DocPlanner’s Karol Traczykowski on international business expansion | #18 (PL)
Hi. My name is Michał Rokosz. I am a Partner at Inovo Venture Partners. We support the most ambitious entrepreneurs from Central and Eastern Europe who want to build global businesses.
Today, we'll talk to Karol Traczykowski of DocPlanner about how to expand internationally based on their company's experience. Hi Karol. Thanks for accepting the invitation. Hi. Thank you for the invitation. Nice to meet you in reality, in 3D.
For starters, could you give us an update. Everyone has heard of DocPlanner. Could you tell us a bit more about what DocPlanner is? What does it do? In which markets does it operate? What do you do as part of ZnanyLekarz i.e. DocPlanner?
Of course. In Poland, DocPlanner is known under the brand name ZnanyLekarz ("well-known doctor"). And most people probably associate DocPlanner with a website for patients where you can find the best doctor, read reviews, and make appointments online without waiting on the phone. When we need to make an appointment, we simply do that. And that's how in fact DocPlanner started out - as a so-called Marketplace for patients.
However, as a company we've been much more focused on SaaS for a while now. Software for physicians that allows them to manage their entire medical practice. We provide the most value around calendar management, bookings, queue management, and reminders. We are able to reduce the amount of time spent on management so that the doctors can focus on their patients.
And we also allow for the reduction of so-called "no shows", a situation in which a patient enrolls but doesn't come. This is a loss of time and money for the doctor. We started as a Marketplace. That is how we entered many markets.
However, we provide a lot of value to physicians and facilities in the form of cloud-based physician software. As I said, we started with a calendar and we moved towards managing the whole office, including electronic medical records, back office, administration, as well as analysis of what's going on there. And those are our core functions and activities. In some countries, we also have simply acquired software for physicians to run a medical practice or facility. Let me interrupt.
Before we move on to where DocPlanner is now and its plans for expansion. I find it very interesting, because Marketplace and SaaS are probably the most popular models for startups. DocPlanner combines the two.
It is said that in SaaS-enabled Marketplace models the standard path is that you begin as a SaaS and at some point a Marketplace is built on top of that. That is the way that Booksy went. You chose to go the other way. DocPlanner was a pure Marketplace that started with a very strong SEO.
Today you say, as I understand it, that the core of your business is SaaS. How do you transition from Marketplace to SaaS? Yes, you're right it's a unique model. Recently, after we acquired Jameda in Germany a friend of mine in that market said it was a surprising acquisition because she has yet to see a company move from Marketplace to SaaS. I told her that is exactly what DocPlanner did. That is, we started as a Marketplace and moved in the direction of SaaS. So, de facto, it started as a place where patients could find a doctor and make an appointment.
We had to find a way to get this patient to the doctor so that the doctor knew they would be coming to them. And in the beginning it was just a piece of paper you might say; calling the doctor to let them know that someone had arrived. Eventually, we wanted to do two things. First, to communicate this information as soon as possible to the doctor so they knew the patient would be there.
Secondly, and this is something that is very important in terms of booking, the goal was to show the availability of the doctor in real time. So we could avoid situations when a slot was declared, booked, and turned out that there is over booking. It was crucial to us that the doctors gave us their availability in real time. In order to do that, we had to provide a tool through which they could give us the information on which slots were actually available.
In the beginning, we only supplied some of the patients. It was more a matter of giving us the dates that were available but still managing it with their analog calendars. As time passed we started providing more and more services including confirming that the patient will come, sending them a text message so that they will actually show up, etc. We started providing more value to the patient and the doctor in that their bookings were in our software. As it turned out, it pays off for the doctors to keep all of their bookings and manage their entire calendars in our software.
The value we gave in terms of user experience was found to be better than the software that was currently available. They either didn't have a calendar section at all, or it wasn't available to patients so they couldn't book online. Starting as a Marketplace and giving doctors simple tools to manage their availability allowed us to deliver more and more value. They found that our solutions were so good that it made sense for them to switch over to what we were offering. And that started with the calendar portion.
Later, we went deeper. Does having a Marketplace give you an advantage over someone who identified a problem that there is a lack of software for doctors and simply built a good SaaS? I think it's like you said, these are different approaches to the same market. Some build SaaS that solves various physicians problems in the form of software. And some players may later build a Marketplace on top of that - much like Booksy did in the beauty market.
