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Is it time for partners to go global or go home?

James Henderson | Oct. 18, 2017
Being global is great and if you’re a software start-up, you must seize the day.

“Building out a channel is a tricky strategy to set up,” Iles cautioned. “Everyone dreams of activating channels in each of the separate markets they enter but it’s much harder than you think and typically, it isn’t the best strategy to pursue.

“You can of course get lucky if there’s something unique in your proposition but the challenge is that you’ll typically be a very small component of a channel partner’s revenue. Therefore you get the mind- set your market share gets.

“In our case, we decided that we would make a couple of bets, which involved ignoring the European market and targeting the US instead.”

After running initial rounds of analysis in relation to the local market — assessing customer buying patterns and competitive plays — Iles and his team began to build out a viable entry strategy across the Pacific.

“The US is a double-edged sword because there are many providers in the market which makes it one of the most competitive globally but also one of the largest,” Iles said. ”If you can crack the US then that’s great but you’re up against the best of the best in theory.”

Having identified a target market in the US, Centaman was then faced with a common dilemma for businesses harbouring global aspirations — hire local or bring your own.

“We made the decision to invest and put our own team on the ground and we set up the business as a full-blown subsidiary,” Iles explained. “You reach the point where you either send your right-hand person or bring someone else in.

“But if you’re going to do something, the best approach is to go and set it up yourself — it’s the most effective but resource intensive strategy.

“This approach means that your team on the ground understand what you’re trying to achieve. Then they can hire people locally in the marketplace that can recruit customers, which represents a good combination.”

Because for Iles, hiring somebody blind that doesn’t understand your company or your values in a new country represents a risky strategy for aspiring software providers.

On the flip side however, local knowledge is key to unlocking the purse strings of local customers.

“Typically you’ll know your marketplace but the perfect set up is that you hire a vice president or country manager that is one of your people and a trusted person you’ve sent over,” Iles said.

“And then they can hire a local sales manager that understands the market and the key players within it. That might be through a competitive poach but once you do, then you’ve got the right combination of skills.

“You’ve got somebody that understands the company direction and you’ve got somebody on the ground that has the right voice and the right language to build that expertise up.”

 

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