This text is a slightly longer version of my contribution to the May 2012 edition (http://www.wired.co.uk/magazine/archive/2012/05/how-to/scale-into-other-markets) of WIRED UK
Taking companies across borders is incredibly rewarding and also sometimes very challenging. Here a brief summary of some lessons learned. There is no right or wrong for all businesses. For some models you need to build a local salesforce, sometimes you can get away with just having a great central Search Engine Marketing team. Sometimes you need to do both.
Most companies chose to have product central at HQ and sales regionalized in other markets. This is tried and tested and works well if your product is „one size fits all“ like a Facebook or Google. The limits to this system of a strong HQ and relatively weak satellites start to show if local tastes and preferences differ too much, or if the sales process has to be adapted massively.
I have seen many satellite offices where people did feel marginalized and unhappy because they had no influence on product direction or felt that top management did not understand their regional needs.
Some recipes to reduce international friction:
- Get local the local staff to work from the central office.
If you are in an attractive location like London or Berlin, you can get the people from other countries into your HQ. We have done this for 9flats in Berlin. Currently, we have 14 different nationalities working at 9flats. We have French, Italian and Spanish people who moved to Berlin to do local marketing in their home markets. Hence if something is not right for Italy, people will go up to the development guys and tell them until they fix it. - Hire key people from other countries.
At Qype we had an English CTO, French COO, and today we have even a British CEO for Qype, a company headquartered in Hamburg. At 9flats, our CTO is Mexican and our head of sales is from Russia. I like the culture this creates and it has worked very well for us. - Check you assumptions.
People might say similar things but their different cultural context will associate totally different meanings. „Consider it done“ means something totally different in different cultures. I was often surprised, that our spanish colleagues often had a more germanic approach to work than the Germans. And language is more stressful than most people admit: I found that people do get tired more quickly if they have to run meetings in English.
I would completely underline the mentioned recipes. If I may, I would add two points, though:
* Start with the company language English. Even if it seems artificial in the first months, and the majority of the team might be from one country (e.g. Germany) – all of the docs produced, the roadmap, the code comments, the presentations and feature requests, etc.
It’s easier to take an international company global, that happens to be in Germany – than a German company, that needs to translate its whole backlog first and operate with two corporate cultures: :an original “German” language culture, and the later introduced “international” culture.
This is in the little things. There shouldn’t be emails going around in German – even if it’s just one German colleague writing to the other. Why not? Because it might need to be forwarded, international people included, etc.
* From an employer perspective, being able to hire internationally and without the need that people need to speak the local (e.g. German) language, will lower hiring costs and extend the possible hiring range. Why? Because highly qualified foreign people get stuck in a city for all sorts of reasons (love, sports, friends, the weather, etc.) But most companies can’t tap into their potential, because of a lack of local language skills.