In part 2 of our fifth episode, we revisit Kreston's North American business arm with Gary and Dan to share some personal client experience, insights into the interpreneurial mindset in practice, and the pitfalls to look out for when starting your global expansion. We'll be taking a break in uploading over the Christmas period for a couple of weeks but we'll be back with two brand new guests on 18th Jan 2023 - see you then!
Link to the full Kreston Global report can be found here: https://bit.ly/3RAdWhV
Written, hosted, edited & produced by Infinite Global: https://infiniteglobal.com/
Kreston Ep 5 Part 2
Hannah Robinson: [00:00:00] Hello. And welcome to Kreston Global's, the International interpreneur Podcast.
I'm Hannah, your host, and we're back again with Gary and Dan to discuss Kreston Global's interpreneur report. But this time in a little more detail and with a little bit more practical advice, if you've just joined us as a new listener, I'd recommend going back and listening to you last week's. Part one, to get the full effect of our interpreneurs' takes on the report.
But if you want to stick with part two for now, there's still plenty to take away and put to use from [00:01:00] this. So let's jump straight in. What do you think the greatest challenges are for interpreneurs right now, and how would you advise them around those common hurdles to give them the best chance of success?
Dan Johnson: Uh, I think it's pretty clear that, um, folks want, advisors that have been through, um, been through the process before, uh, helped companies that have gone into a specific geographic location. Um, that can come in and really provide expertise. Um, to me that's, uh, in my experience what, uh, my clients are looking for.
They, um, uh, they know that, uh, if, if, if you haven't done it as an advisor and, and been involved in that particular geography, um, that you're not gonna be able to bring the best to. Um, so, uh, I think it, it's incumbent upon us as advisors to, um, to stay very active, um, with [00:02:00] our international, um, affiliates.
Um, we don't have all of the answers ourselves necessarily, but, uh, being part of a large, um, group like Kreston International, um, we are able to reach out and, uh, uh, bring to our, our clients, um, the best advice in, in any country around the. Um, so, uh, the, the, the big affiliate programs, um, are, are very important
Gary Klintworth: in that regard.
I also feel like that not just, um, understanding international, but um, understanding like specific industries, right? So, um, you know, if you're a software company and you're expanding international, you have very different thoughts and, you know, and maybe even, um, you know, different. Things that you're trying to accomplish, um, and, and, and people you're trying to hire from a labor perspective as well as, um, you know, whether you're going after an r and d shop or a [00:03:00] sales and marketing shop, or whatever it is that you're gonna be doing overseas, could be very different from a manufacturer or from, you know, somebody else who's trying to seek other advantages.
So, uh, you know, I mean, I was, I started my business 16 years ago. And, you know, it was just me. And, and we built it to about 35 people until CBAs acquired us. And quite frankly, the reason, part of the reason why we joined CBA is a big part of the reason was because we immediately overnight had access to people that understood pretty much every industry out there.
Um, and, and from a, from a perspective of us being in our bubble here in San Francisco, thinking that technology was the only thing out there, um, you know, was a little bit narrow minded or a lot narrow. And, you know, we started seeing, and we've started seeing this a lot lately, is the technology industry and the manufacturing and all the others.
There's, there's, there's not a clear line anymore between sort of, you know, those, there's the health tech industry, there's [00:04:00] the, you know, med device. There's sort of AI that's on top of, you know, self-driving cars or whatever it is. And so industries are kind of mixing and I've found that. Having all the resources that I have now here, being with civas has just been so important for us to pick the brands of folks that are industry experts or international experts.
Um, and, and I and I have access to all of those folks in order to, to fully serve, serve my client base, which has been incredible.
Dan Johnson: Yeah, I think Gary, that's, it's a great point and. Often my clients that have expanded internationally are looking for one specific item. They're not reaching out and saying, Hey, I need you to guide me through everything there is to know about this one international location.
It's, it's more specific. And having the ability to reach out to those within Cibis or those within Kreston that can answer those specific questions, um, makes a big difference. [00:05:00]
Hannah Robinson: Now moving back to a wider. How has the interpreneur landscape evolved since you first entered the workplace? Do you see more interpreneurs than when you started your career or fewer?
