Author: Christian Lanng

Some companies in our industry might encourage you to “hurry up” while you’re in the procurement phase but maybe it’s because there’s something they don’t want you to stop and think about. For example, the question of business models. In what we do, you have two options. The first is pretty simple: make your money from enterprises in proportion to the value you create for their business. That means putting in a solution that makes their supply chain more efficient and accompanying it with the processes and technology that makes suppliers want to use it too. The second is a bit more old-fashioned, a bit less elegant, indeed, somewhat parasitic. This way involves using the enterprises you’re supposed to be helping as a direct sales route to their suppliers, where you’ll make most of the money. Basically turning your customer into your sales channel and pushing the majority of the financial burden down the supply chain to the guys it’s going to hurt most.

Yes, there have been innovations in e-invoicing in the last two years but compared to almost all other areas of technology, it has been standing still for about a decade. The reason for this is simple, most players’ business models have not been driving a need for innovation. In all other spaces, intense competition has driven innovation in software, the technology behind it and how they use it. Which is all fantastic for users. But it’s just not the case here.

The reason we founded Tradeshift goes all the way back to a very specific moment in 2005. At that time I was a student in the policy department of the Danish Ministry of Science, IT and Innovation. I was reading about a new law in the making and I could not believe what it said. The government was about to deploy a combined scanning and electronic invoicing solution for their 200,000 suppliers. That was not the problem. The problem was they had picked solutions that cost suppliers on average €2 per invoice. I was stunned. Who would pay more to send something electronically than on paper?