B2B Revenue Acceleration
B2B Revenue Acceleration

Episode · 3 years ago

10: Establishing a US Technology Vendor in Europe w/ Patrick Conte

ABOUT THIS EPISODE

It’s tempting to think that just because you’ve had success in one market…

You’ll automatically be successful wherever you decide to expand your business.

Patrick Conte is the Senior Vice President & General Manager of International Business at HyTrust, and he understands the challenge in taking your product and moving it to another market like Europe.

HyTrust is a cyber-security company that specializes in cloud security.  They protect the cloud workload for their clients (which is becoming increasingly important in this era of data protection we live in). They also focus on locking down the virtual infrastructure (cloud servers and admins) for their clients.

Patrick and his team were able to expand their technology into the European market through careful strategy and execution.  Patrick joined us for this episode of B2B Revenue Acceleration to talk about the European expansion journey and the lessons learned along the way.

Every company that wants to expand intoa new market needs to look for some point of leverage. You're listening tobe tob revenue acceleration, a podcast dedicated to helping software executives stay on thecutting edge of sales and marketing in their industry. Let's get into the show. Hi, you. Welcome to be to be a reven you acceeneration.My name is ohodium with Yer, and I'm here today with Patrick comte.How are you Patrick Today? Very good, very good, or really and Niceto be here with you. Good so, Patrick, today we wantto speak about establishing a US technology vendo in Europe, and before we gointo the details of your sorts and comments and experience around that, can youplease tell us a little bit more, first of all about yourself, butalso about high trust, the company that you represent at the moment? Sureso. High Trust is a cyber security company based in Silicon Valley there inCalifornia, and I like to tell people where we fit in the overall schemeof things as a relates to cybersecurity, because there are a lot of differenttechnologies, a lot of companies, a lot of different ideas about what constitutecyber security. And so they're really three main categories of sober security. There'sthe network security, which is what most people think of when I think ofsober security, and really is network security is really all about keeping the badguys off of your network or containing them when they get on your network.It get it's a lot of investment money. Probably has the most bad press orgood presses, the case may be, because the bad guys keep trying tobreach the the network. And so it's a very important part of cyberbut it's not us. The second part of sober security, of the secondbig category is endpoint security, which has been around for a long time,even before that the whole security era. But for a long time it wasreally just anti virus for your laptop or, you know other devices. But nowit includes Iot, includes configuration management and includes mobile device management and mobilecontent security. So it's also a very, very important part of cyber but it'salso not us. So the third category is cloud, and that's wherewe play. So so is focused on sober security, but we're specifically focusedin providing sober security in cloud environments. And cloud could be private cloud,it could be public clouder, it could be the hybrid environment, and thereare two things that we only two things that we really spend our time onand develop our products for. The first one is protecting the cloud workload.The cloud workload is basically the VM that has all the critical data in itfor the you know, for the company, or whatever the case may be,and whatever the organization is. So the workload is the most important thing, especially in today's data protection era that we all live in, with GDPRand other day a protection legislation that's out there. So protect the workload,and we do this by encrypting it and also by Geo fencing it, meaningthat we can make that workload stay where you wanted to stay. And thenthe second thing that we do is lock down the virtual infrastructure that sits underneaththe cloud. And what I mean by this, this might sound a littlebit esoteric, but what I mean by that is underneath every cloud our virtualservers, storage network and people. We call them admins or virtual admins orcloud admins, and actually at the cloud admin is where two thirds of allthe breach has happened. So what we do is we lock that down witha whole package of access controls and other capabilities that are very unique. Sothose are the two things we focus on, protecting the workload and locking down thevirtual infrastructure. So that's the high trust part and that's probably spend alittle bit too long on that, but basically my job is to establish hightrust in areas outside of North America because for the longest time the company wasreally focused in the US and maybe to a lesser degree, in Canada,and since I've joined the company a couple...

