Faces Of International Business
Get Perspectives On Going Global
Corner, VA -- December 13, 2000) The decision to move into global
markets comes with many questions, but there’s no question that
companies based in the Greater Washington region have at least one
advantage. “The nation’s capital is a center of international
business and policy and a center for solutions to international
Internet challenges,” said James LeBlanc at this morning’s Morino
Institute Netpreneur.org Coffee
& DoughNets event entitled “Global Business: Challenges and
LeBlanc once served as Chief of Staff to two
Canadian Cabinet Ministers before founding J.
LeBlanc International, a consulting firm offering international
business development and public affairs services. He acted as
moderator for the event, which featured speakers who brought four
perspectives to entrepreneurs considering global expansion.
From the government perspective, Ambassador
Alan Larson, Under Secretary of State for Business Economic and
Agricultural Affairs, discussed many of the efforts and support
services underway by the U.S. and other governments to create a
more predictable global business and eCommerce climate.
From the entrepreneur’s perspective,
Maurice Tosé, founder, Chairman, CEO and President of Telecommunication
Systems, Inc. (TCS), brought the personal story of a
technology company that has grown in just a few short years from a
small consulting operation to a products company doing business on
From the investor’s perspective, T. J.
Jubeir, Managing Partner of New
Horizons Venture Capital, discussed how international
opportunity affects a funder’s decision to invest.
And from the corporate perspective, veteran
businessman Mario Morino, Chairman of the Morino
Institute, technology investor and founder of Legent
Corporation, presented many of the management lessons he learned
in building a global company.
Lends A Hand
International business has always been an
important part of government policy, but never more so than in this
networked world where distance is so easily overcome digitally.
Traditional cross-border business and regulatory issues like language,
culture, currency risk and intellectual property protection have been
joined today by new questions of network infrastructure, consumer
protection and privacy. Larson discussed such recent advancements as
eCommerce policy discussions with Japan and the European Union, a
moratorium on the imposition of customs duties for electronic
transactions and an Intellectual Property protection treaty. In
addition, the federal government has created the Global Information
Economy Working Group to solicit input from the private sector, and
the Digital Opportunities Task Force with the World Trade
Organization, which provides a framework for involvement by business
and non-governmental organizations. The World Bank and the United
Nations also have initiatives in process, and there’s a good reason
for it. According to Larson, global B2C eCommerce is expected to
double from its current $61 billion by 2003; and global B2B eCommerce
is predicted to increase six-fold in the same period from its current
level of $184 billion. For entrepreneurs seeking practical help in
specific global markets, the Feds also have local government offices
to offer assistance. “We want to be of service to businesses big and
small,” Larson said.
Spreads Its Wings
As Maurice Tosé tells it, both the government
and international expansion have played a big part in the success of
his company, TCS.
The firm started as a small Section 8(a) consulting company working
mainly on Defense Department (DoD) contracts. “The federal
government is a great incubator for technology,” Tosé said, citing
not just TCS, but also the origins of the Internet at DARPA, the start
of Network Solutions as another 8(a) company eventually sold to SAIC,
and wireless industry darling Qualcomm which was based on government
spread spectrum technology. For TCS, a DoD networks contract in the
Middle East was leveraged into a major AT&T/Citibank satellite
contract in the Asia-Pacific region. Along the way, the company
developed an integrated intelligent messaging product. With its recent
IPO, the company now has a run-rate of more than $40 million in annual
revenue, in an industry where the European market has an edge over of
North America. Tosé said that some of the keys to global success come
from locating near your customers, leveraging partnerships,
understanding the culture and, most of all, patience. In other
countries, he cautioned, “It takes twice as long and three times as
much money to do something.” There are pitfalls to be avoided, like
ineffective and even corrupt agents, and processes you must put in
place, such as guaranteeing deals and insisting upon a track record of
responsible and prompt payment, but he still calls it a brave new
world. “Many countries want to do business with the U.S.,” he
said, “but it’s not always a level playing field.”
Horizons Venture Capital specializes in early stage investments in
Internet companies. Managing Partner T. J. Jubeir says the fund looks
for companies that have “a long-term commitment to grow the
business,” and the firm puts a premium on companies that have a
vision of scalability both within vertical markets and across
geographic locations. They ask for main questions when considering an
investment, and international factors play a role in all of them:
is the opportunity? Global opportunities are often
underestimated by startups, said Jubeir, and a good VC can help
companies realize them. Despite challenges, he likes to see
entrepreneurs who have considered the international markets
is the context? As the dot.com craze slows down, we hear much
talk about enhanced due diligence and greater focus on real
market opportunities. This plays into the global decision as well.
According to Jubeir, entrepreneurs considering a global reach need
a realistic assessment of market factors such as regulation,
policy, customs and customer profile.
are the people? It’s another classic investment criteria,
and Jubeir added, “The people involved become even more
important in the more complex environment of international
is the deal structure? Your global market plans may affect the
way an early-stage fund looks for later round investors,
especially ones that can smooth your path into certain markets.
There are challenges and complexities in tackling
foreign markets, but good VCs can help entrepreneurs tremendously with
advice and analysis of key questions, such as which markets to enter
easiest? the most similar to ours? the cheapest?
From A Veteran
Mario Morino has a well-earned reputation as a
successful businessman, savvy investor and insightful student of the
technology industry. He started his first company, Morino Associates,
in 1973 and grew it into the world’s seventh largest software
company, with a presence around the globe, before its acquisition. In
his wrap-up to the session, Morino peppered the audience with
rapid-fire bits of hard-won practical wisdom, not the least of which
was that “global business” is a much misused term. “Very few
firms are truly global,” he said; instead they aggregate strategies
in several country markets. There’s nothing wrong with that, but
don’t fool yourself and don’t try to fool others, either. Being
truly global means that you think internationally in every element of
your business from finance to HR to R&D. Only a handful of
companies on the world stage actually do that. Morino went on to give
specific advice that ranged from hiring practices to cultural respect.
He summed it up in a handful of key points:
Orient your team from the start.
Do your homework to understand what markets
you’re going into and why.
Stay very close to your markets and
Execute well, and remain involved in the
Perspectives, One Conclusion
So what’s the verdict on going global?
Listening to all of the speakers, it comes down to one thing¾the
global market is too big to ignore, even if it’s tough and not
always fair. Of course, much depends on your industry or, rather, how
well you really understand
your industry. When Morino says that you have to do your homework or
Tosé says that it’s all about “blocking and tackling,” it’s
the same message entrepreneurs have heard about doing business in any
have to know the space and respond with solid execution. When you’re
ready to go global, it will take the right people to help; not just on
your staff, but also with assistance from advisors, investors and
government trade experts. Luckily, the people and resources are out
there to help, especially in the Greater Washington region.
As Tosé said, “There’s a big oyster out
there to harvest.” Opportunities and challenges notwithstanding,
there’s another reason to keep your eye on the international ball.
As LeBlanc said, “Today, your competitors are in Haifa, in Paris, in
Stuttgart, in Halifax.”
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