In our third episode chatting to Phill Robinson, founder of Boardwave, the European network for the software industry, we discuss what has he learned about launching overseas and the pitfalls other CEOs can avoid.

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Transcript:

Fiona: In this third episode, chatting to Phill Robinson, a tech leader who's worked in a number of international software businesses, and who helped to launch Salesforce in Europe. I ask what has he learned about launching overseas, and what war wounds can other CEOs learn from.

Phill: We built an organisation market by market. So we'd go to the UK, then we'd go to France, then we'd one by one go to Germany, and Italy, and Spain. And what we learned was the first, and all the people that you hire at the beginning of the journey aren't necessarily the people that are the right people for the middle of the journey and the end of the journey. And so, unfortunately, we made a few errors in terms of hiring the right people at the right time, so I think be very clear about the skill sets you need in each of the markets that you're in, to make sure that they're right for the situation.

So you might be quite a mature business in the UK, but you're still a fledgling, you know, start up in France maybe, which is different to the situation in Italy or Germany. And so in each one of those, you've got a different situation, you need to hire the right people for the right situation. And that's not always easy, because certainly, if you're in California, you're seeing a different environment altogether, and you might see the business through one lens, and actually, you should look at it through a different lens, because in France it's a tiny start up with five employees. So that was tricky for us, but eventually overcame that.

I think, actually, we talk about European software a lot, and why we haven't been as successful as maybe the Americans have in the last generation, of building big global leaders, and we've always talked about…well, a few things. One is founder risk profile is one issue. In Europe, we'll admit, we've got a lower appetite for risk. Or that's the theory, anyway. The other one is that they've got one big market. So you build a software product that works in New York, it'll work in Miami, it'll work in LA, it'll work in Chicago. It's one market. And we have lots of small markets, so each one has friction, if you want to go from one market to another, and cost, and therefore, it slows you down. So in the U.S., you know, they could build a $100 million business in six or seven years, if they're doing a really good job. In Europe right now, it might take you 15 years. So it takes a lot longer, as a consequence of that.

That also creates issues with access to capital, because you are more consumptive of cash, and it's going to take you longer, and following on all that is more difficult, and the terms are more difficult, and less liquidity. So those are issues around European software, but actually, right now I think it's changing a lot. The attitude of the next generation of founders is changing, and they've have got a greater appetite for risk, I think.

But also, the way that the European market works, it's a $19 trillion market in terms of the GDP of Europe, and rather than accessing it through one market at a time, today, if you're a software company, you can do one product for the whole of Europe, the way the U.S. can for their own domestic market. So you've got cloud computing, which means rather than having to ship software to different countries, and install it on different customers, you can build one piece of code on one server, and deliver it virtually to any desktop, anywhere in the world, or anywhere in Europe. You've got immediate distribution channels through things like App Stores, and Play Stores from Google, that will get your product to the right people, in the right place, at the right time. You've got the ability to change your product really quickly for each market using AI. So, you know, you can take a software product, and almost at a click of a button, it will translate the software into French and German and Spanish and Italian, almost immediately. And it will also help you to localise it as well very quickly and easily.

And then, finally, you know, there's sort of the distribution channel. When we built up Salesforce back in the noughties, we had to have physical people in each country. Because anybody who was buying a software product, which was an enterprise software product, would expect you to visit them several times, do demos, do proof of concepts, build trust, and eventually, hopefully, they'll buy your software. Today, after the pandemic, the buyer doesn't expect you to come and see them, they're prepared to do business over Zoom. So actually, now you can actually centralise your effort. It has to be multilingual, but you can centralise most of your sales effort in one place.

So for the first time ever, you've got this single-market opportunity, which is a big market opportunity for you to the Pan-European, through the changes of technology in the last few years, in exactly the same way as the Americans have. So one product that works in London can work in Paris, Milan and Munich, just the way the one that was in the States could in each city in the U.S.

So there's a big shift, actually, in the platform, and I think we've got a real opportunity in Europe to build some great software companies in the next generation.

Fiona: So it sounds like, in terms of the difference between sort of scaling in Europe and scaling in the U.S., it's getting more similar. Is there anything that's still a difference? I mean, you mentioned sort of multiple languages, obviously, there, which is a challenge, but anything that actually is maybe even more of an opportunity in the European market, as you see it?

Phill: I think one of our disadvantages was there's this concentration of wealth, concentration of capital, concentration of skillset in Silicon Valley. But we've had, you know, distribution of that across maybe a hub in London for startups, or a hub in Berlin, or a hub in Paris, both of them being that they'll be in one central hub. That concentration is changing in Silicon Valley. So I don't know if you follow the stats, but do you know how much it costs to hire a five year out university software engineer in California right now, or in Silicon Valley?

