Peribit Management Know the Ropes of Going Global
Global customer response meant building a global operation early
in the company's growth. Peribit was fortunate that Graham was very
experienced in the task. A Brit, who has lived and worked in a number
of European countries in addition to the US, knew firsthand how
to "go global," understanding the unique legal, tax and
business requirements of the different geographies.
Unlike many US companies, who head straight for the UK as they
move into Europe because of their comfort with the language and
similar business style, Graham selected Ireland to set up EMEA headquarters.
"Ireland has a much more attractive corporate tax structure
than the UK", and he added, "flying in and out of Heathrow
is a nightmare."
Buckley also looks at European markets in a different way to less
market savvy early entrants. "We don't necessarily subscribe
to the view that the big tier one markets - UK, France and Germany
- are necessarily the best. We have found that smaller markets can
move faster for us particularly if we select the most focused local
resellers with proven credentials and an interest in working closely
with the manufacturer."
To ensure both language and cultural compatibility, Buckley, who
also is fluent in German, employs experienced locals in the countries
where Peribit has representation. In Europe that includes the UK,
Germany and Switzerland in addition to Ireland. Peribit is also
actively hiring in a number of other European markets.
Outsourcing is also important in getting entry to new markets.
For a small company, the more it can leave the logistics to specialists
the more people on the ground can concentrate on building customer
relationships.
According to Graham, "The first step in setting your business
overseas is to establish a legal entity, then you can go about hiring
whatever resources you need." Peribit employs Nair and Company,
based in the UK, to handle the company's taxes and accounting throughout
Europe. Price Waterhouse also provides advice and oversee on European
tax and entity structure.
An independent HR consultant in the UK helps the company select
recruiters in the various countries when new employees needed. The
consultant then helps negotiate salary and other benefits once a
candidate is identified.
Graham advises that setting up a business in France can be expensive
and so should not be among the first European where countries you
enter in Europe, unless of course your market needs dictate you
must. In France, you have to pay the government 40 percent of an
employee's salary for social security and if you fire that individual,
separation costs can be substantial. "Even with the best due
diligence, you can make a hiring mistake and it will be costly,"
Graham said.
At present, Peribit uses shared office accommodations in its major
markets. However all of the European Peribit employees also work
out of their homes, so the company saves considerable cost in office
space and infrastructure. Buckley, in an aside, stated one slight
downside to this. As a growing company, Peribit does not have receptionists
or administrators to manage its home phone lines. One major European
customer called him at his home office and had to leave an urgent
message since there was no one else in the office. He later admitted
to Buckley that he feared Peribit's operation in Ireland operated
out of a thatched cottage with donkeys outside. Buckley had to restrain
himself from admitting to the customer that it whilst his office
is attached to his home, unfortunately it hasn't a thatched roof,
nor are there many donkeys in a busy urban area of Dublin!
And Graham is not a big believer in flying overseas managers back
to the home office on a frequent basis. "We set expectations
for performance and then hold regularly scheduled calls to make
sure everyone is meeting them." The structure and constant
communication mitigate the need for in person meetings, which are
not only expensive but disrupt getting business done. In all geographies,
Peribit employs reseller channels, but the reseller relationship
varies based on geographic business models. Graham explained,"
In the US, the practice is to sell through resellers but the expectation
is that company sales reps will help open the door to the corporate
customer. In Europe, although resellers sell directly to customers,
we need a physical presence to manage the reseller relationships.
In Asia and South America, however, resellers don't need to have
company representation on the ground." As a result, Peribit
handles Asian and South American reseller relationships through
three sales representatives, two of who work out of the Santa Clara
headquarters.
Public relations plays a key role in maintaining global market
awareness. To ensure consistency across global markets, corporate
communications creates the messages and disseminates them to both
US and European PR agencies that handle program implementation.
Graham makes sure to participate in key initiatives, such as press
events and product launches, to provide the critical corporate presence.
Today, Peribit's technology sits center stage in the infrastructure
of a growing number of global corporations. Apropos of its technology,
one could say, the company has cracked the code on successfully
building a global organization.
"Across the Pond - A Transatlantic CEO's Perspective on Establishing
A Global Business" is a monthly column that takes a look at
an emerging technology company whose business needs require establishing
operations in some other part of the world. Whether it's a Silicon
Valley company setting up operations Europe, Asia or Latin America
or an overseas company establishing a presence in Silicon Valley
-- Barbara Kohn in SV and Jeffrey Peel in Northern Island -- look
at the steps - and missteps - companies make when going global.
More about Barbara & Jeff...
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