| in
this issue |
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| Welcome
to the 2nd issue (i.e., we are for real!!) |
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| I
must admit that it was quite a thrill to see all the
positive reaction to the newsletter's first issue. Our
goal is to make this newsletter as interactive as
possible; we have some exciting ideas from a number of
readers for future participation, so stay tuned.
The current issue deals with global expansion. The
first article is one I wrote as I was realizing that
some of my believes about the need and the timing for
global expansion were proving me wrong. As I was
searching for answer, I thought it would be something
worth sharing. The ETI case study recounts the same
topic from the real life experience of one of its
founders; I'm sure you'll find it interesting. Lastly,
you will be amazed at some of the things you can learn
about yourself and about other cultures when you take
the Intercultural Quiz.
Have fun reading, and let us know what you think!
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| Crossing
the Pond to Cross the Chasm? |
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| When
is the right time for a software company to start
looking at international expansion? The answer, of
course, is: it depends. The natural tendency for most
entrepreneurs is to stay close to home as long as
possible, and for some very good reasons: you stick to
what you know, leverage on your network of
relationships, and reduce the cost of sales. At the same
time, depending on your situation, there may be some
equally good reasons why you may want to make the jump
over the pond sooner rather than later.
One reason has to do with market development. If
you're selling a new technology, you're facing the
challenge of developing the market for your products. In
the early years, you're selling to the early adopters
market, while you and your competitors are working hard
to develop the market and cross the chasm into the
mainstream market.
Can crossing the pond help you cross the chasm? Not
directly, but it can help you extend your staying power
while you're attempting to cross the chasm, which in
some cases can be the difference between success and
failure in this endeavor.
Reality is, that in most cases it takes longer than
you expect for the market to develop, especially in
times of economic slowdown. In the meantime, the early
adopters are the ones that support your company's
growth. The problem is, you may start running out of
early adopters before you're able to reach the
mainstream market, which essentially drops you into the
perils of the infamous chasm. This is where crossing the
pond may be your savior, providing an additional crowd
of early adopters to keep you going while the market
momentum is being built. In some cases, you may find
that the market overseas develops quicker than your
domestic market, which can further accelerate your
company growth.
Another reason to develop an international presence
early on is that you don't want to let your competition
get a stronghold in this market. While the first mover
is not necessarily the one who wins the market battle,
there are some advantages for an early move. In the
early days, it's not so much about capturing market
share (which is going to be low for any new entrant) as
it is about accelerating the learning curve. Every new
market has its own peculiarities, and mastering these
takes time. Starting early gives you a head start on
this learning curve, which can translate into a big
advantage down the road.
In some markets, you can easily learn from the
experience of your competitors, in which case you can
let them lead the way and learn from their mistakes.
This is not as easily done if you're selling high-ticket
software to large enterprises, where sales activities
are less visible to the public. In this type of market,
the only way you can learn what your competitors are
doing is by bumping into them in sales opportunities and
at the local tradeshows, which you cannot do if you're
not there.
The third reason has to do with risk reduction. As
we've all become intimately (and painfully) familiar
with economic cycles, we've become more aware of the
importance of international diversification in our
investment portfolios. You want to build similar
diversification into your company's market portfolio.
We've seen several recent examples of the importance of
such diversification. Of the many software companies
that have been selling to the telecommunications sector,
those that had international presence were hit much less
than others that focused entirely on the US market.
So, should you go global? As we said, it depends.
What we tried to illustrate in this article are some of
the reasons you may want to look at international
expansion, but the answer and the right timing for such
a move depend on many variables - such as the market
you're in, your product, the competition, and others -
that should be examined in the context of your company
and its specific situation.
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| Case
Study: Grow as You Go |
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| Robin
Lea Curle is the cofounder of Evolutionary Technologies
International Inc., a provider of software products for
data integration management, based in Austin, Texas.
Robin's company undertook international expansion early
on, as a matter of fact even earlier than it had ever
planned to...
Enjoy
this fascinating case study »
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| Can
you talk Greek? |
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| As
you will see in this intriguing quiz, talking Greek may
mean more than just the language. How well you are
prepared for doing business globally depends much on
your intercultural skills. Find out what you know and
what you don't, and learn about the delicacies of doing
business in places such as Argentina, China, Greece,
Italy, and Japan.
This intercultural quiz was designed by Global
Excellence, a UK-based company specializing in
intercultural management consulting and training. In
addition to this and two other fun quizzes, their web
site provides a wealth of information about
intercultural issues.
Take
the Quiz »
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| Helping
software companies penetrate new markets, capture, and
increase market share.
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