Gary Klintworth: Yeah. I mean, I think that all of the things that you mentioned are, are part, part of the equation and, and things always change, but it's never, it's always been a global economy. Right? And so, like everybody, I think, I think everybody can agree and understand that that's the. Um, obviously in recent times, like supply chain is something that everybody's talking about.
Um, and, and being able to, to get to market and, and figure out how to, to best leverage that. But then also I think that over the course of the last couple years, people are figuring out that they need contingency plans too, right? So, um, on a lot of different things, you know, whether it be, um, you know, their growth strategies or, or you know, supply chain and, and.
Just kind of rethinking things in terms of what that looks like [00:06:00] and in a global economy and environment, how they have those contingency plans in place, such that if there is something that goes sideways, um, you know, it, it, there's the least amount of impact on, on their business. Um, and for us, I mean, you know, we're, we're at the forefront in, in what we're doing in terms of, uh, you know, providing disclosure and, and helping people navigate the disclosures that they need.
Make with regards to ESG and, and all the other things that are happening currently, um, from a reporting perspective as well, which, um, you know, companies don't fully understand. I don't even know that all of us fully understand the impact of some of these things that, um, we need to help our clients navigate through.
But, but they're different. They're different than, um, you know, they were two years ago.
Dan Johnson: Yeah, from my perspective, you know, we live at a time when, um, it's never been easier to operate internationally, um, with, uh, all the technology that's available. Uh, I think back to the start of my career, I [00:07:00] worked with very few international companies, and those that I did were.
Fortune 500 type companies that, um, that, that had lots of infrastructure in place Today, you can get on a Zoom or teams call with anyone anywhere in the world and have a face to face conversation. Um, you don't have to go to that other country, but even if you do, um, you know, our, our air uh, uh, travel isn't, uh, quite as good as it was just a couple years ago, but you can still get pretty much anywhere in the world, uh, within a day's travel.
So, um, the, the opportunities for, for just, uh, facilitating, um, uh, Management and operation of a company in some other part of the world is much better today than it has been, um, uh, just not that long ago. So I think we'll continue to see as technology evolves, as, um, consumers interact with each other. Um, social media, [00:08:00] the world continues to become smaller and smaller, and that's going to almost require companies to consider international operations.
It'll almost. Uh, the norm rather than to say, oh, I'm only gonna focus on domestic. That'll be more the question than, um, am I going to have international customers? Am I going to have international suppliers? It's, it, it's, it's going
Gary Klintworth: to become a requirement. Well, I think, I think it, um, it might be, communication might be easier.
Right. And, and, and facilitating, you know, certain things. It has become the norm. Like I, I have clients that haven't even gone back to the office. Um, and so, you know, these types of meetings that don't take, don't have to take place in, in person, I think are, you know, so it's gonna be easier in certain ways in terms of communication and being able to probably stay in touch with and run a business.
But I think that, you know, there could be other challenges and barriers that, that are being set [00:09:00] set. Um, you know, that that might, might create even, you know, more challenges in a different way though. Agreed.
Dan Johnson: I think it's just different challenges. Um, you're, you're certainly going to have. Local businesses.
Um, no doubt about it. And, um, you know, I love the local businesses here in the Tampa area. Um, but I think as, as companies get scale and want to grow, um, they're going to have to look outside of their local markets, outside of their local countries, um, to, to make that happen. And again, I think, uh, Gary mentioned this earlier, right?
Consumers want things faster. Um, uh, better than they have in the past. And, uh, again, in order to meet those objectives, uh, particularly from a supply chain perspective, um, you have to look at multiple sources. Uh, some of those sources might be available, um, in your geographic region, but often it's going to be looking outside of those regions [00:10:00] and, uh, again, it becomes less of this is what I want, meaning, uh, expanding internationally and more of this is what I need to do to stay competitive.
