Last updated on May 20th, 2019 at 11:23 hrs.
Marc Wullings runs a small consultancy firm near Amsterdam called SkipRed, sourcing from a tight network of senior, industry-specific, commercial experts to help foreign businesses land their proposition successfully in the Netherlands.
He has been working in commercial roles for over twenty years and founded SkipRed seven years ago. His clients are typically Finnish mid-sized IT organisations, such as Nixu, Reaktor and Eficode. But he has also signed runners-up like Nuuka Solutions and Good Sign.
Marc was a guest speaker with the internationalisation programme ‘Software from Finland to European Markets’ on the topic of go-to-market strategies. The programme is run by growth consultancy Pro Growth Consulting Oy, sponsored by the Finnish Software & E-Business Association (Ohjelmisto- ja e-business ry) and supported by the Centre for Economic Development, Transport and the Environment (ELY-keskus).
(For transparency: I contribute to the programme on the topics of doing business with the Dutch and digital marketing in the Netherlands. Marc and I have been working together on some of these themes.)
I talked with him about the opportunities and challenges that Finnish companies are presented with when coming to Holland. But first: what’s up with Holland anyway?
Marc: “Like good neighbours, we actually know quite little of each other. When I ask at workshops in Finland where people think that the Netherlands ranks on the list of trade partners, they tend to guess that it’s around the 16th spot or so. In fact, Holland is Finland’s third largest trade partner after Germany and Sweden. That’s before the U.S. and before China.”
Marc seems to have detected a kind of inherent synergy between technology oriented Finnish companies and business oriented Dutch partners. He says that on average, Finnish firms are technically sound and their solutions are solid, even if not always the best looking. Their strength is that they can be trusted.
“There is often a good fit between what a Finnish company can bring to the Dutch market and how Dutch businesses look at their solution,” Marc explains. “Our own research at SkipRed suggests that the success rate of Finnish propositions landing in Holland is higher than you will typically find in, for example, Germany and the U.K.
“We see an overall uptick in Finnish firms moving into Holland, and a surge of companies owned by mid-career people in their 30s and 40s who just love Amsterdam and the way the Dutch behave culturally.
“Furthermore, it’s an open, no-nonsense market where you can get quick access and quick results, which makes it an easy market to do business in. It is much easier to approach than Germany, while it has three times the national product of Sweden, which is significant from a Finnish perspective.”
When failure is no option
In talking with Marc, I am not getting the impression that he is a strong believer in ‘born global’ start-ups.
“You can use internet tooling, including inbound and content marketing, to detect which markets may be interesting to enter,” he says. “But only very few companies are truly born global. The risk in early scaling is that you may be setting up a business for which there is no market fit yet. In my view, you just have to work with local expertise to get the data and the numbers you are looking for.
“Especially now that the economy is up, many board members will say, ‘If you go abroad, make sure that it works’. The biggest risk you run is that you burn a lot of resources abroad that could be better used to consolidate the revenue stream at home.
“I sometimes use the landing of the allied forces at Normandy in June, 1944, as a comparison. Failure was not an option. All resources were directed at conquering one location.
“When we have that beachhead conversation with our clients, Holland is often identified as an achievable target. And if you succeed in the Netherlands, with the brand equity you build and everything you learn on the way, it will be much easier to engage with the next market.
“Or, in soccer terms, think about Jari Litmanen. He became a successful international player by going to Ajax Amsterdam first. It gave him the gravity he needed in order to play in the big leagues. There is a maturity curve and you need to pick your next market so that it fits to your scale and development path.”
Access to business
In most cases, SkipRed’s clients have achieved maturity in Finland. The product has proven itself and now they are looking to expand, either because the home market has become too small, or because they see opportunities elsewhere.
“While companies may be very ambitious when they decide to internationalize,” Marc says, “the support they can get from embassies is more or less limited to matchmaking. To prevent having to sacrifice their home revenue, our goal is to enable them to create quick access to business – as opposed to access to market.
