Crossing the Pond

Geoffrey Moore's Crossing the Chasm examines how to bridge the gap between early adopters and main street buyers. In an interesting spin, Australian technology journalist Brad Howarth asks how much more challenging crossing the chasm is when there is 10,000 miles of ocean between point A and point B? Here are some of my thoughts on the opportunities and challenges for a technology company Crossing the Pond from Australia to the United States.

5 Challenges

• Sales & Marketing Management. Technology companies with a shipping product are typically investing twice on sales and marketing what they are on R&D. Sales and marketing investments are going to make or break a company and should be invested in time zones with the largest market opportunities. Given the magnitude and location of the investments, managing sales and marketing from Australia makes no sense whatsoever. Tap into the Australian government's excellent export market development grants and either move yourself or hire a great sales and marketing leader to head your US opps. Be very careful if the senior management think that you can run sales and marketing from Australia.
  
• Travel. Be prepared to loathe, and accept, travel. It is a bloody long way from Australia to the US anywhere and the only way to overcome it is to get yourself and your team used to long flights. Avoid the temptation not to travel… it hurts but it has to be done.
  
• Culture. A bi-hemispheric company has to worry about its culture much earlier than one packed into a single garage in Palo Alto. The culture of a company evolves and grows dynamically as a start-up builds, launches and evolves its products and services. But with a team divided by the Pacific it is important to make values and vision explicit and to keep it updated regularly (and travel, see above).
  
• Networking. There is an old school tie network in the US as much as there is anywhere. It can take some time to figure out how to leverage and tap into "networking" correctly. The real problem lies with too many general networking opportunities that can spin off lots of only marginally useful contacts and waste a lot of time. With a focused approach to business development I have seen a number of Australian companies come to the US and come home with major partnership agreements two weeks (and three trips) later.
  
• Skills Leverage. In a small technology company there are not enough specialists to go around and your staff end up wearing many hats. This might translate to a developer coming along on sales calls, staffing a booth at a tradeshow or going onsite to carry out professional services from time to time. A start-up in the US benefits from being able to tap into everyone's skills all of the time. An Australian company parachuting into the market faces obstacles in leveraging its talents. (Note: our team does its absolute best to overcome this through frequent travel, starting work early Australian time and leveraging a lot of phone calls and online meetings with customers… thank you)

5 Opportunities

• The World is Flatter. Online advertising, marketing and delivery of technology have opened up opportunities to start selling well before any physical overseas presence. In Ephox's case we were actually able to secure many early adopters and get real revenue traction through online marketing alone. Online collaboration tools have also made it easier to share screens, make and receive phone calls and co-ordinate activities with staff, customers and partners.
  
• World Class Technology & Talent. Australia has highly skilled technology talent where the universities, government research and thriving IT services community provide many good people who can be tapped to build great products. Australia's advanced economy also means that many of the problems that entrepreneurs set out to solve in Australia are equally present in North American and Europe.
  
• Willingness to Partner. As Australians we are used to partnering with gorillas to get what we want (e.g. the Iraq war and the free trade agreement!). Many start-ups in the US underestimate the challenges of going it alone and have under-developed or nonexistent partnering strategies. Embracing partnering earlier and more effectively than US-based competitors can give a company an edge.
  
• Government Support. Export market development grants, the R&D Tax concession and R&D Start grants have provided millions of dollars of funding to many entrepreneurs I see crossing the pond. At Ephox, we have also benefited from starting in a federally funded incubator and tapped into some excellent Gartner et al research free of charge at the Research & Information Service from the Queensland Government.
  
• Healthy Skepticism. Silicon Valley fever it might be called… when you hear time and time again of acquaintances or neighbors hitting it big in the latest wave (Twitter! Facebook! YouTube! Skype!). The 1,000x returns just aren't part of the technology/business psyche and Australians seem much more interested in companies that are built to last, not to flip. A healthy dose of Australian skepticism can go a long way if you are still willing to take the big bets.

Australia the Brand

Occasionally I will meet an Australian who is under the impression that Australia, as a source of technology companies, is perceived very highly. As far as I can tell Australia as a source of technology is not perceived as an overtly positive or negative place. It's just "ok". I do know that many other countries have much stronger expat communities (e.g. TiE or AAMA) and reputations (e.g. Israel). Even with 99% of Americans loving Australia and its people make sure you bring something more than your accent and stories of crocodile wrestling. The tech industry is very very international – accept nothing less than being the best in the world.