To Survive and Thrive, Go Global Young Startup
While traveling the world over the past dozen years on behalf of the MIT Entrepreneurship Center, I have spoken with hundreds of entrepreneurs in virtually all major business centers of the world, both developed and developing. I would like to see more of our regional entrepreneurs take a big leap by establishing early international relationships and recruiting operations with foreign companies.
While the lack of VC funding and investment capital in general is on every entrepreneur’s mind, being globally competitive with effective sales and sales management is “mission critical.” The importance of sales — one of the most important life lessons — usually comes late in the career of most entrepreneurs.
I’ve seen the benefits of going global. I was a founding member of 3Com Corporation, actually employee No. 8. As the first head of sales, marketing, and planning, I helped 3Com raise its initial venture funding and bring its first three products to market. After a successful launch, I returned to the Boston area where I co-founded several MIT-related startups. These opportunities came after my five years in Beijing under the aegis of Chase Manhattan Bank. I formed a trading advisory company there to assist IBM, General Motors, Gillette, Hughes Aircraft and other pioneering companies enter the China market.
While these large companies knew they needed to grow globally, they also realized they needed outside assistance to build new markets in foreign countries. Many start-up companies may see international markets in their future, but they don’t always hire their initial management team with international sales in mind. Instead, they hire at levels below their growth objectives and then get frustrated when they cannot succeed. Start-ups that aren’t thinking internationally need to think again.
San Diego startups may be at a disadvantage when it comes to having the necessary passion and tenacity for executing a successful global sales strategy. That’s because today’s bright young entrepreneurs may not have been raised to think about the importance of global sales. Have they ever been forced to compete for funding? Where did their sales mentors come from? Most importantly, how does entrepreneurial training in San Diego differ from that offered by our most successful global competitors?
In a startup’s strategic planning phase, it is critical to think globally about the “go to market” strategy, and to identify exactly which markets to enter. If there is an international market for a startup’s product or service, it makes sense to plan an early entry—not only to differentiate their revenue streams, but also to capture market share before their competitors do.
Improving the effectiveness of the sales force in globally ambitious companies, large and small, is consistently cited by business experts as one of the highest priorities. In the current economic climate, every purchase by any prospective customer must be triple-justified at all levels of management. Thus, having the best ROI-based sales approach is essential to shortening the sales cycle across borders and, therefore, to the survival of San Diego’s young companies.
So what are global tech entrepreneurs saying?
—In today’s tough environment, high tech companies must be excellent at sales and customer acquisition or else they will not survive.
—Sincere commitment to solving customer problems is key. If the CEO is not passionately committed to delivering significant value to customers, then either he/she should leave the company, or the employees should find another place to work, because the company will not succeed.
—Loyal long-term customer relationships can provide a key, dependable source of sustainable competitive advantage for growing companies.
Good selling is not an art; it is a science. Effective sales and customer relationship management can be both learned and promulgated throughout the organization. San Diego’s successful regional companies can realize the benefits of global funding, sales, and economic significance by going global. The best way to learn how to do it is from the teachers who have been entrepreneurs themselves. Programs such as the MIT Entrepreneurship Center and Connect’s Springboard program are international and regional assets that excel at teaching sales skills and how to turn concepts related to innovation into profitable business realities.
Editors Note: Ken Morse is scheduled to speak today at the San Diego MIT Enterprise Forum. Details are here.