However, we simply started from a different angle. We certainly provide value in that we allow doctors to be available to patients. To be easily accessible and bookable is a great value to them. First of all, we are able to bring in what is known as "new business" so new patients from the marketplace.
But we also solve the problem of managing the calendar. There are situations where a given software is good at keeping records of the visit for the patient, but the doctor or facility decides to use us anyway as a secondary software for calendar management because that's where we're better. Of course, there is the possibility that someone will enter the market as software for physicians, will start to get better, then will want to build a Marketplace around it. Therefore, we go deeper into SaaS to be an increasingly stronger player, to be able to provide all the software for the physician and the facility. Thanks. Circling back to the beginning, could you tell us a bit about what the geographic range of DocPlanner is? And a few words about what you do in the organization.
Sure, sure. We are currently present on 13-14 markets around the world. Of those, our Big 7 are: Poland, Italy, Spain, Germany, and Turkey in the European section, and we have Brazil and Mexico across the pond. Those are the 7 largest countries from which we receive the vast majority of our revenue. On the other hand, it is important to note that DocPlanner hasn't been a Polish-centric company for a while. At this point, only 15-20% of our revenue comes from Poland.
The top 4 are Poland, Italy, Brazil, and Germany. And they switch places periodically. That is our geographical range. On one hand, we have the core of DocPlanner which is the service for patients to schedule appointments.
On the other, we have the software for physicians. It's the kind of business that is growing very nicely, not without its challenges, but it is growing nicely. My role is to look for and find the next big thing for DocPlanner. Something we will be able to add as another growth lever in the future. If that main line continues its growth, then like the largest companies in the world, have 4 or 5 products in the portfolio that make up the group's total global revenue. How do you look for the next big thing? Because we're talking about a business in tens to hundreds of millions of dollars in revenue.
You're the leader in many markets where there is still plenty of growth ahead purely as a result of market penetration. How do you approach finding something that can make a difference in a business of this scale? Our sort of north star when it comes to finding these new things is to find and build business lines that can bring in about 10% of revenue for the group globally within 3-5 years from launch. The difficulty is that these are fractions with an increasing denominator since it's the revenue of the whole group. It grows every year so this task becomes more and more difficult. What's curious about this is there are less new things that are large enough to affect the entire group.
We mainly look for things that can be transferred between markets with some adjustments. There are very few topics that can be large enough in one country that are actually big enough for the whole group. So that's the sort of limitation we have. I would say there are many topics that are interesting and trendy right now, but we're wondering if in 5 years they'll be big enough for the whole group.
Sometimes, there are new topics that are shiny and trendy, but we tell ourselves at the moment and at the level of market estimation it will not be big enough for us and we are not dealing with it; despite the fact, that many people would probably like to do it. This is when you have to say, "Cool. But we aren't doing it." Thinking further, we probably have two important paths. The first one I call 'Zero to Hero' which means we have ideas coming from different places whether it be a company, investors, employees, customers, or users, and we try to see if they could be that next big thing. Then, we go through a classic process of building an internal startup through qualitative validation, experiments, checking if the international market is big enough, all the way to making a prototype and reaching a point when we have our first customers and the business is starting to grow to a meaningful scale and we see after all that work that this may be big enough. And this is a thing that comes back to us very often.
When we dig deeper and we check if we still believe it can be big enough. This is what the road from 'Zero to Hero' looks like when it comes to generating new lines of products. You said there is a second way... Yes. The first one is 'Zero to Hero' - from idea to healthy growth. The second is when we try to commercialize a product we already have either in a new country through geographical expansion or to a new segment in an established country. Geographic expansion is an example that's fairly easy for everyone to understand because we have a product and we look at where else it can have a product-market fit as I said earlier.
However, the second thing is to look at the country we're in and see if there are untapped segments where we can deliver value with a similar product. One thing DocPlanner did in the beginning was to partner with individual doctors and facilities, etc. We started going up in the market and it happened fairly organically.
We thought we could service bigger facilities and deliver increasing value. Let's see how their needs differ. Sometimes that product needs to be a little different. For instance, enterprise customer service starts to be more important or elements of the product may need to be integrated. There may be a need for integration or exchange of data on the map or something like that.
