Nordiska Entreprenadsystem about exporting servicesThe page was last modified:
The Linköping-based company Nordiska Entreprenadsystem AB has developed NEXT, a mobile business system for small and medium-sized construction, service and general contracting companies. All signs pointed to a success story when the business system was first launched in Australia. Unfortunately however, not everything went as planned. Now the company has learned from its mistakes and is making a new effort in neighbouring Norway.
Verksamt.se’s reporter Anders Nyberg met with the company’s CEO Lotten Tholander and founder Anders Jacobson to talk about why things didn’t work out as expected.
Anders, could you say that the venture into in Australia was a failure?
Yes, definitely. It was a failure. But the preconditions were good and everything looked good - we really thought we had a chance to succeed. The service received a very good reception, everyone liked it. The Australian business culture is so very similar to that in Sweden, and that along with other factors, meant that all signs pointed to success.
So what went wrong?
It is not possible to be successful without being in place locally. A physical presence is essential for success, especially so if the country is nine time zones away. If we had went there and stayed for a few months and were physically able to build the business from there, it would most likely have turned out very different. The time difference complicated things, and eventually led to that things fell apart. I held a training session at six o’clock in the morning, then they slept when I was working and I was sleeping when they were working - so things got drawn out and everything took too long.
What have you learned from this experience?
If one wants to expand internationally and do business abroad, they need to take it very seriously, not simply do it with their left hand. Quite simply, we misjudged it. That was three years ago, and since then we have learned quite a lot.
What would you say is the biggest difference between exporting a service and exporting a product?
From our perspective, our service, which has a digital, Internet-based service, the delivery itself is really, really simple. There is only one difference between delivering the service to Australia and someone here in Linköping: one needs to make a translation, but that can be done quite quickly. In particular, it is a whole lot easier to get started with service sales, especially when it is a digital service.
Well Lotten, I understand that now you are going to attempt to enter a new market again, namely Norway. What´s your important experience from the failure to succeed in Australia?
Basically, we will take with us everything we’ve learned. We will definitely be on-site in Norway. We will build everything from scratch, right from the start. Merge the financial system directly, learn about the Norwegian market and track competitors, for example. We think that is important to really succeed in exporting. But above all, a local presence.
What do you think a company should think about if they want to go out and enter in a new market? How do you get good contact with a new market?
We are working on finding customers that we can enter together with into Norway, so that we follow our customers all the way. Thus, a Swedish customer, whom we can enter together with into Norway. Then we see various types of networks as super important, and actually it’s an inexpensive way to get new customers. A satisfied customer usually produces a new customer.
Why did you choose Australia, and then Norway, for your business? Plus, those are two countries outside the EU; some say that it is easier to start with a country within European Union
It was just a coincidence that Australia in particular came into the picture, through via contacts and networks. As for Norway, we don’t see it as a concern due to that we are exporting a service. The real question is whether we need to start up business operations in Norway, or if we can simply work together with a customer in Norway. We don’t see it as a problem at all, that it is a country outside the EU.
How do you know when you have chosen the right country?
It’s good to have a feeling that one’s product or service is actually going to work in the country, and that’s where a local presence is important. With a local presence, you can see if there are similar products and services in the market, and you can also get a feeling yourself for whether your offer could work, or not.
What tips do you have for companies facing the same journey as you’ve experienced?
Dare to take the step while at the same time try not to make it harder for yourself than it actually is. Find out what you need to find out, and then take the first step.
How do you find out what it is that you need to find out?
Make contact with networks, customers and Almi, or any other party. They are there to provide assistance.
Anders, would you say it’s hard to do business with companies in other countries?
No, not really in fact. The business transaction is usually the same. What is really important to keep track of is the business culture. For our part, Norway and Australia are very similar in terms of business culture, but I think there is a really huge difference in southern Europe, for example. The differences could be simple things, such as payment terms of 90 days on invoices, which could cause some unexpected difficulties.
Anders and Lotten, thank you so much!
Anders, we’re glad to have had the opportunity to share our experiences with you.
Responsible: Swedish Agency for Economic and Regional Growth