Making the Case for Mavericks

It was an honor to speak at the Global Expansion Summit in London, but to be honest, I was just as excited to be an attendee. With attendees from 700+ companies representing 60+ countries, I was eager to absorb a healthy dose of new and varied business perspectives.

It’s an interesting time to be conducting business in a global climate. Supply chains are more global than ever, but the political and trade policy climate in the U.S. and Europe could have long-tail implications. Disruption is happening across every industry and it’s precipitating significant, meaningful changes in how companies operate, compete, survive and thrive. Your supply chain may already be feeling the impact in the form of its own disruptions and changes.

In a recent report from The Economist Intelligence Unit, most companies are confident they will be able to deal with the challenges and disruptions in their supply chain over the next 12 months. But, in order to do that, they are very sensitive about lowering costs. More than half of the 500+ executives surveyed cited reducing costs as a top priority. At the same time, nearly a third of respondents identified the optimization of working capital and quicker receivable collections as areas in great need of innovation.

The state of global business underscores a critical need for improved cash flow. The ability for companies to innovate, compete and embrace disruption(and survive it!) – also known as resiliency – depends largely on their ability to optimize working capital.

For finance and supply chain executives, this requires a maverick mindset and a drive to explore new approaches to cash flow optimization. How do you find $1B or more to fund infrastructure improvements to meet demand? Or an acquisition to help you tap into new markets? Or R&D that will produce innovation?

Traditionally, companies have had four options to access the cash needed to fund large-scale business improvements:

  1.  Deep, deep cuts.
  2.  New debt.
  3.  Equity.
  4.  Selling of assets.

The problem with each of these strategies is they have negative implications on the business – either operationally or financially. Despite finance executives’ confidence in their ability to survive supply chain disruptions and challenges over the next 12 months, many companies can’t afford a material hit to operations or their balance sheets.

One of the things I spoke about at the Global Expansion Summit was the role that supply chain finance plays in this quest. I discussed how PrimeRevenue is helping several companies unlock $1B or more of working capital that was previously trapped in their supply chains. And we’re doing it in a way that helps rather than harms suppliers.

If you were in London last week, I hope you attended the Global Expansion Summit and learned how companies like PrimeRevenue are leading the charge in helping businesses successfully tackle the challenges of global trade.

If you didn’t attend, I’d still like to hear from you. What concerns and challenges do you have related to cash flow in the current business climate? How do you expect these to change over the next 12 months? Finally, what are you doing today to address them?

Global Mobility – A Checklist for Planning Purposes

By Arden Ng CEO Blueback Global

There is a common misconception that the expatriate program entails a full coverage of the costs, including compensation differential, of relocating to work in the host country. This may be true for certain expatriates, but for most others, the coverage of the costs and support by the employer, ranges between “minimal to less than full” coverage. For example, minimal coverage could mean that the expatriate receives none, or some (not full) adjustment to the local cost of living, receive local compensation (which may be lower than the home compensation), and does not enjoy tax equalization.

This gives rise to the question: If the expatriate may potentially be worse off financially or otherwise, than working in the home country, why would he/she make the move? Some of the factors that may help explain such a decision include:

  • Intangible reasons, e.g., attraction to the host country’sulture, living environment, or for personal reasons
    • The desire to take up new challenges of working in the host country, such as having additional work responsibilities, change in work scope, a new job position or opportunities for learning, etc.
    • Desire of the employee to seek a change in his/her work environment and team
    • To meet new people, globally
    • Gain global work experience

Global Mobility Checklist

Once the global mobility initiative is decided and approved, the next important step is to plan and execute successfully. The following checklist outlines the factors that should be considered by the company, when planning a global mobility initiative. This checklist is by no means exhaustive; it is intended to provide a framework that can be customized to each company’s unique parameters, for a successful global mobility roll-out. Thereafter, the external support from global business solutions service can help to successfully implement the global mobility framework and provides relocation assistance.

Arden Ng CEO Blueback Global is speaking at the Global Expansion Summit in 2017.

Going global: How to cross borders as a fintech

By Dr. Jens Woloszczak, Founder & CEO of Spotcap

While fintech is certainly making the world a flatter place, speaking from experience, the mechanics of operating a fintech across borders can be challenging. Success requires balancing local operations with a global approach.  

Opening offices internationally raises brand awareness on a global level, creating relevance in an era of globalisation. By extension, operating in multiple markets attracts investors and influencers with international scope. In Spotcap's case, for example, we realised that our product and platform's appeal isn't limited to one market. After launching in Spain, we expanded into the Netherlands, United Kingdom, Australia and New Zealand. By managing to keep operational and organisational complexity low, we have enjoyed good levels of growth across two continents.

