Founder Talks 16: International Growth

Pivots and pitfalls, scaling, investments and exploring foreign markets.  Our Founder Talks host Evelien Bouma discussed the ins and outs of international growth with Slimmer AI CEO JC Heyneke and CEO and owner of NNZ Group Len Boot. 

For many startups, the creed is usually to dream big and shoot for the moon. But how do you go from local to international? And what are some of the dos and don'ts along the way? JC and Len shared their experiences and helpful tips with the audience during an all new edition of Founder Talks. Here are the highlights.

Two pivots

Slimmer AI is, as the name suggests, an AI business, but not in the traditional sense. “We’re a venture studio”, JC explains. “That means as a company, we’re not in the software business, we’re in the business of building companies. And we use our AI and software engineers, our network and our business experts to help ambitious founders grow their companies faster.”

However, Slimmer AI pivoted twice to get to their current business model. They went from consulting to SaaS and made the strategic decision to pivot again into a venture studio. “It wasn’t out of necessity”, JC says. “We saw an opportunity and made a very deliberate choice, with the support and backing of our shareholders. We now have five companies in our portfolio and we’re playing the long game. So we’re not looking for quick exits, but we’re focused on healthy, sustainable growth for these companies.” 

Build to scale

When it comes to international growth, one of JC’s biggest tips for entrepreneurs is build to scale: “Right from the start, every aspect of your company, every decision you make, should be about scaling. We tend to focus on the here and now with our decisions and organize and streamline the company around that. But when things take off and you need to change things after the fact, it will slow down your or even hamper your growth. You need to be looking ahead when you're building your company.”

As an example, JC mentions a Danish startup he worked with. “They had their customer service in Denmark too, with people working regular hours. So that means if customers from the US and Japan need help, they won’t be able to call you and you suddenly need to completely reorganize your customer service or lose them as customers.” 

Funding is a choice

A lot of startups tend to look for outside investors to fund their international growth. “And sometimes that’s necessary, but not always”, JC says. “It’s a choice, not a goal. External funding makes things go faster, but is speed really essential for your particular company? Is it worth giving away equity? Is it worth spending a lot of time on? Time that you could also spend on developing your product?”

The best laid plans of mice and men

Even though looking ahead is essential for scaling, religiously sticking to a five-year-plan doesn’t work. “Circumstances change, things happen, new opportunities arise”, JC says. “It’s a process of continuous learning, tweaking, experimenting, adapting and sometimes even changing course. Even when you’re currently in a situation where you’re comfortable and you can pay the bills, you should be on the lookout for bigger opportunities. A big pivot can be scary and you should give it some time to work, but it pays off in the long run.”

Nike of packaging

Len Boot is the CEO and owner of NNZ Group, a century old family owned business from Groningen. Their food packaging is used all over the world. “The best way to explain what we do, is to look at us as the Nike of packaging”, Len explains. “We don’t produce, but we design and develop, just like Nike doesn’t produce their own shoes. And it’s not just plastic, but pretty much any type of packaging you can think of.” 

Independent advice

Focusing on the design and development is what sets the company apart from the rest of the industry and is also a large part of their continued success. “We can give supermarkets truly independent advice, for example. “If they were to ask us to design packaging for something and we only produced plastic bags, that would be our solution. But because we can use any type of material, we can come up with the best solution for them and find the right producer.”

Boots on the ground

Len’s biggest tip for entrepreneurs is not just doing extensive research, but actually going to the people you work with. “I travel a lot! I visit about 18 of our producers at least three times a year. Sure, I can meet with them virtually or they can give me a virtual tour of the factory, but that way I won’t get to talk to the people actually doing all the hard work and I will only get to see the parts of the factory they want me to see. You need to be there, meet people in person and see for yourself what it’s like. It really helped us develop long lasting relationships with our producers.”

Structure follows culture

Another added benefit of actually being there and meeting the right people, is understanding the culture”, Len says. “And you really need to look at how the culture works, before you impose a structure. A certain process might work perfectly fine in the Netherlands, but not on the other side of the world. If you want things to run smoothly, you need to find the right process that works with that particular culture.”

New markets

NNZ is active worldwide, but what’s their market strategy? “It depends on the type of product”, Len says. “Getting a foothold and a market share in a new country is difficult. So if it’s an existing product, we tend to buy a company in that country, because with that comes an existing market share. But a completely new product is a different story, of course.”

Does Len have a final tip for entrepreneurs? “We’re from Groningen and we started locally more than 100 years ago. The main reason we went international was because we were mainly in the packaging of agricultural products. So if crops fail, we sell less packaging. But if you’re active in more than one country, you spread those risks. I think going international starts with a good, local foundation and organic growth. Make it work here first and then worry about making it work somewhere else.”