B2B Revenue Acceleration
B2B Revenue Acceleration

Episode · 4 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 into a new market needs to look for some point of leverage. You're listening to be tob revenue acceleration, a podcast dedicated to helping software executives stay on the cutting 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 Nice to be here with you. Good so, Patrick, today we want to speak about establishing a US technology vendo in Europe, and before we go into the details of your sorts and comments and experience around that, can you please tell us a little bit more, first of all about yourself, but also about high trust, the company that you represent at the moment? Sure so. High Trust is a cyber security company based in Silicon Valley there in California, and I like to tell people where we fit in the overall scheme of things as a relates to cybersecurity, because there are a lot of different technologies, a lot of companies, a lot of different ideas about what constitute cyber security. And so they're really three main categories of sober security. There's the network security, which is what most people think of when I think of sober security, and really is network security is really all about keeping the bad guys 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 or good presses, the case may be, because the bad guys keep trying to breach the the network. And so it's a very important part of cyber but it's not us. The second part of sober security, of the second big 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 was really just anti virus for your laptop or, you know other devices. But now it includes Iot, includes configuration management and includes mobile device management and mobile content security. So it's also a very, very important part of cyber but it's also not us. So the third category is cloud, and that's where we play. So so is focused on sober security, but we're specifically focused in providing sober security in cloud environments. And cloud could be private cloud, it could be public clouder, it could be the hybrid environment, and there are two things that we only two things that we really spend our time on and 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 it for 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 GDPR and 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, meaning that we can make that workload stay where you wanted to stay. And then the second thing that we do is lock down the virtual infrastructure that sits underneath the cloud. And what I mean by this, this might sound a little bit esoteric, but what I mean by that is underneath every cloud our virtual servers, storage network and people. We call them admins or virtual admins or cloud admins, and actually at the cloud admin is where two thirds of all the breach has happened. So what we do is we lock that down with a whole package of access controls and other capabilities that are very unique. So those are the two things we focus on, protecting the workload and locking down the virtual infrastructure. So that's the high trust part and that's probably spend a little bit too long on that, but basically my job is to establish high trust in areas outside of North America because for the longest time the company was really 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 the decision to provide a global footprint for high trust and try to help customers who are headquartered outside of North America. Okay, that's what that's was running good and thanks for that. I mean that death was a very, very comprehensive idtunding of the very proposition of which wibviously love because we we've did a thou amount of work with you guys. So that's that's very useful. Thank you very much. But in some of the conversation can of coming back to the point that we want to discuss. There was I was particularly interested to invade you to join the podcast because obviously you are American, you are from the bay area, but I know from the work we've done together, that you have spent a lot of time not only in Europe but also in Asia and building up the business from scratch. And really what I'm interesting to collect to them, and the topic that I want to speak to you about, is is the journey of an American company, or anemy American individual yourself, if you will, in that process of onder something the local markets. Where do you start? Some of the challenges you came along the way? So I appreciate there is lots of things. We don't want to dig into too much details 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 your American background, in your knowledge of the American market and kind of assessing the difficulties of the differences between your local markets and the markets in which you are now successfully but in which you had to start from scratch. So maybe we should start by if you could give us some positive and negatives of that expansion in Europe from available perspective, but with the work for you. Yeah, yeah, that's fine. You know, we as company, we have to look for and every company that wants to expand into a new market needs to look for some point of leverage. Right. You want something that helps you lift more than your own weight. Otherwise, you know, you have to either hire a lot of salespeople or you're going to have a very small funnel and you're going to be very, you know, very laser focus on only a couple of things and and either one of those leads you to a situation where you know your odds of a big success or not very good. So you have to find something that is some different ways that will help you lift more than your own weight, and that's usually comes in the form of some type of reseller channel. Could potentially be a strategic partnership, something where a small company partners with a bigger company and then you get the benefit of the bigger companies relationships. So you know, kind of business development type. I could be an OEM situation where you actually sell your products through a bigger company than 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 Asian markets, 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 that is, you know, it's in country, that's you know, that already has maybe that they already have trusted by cell relationship with so they don't have 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 their marketing in Europe, all was as because the questions, hey, should I start by recruiting someone on the ground or should I start by building up a channel? And and, to be honest with you, the answer that we give them is you should do a bit of boats and you should do it almost at the same time, because the channel is important. The channel will led to potentially shot and yourself cycles, because you may find a Resett or someone who's got a relationship with that end user and because there are reference with the end users you mentioned. They've got...

