Getting Started Overseas

An expert on breaking into Asian markets offers advice on finding foreign partners and outlines mistakes to avoid

by Karen E. Klein

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For more than 25 years, Kaye Crippen has worked with Asian companies and coordinated export plans for U.S. firms. As principal of Market Development Consultancy, based in Dana Point, Calif., she works with small and large firms hoping to expand into any one of the 13 Asian countries in which she specializes. Having lived in Singapore and Indonesia for a decade, Crippen is intimately familiar with how to modify and develop products for new and existing markets overseas. She spoke recently to Smart Answers columnist Karen E. Klein about how companies get things wrong when they try to go global and how they can avoid making mistakes. Edited excerpts of their conversation follow.

What kinds of mistakes do entrepreneurs typically make when they decide to go global?
They don't realize how profound the communication and cultural differences are, and they don't have good estimates of the time and resources it takes to expand internationally in an effective way. They have unrealistic expectations about how they're going to go into a country and find the perfect partner who will smooth out all the difficulties for them. Sometimes connections get made easily, but oftentimes they don't; you have to be prepared for that.

I also find that they think if they're speedy they'll be successful. But you may go overseas and by the time you're ready to implement your plan, things have changed. People think that the first-mover advantage is always going to work, but they may introduce a new product and then see local companies undercut them with similar products at lower prices. The cultural lure around American products is big, but it doesn't always work.

Some companies have the wrong reasons for choosing a particular market to expand into. It's like they fall in love with a region because of the perceived size of the market, or because it's gotten a certain media focus. They hear that China's hot or India's hot and they want to go there with their business, but they don't consider that it may not be a good thing to go into a market where everybody else in your industry is going.

How can they avoid some of those mistakes?
People need to first look in their own backyards. If you're a small consultant, or a small U.S. company, see if there are other firms in your industry already doing projects overseas that you can piggyback on as a supplier or a subcontractor. This would be a real win-win if your small firm has veteran or minority status, or you're an immigrant entrepreneur, because large corporations are looking for those partnerships, and it will be much easier for you to gain entry to an international market that way. Let the larger company do the tough and expensive work of making the contacts, doing the business administration, and making the mistakes, and you can focus on delivering what you're hired to do. Later on, once you've gotten familiar with working in this foreign market and made some contacts on your own, you can do projects there independently if you want to.

Let's talk specifically about exporting, which is what so many small firms can do more easily now, given the reach of the Internet.
You're right, it's easier now, but there are still a lot of issues involved with selling products internationally. There are legalities of importing into various countries and local legislation that might prevent a U.S. firm from exporting or make it tough on them. The nuts and bolts of exporting are complex, and you need somebody in that country or that region who really knows how it works and can help you.

You lived in Asia for a decade and specialize in that region in your business. What unique communication and culture issues do advise your clients about?
There are so many! You have to know enough about communication to get the words right when you approach a business, or they won't give you any attention. For one thing, "yes" doesn't always mean yes, especially if they hesitate before they say the word. If you are in an initial business meeting, you should never talk. Just sit there, listen, and observe.