 

The prerequisites

Regulation can cast a dark cloud over the high-octane plans of young, innovative fintechs. Startups – particularly fintechs – need to be adept at navigating regulatory frameworks, especially while regulatory models are still in embryonic states themselves.  

As such, opening in unfamiliar regulatory territory absolutely requires local expertise, which is why it's essential to hire an industry leader who knows the market inside out. Expert navigation is crucial when dealing with harder issues like compliance, new business landscapes and access to data, as well as softer things, like customer preferences and cultural nuances.

 

A local go-to-market approach

Localisation requires abandoning a generic approach to product and marketing. Part of this is choosing new offices judiciously. Fintechs should select markets that hold regulatory similarities, rather than drastically different approaches to compliance. For example, an office in Brazil might sound seductive, but the time and manpower required to establish compliant operations there may render it commercially nonviable.

Your product, go-to-market strategy and communication should adapt to the local environment. Luckily, I've found that this comes somewhat naturally with the assembly of a strong local team. Accordingly, company culture needs to be nurtured in any international firm – it's important that team members feel connected and part of a larger entity.  

While localisation is key to success, it must be channeled through a global framework of lean, scalable principles. Essentially, you want to avoid ending up with x different settings in x different markets.

 

Brand awareness & talent

We live in a global age – an international brand is crucial to attract the attention of investors and influencers. At Spotcap we use a number of strategies to build brand awareness. A cardinal strategy is to leverage the rising trend of collaboration within fintech – i.e. partnering with corporates and stakeholders. Increased brand awareness can be capitalised on in the recruitment process.

Access to talent is a consistent pain point for startups – so much so that we recently launched a Fintech Fellowship in the UK to inspire the next generation of fintech thought leaders, while simultaneously helping to fill the talent gap. Recruiting can be challenging at any stage of a business, which is why it's good to have people on the ground in the new market, or at least people familiar with the landscape.  

By creating new international infrastructure, fintech is helping businesses transcend borders. By extension, the excitement around fintech makes it a great time to be an international fintech. However, attention must be paid to regulation, localisation and maintaining a cohesive company culture. When done right, it's an incredible industry to be part of.  

 

By Dr. Jens Woloszczak, Founder &CEO of Spotcap

Jens holds a degree in industrial engineering from the Technical University of Berlin and studied economics at Cass Business School. He worked as a consultant for McKinsey & Company for more than five years, where he focused on the commercial banking sector. Working for major European banks, Jens experienced the outdated approach these banks took towards working with SMEs. He co-founded Spotcap after seeing an opportunity in the industry: to use technology to change the SME banking landscape.He will be speaking at the Global Expansion Summit in 2017.

Financially prepare your business for global expansion with these 4 tips

By Adam Reynolds, CEO of webexpenses

In the last two years webexpenses has transformed from a small UK based company into an innovative global solution with offices in Sydney, Brisbane and the latest venture in Austin, Texas. Webexpenses CEO, Adam Reynolds reflects on the four key financial elements that have been pivotal to the success of the expansion.

1. Financial planning is key

Financial planning is crucial when expanding your business, it is the deciding factor for location, strategy and goals. We began with analysing our business expenditure over a projected three-year period, covering all areas of the business such as recruitment, systems, people, development, marketing, events, office costs. Although these costs are subject to fluctuation, they give a good insight into short term and long term business expenditure.

As well as company outgoings you also need to consider return, profit and multiple financial outcomes. Although you cannot predict the market reaction to a new business, it's a good idea to scenario model potential returns. General guidance suggests that anything under three years for an overseas entity to start being self-sufficient is very good.

2. Choose the right investment strategy

You have to explore both investment strategies to make sure you select the best suited one to your business as well as preparing for both successes and failures.

High value strategy

The maximum impact approach, invest heavily, build teams and campaigns and launch big from the onset to achieve quick returns. This technique however can be risky, uncontrollable variables that can come with a new market may slow down the process of a high revenue return.

The drip approach

The gradual approach of lower investment, learning and tweaking as you go. By building a smaller but more dynamic team, once you have an awareness of the key factors in the region then you continue to drip in the investment, building the team and market awareness. Economically this is a safer plan, but returns will take much longer to yield.

The key to making a decision on investment strategy is understanding your financial funding, how much money you have to invest, where it is coming from, how long will it last and what the breakeven point is. There are a range of options - self funding, equity release, borrowing, external investment.