...of years ago, we made thedecision to provide a global footprint for high trust and try to help customers whoare headquartered outside of North America. Okay, that's what that's was running good andthanks for that. I mean that death was a very, very comprehensiveidtunding of the very proposition of which wibviously love because we we've did a thouamount of work with you guys. So that's that's very useful. Thank youvery much. But in some of the conversation can of coming back to thepoint that we want to discuss. There was I was particularly interested to invadeyou to join the podcast because obviously you are American, you are from thebay area, but I know from the work we've done together, that youhave spent a lot of time not only in Europe but also in Asia andbuilding up the business from scratch. And really what I'm interesting to collect tothem, and the topic that I want to speak to you about, isis the journey of an American company, or anemy American individual yourself, ifyou will, in that process of onder something the local markets. Where doyou start? Some of the challenges you came along the way? So Iappreciate there is lots of things. We don't want to dig into too muchdetails about all the issues, the issues and the problem that you come across. But but really what I'm interesting to understand is is your perspective from yourAmerican background, in your knowledge of the American market and kind of assessing thedifficulties of the differences between your local markets and the markets in which you arenow successfully but in which you had to start from scratch. So maybe weshould start by if you could give us some positive and negatives of that expansionin Europe from available perspective, but with the work for you. Yeah,yeah, that's fine. You know, we as company, we have tolook for and every company that wants to expand into a new market needs tolook for some point of leverage. Right. You want something that helps you liftmore than your own weight. Otherwise, you know, you have to eitherhire a lot of salespeople or you're going to have a very small funneland you're going to be very, you know, very laser focus on onlya couple of things and and either one of those leads you to a situationwhere you know your odds of a big success or not very good. Soyou have to find something that is some different ways that will help you liftmore than your own weight, and that's usually comes in the form of sometype of reseller channel. Could potentially be a strategic partnership, something where asmall company partners with a bigger company and then you get the benefit of thebigger companies relationships. So you know, kind of business development type. Icould be an OEM situation where you actually sell your products through a bigger companythan maybe that company even brands your product. So they're these different, different paths. I think the least leverage comes from building a large sales force and, you know, immediately trying to sell direct into into European or even Asianmarkets, because companies outside the US want to buy from somebody that's local.They want to buy for the most part, they want to buy from somebody thatis, you know, it's in country, that's you know, thatalready has maybe that they already have trusted by cell relationship with so they don'thave to renegotiate terms in the dishes, etc. So again, you know, there are good reasons for finding that leverage and in whichever comes from.That's interesting that, because we always took about the chicken and the egg.So we when we engage with with US tatters that are looking at expending theirmarketing in Europe, all was as because the questions, hey, should Istart by recruiting someone on the ground or should I start by building up achannel? And and, to be honest with you, the answer that wegive them is you should do a bit of boats and you should do italmost at the same time, because the channel is important. The channel willled to potentially shot and yourself cycles, because you may find a Resett orsomeone who's got a relationship with that end user and because there are reference withthe end users you mentioned. They've got...

