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The International Entrepreneur ? Interview with International Business Development Leader, Matthias Leitzmann

Matthias Leitzmann, International Business Development

This week I caught up with Matthias Leitzmann, Director of International Business Development at VXi Corporation, a manufacturer of noise cancelling wireless and unified communication headsets. Matthias is a leader on the front lines of the ever-shifting landscape of international business. He is also a regular contributor to the weekly #GlobalBizTalk Twitter group.

 

Matthias, how did you originally get into the international business development field? What made it appealing?

I came to the US to attend college when I was 18. On my initial flight over, I knew I wanted to do ?something? with international business – I just didn?t know exactly in what capacity and when. The thought of connecting and leveraging both my European background and my newfound American experiences seemed incredibly exciting to me. It still is today.

As I entered professional life, I always kept an eye on ways how I might be able parlay any of my skills into international business. As I was working as an executive search consultant/headhunter, the opportunity presented itself when one of my clients needed a suitable reseller for his company?s products in Germany. I jumped at the chance and haven?t looked back since.

 

What approaches work best for you to find & evaluate new international business opportunities?

My approach is a channel-focused model. It is the leanest and most cost effective model. It provides tremendous leverage and scope. When vetting and research show that there is a need for my employer?s service or product in a particular country, then I begin searching for in-country partners (i.e. distributors, integrators, resellers) that see the potential of our market opportunity and want to be part of growing it locally. In other words, I look for partners that want to make my business their business and with whom I have shared interest and trust. My success will depend on finding the right suitable partner and how well I am able to manage and grow the relationship.

 

As someone who works extensively in both North America & Europe, what are a few of the most important differences in doing business that you think our readers should know?

At the core, I find (business) people are very much the same here and in Europe. The goals of running a profitable and successful enterprise, of building something viable and sustainable, and the desire to earn money are all the same. These basic, universally common goals are ?buried? under a web of cultural differences and experiences. Being able to penetrate, navigate and deconstruct those layers is the challenge. In that, it is less about differences per se than being able to understand and relate to those differences. Empathy in international business is very important. The faster you can begin to relate (if you enjoy the process of learning, respecting and working with the differences), the sooner you will be able to get to the core and speak a ?common? language. The better you become at this skill, the more success you will have overseas.

 

What do you wish you had known about international business development when you started in this role?

Patience and romanticism. More of the former, less of the latter. Developing overseas business takes patience, along with a healthy dose of stamina or thick skin. Furthermore, it is easy to get romantic about the idea of running a ?global business?. The questions that needs to be asked: is it going to be profitable and contribute positively to the overall goals of an enterprise?

 

Can you give our readers any advice on maximizing the potential of strategic international partnerships?

Besides looking for the obvious in a potential international partner, such as expertise, track record, capacity etc., the factor that can maximize the relationship is a common personal ?hook?. This is something that builds rapport with that partner beyond the mere business relationship. It could be that the person you are dealing with in Europe attended college in the US. Or it could be that you both follow Champion League soccer. Or you could both enjoy reading the same international newspapers and so on. This rapport will contribute to making a ?long distance? relationship seem so much closer and real. The more you can bond on a level beyond business, the more likely the relationship will thrive (and last). Minimally, it will result in both of you enjoying engaging with each other more and calls getting returned faster. On the other spectrum, such a deeper connection may very well contribute to both of you better navigating any potential rough waters that lie ahead. And as with any business endeavor (especially international business) ?there will be plenty of challenges you and your partner will need to overcome together.

 

About Matthias Leitzmann

Matthias was born and raised in Munich, Germany. He moved to Rhode Island in the late 1980?s to attend Bryant University?s business school. After a successful career in executive search, including having completed multiple international projects, Matthias began focusing on the sourcing, vetting, recruitment and management of international B2B and B2C channel partners. In his capacity as an executive search consultant and channel development specialist, he has successfully completed assignments for leading high-tech companies, such as Cisco, EMC, MKS Instruments, and Ericsson, and many smaller, venture-backed firms.

He is presently the Director of International Business Development at VXi Corporation, a manufacturer of noise cancelling wireless and unified communication headsets. A frequent international business traveler, and authorized to work both in the EU and the US, Matthias speaks fluently English and German. He is currently based out of Boston. I highly recommend following Matthias on Twitter (@MLeitzmann).

The International Entrepreneur – Is your company still an Accidental Exporter?