Another example that is very fresh in our case, is working with general practitioners in Italy. To date, DocPlanner worked primarily with specialists in the private market. That's how it is in Poland and in most other countries. However, recently we have also started to enter the primary care physician segment.
So we have primary care physicians vs. specialists and doctors in the public market rather than the private market. Again, the role of my team was to understand what are the needs of this segment, does the product we have fit or do we need to drastically change something, and eventually start selling there. A year ago we had no customers there. Now we are at 400 paying customers and we're scaling our team. We had to understand how to repackage the product. In this case, it turned out that it just needed to be, let's say, packaged differently.
That is, to highlight certain things and downplay others. We had to start doing sales reconnaissance. We created a product that fit customer needs and was close to the product we already had.
And we just started selling it to local Italian teams and very quickly we saw that it works. We were able to close first sales quickly. Based on recordings from salespeople, we were able to see what we were still missing and actually start going deeper into this market. A year ago we didn't have that at all, and at this point it has become part of our corporate strategy to be in the market of general practitioners. For now, we are focusing on Italy.
However, the commercialization of existing products to new segments or new countries is also one way to build new business lines in a large company. Do you have a market where you first test the products and then try them in the other 13 markets? Or is your portfolio so diversified that each market has slightly different products? I would say that the core product is the same everywhere. We've tried for a long time to make the primary technological aspect of the product available everywhere. If we develop it in one place, we do it so that it can be implemented everywhere. So for a long time there were very few local modifications.
However, if we are talking about testing new products and services then I would say, it depends on where we see the largest product-market fit or e.g. where such demand from customers is coming from. That's often where we start building the concept. Later, we look to see if that might work in other markets.
There are some products that we started testing in Italy such as the general practitioner. It worked there and we're checking if it'll work in other markets as well. But there are also products that we launched in Brazil and Mexico; they worked there and we'll be checking soon to see if they'll work in other countries as well.
So you don't have one market where you test products. Instead you see which one is the most promising for a given product and that's where you go first. Yes, and the second market we'll choose is the one where we feel that the difference in the product will be the biggest.
Because it can also depend on the product or what needs to be implemented. There's a product we implemented in Poland because of the specifics of paying for services. The second market we tested was Brazil because the specifics of paying for services is completely different.
We knew this would be a crucial issue so we wanted to see if it would work there as well. In Poland it would be the easiest to implement and in Brazil the hardest - so it's a bit like the least squares method. Yes. Yes, it is. We expect that all of the other markets will be somewhere in between.
Very interesting. I wasn't familiar with this approach. I knew an approach in which you test in Australia because it's at the end of the world and if it doesn't work no one will notice. And we do that often for more risky product experiments. In order to avoid more problems for ourselves in a significant market then we test it in a small country. Small from the perspective of the number of users, revenue, etc.
And then we turn it on in this small country and look at how it behaves. If it's OK, then we go into other countries. Our riskier products are tested that way. And what does it look like when you have that $50M opportunity? Let's say that everyone has agreed. And what does it look like to further test that initiative? I would say that it's a classic approach in which we build an internal startup. We start with experiments.
Again... there rarely is this magic moment when everyone agrees or that we know everything and we just have to do it. Each time we have some kind of estimation of how big it could be but there are a lot of unknowns. And we just have to solve the unknowns.
At first, it's more qualitative conversations. Later, we move more into quantitative things. These can be experiments where we put up a landing page to collect traffic from both DocPlanner and other sources, and we look at whether it actually converts, whether people start using it, or even whether they go through any kind of purchase path at all in the beginning. Basically, a traditional conversion.
I would say it's not very different from a classic path of trying to build a business. What is different in our case is that we're trying to look for things that are already using assets that we already have. On one hand, we have a great deal of patients using our websites.
We also have a very large number of doctors who use our services. We have ~130K doctors around the world using our paid services. We can also build new things here. We also have the technology - certain solutions that already exist and we can adjust them quickly when needed. These are the three pillars we're trying to build on. If we don't use these strategic pillars then we are just another company that wants to build something in the world.
We can claim that we are smarter than others, which isn't necessarily true, and we can conclude that we have some funding from the company but startups are able to obtain VC financing. So, they have this benefit. OK. Moving on to the topic of geographical expansion. It's something that a growing number of startups in Poland manage to do but it's still a holy grail when you start. You may have a good business model that you built in Poland, thinking "OK, I would like to go abroad".
