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How to Sell your Great Technology Overseas

Tracey James - Monday, January 16, 2017

How to sell your great technology overseas

There are two popular approaches: 1. the higher effort, direct route of the lone warrior with high risk of 'crash and burn' (remember Icarus who flew too close to the sun?) or 2. the lower effort, lower risk, indirect route using emissaries. We explore both with real world examples.

Innovation starts here

A bold claim perhaps, but the Australian hi-tech sector has produced world-class solutions for years in may fields, from the Black Box Flight Recorder to Gene Shears to Quantum Computing. Yet, these and many other breakthroughs were made with little support from federal or state governments.

Most government support has been in the form of limited or empty promises. At federal level, governments on both political sides have slashed funding for Australian R&D to the point where Australia's standing is now just ahead of Greece. Austrade, the organisation set up to help Australian companies take their products overseas, seems more focused on selling Australia’s expertise to global corporations than helping Aussie hi-techs export their products.

Going it Alone

For these and other reasons, most hi-tech start-ups try to go it alone - and we’ve seen spectacular successes like pioneers Cochlear and ResMed and, more recently, Atlassian. It’s instructive that Atlassian chose the US stock market for its highly successful IPO. Maybe because many Aussie investors are reluctant to back a local software company or any hi-tech. More Here from Atlassian founder Mike Cannon-Brooks.

A biotech client of ours listed first on the ASX and then on the NASDAQ, after finding it couldn’t attract enough investors in Australia. The situation is even worse for software companies: ‘… there are no solely software-based companies listed on the ASX,’ says Alex Louey, co-founder of Appscore. ‘In the US they are a dime a dozen.’ That’s the state of affairs Down Under.

The Warrior Route: you’re really on your own

The USA is an irresistible honeypot for many Australian hi-techs because of the vast opportunities and prestige. But for a small Aussie company of 20-60 staff, it can be distracting, expensive and tough to get traction

A former client of ours, an enterprise security software vendor, had connections in the USA and the CEO was super-keen to make his mark there. A few years ago, one of his well-connected mates encouraged him to hire a local salesman and even put forward a candidate backed by an impressive CV with recognisable US names. Against our advice, the CEO hired the candidate, sight unseen.

The decision had unexpected consequences. Not only did the guy have such huge health problems he couldn't fly across the country to visit prospects or attend security conferences, he was too unwell to even walk very far. As a sales resource, he was next to useless unless he was talking on the phone. Face-to-face contact was out of the question, so he arranged a plethora of meetings and waited for high level resources from Australia and the UK to fly over and attend. 

He must have been pretty convincing by phone, because it took the CEO 12 months to realise the full extent of the problem. By then, he's spent a packet in salary, travel and accommodation, he'd distracted his key resources by wild goose chases and lost a precious year in a fast-moving, competitive market.

More than that, the CEO had been so focused on the US, he'd missed the signs that customers in the UK and Australia were feeling  neglected and weren't happy. In the end, the US hire decision cost the company millions.

Sure, this is an extreme case, but this direct approach is hugely attractive with Aussie hi-techs, especially using a lone warrior (hired overseas or relocated from OZ) and more often than not, it doesn’t deliver.

The Emissary Route: big shoulders to stand on

The same company had taken an entirely different and successful route to the UK, some years before the ill-fated foray into the US.

Back then, its technology was breakthrough yet, back in Australia few companies saw the need for it. Although the technology was game-changing, major local banks who clearly needed the highest-performing IT protection, opted instead to buy interior technologies from global players. Sound familiar?

We were advising the software vendor at the time, and it was clear that the target segments were defence, intelligence and law enforcement sectors - whose target organisations needed to apply the smartest technology on the planet, not just choose a politically-correct option. And that's how we positioned it: Defence Grade Cyber Security. As this was a limited vertical in Australia, overseas markets were the obvious answer, but foreign prospects were even more impenetrable than local banks.