Accidental exporter, international entrepreneur

Joe rolled his chair over to company founder, Mary?s desk with a quizzical wrinkle in his brow?

?Can we sell our security product to someone in Romania? We just got an email basically ordering 50 software licenses from somewhere called Timisoara?, said Joe as Mary looked up from her multiple computer monitors.

Mary was just as surprised as Joe. The company had launched only a few months ago. How could someone from Romania have heard about their product, much less have decided to buy it? Their small team of developers were focused on a few potential clients in the United States.

Mary hadn?t even considered when international would enter into the company?s plans. But 50 licenses was an order that was difficult to ignore? So Mary and her company became ?Accidental Exporters? ? taking orders from foreign clients without any real understanding yet of their global markets.

 

International Clients Always Arrive Before?You Expect Them

A byproduct of the world?s Digital Revolution is that anyone anywhere can read your company website. As a consultant, I don?t travel to over 200 countries? but this article will. Businesses and consumers now have access to product options and pricing information allowing them to make more informed choices. If you have something of value like Mary?s security software product, then clients from other parts of the world will begin to make contact.

Mary and her team will likely weigh the revenue of 50 licenses against the risks of doing business with these Romanian?clients. Will the clients pay in dollars? How much interaction is needed for software implementation and service?

If like much software today the delivery is a SaaS model, then allowing access is easy. But are there any regulations related to doing business with Romania in terms of taxes, data location requirements or other restrictions? Most companies ignore compliance issues at first and focus on the money. (Tip: Always know what you?re getting into before you just move forward.)

 

Timisoara, Romania (photo courtesy of wikipedia.org)

Timisoara, Romania (photo courtesy of wikipedia.org)

 

Accidental Exporting Becomes the New Normal

Mary and her company take on the Romanian client? then soon a Canadian client? and on it goes. The company figures out ways to serve these foreign clients in the same way that they serve the domestic base ? home country language, home country currency, home country customer service hours, and home market expectations. In my experience, this directionless approach is the international growth path for about 98% of small and medium-sized?companies.

The surprising part of reactionary-based international expansion is how long this phase typically lasts ? for years and sometimes decades. Companies often seem content to continue on building their international client collection with little thought to the larger markets left untapped.

An extension of Accidental Exporting are overseas distributors who find your company through the website or a trade show; and offer to represent your product in their market. Now you have a distributor based in Australia who gets to build business for you in the APAC region for a 25% discount margin. Most companies just accept this new extension to the reactive model without any visit to the distributor?s offices or 3rd party background checks on their reputation. That?s just crazy and irresponsible.

 

What?s the Alternative to Accidental Exporting?

International expansion planning is the answer. And it needs to start almost as soon as your company initially opens its doors for business. In the start-up phase, a company needs to decide what it can and cannot handle in terms of orders from international clients. Can you convert foreign currency? Can you deliver your product compliantly using the Internet, air or ocean freight? Are there regulations for your product or industry that you should be aware of? For instance, you may decide that Canada is a market you can serve but that Germany?s laws regarding cloud data residing in servers located on German soil rule that market out for now.

Despite anecdotal evidence that startups can be ?born global?, few are actually capable of true international market entry from Day 1. Instead, internationalization works best when a company plans for overseas market entry years before the first foreign subsidiary office is opened. Incorporate international considerations into:

  • Product development ? Are there any additional product requirements to be compliant internationally (CE Marking, etc.)
  • Company talent recruitment– Are we looking for candidates who also have international and cross-cultural experience?
  • Key outside resources ? Can our accountants, attorneys, bankers and PEO providers also advise on international tax, legal issues, foreign exchange and international payroll?
  • Financial capital ? Are we budgeting for our initial global market research and first market expansions?

Preparing for that eventual international rollout will make the transition much smoother.

 

When Should We Get Serious About Internationalizing?

There is no specific milestone that marks when a company should proactively begin its international expansion. But here are some general guidelines:

  • If you have a profitable company providing value to your home market clients
  • If international clients have found you and you are able to successfully serve their needs
  • If your home market is a small one, then you will need to internationalize earlier than large home market companies
  • If you have 100+ employees (this can vary by industry, but IT companies should heed this criteria)
  • If you have earnings, loans or outside equity to fund early expansion efforts

 

My hope is that by writing about accidental exporting it will prompt business leaders to examine their own company?s approach to international markets. With luck a few more ?accidental exporters? can reach their greater?global potential.

 

Onward & upward

Becky DeStigter, The International Entrepreneur

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