Geoff Anderson, CEO, PixelPin
There’s a lot of uncertainty around Brexit and wherever there is uncertainty, nerves and panic can often be found not too far on the horizon. The genie is out of the bottle now and whatever happens, it’s safe to assume that there will be changes to how we do business in Britain.Companies need to start looking at how to not only protect themselves but also flourish in this brave new world.
The tech industry – particularly in areas such as AI and Fintech – has become something of a jewel in the UK economy’s crown of late. Recent figures revealed that more than a third of Europe’s fastest-growing tech firms are now based in Britain while the country also produced 13unicorntech companies over the past year. But with a volatile economic environment at home and many businesses and investors becoming wary of overstretching themselves, how do today’s success stories maintain their momentum and the next wave of exciting start-ups replicate that success?The answer is to think bigger.
At a time when many are looking inward and trying to protect what they have, tech start-ups, in particular, should be bolder and go global.
Many businesses when starting out understandably begin local and gradually expand into new markets and areas as they gain traction. In all fairness, this is quite sensible. However, by looking further afield, there might be far greater opportunities should the right approach be taken. If we look at VC funding, for instance, the potential becomes clear. While the UK and Ireland led the way for VC funding in Europe in 2018 (€7.7billion), this was less than a third of the overall total for the region (€27.8billion).
And that’s just Europe. The US is widely accepted to be the global leader in VC funding thanks to a less risk-averse culture making it an attractive choice for many start-ups. The APAC region, meanwhile, continues to more than pull its weight when it comes to VC funding, propelled by China’s economy, growth in India and the established presence of Japan and its globally recognised goliaths of industry. Where a company decides to look depends on their unique circumstances but there is a strong likelihood that the ideal investor might be the one 4,000 miles away rather than 40.
At PixelPin, we chose to look to Asia as we were getting the company off the ground. Our decision was founded on a few key points, not least the cultural fit of our visual password replacement solution which immediately resonated with prospective partners and customers in countries including Japan and Taiwan. While we continued to pursue opportunities in the UK, it became clear that the potential for growth and success would be far greater if we pursued both avenues.This should be the first step when looking abroad for investment or to grow a business: what makes you relevant? Any successful business will be based on a solution which meets a clear need and it’s no different in this case.
Is there a country with fewer competitors for example, or perhaps somewhere that demand is outweighing the supply? Plan around what resources you have available: if you are a small startup, you may have employees with a network that you can tap into. Getting the team together to propel an export plan forward will bring out skills in your team you never knew existed.
There are additional considerations when thinking global opposed to local too. The first and most obvious will be language. Communication is critical and getting this right is vital to success. Miscommunication and misunderstandings can cause delays and hiccups that a fast-growth business can ill afford. As such, having local employees or working with a partner to facilitate your moves into a new market is a wise investment. You might find you already have team members with experience and language skills in a relevant market, or a champion in a potential customer who want to help. This will also help navigate any additional cultural considerations such as local holidays and festivals.
If you’re able to identify the opportunity and have access to the resources to service it, exporting can draw a whole new revenue stream in markets that are significantly larger than the UK. It also opens up avenues to wider talent pools, partnerships and inspiration for innovations in product and company culture.
If you have a great product then why wouldn’t you take it abroad? While the urge to “stick to what you know” might be a strong one, there are significant opportunities beyond these shores that could be the difference between being the UK’s next unicorn and one of the crowd.