...the comin condition and all that.You can say. Six months of set cycles, which is fantastic, butso our recommendation is always to do a little bit of both at the sametime. How did you go about it? Because I trust well, let mecome and I what you said, because I agree with you. Youreally I don't think you can only do one. But even if you onlyhave one person, they're going to have to find some way to balance theirtime, and the reason for that is the channel. Even if they shareyour view on the marketplace and the technology, etc. They need to be shownthat there's money, or else they're not going to do they're not they'renot going to invest, they're not con invest their time, they're not caninvest their other people's knowledge, because there for profit organizations just the same waythat you are. So you have to show them some path to money.And the way you do that is you go and you talk to the customersfirst, you find the anchor customers and in this way, especially for acompany like high trust that had success in North America, you look at thecut you look at the companies that are similar to the ones that we hadsuccess with, with some exceptions, but for the most part, for examplefinancial services. We did very well in the United States with that government.We did very well in the United States with that. Now financial services alittle faster time to time to value. Government is always a very long timeto value. But but typically when those deals start to happen, then they'revery large. And then healthcare, in the United States, something that wedid very well, not really a big opportunity. And outside the US,because of all the socialized medicine, however, there are there are more and moreprivate doctor groups and things like that, that and big hospitals and other thingsthat need our expertise and helping to lock down the infrastructure for healthcare thesame way we can for financial and for and for government. So there issome market there and there are certainly some groups that need our help. Buteven and even you could think of life sciences, like pharmaceuticals and and medicaldevices. But in looking at, for example, Europe, we had tolook at some other vertical markets, right. We had we had to be pragmaticabout it. You know, in Europe it isn't just as in theUS we could live on just financial services, government and healthcare, but in Europewe really had to we had to look at manufacturing, transportation and retail, because those are still very, very strong markets that don't have incumbent vendorsthat do the things that we do. So so that's one of the thingsthat we did, is we shifted our focus a little bit to add marketsthat were specific to the geography. And the other thing we tried to dowas to focus down on not covering the entire continent, you know, multiplecontinents, right. You know, the EMA theater that many companies call itis the entire, you know, continent of Europe, it's the continent ofAfrica and it's, you know, a big chunk of the Middle East,you know, and basically the Gulf region and in northern Africa. So youcan't cover all that, especially when you're just getting started. So you haveto have primary markets, the secondary markets and then those secondary markets you canonly be opportunistic, you can't be strategic. Mean you can't really be proactive aboutbuilding channels there. You have to focus on your primary markets first,the ones are going to return on your investment faster or the ones you believethat you will return on your investment faster. So those are some of the thoseare some of the things that we we employed or some of the thoughtsthat we employed when we entered the market and I would say that, youknow, I believe we were right on most of them, but some ofthem, some of them took longer than maybe we would. We would havelights for them to so, but that's what we did. Okay, that'svery entorning thing. And out the order that. which was your biggest change? What is the thing that your phone the most difficult to have? Welcome, all the most challenging, from doing business in North America to doing businessin Europe. Yeah, there are a couple things. I don't know whichone's the biggest, but I'll tell you...

...one big one and then maybe I'lltell you another one. So one big one is finding reseller partners that believethe same way, that high trust us. And here's what I mean by that. So I believe that a channel partnership in many ways has nothing todo with the technology itself. I mean, technology is important, but I believethat a successful channel partnership is really based on kind of a balance sheetapproach between you and the partner, and there are really three things that thepartner needs and vendor has to do all of those things or else you can'thave a partnership and the partner has to do three things and if they don't, then then the vendor can't have a good partnership with that. And sohere's so if you think about things sort of on in this this balance sheetapproach, on one side, what does the partner need? The partner needsthree things. You know, when everything else fails, the partner needs threethings. He needs you to be able to uphold his margins structure, becauseall resellers do business on margin and that at the end of the year that'swhat the owners pay themselves. On Your Small Company Yourself, I'm sure thatthe margins on your business not just the top line. It's more importantly,it's the margin, right. So in for our company, you run yourbusiness on the margin, not on the top one. So number one,you have to uphold the margin structure of that company. Can't ask them totake less margin than is normal. Second thing is you have to give themsomething new and cool to talk to the customer about. That's where the technologycomes in, but it doesn't matter what that is that you just need togive them something that that holds, holds water with the customers so that theycan walk in and say I've got something really great and you need to seeit. The third thing is you've got to give them away that they can, that they can actually provide services around your product. And the reason thatthis is so important is because they make two to three times the margin onservices then they do on software and hardware. So if you give them those threethings, then you can or if you if you make those available tothem in the partnership, then you've covered off the things that you have,you know, the foundational things you have to do. Yeah, that's onething. The flip side is for company like contrasts, a company not inthe market place yet, just getting into the market, there are three thingswe need from our partner. One is we need a wider funnel, andthat is we need them to go talk to customers. That would take usa long time to find. mind. It's one of the reasons why weengage with you are really in and your organizations, because we need to widenour funnel very, very quickly, which we were able to do. Butthe partner can help you do that with customers that he already knows. Sowhy do the funnel? Number One? Number two shorten the sale cycle.This is where at the beginning of the cell cycle the customer doesn't know you, but if a trusted advisor comes in, you know the partner's trust. Theadvisor comes in and says, I've got something really great, you needto see it. I've never steered you wrong before. That really takes alot of the education part out of the front part of the cell cycle.That then I don't have to deal with because the end customer trust that thereseller. The third thing that we need our feet on the street, rightwe need people besides my own people talking about the product, you know,talking to customers about it, possibly even providing services and support or the abilityto demonstrate the product. So that's the leverage that comes from more people right. So if if we get the three things we need and they get thethree things they need, then you you have the basis for a good partnership. But there's one other thing that's very important. So those things are greatand you can get a customer or partner to agree to them, but thepartner has to believe themselves to be the type of partner who's responsibility it isto bring the new, innovative technology to their customers. And these are veryseemed like a mind point, but it's not. Many partners only want tosell the tried in the true right, you know, the things are easy, the things that are very well known...

