When we visited Estonia we heard from a young Mexican working for a company based in Tallinn. He lived in the city but travelled on business across the world. He was able to gather all the information required, enter it into his tax return and submit online in less than one minute.
It would not be easy to replicate Estonia’s digital government on a national scale. But this level of speed and efficiency should be an achievable benchmark for financial information within a business. The conversations I have and the things I see every day tell me that is not how things are today.
7 Lessons about the challenges of financial information
Startups and growing businesses need better financial information. My financial information survey was the first step in a plan to tackle that problem. Nothing in the survey has changed that view. Now I am able to refine it to a small number of specific statements about what needs to change.
Here they are!
1. Revenue forecasting is the hardest thing. Neither past performance nor external market views help much.
2. Cash flows and funding needs are the biggest worry.
3. Founders and entrepreneurs want a system to help make decisions and plans. It should be:
5. Lack of visibility about cash flow is the biggest worry. Lack of skilled resources to focus on finance is also a concern.
6. Your numbers should help you understand your business. Achieving this means to integrating data from multiple sources, not just financial numbers.
7. Founders and entrepreneurs what data to help understand how their business is doing. It should be:
Painting by numbers
Learning from potential customers is an exercise in humility. This survey asked some broad and fundamental questions. As you might expect, this has led to identifying some much sharper questions. Not to any definite answers.
The responses came from a wide range of perspectives. Many different countries, roles in the ecosystem and levels of experience were represented. This means you have taken me further forward than I could possibly have hoped.
A full analysis of the survey responses is available to download in this slide deck.
The Chairman's View
I started out on this project because startups need better financial information. Next step for me is to figure out how best to answer the challenges posed by the generous response to the survey.
The job of “finance” is to make the numbers into a voice the entrepreneur can listen to and learn from. All the admin, accounting and compliance should just happen. Real time, right first time, invisible. Low cost. I know the job to be done and my aim is to find or build the tools to do it.
The many who offered to help will be hearing from me shortly. Thank you in advance for your further assistance.
Click here to download the full survey results and analysis.
Kenny Fraser is the Director of Sunstone Communication and a personal investor in startups.