How would you approach that? I think probably the first thing to think about is whether you have any reason why you may want to focus on smaller countries, e.g. in Central and Eastern Europe. By small I mean the size of the economy, the GDP, the population etc. Or do we want to go into these larger countries of Western Europe, Latin America etc. And here the reason may be that simply a given company wants to build a leader in CEE and working with a large number of small countries is OK for them. It's just their operating strategy. This can also be an interesting direction. In our case, we admittedly had ...
I'm sorry. How do you approach the decision of which markets to enter? Yes, it's ... The first hypothesis - we'll conquer the States, the largest market.
The second - we'll win Europe. Third - we'll focus on our region. How would you approach it? Where would you get the knowledge? What mental framework to use to approach the decision? Which regions to attack? I think it is worth starting by creating a high-level short list in which we simply take countries that may interest us for various reasons.
Sometimes because others have gone there. Other times because it is a big country. Or because it's an exotic country. Or maybe because we'd like to live there. It's worth making a high-level analysis for yourself. How big is the country? How many people live there? How big is the economy, e.g. the GDP? We also need to find some metric that hints at how big this market could be for our business. In the case of DocPlanner, it's how many doctors there are in a given market, and how much a single doctor's visit costs.
So from that you can start making superficial estimates, multiplying one metric by the other which will show the possible size of the market. For example, how much doctors make in a month. Or how much people pay for a visit assuming they go to the doctor once every six months.
So we have some kind of approximation of how big the market is. That allows us to make just a short list of countries that might be of interest to us. It's worth taking 5-10 such countries into account. But I would treat it as more of a directional piece of information rather than as a fact that surely these 5 countries that came out best are the ones to chase. With that list you have to start going deeper. We must begin to understand whether these numbers are the actual numbers that tell us what the market is like or not.
Most often, no. Often it turns out that something in the number dictates that we should be counting them differently. And that's the moment when it's worth talking to someone who knows the market. Either because they run a business there and they're in our network or because they're a local expert. Then it's worth reaching out to people in a particular industry in a particular country who are already in business and may know something about it. So you make a short-list of 10 countries then look for someone in each country who's already in your business to help you understand why the numbers may be inaccurate.
Exactly. We learn many things that prove this business may work differently in a given country. Can we have an example of a country on the short-list that looked good but later didn't make sense? Or vice versa? I can show an example when it's not so much that we saw this business won't make sense but rather that the market won't be as big as we expected. One example is Brazil: a country that has 220M people. It's a country the size of Europe - it is worth realizing that. So potentially, it is a very large market. However, in the case of DocPlanner, it turned out that a very large proportion of the public uses medical insurance.
As a result, the position of the insurers is so strong that the price we see in the price list for doctor visits which the patient pays, if they pay cash, is not relevant. If the patient has insurance then the doctor gets a lot less, like 30%. So, it turns out that this market is 3x smaller than we initially thought. In the case of Brazil, it's still a very big market, but it's much smaller than we thought. Another example, Germany is a very big country with a rich economy.
We thought to ourselves there's a lot of doctors, and expensive visits payed for in Euros, so this also appeals to the imagination. The high level numbers are actually high. However, it turns out that in Germany 90% of people use public insurance. Therefore, they do not pay out of pocket for the visit.
That being said, we need to look ... And suddenly, the doctors are inundated with too many patients. We can compare it to Polish public health services where it turns out that doctors are not necessarily interested in having more patients. And often that's the value that the Marketplace brings. They are more interested in getting software to simplify operations, to save time and so on. So if, for example, we tested one of the products which actually helps convert more interested people into paying patients, it turns out that Germany has no such product/market fit.
Despite the fact that it is a sizeable market. In Germany, it makes more sense to enter the market with a software product that will help physicians better manage their facilities. Tying into what you said, how do you make sure there is product/market fit in a given market? If after the short lists and expert conversations we find that the market is what we want it to be.
What are the next steps to see if we have a product/market fit? Speaking of expert lists, I think you have to watch out for people who will say "it's impossible". Experts that say "there is no product/market fit, because I say so". Or because "someone has already tried and it didn't work out", or because "the market is saturated". Very often these people are very knowledgeable about the market and are worth listening to, but in the case of whether something can or can't be done or if there is product/market fit or not, I suggest treating them as a hypothesis generator and possibly someone who gives their opinion which has to be verified later.