“To me, access to market means, ‘I know a couple of people’. Access to business, on the other hand, means that we create a revenue stream, that we transform the activity in the Netherlands into a net profitable unit, in a systematic way, so that it improves your company overall.”
Coaching, consulting, and selling
As an example, Marc mentions Eficode, who have been one of his larger accounts: “As they didn’t have the financial restraints that mid-sized software companies typically have, it was always their intention to hire a local country manager. Hence, our task was co-piloting: helping their Chief Sales Officer to launch successfully together with a local country manager, within a short timeframe.
“The result is that in Holland, compared to all their launches in other markets, Eficode has been much more ahead of their own ambitious roadmap.
“We love that coaching and consulting role. But we are equally happy to serve as sales reps. And often it’s a natural transition whereby, after a while, when revenue is sufficient, the client replaces our commercial resource with their own local sales team. That’s perfectly fine, as well.”
A three-step approach
Marc explains that his clients are looking for a certain trust level with standard procedures to ensure that their investment is going to pay off.
“So, based on our experience with over 100 Finnish and Dutch companies, including start-ups, we have developed a three-step approach to successfully landing a foreign venture in Holland.
“The first step is a workshop in which we establish a thorough understanding of what the key success factors are and whether the prerequisites for success are available in the Dutch market.
“If you call a handful of your Finnish clients and ask them: ‘Why did you choose us?’, after three or four calls you’ll be able to see the pattern and list your five key success factors.
“Next, you can look at whether these success factors also exist in Holland. And you can turn it around, too: ‘Could we still succeed in the Netherlands even if factor A wasn’t there?’
“You could, for example, discover that the way your solution is purchased in Finland is very much impacted by government regulation which doesn’t exist in the Netherlands. This means that sometimes, you have to go back to the drawing board or conclude that this is not your best fitting market.”
The second step is what he calls a quickscan, meant to identify possible obstacles and major roadblocks early on. This involves local research on the feasibility of the product in the Dutch market, including interviews with market experts, desk research on competitive offerings, validation of the differentiators, and initial testing of the appetite for the product in the market.
The third step is a roadshow. In Finland, there is sometimes a notion that if the product is good enough, it can sell itself. Marc sees a lot of companies struggle with this.
“It’s not that Finns are bad at marketing; they just haven’t needed to use it that much at home. We’ll have a number of structured conversations with selected potential clients in the Dutch market in order to validate the proposition. Our team arranges those meetings and is present all along.
“We call it soft positioning. We don’t go in to sell something, but rather to have a conversation that can help us understand the market: ‘Here is a solution we think could be of interest to you. Please, have a look and tell us if and how this could benefit you – or not.’
“If they like it, they will probably want to do business with you. If they don’t like it, they will give you very straightforward, valuable feedback. Because of this structured approach and our experience, we have been able to develop benchmarks that help us signal if things are going better or worse than is to be expected.”
The three-step approach is just the start, though. What Marc sees as setting SkipRed apart is an aim for large reference clients. Here, his associates rely on personal networks in specific verticals.
“If you can get a big player to use your innovation, that’s going to be a huge boost to your credibility. It takes some time to find and connect to the best possible prospects, the big ones that can shake up the market. It’s a craft.”
In Marc’s experience, there are some things that Finns sometimes have a struggle getting used to when doing business with the Dutch. These barriers tend to revolve around awareness, trust and nurturing.
“At home in Finland, our client companies’ awareness has developed organically over the years,” Marc explains. “Perhaps they’ve gotten some press coverage next to doing their own marketing and they’ve attended trade fairs based on a network where they were already known.”
A pilot is a pilot
He then goes on to say: “People buy from people they can relate to: culturally, language-wise, and technically. In Finland, as business executives know and trust each other within the network, that makes things click and move forward. A handshake and a pilot usually means that you will get the deal unless the pilot goes terribly wrong.
“As a newcomer in Holland, your potential customer base will not know you or your solutions unless they have heard about you from somebody in their network, or you have gotten major press coverage, or you have done a very visible market launch event,” he says. “In other words, you really need to work hard on awareness building.