Gary Klintworth: It's funny because I was thinking about earlier, I was thinking a little bit about, um, you know, inter international expansion and kind of following. Following, like the path that's, you know, already been proven and it's, so, I don't know why it came to mind, but the thing that came to mind was a commercial that was, um, from B A S F and it used to say that, you know, we don't, we don't make products, but we just make the ones that you buy better.
Um, and so, you know, I'm thinking of sort of the mindset of, you know, well this person, you know, win international, it's a competitor or. . Well, I'm gonna do that as well, but I'm gonna, but I'm gonna do it better, right? I'm gonna, I'm gonna learn from mistakes. I'm gonna, I'm gonna figure it out. Um, and, you know, but, but dance, right?
Like you do see that, that the, the demand here is, is almost, [00:11:00] you know, it's, it's immediate. It's like I want something on my doorstep now. And being able to coordinate that in an effective manner, but then also, , um, you know, tap into the international marketplace for whatever it is that you're, you're needing to, from a sort of a supply perspective or a customer perspective, um, you know, it, it becomes, it becomes challenging.
Um, but then also it becomes a little bit easier with being able to, uh, have remote workforce anywhere, right? And, and be able to communicate with them on, on a daily basis without being their.
Hannah Robinson: What are the challenges that consistently surprise interpreneurs or maybe that they least expect when trying to expand internationally?
Any surprising trends in that vein that you're seeing at the moment that align with the findings?
Dan Johnson: Um, no surprises from my perspective. I think again, it, it's sort of this, uh, mindset change of, [00:12:00] um, going from, uh, there's fear related to, um, expand. Whether it's internationally or to new products or any of the things that, uh, uh, management teams are all the time considering and, um, saying No.
I've seen others that are in my industry. I've seen others that are in, uh, similar industries. They were able to get the right, um, guidance. Um, they were able to make that leap. I'm gonna do it
Gary Klintworth: too. Yeah. So I, no surprises here. You know, what I'm seeing right now is cuz I primarily work in the venture capital world, like probably 90% of venture capital back companies.
And um, you know, leading up to maybe 3, 4, 4 months ago, um, you know, some of my clients were getting series B rounds at like 200 million. And you know, what, what are you gonna do with that 200 billion? Like, how much are you gonna allocate from a funding perspective? growing [00:13:00] domestically, growing internationally.
Is it gonna be for hiring? Is it gonna be for, you know, new service lines, new business lines? You know, what is that gonna look like? And, and honestly now that like some of that funding has sort of, it hasn't dried up, it's still out there. It's just, um, it's more limited. And, and from evaluation perspective, a lot of my clients, um, you know, in this marketplace, their evaluation has dropped significantly.
And like equity funding, Well, not the perfect opportunity. So the one thing that I always think about is like, how do you, how do you go about funding that and what's the appetite from a, from a venture debt perspective or a debt perspective, um, for companies to be able to make those investments. Um, and sometimes they can be extremely significant.
Um, in a lot of cases they are. Um, and so, so my, my thought process was like, is the. Is international expansion still going to be on the top of the list? Um, you know, given [00:14:00] that, you know, from a funding perspective, I have to go out and, and, you know, and get debt in order to, to do that. Um, and in some cases it will, and in some industries it'll totally make sense and in others it may not.
Um, and so that's the one thing that kind of is in the back of my mind is as. You know, talk to bankers and, and, and venture capital and, and some of the folks that are out in the marketplace. There's still a lot of cash on the sidelines and there's still a huge appetite for, for, uh, companies to, to grow international for, you know, so many different reasons.
Um, but it's an expensive proposition and, and being able to fund that and how they fund it is, uh, I think is gonna become important over the course of the next year. And a. Um, as we're seeing less and less, um, people tap the, the i p O market, um, and be able to raise, you know, public funds. Um, so, and, and I'm talking obviously for the, for the private companies that are out there, not the companies that are already public where, you know, they probably could go out and do a capital raise.