...the comin condition and all that. You can say. Six months of set cycles, which is fantastic, but so our recommendation is always to do a little bit of both at the same time. How did you go about it? Because I trust well, let me come and I what you said, because I agree with you. You really I don't think you can only do one. But even if you only have one person, they're going to have to find some way to balance their time, and the reason for that is the channel. Even if they share your view on the marketplace and the technology, etc. They need to be shown that there's money, or else they're not going to do they're not they're not going to invest, they're not con invest their time, they're not can invest their other people's knowledge, because there for profit organizations just the same way that 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 customers first, you find the anchor customers and in this way, especially for a company like high trust that had success in North America, you look at the cut you look at the companies that are similar to the ones that we had success with, with some exceptions, but for the most part, for example financial 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 a little faster time to time to value. Government is always a very long time to value. But but typically when those deals start to happen, then they're very large. And then healthcare, in the United States, something that we did very well, not really a big opportunity. And outside the US, because of all the socialized medicine, however, there are there are more and more private doctor groups and things like that, that and big hospitals and other things that need our expertise and helping to lock down the infrastructure for healthcare the same way we can for financial and for and for government. So there is some market there and there are certainly some groups that need our help. But even and even you could think of life sciences, like pharmaceuticals and and medical devices. But in looking at, for example, Europe, we had to look at some other vertical markets, right. We had we had to be pragmatic about it. You know, in Europe it isn't just as in the US we could live on just financial services, government and healthcare, but in Europe we 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 vendors that do the things that we do. So so that's one of the things that we did, is we shifted our focus a little bit to add markets that were specific to the geography. And the other thing we tried to do was to focus down on not covering the entire continent, you know, multiple continents, right. You know, the EMA theater that many companies call it is the entire, you know, continent of Europe, it's the continent of Africa and it's, you know, a big chunk of the Middle East, you know, and basically the Gulf region and in northern Africa. So you can't cover all that, especially when you're just getting started. So you have to have primary markets, the secondary markets and then those secondary markets you can only be opportunistic, you can't be strategic. Mean you can't really be proactive about building 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 believe that you will return on your investment faster. So those are some of the those are some of the things that we we employed or some of the thoughts that we employed when we entered the market and I would say that, you know, I believe we were right on most of them, but some of them, some of them took longer than maybe we would. We would have lights for them to so, but that's what we did. Okay, that's very 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 business in Europe. Yeah, there are a couple things. I don't know which one's the biggest, but I'll tell you...