...by their customers and the things thatare already being asked for. They don't see themselves as bringing the new things, but some partners do, and those are the ones that you need,especially if you're a new vendor coming into a market place, Uni people thatsee things the same way that you do. I kind of call this sort ofevangelist partner. So number one hard thing about entering a market is findingthose guys, because you have to look for them, just like you haveto look for salespeople and other partner so that was that was one of themain things. I would say the second main thing that was difficult for usas we enter the market was because we really had no presence at all.We had to establish presence with our strategic partners, especially intellmvm where where theyreally didn't know us and they knew us in the US and they know usfrom a headquarter basis, but in the field they did know us at all. So it's taken a long time to, you know, find the right peoplethat we could talk to you there, that understood our mission, understood theirown mission and how we would fit into it in an ecosystem. Andso I would say that's just been roll up the sleeves kind of spade work, if you will. So those are the two things, I would say, that have been the most difficult as far as getting getting going at thebiggest challenges we found in expanding in Europe. Okay, so would you it,and but that you see, you see a difference in the way toUS Chinn, or is a parrating the else? Use the Europe and Chin, or or was it just a question of building up this relationship at thebeginning with the Europe and both knows? I think it was a matter offirst of all finding the partners that that felt the same way that we did, because you never know, you have to cast your net very wide andtalk to a lot and you talk to a lot of talk to a lotof people, as the saying goes, kiss a lot of frogs, andso you have to talk to you know a lot of partners will approach you, especially if you know they see you at a show or whatever, butthey, a lot of them, will waste your time, and so youneed to you need to find out quickly. Are they the evangelist that will helpyou spread the word about your product, or are they really looking for aneasy sale? Because no startup company, no young Technology Company, no privatecompany, is going to have something that is so easy that's just goingto fly off the shells. And if it's that easy, then you don'teven need a channel. You can just sell it through a retailer or,you know, some type of you know some type of direct marketing or youknow something like that. So it's always going to be some real work rollingup the sleeves and going and finding those customers that you can help. Isort of think about this in that way, right, you have to seek outthose customers that that need you but don't even know that they need you. It's almost like this is not a religious reference, so please don't takeit that way, but I think it it really more like the missionary whohas to go out and seek out the unconverted. But the unconverted are thosecompanies that don't know that there's a technology they can help them, and soyou have to find resellers and partners that believe the same way, that youdo the belief that finding those that the the number one, most important thingis to find customers you can help with your innovative technologies, and those,those partners, are very rare. So I will just tell you that.You know, that's that's one of the most difficult things. You can't usemodels from the US because in the US, if you already have a business thathas has volume, then the resellers can, they can take orders andthey can you know that they don't have they'll have to work hard to beevangelist for your your technology. But in a new market like you're apar Asia, you have to find the ones that believe. Yeah, that's okay.So very interesting. So in the response that you you gave me a regardingthe challenges. You don't mention the direct sense, Folso, the direct peoplethat you had to recruit. Is that because he was like a flawless processfor you? Is it because you workruited people that you you walked within thepast, of people that you know are it's it, but you know areason why you don't mention any challenger. But actually finding this first, Itrust people on the ground in, you know, new territory. No,it is a challenge and I'll tell you...