[00:15:00] Um, but you know, some of those stock prices are depressed. We're finding that that's leading to a lot more transactions in terms of acquisition. You know, companies are cheaper out there. Um, and so from a growth perspective, you know, putting money into acquiring other companies, whether it's domestic or international, is, um, I think that's sort of the wave of the next six months.
Um, but, but it's, it's going be interesting how it plays out over the course of the next, um, next couple of years I've. Some clients that are going public on international exchanges right now, as opposed to, uh, here in the us. Um, so, so it's interesting how it's going out
Hannah Robinson: finally, and most importantly for some of our listeners, I'm sure.
What advice would you give to aspiring interpreneurs looking to expand globally over the near future? What have you found most valuable in your own careers?
Gary Klintworth: I don't know. I mean, I, I feel like I've always been this way. Like I, I. I can do certain things, but like I have to balance, [00:16:00] I always have to balance my mindset with surrounding myself with others that have sort of a mindset that might be different.
Right. And, and in building my business, um, over the last 16 years, you know, I have, I have been very fortunate to be able to hire people that, that challenge me. Um, and so I think that, You know, either having, you know, surrounding yourself with advisors that can challenge your, your thinking and, and, you know, your growth strategy and everything else is super, super important.
But then also surrounding yourself with mentors and other folks that can, you know, that can challenge, challenge you. And then, um, you know, hopefully, hopefully avoid the possibility of potentially wasting capital on an opportunity. That, you know, may, may either not have been there or, um, that just didn't materialize.
Yeah, I think it comes
Dan Johnson: down to like any investment, it's build the business plan, um, run the right scenarios, [00:17:00] uh, get the right advice, get the right people in place, um, uh, and then go execute on. Uh, the, the execution is gonna be, um, the key obviously, but, um, that upfront planning is going to make sure that you don't make that catastrophic mistake.
Where that investment is not gonna be, uh, anywhere near what you had hoped for. Um, and what your investors and shareholders and others that are, that are behind you are hoping for. Um, but, uh, if you, if you do the right planning and research, international expansion is absolutely a, uh, key part of growing a business.
And, uh, and, and once you get started, the opportunities will continue to come. Your. Um, it may be, uh, I'd start small, um, uh, you know, start in the, the geographies that make the most sense for your business, for your industry, and then, um, [00:18:00] that first step will lead to the next step and so on until, uh, ultimately you become a multinational company.
Gary Klintworth: It, it's, it's almost a guarantee that, you know, most companies at some point are going to be thinking about international expansion. And, and kind of what that looks like. That's, that's almost, you know, a guarantee in their, in their life cycle. Um, so I don't think that that's, that's gonna change. Um, you know, I think that, I do think that with, with everything going on right now within the global economy and, and, and, you know, some of the other things that are going on, um, I think people are gonna be a little bit more thoughtful.
But, um, you know, I think that. The global economy's here to stay, and like if people don't take advantage of it, then they're probably not. Um, it's not the highest and best use of, of, of, uh, some of the funds that they do have. So,
Dan Johnson: [00:19:00] um, I'd just like to applaud Kreston for commissioning this study. I think it's, um, uh, the idea of, uh, international expansion is top of mind that a lot of my.
And, uh, this study provides some insights that, um, I don't think you can find elsewhere. Um, getting into the mindset of the interpreneur, um, is not something that I've seen anywhere else, and I think it'll be, uh, these insights will be, uh, of value to, to my clients, to those that are, um, thinking about international expansion that are just starting up.
C. Um, it, it, it, uh, there's a lot to glean from this
Gary Klintworth: report.
Hannah Robinson: Well, I think we've covered off all of the different angles we want to discuss over these last two episodes. So thank you so much to Gary and Dan for joining me to discuss the report. I'm sure this is all invaluable to our listening interpreneurs and anyone who's interested in global business.
[00:20:00] Really, we'll be taking a short break in podcasting over the Christmas period, so this is the last episode we'll be putting out for a couple of weeks, but we will be back with two new brand new. As of the 18th of January, 2023. As always, there's a link to the research report in the podcast description, and have a great Christmas and New Year.
Everybody. See you on the other side. Bye.[00:21:00]