Last updated on December 20th, 2018 at 12:55 hrs.
When it comes to startups aspiring to go abroad, 25 years of international business development, including 20 years of working with software companies, have taught Petri Rinne the importance of quickly gettings your hands dirty by shifting into sales mode – after some initial desktop research.
I talked with Petri about going abroad, selling ‘on the ground’ versus online, and Holland as a target market.
Petri is an expert contributor to the internationalisation programme ‘Software from Finland to European Markets’, 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.)
He starts by explaining how the decision on which foreign market to approach first is primarily informed by the solution that you’re selling.
“You may have a specific solution for which there is great demand in, say, Singapore. But barring that and if your resources are limited, don’t start too far from home. Don’t try to ‘take’ South-America first, or scratch the surface in the U.S.A. In most cases that will turn out to be a waste of time and money.”
Smaller markets can balance risk
“Sometimes, startup founders think it’s best to address a big market right away, like the U.K. But the competition there is fierce,” Petri says. “U.S. companies often come to Europe by establishing a beachhead in the U.K., which creates even more competition, and a massive amount of sales messaging.
“With larger markets on the European content, like Germany and France, there tends to be a bit more cultural distance, while bureaucracy and language barriers play a role as well. Ultimately, there may be more benefits to reap in these markets, but often it is less risky to start by looking at some smaller, north-western European countries.
“I often recommend looking at the Netherlands. Finnish companies have a good reputation there, as they do also in Sweden and Denmark. Denmark can be a bit tricky because, if there is a Danish competitor on the sales side, buyers often choose Danish. Sweden is more open, like the Netherlands, but also smaller and a little more peripheral to the European mainland.”
Shifting into sales mode
What does Petri mean by shifting into sales mode quickly?
“Well, you can start your market research with a basic desktop study of, say, 4 to 5 countries. Map out the market landscape by looking at the customer base, competition, potential partners, and requirements for localization.
“With those data, you may narrow down the list to 3 countries. Next, run a 3-month sales project in each market. Hire a local sales rep and ignite your international sales engine. After 3 months, see where you are.
“If you haven’t gotten any traction, i.e. nobody is calling back or showing any interest in your solution, well, then you have done your market research, so to speak. But if, for example, in one of those markets you managed to send in a few proposals and you have a couple of prospects in your pipeline, you know that that’s where you should start selling in a more scalable way. You can buy more sales capacity there, or relocate some of your own people. A process like this enables businesses to manage risk and cost levels.
“In any case, you need local people with local contacts on the ground. Some people disagree on whether to build an international sales operation through partnerships or with their own team. But they need partners either way. Partners that have customers.”
Who owns the customer?
At the same time, one needs to have the direct touch as well, Petri says, because it is important to sign up customers as references for new partners.
“Larger sales channel partners will insist that they own the customer. So in many cases, you have to be realistic and let go of that ownership. Even if you sign up new deals where your local sales partner plays a smaller role, you have to give them the credit and credibility. You have to recommend your partners and be transparent about that towards them.”
He says that, while he is rather familiar with B2B and B2B2C contexts, B2C is not his cup of tea. And so he sees getting ‘feet on the ground’ as the primary objective in B2B sales. This can be backed up with digital marketing & sales and social selling, which Petri sees supports F2F sales and generates leads.
“Pipedrive is often mentioned as an example where online selling works well. But they have the benefit of being in a space where the market already exists (CRM), the solution is easy to understand and the barrier to buying online is low. Until you have that, you need to do the legwork.”
Storytelling in the mix
What role does he then see for digital, inbound marketing? “I’ve had discussions with Antti Pietilä (founder of Loyalistic, the inbound marketing & sales SaaS provider – JS) about whether you can create a successful market presence using just inbound. To me, inbound marketing is great in creating overall awareness, leads and nurturing those leads. If you want to use it for market research, why not? But then you need to combine it with solid content marketing.”
Petri then explains that for many of these young software companies, their internal culture is very much defined by technology and engineering. “Even understanding sales and creating a sales mentality can be really hard. Let alone storytelling. But if you can build content marketing and storytelling into the equation, that’s very good.”
The family business
After working in various business development and sales functions, including as ‘first hire’ for foreign software businesses moving into the Nordics, Petri decided 11 years ago to dedicate himself to building up a family business.
Reigate helps small Finnish companies develop and execute international sales strategies, form alliances and partnerships, and manage funding rounds. One of his sons develops websites and web services, while the other focuses on market research.
Petri is also on the board of 7 software firms, member of the Finnish Business Angels Network (FiBAN), advisory council member of Guidepoint Global, and an advisor to international software companies, including Getronics on innovation management.
Urgency and agreements
As a coach to the internationalization programme ‘Software from Finland to European Markets’, Petri worked with the 11 participating SaaS companies during two half-day sessions.
In the first session, on marketing and market research, he reiterated the urgency of shifting into sales mode fast: “After you’ve done your basic desktop research, you need to reach out to potential customers and ask people: ‘Do you buy this?’”
His second session will revolve around the topic of agreements in building partner networks.
Asked what a successful completion of the programme should look like to the participants, Petri says: “There is a lot of stuff on the table, so you cannot dig very deep. I think the best thing I can do is to throw in ideas and try to get the lamp to shine, as it were.
“If I was a CEO of one of those companies, I’d love to get really concrete guidance: What are the success factors? What are the things you should do? What should you avoid? I’d want to get the clearest possible picture of my next steps.”
All eyes on the Netherlands
Throughout the programme from September to May, all eyes will be on the Netherlands as the foreign market of choice.
“It’s not a bad place to start,” says Petri. “I have done lots of business in Holland and have many Dutch friends. It may sound a bit generic but, in my experience, the Dutch are straight shooters. Their culture is such that people – you know, any people – are business-minded in their thinking.
“In negotiations, this means there is less risk of a hidden agenda, less waste of time than, for example, in England, where people are so polite that meetings always seem to go well, even if nothing may come of it.”
Final question: Have you read any good book – or consumed some other interesting media resource – lately?
Petri: “While perhaps not so directly related to our topic, I really enjoyed reading ‘Life 3.0’ by author Max Tegmark. My takeaway from it is that you can think about Artificial Intelligence in many ways, as a challenge or an opportunity. Tegmark explores how humanity can live for billions of years conquering other planets with AI. I thought that was a refreshing view on AI.”