...that I didn't mention it only becauseI felt that, you know, when I took this challenge on, Ineeded to understand what the market was going to be like before I went outand found the people that, you know, we would be able to we'd beable to use to grow the team's and there's a reason for that.I believe very strongly that you build the team to support the mission, notthe other way around. And a lot of people in Solicon Valley, alot of companies see at the different see at the other way. They basicallysay, well, let's just assemble a team and then let them that.Let's figure out what we should point them at. But I believe that,and I believe this even more and more after a number of different startup companiesthat I've been with over the years, that you the first thing you startwith is the fundamental problem that you're solving with your technology. The second thingthat you look at is who is the customer that I'm helping with this?The third thing you look at is who's the person inside that customer who needsyou right or it could be did, it could be several different groups,but you need to identify the person that you can make a hero out ofif your technology works. The fourth thing you look at is how do theywant my technology to be packaged so they can consume it? The fifth thingthat you look at is how do they want to buy it? Who Dothey want to buy it from? What kind of a channel? Direct viathe web service, whatever that is. And then finally, in not atyou know, your channel, in other words, at last part. Andthen the last thing is the team. And it should be the last thing, because you need to have all these other things sorted out before you builda team. Otherwise you're building a team that may or may not fit themission. And you know, I'll say that I have. I've been achief revenue officer, I've been this CEO. You know I've been I've been hadof sales, for sales, marketing, business development for a number of startupcompanies and even more now, after all this time. I will leavethis to be true, that you build the team appropriate to the mission,and so that's why, you know, when it came to hiring, Ididn't really worry about it in the early time. I need to understand themarket, I need to understand the mission and then you go and you findpeople that you think are good, you know are a good fit, andeven when you feel like you have a good understanding of that, you couldbe wrong. I will say that. You know, I was wrong inthe initial hires I made an Asia Pacific. You know, the people that Ihired there were not start up people, and that's that's a critical thing whenbringing somebody into the company that's a company at stage that high trust is. That is they have to be flexible enough to deal with the challenges ofwhat I call start up land, because it's not the same as big companieswhere you have a lot of support and you have maybe at different expectations,etc. So that's that's that's very true. Mean, we've seen that case manytime. While individual we have been very successful in the large organization withjust them arrived in the smaller organization. Well, you know, it toin it to of the recruitment touch. You need to have the channel howto. You need to be a dark service person. You almost to bea Swiss army knife. You need to be a ready they will be anew challenge coming every day and some things that challenge maybe you know, bringingsome milk in the office or whatever it could be. It could be somesilly things, but it's about it's about being ready to work very in autonomy, and I think that's very difficult in large organization because you've got a lotof support from different places. Okay, I've seen some people starting in Europe, you know, having to really do some nitty gritty stuff and it takesa specific character to be able to do so and definitely having the entrepreneurial orthe having some management experience in the past can can very be very useful.We've also seen some up and coming, you know, kind of people thatmay never have proved themselves before in running an organization in Europe, but particularlyin one of the end point company, one of the Big One, we'veseen one guy was coming from another startup, just as one of the top salesguy picking up his first vp em a role and being very successful.So I think it's a mix of both. Sometimes you may need to look atsomeone who's got the potential, D...

