Tallinn University of Technology

Born from the university studies of Risto Vaher (22), a graduate of the Department of Business Administration of TalTech’s School of Business and Governance, and Kevin Janson (23), a student of IT systems development, start-up company Woodspot is working on an MVP (minimum viable product) for bringing innovation to the forestry industry.

Woodspoti asutajad Risto Vaher ja Kevin Janson
Risto Vaher (left) and Kevin Janson are working on changing the mindset in the forestry business.

The joint venture of the business administration graduate and the IT student is a prime example of multidisciplinary co-operation at a technical university.

Kevin Janson developed the MVP on his own, using the knowledge he acquired from his university studies. He is grateful to the teachers who allowed him to work on Woodspot in the courses they taught. However, he also notes that there was much that he had individually learn.

Janson believes that multidisciplinary co-operation should be given more attention and perhaps even involve investors. He believes that what he likes most about it is that it allows students from different disciplines to put their heads together and solve real problems. ‘I have a couple of good ideas about how that could work. It is wrong to assume that IT people are all guys with ponytails that are difficult to communicate with, as the prevailing stereotype goes. You have to be active and keep your eyes open,’ Janson added.

Help and support from the Dean’s Office

Risto Vaher wrote his bachelor’s thesis on an issue in the forestry industry that came to his attention when observing the activities of his father’s timber company. The idea was born during his studies at the School of Economics of TalTech and has now developed into a proper company looking for its first funding.

The supervisor of his bachelor’s thesis, entitled ‘Efficiency of Information and Communication Channels in the Timber Market’, was lecturer Martin Toding at the School of Business and Governance. Vaher considers that he is glad that the staff of the Dean’s Office of the School helped him as much as they did and directed him to the people who were most knowledgeable about business. While he had not encountered Toding before he started working on his bachelor’s thesis, Vaher found him extremely helpful as a supervisor.

‘At my father’s company, I saw how difficult it was for everyone involved to get an overview of the prices in the market, as well as from how far away materials are shipped to different locations,’ Vaher said.

He explained that as he discussed the initial problem with his supervisor, it led to the establishment of a business while working on his thesis. Eventually, they realised that the initial problem was transforming and becoming much more serious than they had at first anticipated. ‘When I started working on my bachelor’s thesis, I initially set out to explore the challenges faced by timber purchasers in passing on purchase information and keeping abreast of the market situation, but soon identified a serious problem in the operations of timber suppliers. Timber suppliers frequently lack up-to-date price information from purchasers and their logistics are extremely primitive,’ Vaher noted.

Pivots, i.e. changes or new trends in the business model, are common in the world of start-ups. In addition to purchasers and suppliers, the university-born company also received interest from transport companies, who submitted prices for entry to the developed model and who wanted to be similarly visible. The students are currently also working on a technical solution for this market segment. In addition to developing the company, Vaher is currently pursuing a master’s degree in logistics and supply chain management at TalTech.

Negotiations underway for seed funding

Woodspot is currently in negotiations with investment funds from the Baltics and the UK. Their hope is to find a fund that is willing to become a lead investor, plus some private angel investors.

Additionally, Woodspot have signed their first (non-financial) co-operation agreement with the Estonian State Forest Management Centre (RMK), who also acknowledge that there is a problem in the sector and that Woodspot may be able to help them solve it.

Regarding competition, Vaher remarked that their competitors in Estonia are telephone and e-mail systems, Excel spreadsheets, and Google Maps, which are currently the main logistics planning tools of forestry companies.

‘In many ways, what we are doing is changing the established mindset, which is not the easiest task. It has frequently been said that we are also competing with forest management co-operatives and brokerage companies, but in reality they are engaged in the sale of timber, while our purpose is the provision of a more convenient logistics tool. Our business ambitions are not confined to Estonia; in fact, we see a large market in Germany and Scandinavia. Over there, they also have large timber purchase and sale portals – similar to [car sale listing website] auto24 in Estonia,’ Vaher explained.

According to Vaher, however, these foreign portals take a different approach to the timber business. They see themselves as a sales environment, while what Vaher and Janson are creating is a first-mile delivery and logistics environment.

Whether you are constantly shipping materials over a distance of 50 km or 100 km can make a significant difference. It could mean savings of several hundred euros on just a single truckload.

What problem does Woodspot seek to solve?

Timber purchasers, such as sawmills, are currently exchanging purchase information via e-mail or by phone in Excel spreadsheets. Timber suppliers need to constantly process this information when planning logistics, while also calculating transport costs via Google Maps.

The place of departure (location of the log landing site) is constantly changing, as is, therefore, the distance to the timber purchaser. The absence of an interactive logistics environment currently makes it difficult to gain an overview of the market, and makes logistics planning time-consuming and highly error-prone.

Woodspot gathers all purchase offers on a single screen, giving suppliers an overview of the purchase information and the cost of delivery to the buyer’s location. All that the supplier has to do is register the location of their warehouse, after which they can immediately access all of the information needed for logistics planning. This allows forestry companies to get what would previously have been two hours of work done in 10 minutes, as well as to improve their logistics efficiency, reducing both labour and transport costs.

The original article was published on 11 February in the special publication on the 80th anniversary of TalTech’s School of Business and Governance with the newspaper Äripäev.