“Automation is good, so long as you know exactly where to put the machine”
This quote by Eliyahu Goldratt silently reverberates around me when Datasnipper co-founders Jonas Ruyter and Maarten Alblas talk about their reason for starting an audit platform within excel that aims to solve the pain point of auditors around the world.
Jonas, Maarten, and Kai have built a startup that has a huge user base and solves a problem that has limited the work of a lot of auditors. However, they have done this as a bootstrapped startup, meaning they have not raised any external funding for growing their company.
When asked if that could change with unrealised market share, Jonas says they would first want to burn their own cash and make sure that Datasnipper is installed on every auditor’s machine. Without dismissing the possibility of raising external funding, Jonas says going for funding can also be a distraction.
He says the immediate goal of the company is to ensure that it is the de facto standard for external audit. However, it also wants to establish itself in internal audit and financial control, which will allow Datasnipper to target a bigger market. Another area that Jonas and Maarten say they are focused on is hiring the best engineering talent.
Their origin story is a classic tale of solving a problem for a friend that ends solving a problem for a number of people. Datasnipper’s story is also one of resilience, self-realised goal setting, and most importantly, an intent to build a product that is market fit from the beginning.
Friend’s problem is auditor’s world problem
Maarten Alblas begins by telling the story of one of their friends, who worked at one of the big four accounting institutions in the Netherlands. Alblas says their friend was one of the most enthusiastic people in the audit profession but after three months in the job, this friend began complaining about all the repetitive tasks that an auditor has to do.
To understand these repetitive tasks, it is important to understand the work of an auditor. Alblas explains that an auditor needs to reconcile all their data by often checking with the data in their older systems and verifying the same with underlying documentation such as “invoices, bank statements, delivery notes, and contracts.”
For the aforementioned friend, this repetitive work was tying him up from doing creative or interesting work. Alblas saw the problem and realised that his programming skills could very well be used to solve this problem. Jonas, on the other hand, knew how to sell software and they joined forces with Kai Bakker to start the company.
With a bright smile on his face, Alblas reiterates that they began this journey with the intent to solve a problem faced by a friend. However, they have now solved a problem that auditors worked with knowingly or unknowingly. The work done by Datasnipper also augments the possibility of automation to complement human work.
Auditors live in Excel and Datasnipper does too
It is common to see startups launch their product as a standalone tool that can support plugins but Datasnipper is different. It is an intelligent automation platform that runs in Microsoft Excel. Yes, a platform solving a problem faced by auditors around the world is not a separate platform. It is instead a tool that lives within Excel. When asked about this product positioning, Jonas Ruyter says they began by offering their service as a separate solution.
The first people who tried Datasnipper, Ruyter adds, kept asking them to add features that were already available on Excel. So, instead of turning Datasnipper into another Excel, the co-founders decided to make Excel better by offering their tool within Microsoft’s spreadsheets tool.
The co-founders of Datasnipper are so grounded in their approach that Alblas chimes in to say that this also helps with easy distribution. “I think it’s good to understand that auditors live in Excel. Most of the time, when they’re doing their work, they’re working in Excel. So, it’s really the platform they are comfortable with and one that also integrates with other plugins and tools,” Alblas adds.
In a nutshell, Datasnipper has built a tool that lives within Excel and helps auditors with their data reconciliation process. With Datasnipper, auditors gain the ability to automatically reconcile all of their documents with the data system. While Datasnipper is an excel(lent) tool right now, Jonas says that they have made sure that it can also run on cloud.
As a technology company, both Ruyter and Alblas confirm that their product is forward-driven with the ability to run online as well as on cloud. Datasnipper is not only cognizant of the technical changes but also the fact that their clients are just ready for any big technical change.
Adaptive and artificially intelligent
Alblas says the first problem they tried to solve, based on the recommendation from their friend, is the reconciliation process. A process, which is similar to sample testing, can be seen as an auditor taking 200 documents and trying to reconcile it. Datasnipper does that for an auditor with its test of details approach. After that, Datasnipper switched its focus to checking financial statements.
This involves, Alblas explains, checking if all the settings are correct and then verifying if everything is internally consistent within the document. The process doesn’t stop there. They are also required to check the consistency of data with the previous year. A lot of the features that Datasnipper has built have come based on feedback from auditors that use the tool around the world.
The ability to tweak and build features has resulted in people building on top of the existing features. Datasnipper, which started as a tool within Excel, has become a tool that auditors are able to integrate with their current workflow effortlessly. The founders of Datasnipper further explain that AI is not taking over the audit profession but helping auditors to be more effective and efficient in their job.
Ruyter adds that they have generally focused on low hanging fruit, which is the data reconciliation process, and till the time they don’t solve this manual reconciliation process, they cannot build smarter algorithms. Alblas says despite the service using AI, they have not emphasised on that part.
Rise helps see the distant vision
Datasnipper was one of the nine Dutch startups and scaleup to be part of batch 7 of Techleap.nl’s Rise programme. While Maarten Alblas could not attend, Jonas Ruyter and Kai Bakker joined the programme. For Jonas, Rise helped him think about Datasnipper from a two to three year horizon.
He says as startup founders they are working long hours and focusing on every day aspect of running the business but at Rise, he found the ability to think about the future of Datasnipper. He says this was possible because of communication with other startup founders and also the mentors.
Alblas says the reason for Datasnipper to join the Rise programme is to learn from the people who have been through the same phase as them. He says the opportunity to learn from other tech companies is another advantage of the programme. As a bootstrapped startup, the co-founders of Datasnipper say that learning is at the core of their company.
This learning is not just restricted to the people working at Datasnipper but also the founders who joined the Rise programme to learn. Jonas says Datasnipper was built as a tool for auditors in the Netherlands but they found that every auditor in the world struggled with the same reconciliation problem.
A tool used by over 300,000 auditors
Launched as a tool for auditors in the Netherlands, Datasnipper immediately became a tool being used by around 300,000 auditors in around 85 countries. They also recently discovered that their tool could also be used by the clients of their clients. This meant Datasnipper had a client base that was 1,000 times more than they initially thought.
Jonas then admits that he did not feel prepared to reach out to this potential customer base and began looking for people who can help them take the step forward in reaching a new client base. He further adds that Datasnipper as a tool can be used for internal audit, financial control, and external audits, which gives it a large untapped market potential.
In order to get to those 100 million customers, Jonas says he joined the Rise programme and hopes to transform Datasnipper into a common platform for internal and external audit as well as financial control.
Potential to become really big
Both Jonas and Maarten say that entrepreneurs should be prepared for the possibility of becoming very big real soon. Maarten Alblas says “they were thinking too small in the beginning without realising that their product was infinitely scalable.”
If given a chance to start again, Alblas says he would start hiring people sooner than they did with Datasnipper. Jonas says they would also be prepared to give away responsibility sooner than most tech founders do. He says that a number of tech companies and startups are mainly focused on their brand image instead of the technology they are championing.
Jonas also says that startup founders should focus on getting their clients first before building the real product. All of this comes back to that one friend who explained a problem that got Alblas, Ruyter, and Bakker thinking about solving a problem for the world.