...one big one and then maybe I'll tell you another one. So one big one is finding reseller partners that believe the 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 to do with the technology itself. I mean, technology is important, but I believe that a successful channel partnership is really based on kind of a balance sheet approach between you and the partner, and there are really three things that the partner needs and vendor has to do all of those things or else you can't have 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 so here's so if you think about things sort of on in this this balance sheet approach, on one side, what does the partner need? The partner needs three things. You know, when everything else fails, the partner needs three things. He needs you to be able to uphold his margins structure, because all resellers do business on margin and that at the end of the year that's what the owners pay themselves. On Your Small Company Yourself, I'm sure that the 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 your business 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 to take less margin than is normal. Second thing is you have to give them something new and cool to talk to the customer about. That's where the technology comes in, but it doesn't matter what that is that you just need to give them something that that holds, holds water with the customers so that they can walk in and say I've got something really great and you need to see it. 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 that this is so important is because they make two to three times the margin on services then they do on software and hardware. So if you give them those three things, then you can or if you if you make those available to them 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 one thing. The flip side is for company like contrasts, a company not in the market place yet, just getting into the market, there are three things we need from our partner. One is we need a wider funnel, and that is we need them to go talk to customers. That would take us a long time to find. mind. It's one of the reasons why we engage with you are really in and your organizations, because we need to widen our funnel very, very quickly, which we were able to do. But the partner can help you do that with customers that he already knows. So why 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. The advisor comes in and says, I've got something really great, you need to see it. I've never steered you wrong before. That really takes a lot 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 the reseller. The third thing that we need our feet on the street, right we 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 ability to 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 the three 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 great and you can get a customer or partner to agree to them, but the partner has to believe themselves to be the type of partner who's responsibility it is to bring the new, innovative technology to their customers. And these are very seemed like a mind point, but it's not. Many partners only want to sell 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 that are 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 that see things the same way that you do. I kind of call this sort of evangelist partner. So number one hard thing about entering a market is finding those guys, because you have to look for them, just like you have to look for salespeople and other partner so that was that was one of the main things. I would say the second main thing that was difficult for us as 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 they really didn't know us and they knew us in the US and they know us from 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 people that we could talk to you there, that understood our mission, understood their own mission and how we would fit into it in an ecosystem. And so 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 the biggest challenges we found in expanding in Europe. Okay, so would you it, and but that you see, you see a difference in the way to US 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 the beginning with the Europe and both knows? I think it was a matter of first 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 and talk to a lot and you talk to a lot of talk to a lot of people, as the saying goes, kiss a lot of frogs, and so 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, but they, a lot of them, will waste your time, and so you need to you need to find out quickly. Are they the evangelist that will help you spread the word about your product, or are they really looking for an easy sale? Because no startup company, no young Technology Company, no private company, is going to have something that is so easy that's just going to fly off the shells. And if it's that easy, then you don't even 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 you know something like that. So it's always going to be some real work rolling up the sleeves and going and finding those customers that you can help. I sort of think about this in that way, right, you have to seek out those 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 take it that way, but I think it it really more like the missionary who has to go out and seek out the unconverted. But the unconverted are those companies that don't know that there's a technology they can help them, and so you have to find resellers and partners that believe the same way, that you do the belief that finding those that the the number one, most important thing is 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 use models from the US because in the US, if you already have a business that has has volume, then the resellers can, they can take orders and they can you know that they don't have they'll have to work hard to be evangelist 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 regarding the challenges. You don't mention the direct sense, Folso, the direct people that you had to recruit. Is that because he was like a flawless process for you? Is it because you workruited people that you you walked within the past, of people that you know are it's it, but you know a reason why you don't mention any challenger. But actually finding this first, I trust 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 because I felt that, you know, when I took this challenge on, I needed to understand what the market was going to be like before I went out and found the people that, you know, we would be able to we'd be able 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, not the other way around. And a lot of people in Solicon Valley, a lot of companies see at the different see at the other way. They basically say, 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 companies that I've been with over the years, that you the first thing you start with is the fundamental problem that you're solving with your technology. The second thing that 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 needs you 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 of if your technology works. The fourth thing you look at is how do they want my technology to be packaged so they can consume it? The fifth thing that you look at is how do they want to buy it? Who Do they want to buy it from? What kind of a channel? Direct via the web service, whatever that is. And then finally, in not at you know, your channel, in other words, at last part. And then 