Often someone has tried but the old way. The other way didn't work and the new way does. And we have examples of us doing that, too. But going back, what is worth doing is seeing if there is interest in the service.
And here we go again to a traditional model to build a startup or business. Depending on what kind of market it is, whether it's B2C or B2B, whether it's a small B2B market or more enterprise. The way to test this may be different. Let's assume it's B2C, like with many startups that are built for consumers. Then we can just do it the normal way as if we were building a startup from scratch, i.e. create a landing page for a service that describes what we'd like to do fueled by this expert knowledge. And then see if there is user volume that we can pull on this landing page.
Are people looking for something like it, how do they behave on the landing page, are they converting, etc. In the case of B2B... But you don't have a product or service yet, right? At Google, I believe they call it fake-door testing. You pull traffic to the site and observe how much it costs.
These people don't have the ability to buy, but at least you can see how many have expressed interest. The first information we get is the volume of Google searches. For example, we want to base our acquisition channel on this, which in the case of B2C is very important. So we're looking at whether people are searching for a solution to the problem we want to solve. If it turns out that they're not looking fot it, then that's already valuable information for us.
It's even possible that we have a cool solution to a problem that no one is interested to solve. This is the first information we get and then we check if this product exists or not. Maybe it can get that traffic flowing there. I also imagine that we have a site that already exists because we had it somewhere and translating it to the local language or uploading it in English is easy. Then it's worth putting up the site and pulling in traffic to the existing product.
But creating a landing page which is more to research interest is also okay because it gives us information. Okay, let's assume that Germany came up as the market we want to attack. How do you start up the first new country? One more thing that's worth saying - because that was B2C. It is also the case that companies enter the market with B2B businesses.
Then one of the things to start with is sales recognition. We assume that we know a lot, which means we gathered information. We know what problem we want to solve. We know from the size of the market and the experts that it might make sense. Then you have to start talking to customers or send sales people who will start talking to customers. They should conduct the conversation in a way that doesn't just pitch but they try to understand the problems first. Does anyone have these problems? How big is the problem? What would happen if we solved this problem? Then we can try to offer this service that we have and see if they're interested.
Again, it a form of market research through speaking with potential customers. Who is supposed to do this market research? In Germany, for example, there is quite a bit of resistance. Often, in certain industries, people only speak German or speak little English. But there is also high cultural resistance in doing business with non-Germans.
Like I said when my team was testing one of the products that we already had in our portfolio on the German market we did it in such a way that we found salespeople from a partner company. People who are able to conduct this sales process with the customer on site in German, so native German speakers. They actually went to these meetings. However, what's important here, as anywhere, in the first steps is we shouldn't be playing a game of telephone. Meaning our salesperson is going to a meeting where he talks to the client and then passes it on to us. And then we lose something through translation.
The important thing is that the visibility of what is happening be as high as possible. One of the methods we try to use is recording meetings. Let's say, I'm responsible for testing this product on the German market, I'll try to join the meetings or at least watch the customer's reaction to see if they're interested or bored.
If I'm at this meeting or have it recorded; I'm able to translate for myself with an automatic translator. I can see how the conversation went. Did the salesperson ask about those things that I wanted them to ask? Did they not? They can come back after 10 conversations and just tell me "it's not possible". And now I don't know what was the quality of those conversations. In the first steps you have to be very close to the process.
Okay, so we know we want to start on a specific market. We have identified needs. How is it done? We only have a team in Poland. What would you say is the manual for starting the first foreign market? Apropos manual. I think it is important not to think of a manual in terms of steps that are sure to work. I talk about the steps that worked in the case of DocPlanner. They won't necessarily mean something to others. This sentiment is essential. When I'm speaking with someone, they will say,
"Because you do it this way," or "this company does it this way, and I have to do the same." It's worth a try but it doesn't mean it's the only way. What worked for DocPlanner, especially if we are building the market ourselves... There are two paths. One - we can build the market from scratch. Two - if there is someone already in the business we want to enter, we might want to consider either a form of a partnership or an acquisition. That's the first thing, but it's also important when we analyze the market.
