Former Tech North boss urges firms to take 'cowardly' option
As someone who has devoted my life to tech I’m always stunned at the lack of ambition of many UK companies to move outside of their home territory.
Before becoming the director of Tech North, I was the co-founder of SAScon Ventures and managing director of Latitude Digital Marketing. I now advise eight tech companies and agencies.
The UK’s digital and tech sector is one of the most advanced in the world and the competition is fierce. However in other countries, with less-developed industries, the competition is lighter so the chances of being the winner are much higher.
In a strange way, rather than seeing expanding internationally as a brave move, it’s almost cowardly – and I would encourage more tech firms to do the same. It frustrates me immensely that more don’t.
The tech firms that I work with talk a lot about international markets but they tend to be the exception rather than the rule.
I hear a lot of conversations where tech CEOs talk about expanding across the North or across the UK. Don’t get me, that's fine, but I just think the bigger potential is other markets.
Part of it sometimes is people are scared that they see companies try to crack America and fail and burn through a lot of cash.
My answer to them is not to do America as a whole, but take it state by state. You cherrypick the ones that have the best fit.
If you're worried about language differences, then choose the English speaking countries and expand from there.
There's lot of different ways of getting over it; the hurdles are perceived to be large, but in reality they're not that scary, or no worse than they are in the UK market.
Pick the easy battles. Back in the days of Latitude Digital Marketing, we'd been very successful in the UK and had some accidental overseas business. A chunk of stuff in Europe went well and then we made the leap to open in the Middle East.
We based the decision on certain criteria, including the maturity of the market, the level of competition and the client fit in terms of our expertise. It was the perfect place.
There were no other agencies there of any scale. Some people probably thought we were mad to go but we would have been mad not to have gone. We were very early day adopters. When we did a pitch there we weren’t up against five or six other agencies.
You feel like a bit of a coward at the time doing that because you're avoiding the complicated extensive pitch process that is part of agency life in the UK but were able to increase our margins. That's good business.
Brexit has created uncertainty but there’s always uncertainty in business. I think the skills shortage is a bigger issue than some of the international problems.
Rather than see Brexit as a negative, look at the positives. Because of the impact on our currency we're 20 per cent cheaper than the US and Asian markets. Now is the time to go and get a foothold in those countries.
My advice to tech firm is to think international as soon as you can and keep your focus. The two go hand-in-hand. Get the focus first then do the international piece after that.
We made the Middle East work for Latitude because we relocated someone that had been part of the organisation for a while over there so that trust was already there. They work different days of the week in the Middle East so you had to trust the person you put on the ground. If you recruit someone remotely that doesn't know the DNA of your business, there's risk to it.
A lot of people expand into the US and open an office in New York. Do you know how many digital agencies there are within a square mile in New York? Why not go to Florida, Texas or Atlanta instead? There’s a lower density of competition but still massive population and revenue potential.
- Richard Gregory is a non-executive director and advisor to multiple tech companies and agencies. He’s a former director of Tech North