Lhotse is the fourth highest mountain in the world, often forgotten beside the bigger peaks of Mount Everest, K2 and Kanchenjunga. So it’s fitting that when LBS alumni Henning Hatje and Jan Berssenbruegge were creating a company that provided procurement solutions for essential, but often overlooked costs, the concept of Lhotse sprung to mind.
Lhotse is a startup procurement solution which focuses on a company’s non-strategic spend. These costs can be regular and significant, but because they are not part of strategic planning and budgeting they tend to be neglected in terms of competitive tendering. The team at Lhotse, headed by Henning, Jan and Can Akin, estimated that across any industry, this non-strategic spending accounts for an estimated 20% of total annual costs, and can be anything from pens, paper, laptops and pencils to desks and office infrastructure.
Taking control of this non-strategic spend can give businesses the opportunity to make contact with suppliers and potentially reduce costs across a significant part of the annual budget.
Rethinking the non-strategic procurement process
Lhotse aims to enable a more effective relationship between organisations and suppliers, reducing processing and administrative costs. The Lhotse app automatically identifies suppliers, requests offers and provides a transparent overview of the best options, as well as a supplier’s historical data, thereby uncovering significant savings potential.
The mountain itself is an inspiration, too. Several members of the team at Lhotse have trekked to Everest Base Camp to gaze upon the peak, and there may be a larger expedition there in the future.
In the meantime, the youthful founders Henning (31), Jan (30), and Can (35) are busy disrupting the world of procurement and list Germany companies FUNKE and KWS among their customers.
“About two years ago, my co-founders and I came to the realisation that there was a huge amount of untapped potential in the procurement space,” Henning explains.
“I worked at Boston Consulting Group as a management consultant for over four years and I noticed first-hand that there was a great opportunity to digitise procurement,” he says. “So, Jan Berssenbruegge, Can Akin and I embarked on a quest to make the procurement process simple and optimal so that its use would no longer be restricted to expert users with procurement experience but, instead, could be used by anybody, no matter their department.”
With the Lhotse app, the entire front-to-end process of communication with suppliers is automated. It can achieve three times more competitive supplier offers with the aid of in-app sourcing and negotiation features.
“This enables procurement teams to spend less time on manual work and focus on more strategic tasks,” he says. “In other words, we automate anything in a procurement workflow which doesn’t require human judgement.”
Understanding business and corporate structure
Jan and Henning met at the University of Maastricht and then attended London Business School together in the 2014 to 2015 cohort.
Henning had studied International Business at Maastricht University and decided to follow this with a Master’s degree in Management at LBS. After graduating, he worked in various corporate roles – as a consultant in the energy space at PwC, in private equity at NORD and at BCG as a consultant.
“Doing my Master’s degree in Management at LBS helped me develop confidence in business and gain an understanding of what it means to work in a corporate structure,” he says.
“The in-depth knowledge of how different parts of a business work in concert with one another to produce the best outcomes was crucial information that benefited me when I started Lhotse with my co-founders. It also helped me a lot to build my professional (and personal) network which is extremely valuable nowadays.”
He believes that one of the advantages to the Management Master’s at LBS is the wide range of interesting electives that are available.
“The curriculum gives you both a ‘big picture’ of business management, but also encourages you to make connections between different business functions and concepts,” he says. “The Master's degree covers all the necessary fundamentals so that you graduate with a complete set of managerial skills and sound leadership knowledge. This combination has proved invaluable in my career, both at BCG and now, as a start-up founder.”
Working together with shared values
It was Jan who persuaded Henning to leave his job and put his knowledge and experience into practice in a startup setting. With Henning’s background in management consultancy and supply chains, the friends realised procurement was an industry ripe for digitisation and reform. Later they got in contact with Can, the third co-founder.
“I think the other two founders and I work so well together because we each share similar values as well as a common vision for Lhotse’s future,” Henning says. “Likewise, we each work hard to ensure our teams are well supported and we are all walking in the same direction (or climbing in the same direction, as we like to say at Lhotse!).”
Henning is responsible for building connections with clients and driving partnerships. In this role, he works closely with the growth and marketing teams to build lasting partnerships with some of the most innovative players in the procurement industry and to connect with the top procurement experts and business leaders.
“We are a small team, but we are all very ambitious and extremely dedicated, so whilst work feels challenging it’s also fun,” he says.
The office is located in Berlin although many of the staff work remotely across Germany and Europe. Although Henning is a native German, the language in the office is English. Berlin has a great network of startups and innovative companies, and the city is a great place to do business
Advice to startups
Henning’s advice to anyone who wants to build their own company from scratch is simple: find a problem and create the solution for it, and not the other way around.
“Try and find a gap in the market and take advantage of it as this will give you a unique selling point,” he says.
“It is also crucial to have the confidence and determination to follow through and execute your idea. There are many brilliant startups out there that have never come into existence because people have not had the courage! At the same time, though, the job necessitates a level of open-mindedness whilst taking feedback and criticism so that the product or service can be improved and stay competitive in the market.”
Tips for budding entrepreneurs
- Find a gap in the market and take advantage of it as this will give you a unique selling point
- Use your confidence and determination to follow through and execute your vision
- Be open-minded whilst taking on feedback and criticism
- Build a great team around you
- Make the most of the LBS opportunities to network and join extra-curricular activities and roles
- Stay flexible so you can adapt to changing market conditions and demands.