Full disclosure: I used to consult Giosg, the company powering most of Finnchat’s chat’s.
Chatting has always been a huge part of the internet. At one point, that was probably the most fun thing you could do, because everything else was too slow. Remember the good old ICQ and IRC days?
Times change and so did chatting, we moved away from chat rooms and back towards one-to-one communications. With that, developed the on-site chat industry, from companies such as LiveChatInc, BlodChat and Zendesk. Mostly, they focus on support and often outsource the chat to other companies. One thing that very few of them do is pro-active sales chat. You know, the type you get in your average retail stores, when a store attendant comes up to you and asks: “How may I help?” or “That looks really good on you, would you like to see one in red too?”
This is where Finnchat comes in, which as you may have guessed is from Finland. For some time they were running an online e-commerce site, selling dog supplies and wanted to have sales oriented live-chat on their store.
However, even if they could find an affordable live-chat platform, they would not be able to afford a full-time sales agent. Moreover they could not find a single company online that would provide everything for them – the platform, the sales agents, etc. To solve the problem, they added a number of friend’s e-commerce stores and split the costs of the extra person between them. Sales grew and they saw the potential in the approach and so Finnchat was founded in May 2012 and employed 3 people.
Today, they have reached 30 employees, are serving large companies like Sokos and KESKO and made over EUR 420 000 in turnover by the close of 2013. Impressively, half of the income trickled in during the last three months of the year. Since this is a labour heavy startup, requiring sales agents to get the job done, the scalability might be a concern but Roope Rämänen, the CEO of Finnchat told ArcticStartup that their “…real focus is on the organizational culture. Everything starts from the people. Through good organizational culture, I am really hopeful we will establish the right kind of models and scalability.”
Another step to enable this, was a decision not to compete with chat companies and instead use them. Finnchat does have some of its own software, but it only focuses customer reporting. For the actual chatting, they use two other Finnish companies that provide live chat solutions – Giosg and Zef.
When looking at how quickly the company is growing, it is impressive that they are able to do so with such a labour intensive business model and are outperforming many startups that are much easier to scale. Which just shows us once and again that scalability is a term misunderstood by many. It is all about the market and delivering a great product.