Scaling Internationally

Quick intro

1993-1998 Cornell University, New York, USA1998-2003 Lehman Brothers, New York, USA2004-2008 Built HILD & OTP Életjáradék ($120 and $80M market cap)2009-2010 Entrepreneur in Residence at a Venture Fund2011-2015 iCatapult - HUF 140M invested into 4 startups2011 - Mentor for Seedcamp, StartupBootcamp, Pioneers2011 - Hungarian Venture Capital Association2013 - 1st Central European Startup Roadshow in New York City2014 - Hungarian Innovation Federation2015 - MIT Venture Lab Mentor2015 - 2016 Digital Factory Contributing Partner - 200M into 12 startups2015 - Global Traction - Business Dev. for 8 startup/scaleups

Scaling Internationally…

1. First Hungary2. Then region

3. Then rest of Europe4. Then USA…

… Sounds like1. …Small & Irrelevant test

market

2. …enter 9 new, Small cultures

3. …Then enter some large markets

4. … and finally enter the largest..?

Who has the time for all this?

Why Scaling Internationally?

• Size of the market• Value arbitrage opportunities• Potentially easier sell

Hungarian market can be driven by alterior motives• Product will be closed to cutting edge• Real benchmarking instead of filter bubbling• Be better at predicting what is coming

Good reasons:

Why NOT Scaling Internationally

• Old, tired product line• Quick fix is needed• “We are squeezed out of the Hungarian

market”• “van rá pályázati pénz”• “Owners tell me to do it”

Lousy reasons:

Before you even think aboutscaling internationally

Investigate:

Legal

Product

Management

Before you even think aboutscaling internationally

PRODUCT LEVELBasic Due Diligence

• Born in country: …. Year: ….?• Does the problem exist in the target market?

• Who is currently solving the problem?• Local cost structure, operating environment

• Sell, complement, custom develop?

Before you even think aboutscaling internationally

LEGAL LEVELBasic Due Diligence

• Acceptable company structure, form• Acceptable capitalisation, investors, owners

• Commerce and merchandising laws, regs

Before you even think aboutscaling internationally

MANAGEMENT LEVELBasic Due Diligence

• Company compatibility (values, speed, openness)• Culture, size, capacity

• ‘Firepower’ (expansion, replacement)

Do you have the right attitude..?

• Understanding your profitable home market• Ability to manage Customer Acquisition Cost • Understanding your own value proposition in your

home market• Are you building on familiarity & involvement?

Traditional methods

Method 1: Fly-in Fly-out sales

International Fairs, ExposRoadshows, Events

Intense, time-consuming processValue is much defined by connecting contactsMany meetings help with clarity of value prop

Each contact can give another contactFollow up, follow up, follow up

Nagging issues, questions:When you are selling they buy you…

Can you sell?Do you have local presence?

A note about sales…

Sales is a contact sport

Entry pointsin order of hotness

Cold outreachChamber of Commerce leads

Meetup leadsTrade leads

Filtered (pre-contacted) leadsPersonal introduction by local partner

Personal introduction by local executive Introduction of the above contacted

Order of access

Access to company - start at the top

Accessing the market - bottom up

Method 2: Corporate Piggyback

IBM - MicrosoftIntel - Webcam Labs

Samsung - Bookrkids

Method 3: The local partner

• Entry point managers• Some became travel agents• Government programs slow them down

Local partners are worth the money for 3-4 months…then decide

A. Have them build a sales teamor

B. hire a local full time executive

Method 4: Relocated Hungarian Management

“Founder escape”Culture and context takes a long time

Reverse-remote managementLost management focus

Gives up by the time things get going

Method 5: Hired Gun+

Effortless access to industry, business communityBorrowed filofax - credibility and trust

Fast decision making and market knowledgeEfficient and speedy, if done right

Primarily for sales

-Unknown person

good sales persons are good sales personsSalary is an important incentiveCan be as expensive as a CEODistance is not your advantage

Could work for multiple companies

Method 6: Foreign Co-founder / Co-owner+

Ability to choose from a large poolTop talent for equity

Credibility and trust associatedWorks for little cash, incentived in the long run

Fully on the team, a lot can be expectedTimeline, milestones, performance

Vesting

-Unknown person

good sales persons are good sales personsDistance is not your advantage

Vesting - lower monetary and wealth risk of failure

Essential elementsof scoring at the party

1. Get invited2. Follow the dress code

Get invited to the party

Build your descriptive profile

Value of positive associationThey will look you up anyways :)

LinkedInXing

Crunchbase, Angellist, ChubbybrainOwn blog

Guest postsSlideshare

Social sites (nextsociety, quora, swarm)

Build your contextual profile

Value of positive association

Through ownership (founder) structureThrough investor structure (pl. Prezi)

Through top clientsThrough partnerships (GAN)

Be (at) the centre of the party

How and why networkNetworking - promoting yourself and your business

by borrowing someone’s credibility and trust

•Use of existing, personally accessible network•Use of available online networks

(clarity.fm, quora.com, angel.co, linkedin/pulse)•Available social networks (nextsociety, swarm)

•Approach reputable opinion leaders•Seek out actionable contacts (the higher the

better)•Be alert, fast, take notes, impress partners

•BNI

Effective tools for entering a market

Pain: lack of physical presenceMedicine: 360 Omnichannel high F&C communicationSustained presence before entryTeam up with established local entry managerHave a local lawyer

Pain: market, buyers know little or nothing about youMedicine:Develop professional credibilityThought leadershipAssociation with ‘kahunas’

Unique market entry tactics

1. Social proof2. Backdoor USA

3. Inbound Opportunities4. Online Platforms

Global market entry tacticSocial Proof

1. Prezi2. Ustream3. Skype

Backdoor USA

CANADA

Cultural similarities (identities)Physical access to the USEntrepreneur friendliness

Foreigner / immigrant friendlinessFlexible employment opportunities - low cost HR

growthLower costsTest ground

NAFTA - Free Trade Agreement

INBOUND BUSINESS OPPS

Summify - Grow LabPrezi - Sunstone

When they come knocking(..as a result of good communication and brand

strategy)

FreelusionEDM

Investors

Sales partners

Online Platforms

Use of info marketplace - Github and TechteamerUse of product marketplace - Amazon etc.

Use of App Stores - SuperpoweredUse of TED - Prezi

Use of Tumblr - Brickflow

Contact and more info

www.imrehild.com

LinkedIn: hu.linkedin.com/in/hildimre/

hildimre@gmail.com

https://www.facebook.com/hildimre

This presentation available at:

http://www.slideshare.net/hildimre