Enterprise software has a long sales cycle, and it needs skilled people who can manage POCs (Proofs of Concept) and deployments, and keep existing/potential customers and partners happy, long term. Fortunately, the company had a very experienced, senior sales person who was willing to go the UK for a few years. She was Celtic, charming, intelligent and fitted in right away. We'll call her Sinead.

The strategy was to focus on building partnerships with IT systems integrators like BT, Capgemini and Logica, to ease open doors to the big defence and intelligence contracts, and it worked. Sinead spent most of her time building relationships with these 'emissaries', activity which we backed up with thought-leading White Papers in email campaigns that highlighted the vendor's ongoing technical advances in these specific segments.

Several of Sinead's UK emissaries introduced her to their existing clients who introduced her to more players in this closely-knit, closed-door, hush-hush community. It wasn't long before the UK business, focused almost entirely on defence, intelligence and law enforcement, outgrew the business Down Under.

For this vendor, focus on partners has continued in the UK and Europe and has continued to bear fruit, while the US market is still proving elusive.

Choose the Right Partners

In the crowded, competitive, noisy hi-tech US markets, you'll probably need several well-performing partners to get you traction. The huge US market is often divided into US east coast, middle, west coast, and Canada.

So, apart from reach into the markets you want, you need to choose partners who need your product, not just those who'll sign up to sell it. For the former, your technology fills a vital gap and strengthens their offering. For the latter, they don't need you, so they'll accept the leads you generate and the margin you give away, but won't do much else. 

You need to be tough when vetting potential partners, especially overseas, to find the ones of best fit. We find having a series of questions to verify those with the right experience, internal technical and sales expertise, and clients in verticals that match yours, is a good start, so long as you don't make exceptions or waiver.

With a handful of select organisations with whom you have productive relationships, it will be easy to manage, even for a smallish Aussie company. If you’ve chosen partners carefully, your main role will be to train them (either in the US or Down Under), keep their training up to date and help them to sign their first deals quickly. Just like for a rooky salesman: early wins build confidence, loyalty and desire for more, and will set up your new partner for strong growth. The reverse applies too.

Another client, a European antivirus software vendor, had a product that was far superior to that of the market leader at the time, Norton from Symantec. Most PC resellers were selling Symantec, so focusing on them would only have sparked a price war. Instead, we suggested approaching a few specialised, niche-focused resellers who needed clear differentiation from the Symatec resellers. It was an obvious strategy and it worked. We used exactly the same strategy for a Compliance Training software company, who expanded using carefully-selected, matched partners.

Start in the Right Place

If you don't already have an overseas presence or a big budget for global expansion, starting with the UK or US - even via partners - may not be the best choice. Moving sequentially outward in geographical waves might make more sense, and it looks a bit like this:

  1. First prove your technology in Australia. When it comes to IT software, the local market is as mature as any in the first world so, if it works here, it will work in Asia, Europe and the USA. You can also forge relationships with partners located in Australia who have global offices to help your expansion.
  2. Overseas starts across the ditch (like it or not). New Zealand may not offer glittering riches of the USA, but it’s a convenient place to test assumptions and become familiar with the logistics, challenges and cultural differences in other countries. It's also a short flight with just a two-hour time difference – and if things don’t work out straight away, the whole world won’t be watching and your powder is still dry.
  3. Next stop: Asia-Pacific. Singapore, Malaysia, South Korea Taiwan are major tech exporters and heavy users of advanced technology. Singapore is the easiest starting point, in terms of flight times and time zones, but also culture and sophistication. Singapore is a cosmopolitan market with exposure to cultural differences.

The Bottom Line

So, the simple answer to the question ‘How to sell your great technology overseas': 'Walk before you Run. Run before you Fly'.

The image in the header it's Icarus, the character in Greek mythology who wanted to fly. He ignored advice from his father, Daedalus, and headed straight for the sun. The result: melt, crash and burn. Not a pretty sight then or for a high tech 2,500 years later.

Tracey James
Chief Executive

Tracey used to be a bio-technologist but got sick of acid holes in her clothing. She switched to biotech marketing for companies like Merck and GE Health before taking a leap of faith into marketing IT.

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