3. Local and global management

It’s important to prepare your team for what the potential challenges are when managing an expansion. Ultimately one of the main factors that need to be considered is whether it’s possible to manage the financial elements in the local country. Will the accounting practices and tax implications be managed in-house or will you use a specialist consultancy? How will the team forecast and invoice across multiple territories as well as the group? Will the software that is in place manage this or will new applications need to be put in place and embedded?

Once the territory move has started, the finance team needs to continue the agility. At webexpenses we generally review our plans/forecast on a monthly basis and revise up or down based on actual performance and also market conditions.

If investment is being exchanged into overseas currency the market performance will impact, for example the Brexit decision last year took the conversion of £ Sterling to AUD from £1=$2.2 to £1=$1.6. On a half-million-pound investment that fluctuation equates to $300,000 AUD, which had a severe impact on both our planning and execution – a quarter of our planned investment had just potentially disappeared.

4. Stay agile and review

Expanding your business can be a long process, so you need to put all relevant practices into motion to ensure it’s a successful one.

It’s important to continuously review the system and approaches you have in place to effectively plan for the future. Ultimately business costs will be multiplied so be financially smart, build in contingency plans and over estimate on outgoings to ensure no nasty surprises.

Adam Reynolds, CEO of webexpenses, is speaking at Global Expansion Summit 2017. 

Essex is an integral extension of London’s world-leading finance cluster

Essex is an integral extension of London’s world-leading finance cluster, crucial for Financial and Professional Services companies.  From a reduced-cost Essex base, businesses can access the City of London in as little as 30 minutes and enjoy fast data connectivity and therefore high-speed trading.

The local skills base offers…

• The second highest concentration of finance and insurance workers in the EU

• A pool of 413,000 finance workers – 1/3 of the UK’s total supply

• A location next to London, Europe’s no.1 finance hub

• Over 7,000 students enrolled in finance and business related degrees each year giving investors access to a highly talented, youthful workforce

Some of the many reasons why Essex has been selected as a business location by leading financial services and outsourcing companies including Liverpool Victoria (LV), Royal Sun Alliance (RSA), Cofunds, First Data, International Financial Data Services (IFDS), MS Amlin and Ventrica.

Essex based financial services companies are also working in tandem with academics in Essex. Insurance company, the Hood Group, have recently received government backing for an AI project which will see data scientists from the University of Essex working with the company to innovate insurance through data.

The business professional financial services sector is a growing sector in Essex. Fintech company Thames Card Technology, one of the UK’s largest plastic card manufacturers, has seen demand in their services increase with the surge in electronic and contactless payments and Bibby, the UK’s largest independent invoice finance provider, has just announced their expansion.

FIND OUT MORE

Contact INVEST Essex to find out more about property, people and support for your expanding financial services business in Essex, UK.

Product Market Fit, Forecasting And Not Running Out Of Cash

By Paul Fifield, Chief Revenue Officer, UNiDAYS

 

Product Market Fit

Before you even think about expanding anywhere you have to be sure you have product/market fit. Literally this is THE most important foundational aspect of your business to get right. Or everything will be a disaster. You will maybe raise money, build a sales team and invest in marketing but all that effort will come to nothing. Zip. Nada. Years of wasted time.

So how do you know when you have it?  Well this is also hard (what isn’t in this game!) but I have a fairly simple way of testing it that I think works. And here’s the thing, you have to strict about this. Your business is emotionally almost like your own child, so you need to be as objective as possible and be prepared to hear the truth, as painful as it may be to hear. 

The test is this. Imagine you said to your customers - hey we’ve got some bad news. We’re gonna shut the company next week. It's been a long slog, we’re all tired and we’re going to work on something else. The lights are literally going out. What would their reaction be? If they would be a little inconvenienced, it’s annoying but they respect your decision, you have not got product market fit. If however they would run for the hills screaming, beg you to reconsider and feel like it could materially damage their own careers and their business then you probably have product market fit. 

I’m sure this is not foolproof, but the mental exercise should be revealing. It may be that you could actually ask the hypothetical question to some friendly clients to actually test it out. 

If you use this method, or scour the internet for other ways of determining fit, you must have a high level confidence that your product is really solving a big problem and it creating real value. 

 

Forecasting and Not Running out of Cash

So making the assumption you have product market fit, the next big task is creating a forecast. Let me focus on entering the US market, something I’ve done twice. 

You will do the following. Either alone or with a few trusted people like the head of sales, you will build a spreadsheet with a revenue line. You may well start to think the following:

  • The market is massive 

  • There are hundreds or even thousands of companies that could buy our product 

  • Or millions and millions of users 

  • It's going to be wild 

  • We can grow there and become massive!  

