Applied learning pays off

Technology has made communications between an entrepreneur's parent office and its new operation almost a non issue. It has also enabled the Asian entrepreneurs we interviewed to preserve a relatively compact reporting structure when venturing into new markets, with staff at the new operation reporting directly to headquarters.

In addition, technology has greatly reduced the need for the founders and CEOs of startup companies in Asia to travel frequently to their overseas offices, with face-to-face meetings reserved for strategic reviews and important sales meetings.

As one entrepreneur commented: "We try to build relationships from our main office first, through e-mail, phone, etc, before travelling to meet potential clients and partners in the foreign location." With Asian startups' internationalisation creating balanced regional and global networks offering high quality coupled with low cost, research and development issues are on an almost equal footing with sales when it comes to prioritising headquarters' commitment to the newly established overseas operation.

With R&D typically centred in one location, progress in this area was crucial to many of the startups' business agenda in the first 12 months of overseas expansion.

Some lessons were learned intuitively, but "process" was the operative word in successful overseas expansion stories, even though a fresh set of variables was reported with most forays into a new country. Beyond the initial evaluation of existing technical expertise and industry contacts that steered the entrepreneurs toward a specific market, the key to success was efficiently repeating the set-up process in new target markets.

A Hong Kong startup we spoke to had originally tested the waters with a Shenzhen operation. Within a year of branching into the China market, the company set up five more offices across the country.

Regardless of the new operation's location, for the majority of entrepreneurs their overseas venture has proven to be a valuable learning experience. It also enabled them to identify priorities amid the "Big Bang" process of building a local team, winning customers and securing local partners.

In fact, only a minority of entrepreneurs in our survey considered that the overseas move had not served to prime their business for growth.

One of the respondents summarised his assessment of the first 12 months of overseas operation as follows: "Most decisions [at the subsidiary office] can now be made autonomously, and many of the processes have been automated, so there isn't much need for constant interaction between the offices."

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