designed and built to protect the rights and privacy of each and every individual.
Turning security on its head provides a basis for trust. Openness and transparency cements this by offering a clean and simple form of control. Your digital ID lets you see everyone and anyone who has accessed your data in real time.
Imagine a couple. One is a police officer and the other an ordinary law abiding citizen. The police officer uses that privilege to review data about their partner’s digital behaviour. The partner sees this and asks the police for an explanation. Once the unauthorised access is discovered, the police officer ends up in jail.
This is not made up. Its a true story and every Estonian from the President down knows it. The consequences of being open are profound. Trust has deep foundations. Bottom up rather than imposed from the top. Confidence enables a whole host of digital services and value propositions.
We can all learn from this and apply it.
And the impact runs deeper. I met perhaps a dozen Estonian founders, entrepreneurs and investors during my visit. Every business I learned about was founded on integrity. Digital trust has transformed the entire culture. Both Government and business ethics reflect the highest standards.
How was such a transformation possible?
How did this happen? One of the highlights of the trip was hearing first hand from Linnar Viik. Estonia set itself free during the collapse of the Soviet Union in 1991. He was one of the team tasked with building systems for a whole new country. They had no money to spend and no legacy to build on. The innovative choices they made back in the nineties still form the base for digital trust today.
Its a great story and you can listen to Linnar tell it as To E or not to E. It would be easy to conclude that all this was only possible because of the absence of legacy. Estonia had it easy because they started with a green field. We could never do that here.
The Chairman's View
That is both arrogant and unfair. It reminds me of an old joke. Para Handy is sitting on a capstan by the harbour when a stranger approaches and asks for directions. His helpful reply is “Aaah well, you know, I would not start from here."
Estonia emerged from a long history of oppression, authoritarian rule and worse. You would not wish this on anyone. And the country still has a long way to go. Yet they have built a unique foundation with trust at its core.
Its a great reminder that user experience is as much about the road travelled as it is about the destination. We should not complain about the challenges of our legacy - rich developed country, excellent public services and the world’s oldest democracy is not such a bad inheritance. Let’s learn from Estonia and build a better society and better businesses for ourselves. No excuses.
I set off for Tallinn with high expectations. My goal was simple - to listen and learn. The place, the culture and the digital story far surpassed my hopes. My sincere thanks to Peter Ferry, Dianne Ferry, Neil Mathieson and Chris Martin for making it all happen.
This article is a summary of my most powerful first reflections. I aim to write more about the lessons and the ways I can apply them in the weeks to come. You can see a little more about the trip in Tartan in Tallinn. If you get the chance to go yourself, grab it with both hands.
At some point in every enterprise sale you run into the person who loses their job when the company implements your SaaS. Customers buy the benefits of your SaaS. Benefits are realised through change. Change destroys jobs. If you're lucky it creates better jobs in exchange.
Customers buy the benefits of your SaaS. Xero and Quickbooks simplify the accounting process. This reduces the need for purchasing managers and debt collection specialists and wages clerks. Cost efficiency is often measured in headcount reductions.
Hold on I can hear you say. My SaaS is about enabling growth not a nasty old cost cutting tool. You are not alone. Sales and marketing tools are one of the busiest sectors in the whole SaaS landscape. But growth is only different because it kills your customer’s next job, rather than the one he or she has today.
Surely growth is different?
Think about a typical about a typical SaaS value proposition. A beautiful, easy to use tool that generates twice as many qualified sales leads for every dollar of marketing spend. (I made this up but it sounds real huh?)
For a sales rep this means more time talking to people who are likely to buy. That’s great. Except, any smart sales manager is going to turn that into more demanding targets. Better leads will lead to you needing a higher conversion rate to earn your commission.
The sales manager doesn’t have it easy either. His target will be stretching upward as well. His boss might think that at these conversion rates he can manage a bigger team. And who do you think needs to listen to the complaints of all those Willie Loman sales types struggling to handle the new reality.
At the top of the hierarchy, sits the sales director. This is a different animal. A typical C suite leader. Rational and ambitious. A lion in the sales jungle. All that extra growth and efficiency sounds fantastic.
This person may not even recognise the nagging doubt. Achieving this dream means either a smaller team or a bigger target. Or both. And the credit for soaring sales might go to an upstart SaaS tool rather than a brilliant sales leader. Not every forward thinking sales director sees this analysis as the ideal career stepping stone.
Hope and change loom larger than facts and figures
It all comes back to hope and change (remember those days?) A base case for new software might be as simple as eliminating existing roles. Often things are not so simple. The benefits of SaaS come through better growth, higher margins, great agility. These gains sound abstract but rational analysis shows they are real.
And there is a human reality too. Your SaaS will change jobs today or make the jobs of at least some people different tomorrow. This kind of change is necessary to deliver benefits. But everyone is a little scared of change.
Change the shape of a job in future holds a particular fear. These are the jobs the people you talk to today are hoping to get. The sales rep wants to be the manager. The manager aspires to be sales director. Once in the C suite the director fancies the CEO role.
These hopes matter more to your customers than the day job. Most people in big corporations enjoy what they do. They all hope their next role will be better than their current one. Taking away a known opportunity is a bigger threat than losing what you have.
Making the rational case for the new world is easy. Your new job will be better than you hoped. Easier, less admin, better results. Its still different. Getting there fast just multiplies the effect. Remember there’s a reason why breakneck speed is described that way.
The Chairman's View
When you sell to the enterprise you are not making an individual sale. You are making multiple sales to a variety of different people who all happen to have the same logo on their business card. Some of them are going to feel threatened by your SaaS.
So build the business case. Understand how the customer needs to change. And then help the people you meet deal with the emotional side. Understand the impact you have on their work today and their hopes for the future. That is what I call walking a mile in your customer’s shoes.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.