You may be right, but I can promise you one thing, it will take way way longer than you ever thought. Remember it probably took quite a long time to get decent traction here in the UK, your home market. 

There is some basic logic you can apply here. Let’s say you are an enterprise software solution. You have a 6 month sales cycle.  You open up in a WeWork in NY and get cracking. First you need to hire two sales people. In one of the most competitive talent markets in the world. So its takes 3 months before you have your two crack sales people. Then it takes 2-3 months before they are fully ramped on your fairly complex product. Then it's a 9 month sales cycle because you discover with no referenceable US clients, it's taking longer to build trust and, in amongst all this you realise the pricing needs to change. And the first deals you get are only trials so you cant get a year's payment up front….. So that’s 15 months until your first deal.  And not even much cash to show for it. 

As an aside, I would strongly recommend that you start selling into the US from the UK first. On an ESTA you can be in the US for up to three months and you have a fair amount of leeway on coming in and out. Get those referenceable clients, test the market and start to build an understanding of how the market may differ from the UK. 

So in summary...

don't fall into the trap of forecasting a big number too soon because the market is massive and all you read about is huge numbers other one-in-a-million companies are achieving, then build a cost base around that. You will be at extreme danger of running out of cash and join a very large pile of UK companies that failed trying to expand into the US with unrealistic expectations. Be conservative, there is no shame in that.  Amazing companies started this way. 

Do your first pass. Then halve it. Investors will do the same in their heads anyway so do it for them! I get it's a hard balance to strike - you have to excite the investor with your sales projections but you need to find that right balance.    

As a final note, when you are up and running, monitor your sales metrics like a hawk. And if any sales cycle or close ratio assumptions are going awry in any meaningful way, act early, act boldly and act fast. 

Paul Fifield, Chief Revenue Officer, UNiDAYS, is speaking at Global Expansion Summit 2017.

 

5 Essentials you Need to get Right before taking your Company Global

By Paul Fifield, Chief Revenue Officer, UNiDAYS

Assuming you’ve got great product/market fit and you have it worked out in terms of capital (ie: you won’t run out of money any time soon), there are five areas you need to get right to make a company work globally, whether it’s in one country or 50.  These are very much the key secrets of the Silicon Valley approach. 

 

  1. Vision & Mission

  2. Culture

  3. Values

  4. Hiring (this is fundamental)

  5. Communication

 

Mission & Vision

Getting the mission and vision nailed is really important. It's not easy, and if you haven’t done it yet, I’d suggest making it a company wide initiative, lead by the senior team. Some have just the mission statement, some opt for both a mission and a vision, but the aim is the same - create company wide alignment behind one clear purpose. It should be inspirational, measurable and attainable. 

All decisions then can be set against that clear mission. If an idea, product feature, partnership or initiative does not in some way help to achieve that mission then its not right. And should be ditched. 

 

Culture & Values

Getting this right means you can craft and then maintain a consistent culture across the company no matter how many countries you are in. The ambition should be that you could take down the company signs from your office, but you would know the company you had walked into. 

Culture is the collective personality of your company - not just today but also what you aspire to be. The values are the ways you expect people to behave that then create the culture itself. They are the operating principles that also guide day to day decision making.  Getting culture and values nailed means you know the kind of people you are looking for in hiring, it hugely influences on-boarding, training, performance evaluation etc etc. It really is the glue that binds.  

The secret here with Mission and Vision + Culture and Values is all to do with decision making. As you scale into new territories and headcount grows from 100, to 500, to 1000+ thousands of decisions are being made every day assuming there is not an overbearing top down management approach (not fit for purpose for fast growth companies). These tactics help to ensure that decisions are made as if the senior team were making them.   Its what Reid Hoffman describes as a ‘vertical not horizontal’ management approach.

 

Hiring

In ‘How Google Works’ by Eric Schmidt he has a chapter called ‘Hiring - The Most Important Thing You Do’.  Because it really absolutely is - people are everything and getting the right talent will transform your chances of success.  I would suggest reading both Eric’s book plus ‘Work Rules!: Insights from Inside Google That Will Transform How You Live and Lead’ by Lazlo Bock, Google’s head of People for inspiration.   

And please don't say "well, we’re not Google we cant possibly do that". Within these two books there are many ways, without any resource, that you can improve your hiring process overnight and lower your chance of making very damaging or even fatal hiring mistakes.  Having your mission, vision, culture and values down is really key here. 