We also need to see if there are already players in this market doing a similar job, solving a similar problem. If that's the case, one thing to consider is whether it makes sense to buy such a player or to go in organically. And you may wonder how to make that decision. One of the first things is to try to estimate the scale of these players. Is it the kind of scale that we're interested in, that will help us? Because the acquisition alone is buying us time, validating that the market works; players come with some measure of product/market fit. We are buying time because when we enter this market and buy a company, it already has employees, a product, paying clients, customer relationships, and accumulated traffic.
That's the biggest benefit of making an acquisition. Now, it's worth seeing what players are in the market and it's time to start talking to them. As to see ... In the case of DocPlanner, what is important when I talk to such companies is whether it's a healthy company showing healthy growth. Maybe not even necessarily very quickly because it doesn't know how to but it's a growing healthy business. That's one thing.
And the other thing is whether it's a company run by people that we would want to work with. That cannot be overstated. There are businesses that are healthy, but we see after interacting with each other that the divide is too large and it will eventually fall apart. And during acquisitions, this is hugely important because we're buying time and market fit but we're exchanging time and market fit risk for human risk. It turns out there's a team who already has their child i.e. the business.
And we need to see... we need to work with this team to make it work. We jumped to the topic of acquisitions. There's a bit of an urban legend that most acquisitions fail.
And that the human factor is very important. I am confronted with two opinions. On one hand, when you're buying an entrepreneur's business they'll find it hard to fit into another company and assume a second or third tier role. On the other hand, those are phenomenal country managers. When you've got someone who's been an entrepreneur, they're going to keep running it like an entrepreneur.
They will certainly be better than a country manager hired by you to run the business. Yes. In the case of DocPlanner, it can be said that the acquisitions were successful. We didn't have situations where we had a big divide between teams, in the sense that someone packs up their things and says they aren't going to work here anymore.
I think we've solved that. Rather, we didn't have that problem. It is important to talk beforehand, trying to get to know each other a little bit.
And also to talk about what cooperation might look like. Though, we often take the approach that we don't know what the future setup is going to look like. It may turn out that when we begin to understand it better, that their product is better and we should be scaling their product and not ours. Or arrange it in some other way. It's more a matter of us trying to see... These are usually mature people who have an entrepreneurial mindset.
And because of that it's possible to put it together. In our case, if I recall correctly, it also depends on what kind of background the head of the company has locally. They don't necessarily need to be a person who wants to continue to lead a part of the company like P&L. They may want to focus on the product.
And this has happened to us in many cases. Maybe they want to focus on advising the company on strategy like where to go next or what new markets to launch. Such setups are also successful and I would say from our perspective it usually worked. I believe your largest acquisition, I don't know whether to call it an acquisition or a merger, was Doctoralia, which moved you to another level.
I don't know exactly... Roughly how many acquisitions has DocPlanner made? I would say three significant marketplace acquisitions meaning we were buying marketplaces. The first was in Turkey. The second was Doctoralia in Spain which was also a bridgehead to go to Brazil and Mexico.
And most recently, Jameda in Germany. Those are the three biggest Marketplaces. Plus we have made three software acquisitions. And it's a software player who provides sector-specific solutions for facilities or physicians in a given market. We've had acquisitions like this in Italy and Spain.
Why do you buy a Marketplace? And why do you buy business software? In both cases it is about buying time and some other asset that is already there so you don't start from scratch. In the case of the Marketplace, building one from scratch is a long, hard, and expensive business. It takes a lot to build that kind of liquidity before anything gets rolling.
And buying a Marketplace which is already rolling simply allows you to accelerate time. It allows you to work more on the growth of traffic sources, from both sides of the marketplace. These marketplaces were needed for some part of our Marketplace/SaaS business. In the case of software, our thesis is that we will be able to buy a customer base that we can then migrate into one combined solution.
The other thing is that it's about buying that SaaS-enabled Marketplace. We're buying SaaS that is used by a number of physicians and we can try to upsell them the Marketplace. So it's a bit more of an acceleration. You're buying half of the Marketplace. Yes. You could say that.
Buying the software was primarily about buying the customer base and not buying the technology itself? I would say both. Until now, it's been the case that... I have an example from the Italian market. DocPlanner software is more adapted to individual physicians of small and medium-sized facilities. We bought software which is designed to accommodate larger facilities. When we're considering a new acquisition, we now have software prepared for even larger facilities.