Fiona: I don't.

Phill: $300,000.

Fiona: Oh, wow. Okay.

Phill: It's a lot of money. And that's the price being paid by the big mega companies, because there's a fight for talent, so they can afford it with trillion-dollar valuations, whether it's Google or Meta or Salesforce, or whoever. And of course, that makes it really difficult for a scrappy startup to get started and get going. So there's a sort of a fragmentation that's starting to happen, where some of these companies are beginning to move away, right? They're moving to sort of Texas, or they've moved to Miami, or they've moved to New York, or Denver, or wherever, so there are multiple hubs now that are popping up as people distribute themselves elsewhere because the cost of labour is so high.

As a consequence of that, you've got the similar dynamic in the U.S., where you've got multiple hubs, with less concentration of skill set and capital, and it starts to look a little bit like the European market. So the sort of disadvantage you might have had with this concentration of wealth and concentration of skill set is changing. So actually, I think we've got an advantage over them now in that we've actually got a generation of founders that have the appetites to build big companies, big global companies, within a single market that's huge, and not dissimilar in size to the U.S. economy. And we've got hubs in London and Paris and Berlin and Amsterdam, which are really capable of building great start ups and great scale-ups.

Fiona: Is there anything that a CEO can do in order to kind of stay innovative, and maintain that as you scale, do you think?

Phill: Just focus on the customer, and what the customer wants, and focus on the product. If you focus on nothing else, focus on those two things.

I've got a friend of mine called Leo, who used to be the CEO of SAP. He would say it needs to be not a vitamin, but a painkiller. So don't build products that are vitamins, build products that are painkillers, that actually solve a real problem in the business, or business pain, and you'll do well. And you do that by understanding what the business pain is of your customers, by talking to them regularly, and understanding the product you have today, and what it does for them, and what it needs to do in the future. So keying in on the customer, and making sure they're happy and well-supported, and listen to what they need, and making sure that the product's a painkiller not a vitamin, and if you do those two things well, I think you can build a great company.

Fiona: Phill Robinson's top advice for maintaining innovation there, a focus on customer and product, that seems to be a recurring theme for CEOs we speak to, but also making sure your product is a painkiller not a vitamin, so it solves real business pain.

In the next episode, we ask Phill about his experience working with the private equity industry, including what mistakes both CEOs and investors can avoid.

ECI partner, Suzanne Pike, recently spoke to Real Deals about how we leverage the use of AI technology in the deal origination process, and how we incorporate our proprietary AI tool, Amplifind, to streamline lead sourcing, deal prioritisation and assess potential bolt-ons for portfolio companies.

To be competitive, ECI’s Origination Team needed to identify leads and meet target company management teams earlier and earlier. This dynamic, coupled with the strong growth profile of the companies we invest in, means the universe of businesses that may be a potential fit for ECI has grown significantly as we have moved up in deal size.  With so much data now available, it’s become impossible for humans to analyse it all.

Created in 2020, Amplifind was enhanced and the prioritisation tool was embedded into our core processes from 2021. In the article, Suzanne describes that at the heart of Amplifind sits machine learning that sources and prioritises leads. She explains how it started life as a lead-sourcing tool, but that its remit has grown to effectively become the backbone of ECI's origination research process.

Automating the analysis of company descriptions and performance has reduced the time spent on reviewing potential leads by 80%, freeing up analysts' time for more in-depth research. Suzanne highlights that ECI has seen an eight-fold improvement in converting companies reviewed into quality leads when compared with our previous Companies House search approach.

While Suzanne discusses the benefits of using Amplifind in deal sourcing, she also identifies the impact it’s had on investors. Essentially investors want a track record and nothing trumps that she explains. But they also want to look forward and know that private equity firms have a coherent, repeatable model, and Amplifind demonstrates ECI have excellent central management and a robust process for triaging the hundreds of potential deals we see every year.

For a more detailed exploration of ECI's innovative approach to deal origination with Amplifind, and learn more about how it's harnessing technology to gain a competitive edge, read the full Real Deals article here.

Moneypenny has announced that it is further extending its services in the US with the acquisition of Sunshine Communications Services.

Sunshine is an award-winning provider of bilingual (English and Spanish) call management solutions to businesses of all sizes, ensuring they run smoothly 24 hours a day, 365 days a year. Based in Florida and founded in 1975 by the Gross family, the company is dedicated to representing clients’ business in providing customised services across a variety of industries.

