In the first of our founder interview series, we caught up with HERO Software’s Michael Kessler. After initially launching a lead-gen tool for tradespeople, in 2017 the HERO team pivoted to create a cloud-based ERP solution for the industry. Now an industry-leader in the DACH region, Michael reflects on HERO’s progress so far, and where they’re heading next.
About HERO Software
Created: 2017, Hanover
Founders: Michael Kessler and Philipp Lyding
Cusp Capital thesis: Industry-specific software will revolutionize business for SMEs
Learn more: hero-software.de
What inspired you to develop HERO?
Having started as a lead gen business for tradespeople, we spotted that the industry was seriously underserved by technology. These talented craftsmen and women were being held back by a lack of appropriate systems and software. That's why we decided to build a modern, tailored cloud ERP (enterprise resource planning) solution to suit local companies of all trades and sizes. Our goal is to create tools, training and services that allow our customers to focus on what they love: the craft.
Calling your company HERO is quite a statement. What’s behind the name?
Our first business venture was called Energieheld (Energy Hero), so when we pivoted from lead gen to ERP, we decided to shorten it to HERO. We think it perfectly sums up our hard-working customers, and also serves as a reminder of our own aspirations. We’re passionate about improving the way tradespeople do business. They work hard every day to provide us with our home comforts, so we’re on a mission to make their lives easier too.
What sets HERO apart from the competition?
Simply put, we’re the best-in-class cloud ERP for tradespeople in DACH. As well as being packed with tailored functionality, HERO has an intuitive UI/UX, which makes it really simple to get started. The market is still dominated by old-fashioned legacy solutions, with small businesses relying on generic accounting tools, and software like Word and Excel. Compared to these clunky, disjointed solutions, our state-of-the art operating system makes trading a breeze.
How do you promote HERO – to prospective customers and potential employees?
There’s a high natural demand for trade-specific software, so we generate most of our leads via search engine traffic. To convert searches into sales, we try to offer prospects plenty of helpful content and a community for sharing information and insights. We’re also experimenting with other channels like social media, trade fairs, and word of mouth. When it comes to attracting talent, we’ve noticed that the best people are looking for three things: a challenging job with purpose, an ambitious team and excellent working conditions. Social channels like Instagram are a great way to show what it’s like working at a fast-growing SaaS scaleup, and we’ve met some great team members that way.
Talk us through the HERO customer experience
We want every customer to be able to make the most of HERO. At the same time, we know they have very little time to set up systems and integrate lots of tools. While we believe in a data-driven approach to customer success, education also plays an enormous role. That’s why we’ve invested in creating some great support options, from free online demos to 1:1 onboarding calls and a specialist team to support bigger accounts.
HERO and similar start-ups are really taking off at the moment. Why do you think that is?
It’s all about being in the right place at the right time. For us, that’s Europe and– well – now! There’s growing focus on supporting small businesses and the local economy. In Germany alone, there are over 550,000 local trade companies, employing more than 5.4 million people. But, with a shortage of skilled workers and a growing number of construction projects, time and resources are tight for small businesses. These companies have been technologically underserved for years, so there’s a real appetite for tools, training and services that relieve the burden on staff.
Looking ahead, what’s your vision for HERO?
Trades people are always at the heart of how HERO evolves. Our vision is to enable small businesses to succeed and thrive. So we’ll continue to seek ways to smooth the path for them. The market is very dynamic at the moment, and the next five years look set to be exciting. Legacy software players will be looking to transition to a cloud infrastructure. Meanwhile, there’s competition popping up in the shape of other newcomers. In short, we’re expecting a landslide towards modern cloud software – so we’re planning on staying a step (or three) ahead!
Thank you, Michael. Let’s end with a quick-fire round. In one sentence, tell us…
…your business hero.
I admire Larry Page & Sergey Brin. I think they built something incredible ...
…the biggest challenge you’ve faced.
To give enough time to the two things I love most: My family and HERO.
…why craftspeople?
They are the #1 key player to achieve climate goals in the construction sector.
…what did you want to be when you grew up?
A pilot and also an architect …. and many other things ;-).
…any advice for other founders?
Sometimes the problem is not your performance - it’s just not the right time.
Our two cents
Max has been working in venture since 2018, and specialises in SaaS.
One of his main investment areas is centered on our thesis that industry-specific software will revolutionize business for SMEs.
From an investor’s perspective, why did you decide to partner with HERO?
HERO Software is a text-book example of an industry-specific operating software. Thanks to Hero Software, thousands of craftsmen businesses have digitized their workstreams end-to-end – from planning to invoicing. The market opportunity is huge, with around 500k craftsmen businesses in Germany alone.
The founders, Michael and Philipp, have dedicated their entire careers to digitizing the craftsmen space. They have developed an in-depth understanding of the problems of the industry, built a first-class solution to address the specific needs of craftsmen and by doing so are transforming the way their customers do business. Michael and Philipp are building a high performing team with ambitious plans for the future. We are very happy to be supporting on their growth journey and executing further growth initiatives.
Why do you enjoy working with the HERO team?
You will rarely find a better founder market fit than with Michael and Philip. Their passion for the craftsmen industry and for their product are outstanding. Furthermore, they are eager to improve every day. Finally, the huge market we are addressing is the cherry on top. There is a lot of work to be done, but with this team we are ready to take on any challenge.
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