We can simply buy technology or a product that is tailored to a certain customer segment which would take us a long time and work to reach. I'll end the topic of M&A. It seems to me that most startups in Poland and people who'll be listening will opt for the organic path.
Unless you think it's the wrong direction and they should pivot to M&A. But suppose we start in the country organically. I'll just say - it's definitely a natural direction. It's worth seeing if M&A is possible. Of course, it depends on the scale. DocPlanner had already been scaled somewhat on those first acquisitions.
However, Doctoralia was a business similar in size to DocPlanner when we bought it. So, that can be done as well. It is worthwhile to think about and start talking with a potential company we might want to buy. Be in a relationship and understand the market too and share experiences a little bit.
And it's possible that at some point there will come a point in time when one company or the other will be interested in acquiring or selling their business. This was the case with Jameda in Germany. OK, jumping to this organic path. We know we want to start in a given market, done all the research, and have some capital that we're able to invest.
What's next? I would just like to add one thing in support of the thesis that you can start organically. DocPlanner was built in Poland organically from scratch. One of our largest markets, Italy, was also built organically from scratch. It's not that only one way works; they both can work.
What worked for DocPlanner was hiring a strong and ambitious country manager early. We weren't setting things up as a satellite from Poland pretending to understand the market and we speak Italian. We just hired a strong country manager very quickly. He helped us build the structure from scratch, closed the first sales, built relationships and the sales team. What do you mean by strong? How do you look for a strong country manager? In our case, these are people with a commercial background. Simply put, these are people who were managers or senior sales managers.
They have already run a sales team or were sales directors. So they have commercial experiences, are able to close deals, and are good at it. They have a trackrecord of good results as a sales leader. As a result, they often understand a little more. If you're a good salesman who closes deals to different types of customers, then you also need to understand the product offering and what will or won't work. I would say that's the thing that worked for us.
And you're looking for someone who's been a country manager before or who was head of sales? In our case, it was people who were head of sales. These weren't country managers, but people who already had sensible sales structures under their belt. The coolest people are the ones who have taken the path from salesperson to team leader to manager, etc. They have their own track record of hard work. They've managed teams at various levels so they have experience with that. They know what problems a sales manager is faced with.
OK but you are looking for a person who hasn't yet been a country manager. For them, it's a promotion and the next step in their development. Exactly. It's also what I said, a strong and hungry sales manager.
For people who have been sales managers, stepping into the role of country manager is a promotion for them. It's a challenge they want to face. It seems like a challenge to get someone that's "been there, done that", while making sure they are still hungry to succeed. Yes. I think it's important what you said that this person wants to work, get their hands dirty, and close the first sales.
When we speak with a person who might be a country manager, we want to see if they're ready to take their briefcase and close the initial sales deals. And it could be that someone has been there and done that and doesn't want to do it anymore. This is also OK. These individuals can also have their role in later stages. At the beginning, we are looking for a person who is prepared to build an organization from scratch. From nothing. No office. No processes. No people. Everything has to be done from scratch.
Do you have any best practices to test that during recruitment? I think this topic... Firstly, when speaking with Lucek Samulowski, our VP People and one of the Co-Founders, it takes dozens if not hundreds of conversations for one role in one country. We really went through many people and got to know them. I think Lucek has a detector for strong people.
He'll reject many people quickly. I think it's like you said about the entrepreneurial mindset and a person who wants to work hard. And somebody who has proven to reach their goals no matter what; people from commercial backgrounds often have that ability. How do you convince strong people to join you? I understand that's not your problem today but say you are a small startup only in Poland, and you enter Germany and the United States where the job market is very competitive especially for those positions. I think it's part art and part science as they say. I think it's about the mix of an enthusiastic and entrepreneurial approach of those recruiting.
In our case it was Lucek, Konrad our Head of Sales, and Mariusz (Gralewski, CEO). These are the kind of people who can build a sense that it's actually a challenge you want to throw yourself at. Because it's going to make a real difference in your life and the world.
It's building that bigger picture. And the other thing is that we are looking for ambitious people ready to take the next step in their career. We have a sales manager who could potentially become a country manager with a larger, more influential role. And I think the topic of dividing this pie we're building together emerges. Either some stock options or shares.