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 build a team. Otherwise you're building a team that may or may not fit the mission. And you know, I'll say that I have. I've been a chief revenue officer, I've been this CEO. You know I've been I've been had of sales, for sales, marketing, business development for a number of startup companies and even more now, after all this time. I will leave this to be true, that you build the team appropriate to the mission, and so that's why, you know, when it came to hiring, I didn't really worry about it in the early time. I need to understand the market, I need to understand the mission and then you go and you find people that you think are good, you know are a good fit, and even when you feel like you have a good understanding of that, you could be wrong. I will say that. You know, I was wrong in the initial hires I made an Asia Pacific. You know, the people that I hired there were not start up people, and that's that's a critical thing when bringing 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 of what I call start up land, because it's not the same as big companies where 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 many time. While individual we have been very successful in the large organization with just them arrived in the smaller organization. Well, you know, it to in it to of the recruitment touch. You need to have the channel how to. You need to be a dark service person. You almost to be a Swiss army knife. You need to be a ready they will be a new challenge coming every day and some things that challenge maybe you know, bringing some milk in the office or whatever it could be. It could be some silly 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 lot of 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 takes a specific character to be able to do so and definitely having the entrepreneurial or the 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 that may never have proved themselves before in running an organization in Europe, but particularly in one of the end point company, one of the Big One, we've seen one guy was coming from another startup, just as one of the top sales guy 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 at someone 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 already done it in the past, but does the reason why askuld the question because we know that it's a paint point for most of most of our clients coming into Europe and we've seen people making making making the mistakes, which I don't think you should be ashamed of, because it's it happens. At some point you need to make a decision. The most important is to make sure that if you make the wrong decision, you can you can rectify it as quick yes, Pussy Point, but look, but that was very useful. I guess 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 trust or they want to discuss some of your experience in Europe a pack and carrying the flag of Fight Dress Indus New territory in a very successful way. So what 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, if they want to reference this podcast, I heard you on the podcast, or interested to talk more about this particular subject. I'm always happy to talk to companies and people that are looking to enter markets and and and whatnot. I've done a lot of that kind of consulting and those types of things in my past and the look, it's not easy and I think that ultimately, if you do one thing right in entering a new market as a company, it's to hire that first person. Hire the right first person. And you're right what you said that they may need to be a Swiss army knife. They may not ultimately be the person that grows and leaves the organization, but they may be. And put the most important thing is they have to have that that 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 lot of nose, you're going to you know you're going to run into a lot of 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 what you'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 the missionary has really one thing that makes them different, and that is they do it for the mission, right. I mean my Catholic school nuns used to call it missionary zeal. So, and that's what missionaries do. They go out and because they believe that they're they're there to help save people. And again, this is it religious. This is about saving people technologically. But remember, remember, if you're a crappy missionary, what happens to you? You get killed, the Eaton by the natives, right. I mean that is oh so. Therefore, missionaries are fearless because they don't they don't think about the negative consequence, because they're not there for a plus, they're there for the mission. And so when you hire people, need to hire people that you believe feel this way. And I look, lots of people think they do, but I like to test people before I hire them and say look, you know, think about what this is going to be like when things are good, you know, and you're getting good response from customers and things are moving forward and you're all energized. And think about it when, when things are not as good, you know, will you will you be able to keep your energy level up. Will you be able to make that next call? Will you be able to push through? Because the opportunities are there and Europe in particular is a phenomenal market, and it is, it's in 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 to customers and prospects in all these different countries. I enjoy the you know, the challenge, the sort of the puzzle of finding a way to fit how our 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 a great opportunity. I'm still excited about it even after even after the couple of years that have been, you know, the heavy duty spade work, if you will. But personally I like...

...building companies and so when you pick somebody, 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 so when a guy said that would be my last maybe comment and then I'm perfectly happy to talk to anybody who's interesting, unless you're a direct competitor on which case, if you buy me a drink on my talk to you, ha ha, 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's off inside that. I like some of the energy that your views. I think it don't make sense. And Yeah, I would encourage really anyone that may want to have a chat with someone and bound some mayds and but also looking 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 Rossetta or distribute to what model, vows, etc. Etc. Because we actually spoke about it in length a few time. So I think they would really benefit from your expires. I would really encourage in your party and those two to get in touch with you've down looking at expending geographicity, but you know as of today. But I really appreciate your time and insights. So thank you very much for today. And Yeah, as we discussopre, I would see you soon in London Fall. One not to drinks. Yeah, looking forward to that and thanks so much for inviting me. I really enjoyed it and 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 existed for many years, companies are struggling with a lack of focus, agility and scale required in today's fast and complex world of enterprise technology sales. See How operatics can help your company accelerate pipeline at operatics dotnet. You've been listening to BEDB revenue acceleration. To ensure that you never miss an episode, subscribe to the show in your favorite podcast player. Thank you so much for listening. Until next time.

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