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/
https://www.facebook.com/hildimre
This presentation available at:
http://www.slideshare.net/hildimre