“And a pilot is just a pilot: an opportunity for you to test your product. No deal implied.”
Features vs. benefits
Another thing he identifies as a frequent struggle is that in marketing and sales, Finns tend to talk a lot about features whereas in Holland, it’s all about benefits.
Marc: “To put it bluntly, or more Dutch if you will, the potential buyer will ask: ‘Why should I talk to you?’ And the answer should not be, ‘Because my product has X, Y, and Z,’ but rather: ‘Because it helps you achieve A, B, and C.’
However, the best piece of advice Marc has to offer to Finnish business people is that the Dutch are what he calls ‘very high-touch clients’.
“In Finland, everyone who matters in your industry knows each other. And if you’re part of the network, business trust is automatically there. The great thing is that this means you can be more transactional. You have a conversation. After that, the prospect knows you exist and they’ll call you when they need your solution.
“In Holland, on the other hand, you will need to build that trust in a methodical and systematic way. Rather than shooting from the hip, you need to know what your wish list is and work towards it. Once you establish rapport with a client on your list, you need to make sure that you don’t leave any means unused to secure a deal.”
“Economising doesn’t work here,” he emphasizes. “You need to make that effort. You cannot meet in May, say ‘let’s take this over the summer’ and come back in September. Your prospects don’t sit at their mökki. After the summer, at best, you will have to re-introduce yourself. At worst, and not unlikely, they will have moved on.
“High-touch selling means that you engage and develop a relationship, whereby most of the work is being done close to the client, nurturing them through the idea. You need people in your client’s network who can help you establish trust.
“Furthermore, you may need to find an executive sponsor within the client’s organisation to promote your solution internally. That sponsor has to be convinced that they can trust you personally and that you will not disappoint if your deal goes through.”
As an example of high-touch sales, Marc mentions smart building management software developer Nuuka Solutions. “Their initial idea was to make a tonne of phone calls in order to find opportunities, like they had done in Finland. But in the Netherlands, we agreed to take a slightly different approach.
“We identified two major ‘must-win’ prospects: OVG Real Estate who were in the process of setting up real estate developer Edge Technologies, and architecture and engineering consultancy Sweco. Nuuka managed to sign up both.
“With deals like this, the market starts talking about you, and the next time you’ll be able to put out reference names that really matter,” Marc adds. “And what’s more, it makes the internal discussion about whether it was a good idea to go to Holland a whole lot easier.
“The reference for Edge got them involved with prestigious projects such as that of a Fortune 500 company’s new U.S. Headquarters in New Jersey. It also gave Nuuka the credibility to win deals at Swedish retail property firm ICA Real Estate and the City of Helsinki.”
Acculturation á la Hofstede
One thing Marc and I have in common is that we are both married to a Finn who has lived in both countries. It is therefore no surprise he brings up Geert Hofstede’s acculturation curve, which describes the stages that a person entering a new society typically experiences.
First you have the honeymoon period, in which everything is just great. You love the differences; the people here are so friendly and honest, it’s so refreshing!
But after a while, disillusionment sets in. A Finn will start missing the punctuality of the Finnish transport system, but also the forests and the lakes. And by the way, do these Dutch people always have to be so blunt and superficial?
“And when you finally overcome that stage and start appreciating the best of both worlds,” says Marc, “you figure out how you can actually leverage that, privately and in business. That experience of cultural adaptation is something that enriches you and makes you better prepared to conquer your next market.”
Last question: Is there a good book or other resource, classic or contemporary, that you’d like to recommend? Marc suggests two books.
“By looking at direct versus indirect wording and implicit versus explicit transactional behavior, ‘The Culture Map’ by Erin Meyer explains very nicely how cultures differ from each other and how you can use that to prepare for business conversations.
“And another great read is Ben Horowitz’ ‘The Hard Thing About Hard Things’, which describes growing as a company and the decision making involved from the perspective of an entrepreneur. In Holland this is almost a bible.”