...energy and is angry to hope.She's angry to prove ourself by himself, and sometimes you need to add someone. You could look at the second profile, which is that individual that has alreadydone it in the past, but does the reason why askuld the questionbecause we know that it's a paint point for most of most of our clientscoming into Europe and we've seen people making making making the mistakes, which Idon't think you should be ashamed of, because it's it happens. At somepoint you need to make a decision. The most important is to make surethat if you make the wrong decision, you can you can rectify it asquick yes, Pussy Point, but look, but that was very useful. Iguess my next question to you is really around the Oudo or listener.I can get in touch with you if they want to discuss about high trustor they want to discuss some of your experience in Europe a pack and carryingthe flag of Fight Dress Indus New territory in a very successful way. Sowhat is the best way to get in touch with you? Pets? Yeah, sure, so probably the best way is for the email me at Pcnte, at High Trustcom pee county, at high trustcom and you know, ifthey want to reference this podcast, I heard you on the podcast, orinterested to talk more about this particular subject. I'm always happy to talk to companiesand people that are looking to enter markets and and and whatnot. I'vedone a lot of that kind of consulting and those types of things in mypast and the look, it's not easy and I think that ultimately, ifyou do one thing right in entering a new market as a company, it'sto hire that first person. Hire the right first person. And you're rightwhat you said that they may need to be a Swiss army knife. Theymay not ultimately be the person that grows and leaves the organization, but theymay be. And put the most important thing is they have to have thatthat mentality that we were talking about before, that sort of that missionary and mentality. And because you're going to you know you're going to hear a lotof nose, you're going to you know you're going to run into a lotof roadblocks that are just naturally put up for you, a lot of friction, and but you can't let that stop you. If you believe in whatyou're doing, if you believe that you can help customers with your innovative technology, then then you won't let that stop you. And then here's my analogy. Right. You know, there's there's difference. You know, they themissionary has really one thing that makes them different, and that is they doit for the mission, right. I mean my Catholic school nuns used tocall it missionary zeal. So, and that's what missionaries do. They goout and because they believe that they're they're there to help save people. Andagain, this is it religious. This is about saving people technologically. Butremember, remember, if you're a crappy missionary, what happens to you?You get killed, the Eaton by the natives, right. I mean thatis oh so. Therefore, missionaries are fearless because they don't they don't thinkabout the negative consequence, because they're not there for a plus, they're therefor the mission. And so when you hire people, need to hire peoplethat you believe feel this way. And I look, lots of people thinkthey do, but I like to test people before I hire them and saylook, you know, think about what this is going to be like whenthings are good, you know, and you're getting good response from customers andthings are moving forward and you're all energized. And think about it when, whenthings are not as good, you know, will you will you beable to keep your energy level up. Will you be able to make thatnext call? Will you be able to push through? Because the opportunities arethere and Europe in particular is a phenomenal market, and it is, it'sin many ways. In many ways it's the best job in the company.I have to say I really enjoy being over there. I enjoy talking tocustomers and prospects in all these different countries. I enjoy the you know, thechallenge, the sort of the puzzle of finding a way to fit howour innovative technology can help these companies that may not even know about it,and I like working with world class customers. So, you know, it's agreat opportunity. I'm still excited about it even after even after the coupleof years that have been, you know, the heavy duty spade work, ifyou will. But personally I like...

...building companies and so when you picksomebody, you have to find somebody that is willing to do the hard work, is willing to do the manual labor of company built. And so sowhen a guy said that would be my last maybe comment and then I'm perfectlyhappy to talk to anybody who's interesting, unless you're a direct competitor on whichcase, if you buy me a drink on my talk to you, haha, I'll say it's more like fall fife from my own bustling expense.That enough. Well, that's that was one of footbutter coming again. Let'soff inside that. I like some of the energy that your views. Ithink it don't make sense. And Yeah, I would encourage really anyone that maywant to have a chat with someone and bound some mayds and but alsolooking at expending a US organization. or You could even be an Eastraili vendel, Asian Veno but with vend outside of Europe trying to come into the market. I know that you are very sorrow when you looked at the different Rossettaor distribute to what model, vows, etc. Etc. Because we actuallyspoke about it in length a few time. So I think they would really benefitfrom your expires. I would really encourage in your party and those twoto get in touch with you've down looking at expending geographicity, but you knowas of today. But I really appreciate your time and insights. So thankyou very much for today. And Yeah, as we discussopre, I would seeyou soon in London Fall. One not to drinks. Yeah, lookingforward to that and thanks so much for inviting me. I really enjoyed itand you know, I'll just say goodbye to all your all your listeners.Thank you. operatics has redefined the meaning of revenue generation for technology companies worldwide. While the traditional concepts of building and managing inside sales teams inhouse has existedfor many years, companies are struggling with a lack of focus, agility andscale required in today's fast and complex world of enterprise technology sales. See Howoperatics can help your company accelerate pipeline at operatics dotnet. You've been listening toBEDB revenue acceleration. To ensure that you never miss an episode, subscribe tothe show in your favorite podcast player. Thank you so much for listening.Until next time.

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