In a context of declining domestic demand, European technology based companies from peripheral countries find themselves without an easy testing and demonstration ground. For these start-ups, bootstrapping will require them to bypass the traditional growth cycle of creating a domestic showcase, before venturing into external markets. This is a far more challenging context than that faced by start-ups in economies with significant local markets.
One pattern is that companies try to get a foothold in the market without clearly identifying their overarching goals for their presence in that market space. As part of a growth strategy companies will need to research the market, adjust their pitch and sell, either through channel partnerships, if their margins are high enough, or directly with very limited upfront investment. However, this process has to be significantly tailored to ensure efficiency of sales growth strategies.
If the product or service isn’t differentiated enough in highly competitive economies, selling and conquering market share is extremely expensive and risky. This is usually the case for economies such as Britain, central Europe or the US. These markets can become a good ground for understanding market trends and requirements, benchmarking, building reputation, case studies, or expanding capability or capacity if qualified human resources within the domestic market ever becomes scarce.
In growth markets you may also want to have a more robust presence. An incorporated company and a bank account will simplify local partnerships, as agreements and commercial transactions will be crafted under the same legal framework. Calls should he handled in local language by natives. Furthermore, you must keep a finger on the market’s pulse at all times. Track your customers’ behaviours, keep an eye on competition and act very quickly.
Regardless of your strategy for a given market, in these times of crisis and austerity, when everyone seems to be avoiding the costs of flying, you can make a real difference by being there, meeting your partners and customers face to face instead of giving them a call. Business is all about people, regardless of how much effort you put into defining sales strategies, meeting customers and showing that you care, is bound to create a great impression.
By Nuno Almeida
Managing Partner at Almeida Consulting