Getting a world class hiring process in place is fundamentally important before you put the foot on the gas of international expansion. So do it! 

 

Communication 

Finally communication. Company wide and one to ones are crucial.  

Company All Hands

I would suggest every 2 weeks for a company all hands is about right. Google since the beginning have done it weekly (TGIF - thank Google its Friday), but I think every 2 weeks is the better cadance. And the All Hands shouldn’t be lead only by the senior management team, but provide a platform for others in the company to talk on specific areas of interest. It breeds a culture of openness and transparency which smart, invested people will like.  

 

One on One’s

I have teams in 6 offices, from Sydney to London, Silicon Valley to New York. I can honestly say none of them feel like remote outposts because of my regular weekly one to ones and team calls that I do. In the beginning when teams or individuals are really new it's not unusual to do a daily 20 min stand-up to make sure questions are answered quickly and people feel supported. 

These regular calls, with shared docs to create agendas and track action items also have a powerful unifying and team bonding effect.  Everyone has different styles but I also set aside time to talk more freely about any topic, both personal and work related as if they were a colleague sitting near you in your own office. 

 

 Paul Fifield, Chief Revenue Officer, UNiDAYS, is speaking at Global Expansion Summit 2017.

5 Things to Consider when Setting a Corporate Risk Agenda

By Carolyn WilliamsDirector of Corporate Relations, Institute of Risk Management

Risk management is not new. No doubt the Egyptians had some form of risk management in place when building the pyramids, although their risk appetite in relation to health and safety was probably a bit different to that of today’s construction companies. Some years ago Stephen Carver of Cranfield gave a brilliant lecture for us proving that William didn’t become the Conqueror because he was the best soldier, but because he was the best risk manager around.

Risk is a natural part of corporate and individual existence. We all want to change the world in some way and that might go well, or it might not. Some things we can control, others we can only be prepared for. But without risk there can be no progress and no reward. Expanding business, particularly into global markets, is always going to be challenging, but there are things that can help organisations prepare themselves for a smoother ride.

 

Context

Risk does not exist in a vacuum. Useful talk about risk is always linked to objectives. Your organisation first of all has to be clear on its strategy, what it wants to do and on what success means. What do you want to achieve? How will you know when you’ve achieved it? What will be the measure of success? What do you need to protect (think financial, physical, human and environmental assets, bearing in mind that a big proportion of value today is found in intangible assets including brand)? What will the tolerances be – there may be a range of acceptable outcomes. Then you can talk about risk – what might stop you achieving your objectives? And also, what are the opportunities that might help you exceed your objectives? The risks you identify can be external (for example political developments in key markets or failures of third party contractors) or they could be internal (like loss of key personnel, a flooded factory or a cyber attack).

In the long-term organisations don’t get good at risk management in isolation: it goes hand in hand with getting good at all aspects of management.

 

Culture

Identifying risks, and putting together plans to manage them, is important but not quite enough. Over the past couple of decades we’ve seen the introduction of more standards, regulations, codes and management controls than ever before. But we’re still seeing problems occurring when people just don’t behave as you expect them to.

Whether it’s not following set procedures, bad judgement calls, groupthink or perverse incentives, organisations need to be aware of the impact of their culture on their risk environment. How people behave in your organisation can mean that they take too much risk, or possibly not enough.

 

Complexity

Growth, mergers and takeovers, globalisation and management trends towards outsourcing and shared services mean that delivering any sort of product or service, whether mobile phones or child protection, relies on complex networks.

Organisations need to take time to really understand not only their supply chain vulnerabilities, but also the wider ‘extended enterprise’ that comes together to support their operations and which might include parties such as regulators, customers and the dangerous factory next door. Risks have a nasty habit of being interconnected, or, like buses, arriving together. This can quickly wreck a complex, but fragile, operating model.

 

Clockspeed

Linked with the complexity of modern business is the speed at which things move these days. Business is getting faster – and hence the time to respond to some risks is getting shorter. Some decisions need to be made at speed and unless the organisation has invested in preparation and good information they are not likely to be quality decisions.

 

Competence

To maximise the chance of achieving objectives and being able to take advantage of opportunities, organisations need to ensure that they are good at risk management. As with other skill areas like finance, specialists will be needed to drive the process and advise at all levels, but there is also a need for a wider appreciation of risk across the management team. Most large organisations, and those with mature risk management processes, will be seeking to embed risk-based thinking across the company, building it into project processes, decision making and talent management. In an increasingly uncertain world, risk management is a skill everyone is going to need.

Carolyn Williams will be speaking at the 2017 Global Expansion Summit