Moneypenny's US operation is HQ'd in Atlanta and the company employs over 1,000 people globally, delivering virtual receptionist and phone answering services, live chat, switchboard, fully outsourced customer service teams and a host of AI and technology-enabled services handling over 20 million calls and chats annually for thousands of businesses, from sole traders to multi-national corporations.

The company has ambitious growth plans, and this acquisition will take the US business to a third of the Moneypenny Group turnover. Demand for its services is growing at a significant rate as businesses continue to look at ways to improve how they interact with their customers, by blending technology solutions with highly skilled personal assistants to maximise operational efficiencies.

In our final conversation with Welsh rugby and British Lions star, Jamie Roberts, he discusses some of the key elements that create great teamwork at the elite level of sport- all of which are highly transferable and relevant to management teams in business scenarios.

Keep it simple, focus, focus, focus

I always really admired Shaun Edwards when he was the Welsh defence coach. He had an incredible way of simplifying what is quite a complex game, and I think that’s hugely important when focusing a team’s performance and driving optimum output.

Mid-week, before say an England game, he’d pull out this shoddy bit of paper from his pocket with three bullet points on it, and it would just be (for example) 1. Line speed, 2. Make sure you work hard around the corners and number up correctly, and 3. Watch their kick / chip chase. That was it.

He’d obviously done hours and hours of analysis, combing footage and reviewing the opposition, but he knew that in the heat of the battle, in the 70th minute, you can’t remember ten things. You can’t have loads of stuff on your mind. You need to anchor down on two or three things, so you remember what’s core, what’s important. I believe that focus is key when steering any team to success. As a leader, you need to do your homework, distil everything down to the few core elements and communicate those clearly and frequently.

Getting clarity on roles

One phrase I used to hear all the time was ‘you have to enjoy this’, and it would really frustrate me when people said it before a game. Because you shouldn’t have to try and enjoy something, you either do or you don’t. What creates great teamwork is building an environment that everyone automatically enjoys.

In my experience, this is where clarity of roles plays an important part in any team. I was always asking questions, so I specifically understood my role and, when I was defence captain, always challenged other team members to make sure they knew theirs as well. I also encouraged and expected to be challenged as it helps reinforce clarity. My advice is to have those little conversations to make sure everyone has complete clarity of their role and what’s expected of them. Then you’re creating an environment where there’s no ambiguity helping the team enjoy what they’re doing.

Adaptability & fitting in

I remember when I first trained with Cambridge University, straight after playing South Africa in the 2015 World Cup quarter-final. Looking back, I loved Cambridge, really loved the people, teammates and the experience, it was great. It was obviously very different to a professional environment; people arrived late for training (because they had lectures), wore mismatched kit (from their colleges) and the standards in training were a world apart from what I’d experienced just a few weeks prior. It was the complete opposite of what I was used to.

And you know, the standards you walk past are the ones you’re willing to accept, so, feeling somewhat frustrated, I went on the offensive to try and motivate them and I remember vividly the team Captain approached me after training one evening asking me politely to ‘tone it down a bit’ - fair play to him. It was simply an ask to approach my messaging a bit differently - a challenge to adapt better to those around me. I often felt the same frustration during my time at Racing Metro in Paris where the French are much more laissez-faire in their approach and certainly different to what I was accustomed to.

So you have to quickly learn that you often can’t fight it. To be an effective team leader (and player) you need to respect those feelings and adapt accordingly – in this example, I wasn’t going to change the way people approach their rugby at an established club, regardless of my perspective. The moment I embraced that contrast, it became a really beneficial learning tool as I allowed myself to reflect differently on past experiences and challenge my own traditional methods of thinking. I don’t think that applies just to sports teams, I think adaptability and mental flexibility are key to any team dynamic.

Creating a framework

As I’ve mentioned before, rugby teams are made up of all sorts of different people, who have different backgrounds, motivations and personality types. To manage this, the best leaders I’ve worked with set the ground rules and create a loose framework that has to be adhered to. The framework (in rugby) often defines the social boundaries – behaviour, curfews, alcohol etc - that everyone has to operate within.

Leaders had the discretion to stretch those frameworks for certain individuals where necessary, but there has to be that framework. There’s no right way or wrong way, because remember at the end of the day, the result is all that matters. But there have to be non-negotiables and if a player doesn’t adhere, they have to face certain consequences, otherwise, the framework falls apart and the discipline of the team does too.

In my experience, frameworks that were co-created (often without coaches' involvement) are the ones that worked best, as opposed to operating under a dictatorship. When everyone’s involved in setting the rules they’re more likely to respect them.