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December, 2010

Key Success Factors: Internationalisation of Spanish e-Businesses

Monday, December 27th, 2010

In December 2010, our team attended the First Tuesday event that takes place every month in Barcelona. The conference aimed to explain the key success factors when launching an e-business in a foreign country. The focus was to provide specific tips for Spanish based e-businesses who would like to internationalise.

The guest speakers for this occasion were Venturepreneur Rodolfo Carpintier and entrepreneur Lluís Font. Rodolfo Carpintier is the owner of Digital Assets Deployment (DAD), an incubator for e-businesses in Madrid. Lluís Font is the CEO of Zyncro, which offers innovative document and collaboration tools to companies.

The six main topics were:

1. Spanish entrepreneur profile
According to Rodolfo Carpintier’s experience when it comes to internationalisation, Spanish entrepreneurs often lack ambition and international background. It’s very common for Spanish entrepreneurs to plan to sell and operate on a local level only.  It’s compulsory for every entrepreneur thinking about internationalisation to speak English and get a stronger international background. Such factors greatly help the entrepreneur when going abroad.

2. Hernán Cortés syndrome. Europe vs. South America
Sometimes Spanish entrepreneurs go to South America to start an affiliate of their current company just because the language is similar. Although language is important there should be more and valuable reasons when expanding into a new market. Both Carpintier and Font recommended trying Europe as well which has very strong markets like; England (albeit being very competitive), Germany and France. It’s a good first attempt and a good indicator of success.

3. Team up with the right partner
It’s important to find the right partner in the new geographical market. Regarding financing the new venture Font and Carpintier recommended the ideal scenario to be to give away at the most 49% equity with a buy-back option. In this way the majority ownership is maintained. In addition the risk is shared and if the project goes well full ownership can be reclaimed.

4. Team structure in foreign markets
Ideally, the best option is to have the complete team only in the headquarters and just the staff that is really needed in the other countries in order to deal with the different issues of each country. When thinking to launch in a big and very diverse market like the USA, then it’s better to have a complete team there to deal with issues such as the size of the market and the time difference.

5. Spanish names syndrome. From “Portal del Jamón” to “Ham online”
For the Spanish start-ups that use very Spanish names for their brands it is recommended to change these into more international catchy names that sound good both locally and abroad. Otherwise, having a very local name can prove successful in the local market, but is not very useful when expanding the business abroad. This tip is also applicable when thinking of a name of the company regardless of the country. The name should sound international.

6. Further tips for success
Entrepreneurs need to be persistent. It’s vital to have cash to be able to pay the staff that is part of the team. Knowledge of the different legislation systems is recommendable. Last but not least, the product needs to be standardized from the launch country to the country of origin, and not the other way around.

It’s very important to adapt a global vision when thinking of selling in other markets; study in depth what the situation in each country is like and then pursue the best strategy accordingly. Most of the mistakes that entrepreneurs make in the expansion phase are due to the implementation of the wrong business model to the new country entering.