This is a reward for someone who started early and went far with the company. Do you give shares in the country they are managing? Does Italy's country manager get stake in Italy or rather a stake in the overall company cap? In our case, the shares are for the whole DocPlanner Group. OK. I've seen both practices. You have 13 markets. From the perspective of a company from Poland that has a certain cultural code,
are there any countries where it's easier to manage or worse to manage teams for cultural reasons? I think it's definitely worth realizing that every country is different. it's not better or worse, but certainly different. Perhaps the most glaring case is working with people from Brazil.
Super optimistic people. I love having a conversation with a Brazilian on a Friday afternoon, because you're barely alive, already want to go home, and you're joined by a guy smiling from ear to ear. For them, it's the start of the day so there's a little more energy. All of a sudden you find yourself leaving recharged after such a conversation. That's really cool and interesting. We have to be careful because for them we, as Poles, very often look like sad and offended people.
They often ask if something happened: is everything OK with you, or have they done something wrong. That's one thing to pay attention to. However, this optimism can sometimes backfire. It may result in assumptions that are too optimistic. It's worth to remember about questions that will dig deeper into their assumptions, like' "why it is so" etc. to catch different things and to remember to ask them.
If you work with someone for a very long time then you know how they built their assumptions. You can't translate this to a person in another country and say, "this is how it's going to be". And Brazil is an example of this.
In Germany, especially when testing new products, there is greater hesitation to work with unfinished items. For example, when we were testing our product before we made the acquisition, the local team we were working with didn't want to go to the customer until we had a German-language localized agreement they could show there so that it was somewhat professional. It was also more difficult for us to record sales calls in Germany because they are very sensitive about GDPR. It was super hard to get sales calls recorded and to get the doctor to agree.
In many countries, the salesperson only has to say,"this call is being recorded for training purposes," and in most cases, doctors don't have a problem with it. In Germany, it looks more like "I would prefer we not do this." Karol, I know you advise other startups and share your experience.
I think it's great that people from companies like DocPlanner share this scarce knowledge and experience. What is the biggest problem of the startups you advise? What advice do you most often give startups? For those you work with as well as those you have limited contact with. I think the most important thing is the topic of setting up the structure. Usually, a startup is growing fast, is running forward, and it would like to do more of this and that. It would like to do everything at once.
And very often some common questions that arise are: "What does our strategy look like? What do we want to do? Where do we want to go? And do we have the tools to get there? Do we have clearly defined ways we want to go? What idea do we have to get us there?" A so-called strategy - it's often not defined. The second topic is very often a strong team to support the founder. Especially in the beginning, the founder does a lot, knows a lot, and doesn't want to give that up.
They won't find a strong and experienced person they can delegate to and say: "we're doing this now." A trusted team of co-founders and department chiefs is extremely important. I have the opportunity to collaborate or talk to companies that are reasonably good at operational enforcement. Which means that they actually implement the things they come up with and sometimes I am very positively surprised.
I'm the person who would have spent more time thinking and here's a team that already implemented a cool idea. A VC protip: hiring very strong people is something that gives you extra points when we analyze your investments. It's often a barrier that founders won't hire people who are better in a given field and give them the reins. At the beginning of a startup, you need so-called Swiss Army Knives where a few individuals can do everything because the company doesn't have those resources. And that's a big leap that just needs to be made. That's something we really pay attention to.
It's a difficult question for founders, "how do I find these people and recruit them seeing as I'm not an expert." Here are two ideas. If you work with a VC, then most often the VC is able to help. Because either they are entrepreneurs themselves with experience or have people in their network who are experts in this field and are able to help.
Or people in other companies that can help or connect you with someone. I would caution against recruiting people who are very well known and appear everywhere because it turns out that this person is strong in what they show on the internet but then don't produce. I know of such cases.
I also recently had the opportunity to tell someone I've seen a certain person in a recruitment process and they have some strengths, but they are certainly not as strong as one would think looking at their online image. Karol, thank you very much for a super interesting talk. Hopefully for everyone listening as well.
I think there were a bunch of cool insights. If you enjoyed this conversation I invite you to subscribe to our channels on YouTube, Spotify and Apple Podcasts. Also to follow our profile on LinkedIn. We will try to record equally interesting content in the future.
Karol, thank you. Thank you for the interview. It was a pleasure.
2022-06-02 12:36
