Perille is a web-based service that makes the usage of public transportation easier by offering intercity and local transport route search and ticket purchase in one place. Perille joined SmartUp Accelerator in September 2019 with the goal to have at least one pilot project in a new country, and find a potential region for them to grow in. After some initial pivoting, their hope was that SmartUp Accelerator would help them build a plan for entering the Russian market, support their understanding of the market and provide new contacts. We met Vesa Heikkinen from Perille and their target market partner Maxim Balanev from St. Petersburg Foundation for SME Development for an interview to discuss their experience of SmartUp Accelerator.
Perille had earlier participated in the EU Climate KIC accelerator and has some experience in testing the service in Tallinn and Helsinki-Tallinn connections. When joining SmartUp Accelerator, Perille was keen to further expand to the German market, but after some time they pivoted to enter the Russian market instead and received support from the Russian SmartUp Accelerator partners in St. Petersburg.
– Before the SmartUp Accelerator bootcamp, and at the bootcamp, we analyzed which country would be the best for us, says Vesa. We decided at the bootcamp that for us it is more feasible to expand to Russia as we have a common border. When we made this decision, Maxim Balanev from St. Petersburg Foundation for SME Development came into the picture and we started discussions with Maxim already during the bootcamp. Together with Maxim, we finetuned our expansion plan for Russia. During our “fact finding phase”, we had a lot of online discussions where we could verify and discuss our expectations and ideas with Maxim and his team.
The St. Petersburg Foundation for SME Development is a non-for-profit, non-governmental business support institution as well as independent professional business consultancy. They work with startups, small, medium and large business, institutional clients, government agencies, youth and students and other groups of clients.
– We think that the most important method of support for the company is partner search and consultancy services on specific market issues. The idea to focus on the cross-border segment of the market was born during the International Bootcamp in Riga, during the one-to-one consultations, says Maxim Balanev from St. Petersburg Foundation for SME Development. On the very first steps, the company was thinking about the Russian market of intercity routes, but then after the market research we decided to develop and realize the road map for entering the cross-border routes market. One of the most challenging issues after the strategy development was partner search.
Travelled to Russia for face-to-face meetings
After the bootcamp, Perille managed to come up with a list of concrete companies who they wanted to meet and collaborate with in the transportation sector. There were mainly bus companies, but also a ferry company that is travelling between Finland and St. Petersburg.
– We got a lot of support from the Russian SmartUp Accelerator partner to reach these companies since they were not always willing to cooperate or communicate directly to us, tells Vesa. The Russian partner managed to convince the local Russian companies that we were serious with our plan to expand to Russia.
Maxim tells us about how Perille decided to travel to St. Petersburg.
– The contact with the first bus company was successful, and Perille tried their best to start negotiations with the potential partner. After several negotiations, Perille started to prepare the contract with the company. The partner, Eurolines company, has headquarters in St. Petersburg and Tallinn, so Perille planned the visit to St. Petersburg in mid-January. St. Petersburg Foundation for SME Development suggested organizing meetings with the rest of the companies on the list and with the Finnish Consulate in St. Petersburg and the Russian-Finnish Chamber of Commerce and Industry during the visit.
– We have had online discussions, offline discussions and at the end of the period we had face-to-face meetings, says Vesa. It was very important for us to meet the companies in St. Petersburg face-to-face since the biggest challenge we had before was the communication with some of the companies.
Maxim points out that it is much easier for a local partner to contact the companies and arrange meetings.
– Perille was working on the Finnish market and already had partnerships with the most important players in the industry. This made it possible for us to demonstrate to potential Russian partners how the service is organised in Finland, and what the competitive advantages are.
“We had the questions and they were very good in finding the answers”
Before entering the Russian market, Perille discovered some insecurities regarding the Russian regulations, which the Russian SmartUp Accelerator Partners could support them with.
– It happened in such a way that we did come with questions and they found out the facts and all the answers. We did not expect that they would give anything to us without asking, but we had the questions and they were very good in finding the answers, says Vesa. And that was important, because we had to have some independent contact person locally to find the facts. We never found that information from the internet, for example. You are never too confident with Russian regulations. The regulations might change. But at the very moment, we are confident that we know how to navigate in this jungle of different regulations, when it comes to data protection and so on. It is not easy but we have done our homework, I hope, well enough to understand how to navigate in each of the situations.
Maxim agrees with Vesa about the challenges with Russian regulations and entering a cross-border market.
– In our opinion, the most challenging issues when entering the cross-border market is the question of GDPR (i.e. data protection regulations) because both Perille and their potential companies should store personal data. Also, according to Russian law, the lists of cross-border transport routes should be transferred to the Ministry of Transport of the Russian Federation. Another question is about the marketing campaign in Russia to attract clients. The website with service should be translated into Russian – also, the marketing via social media channels should be in Russian, or both Russian and English.
So how did the SmartUp Accelerator and Perille tackle those issues?
– The potential partners (e.g. bus companies) offered the company their solutions for ticket sale integration. The GDPR issues were discussed during the meeting with the Russian-Finnish Chamber of Commerce. The experts advised the company to consult with the Chamber’s lawyers. As for the marketing questions we had, the Consulate and the Chamber advised some marketing agencies with the experience of cross-border marketing.
Five new partners in St. Petersburg
Overall, both Perille and the St. Petersburg Foundation for SME Development rates the SmartUp Accelerator as a success.
– Me and my colleagues are very happy with the SmartUp Accelerator program, says Vesa. I was not involved from the beginning, but I know that my colleagues received a lot of case studies and materials in advance of the bootcamp. I came into the picture at the bootcamp in Riga, and for me the biggest value of the bootcamp was that we were forced to look at the facts and decide about which country to focus on in two days. After making the decision, we were able to start the discussions with the local team immediately, from whom we got great support during the whole process. If I would give SmartUp Accelerator a point between 1 to 5, I would give it a 4.5!
– By assisting the Perille company we gained new experience. We also widened our partner network, which is very important, Maxim tells us. In Perille’s case, we think that the activity of the company and the support of their local SmartUp Accelerator project partner, Demos Helsinki, made this success story come true. To support a SmartUp successfully, you should have an analytical and creative mindset to find new opportunities and solutions. Also, you should understand that not all the strategies chosen by the SmartUps are profitable – that is why they come to the accelerator and ask for assistance.
Today Perille have five different partners in St. Petersburg and with one of them they have just started the commercial operations.
– We have integrated our data systems and are selling the tickets of the first bus company this month (March 2020). So, we can really see that this is a success story from a business point of view.