Local talent turns out to be vital to reach big markets
Originally published in www.bwob.ca.
Tuesday January 17th, 2012
The best way to learn is by doing, according to James Appleyard, chief executive officer and chairman of Artez Interactive Inc. of Toronto. He has learned how to sell his firm's Web-based fundraising solutions to charities in the United States, U.K. and Australia by doing just that.
Appleyard sees Artez as an electronic alternative for the clipboard-toting fundraiser knocking on doors. Sitting at a computer, the fundraiser can instead register for an event and ask for support from hundreds of people through his or her e-mail address book. "Suddenly, the money's flowing in, because people are likely to say yes when we're part of one another's social network," he says.
Appleyard, 43, has an MBA from the Rotman School of Management at the University of Toronto, and is a former professor of management at the University of Toronto's Mississauga campus. Artez was established in 1998 to create custom online fundraising applications for large charities. The business took off after 2003, when the company realized it could create a product for many types of charities without having to rebuild its functionality each time. Version 1 was released in 2004; the company is soon to release version 153. Artez has 50 employees and satellite offices in Boston and Melbourne, Australia.
What have you learned about launching your product in foreign markets?
The best way to learn in these markets is to participate in these markets. You could go online and do all sorts of research, but the most powerful lessons come from our activity in those markets. I think it is about information gathering, but you don't want to go into an analysis paralysis.
How did you penetrate the U.S. market?
It was a bit of a winding road for us, frankly. First, we sold from our Toronto office, because the time differences allow that. Then we tried working with a reseller in the U.S., but found that wasn't scaling adequately. The reseller wasn't growing quickly enough to pursue the market opportunities, so we decided to open under our own steam.
That's made the difference. We've really accelerated sales in the U.S. because of our local presence. It's such a large and complex market. So we hired people who had relevant industry experience in that market. We've got two people in that office today [in Boston] and they're both Americans.
What do you mean by reseller?
An organization selling related products-in this case, consulting services to charities. So they would sell their consulting services along with our product.
Why did you try a reseller first?
Because we didn't have the capital at that point to go opening offices in other places. We just didn't have the scale to be able to achieve it. We thought that the reseller path in that market was the path of least resistance.
What should business people know about the U.S. market?
There's so much more segmentation in that market. You really need to focus on the segments where you can be the most successful. It's simply harder to build a brand and to be known, because the market is so large. There are about 80,000 charities in Canada, and in the U.S., there are more than a million. It's just unimaginable how many charities there are.
How do you get your word out?
We found ways to communicate with charities internationally, without having to travel to them for one-on-one meetings. That is not a scalable way to grow a business, and it's also a way to spend an awful lot of money on plane tickets.
Five years ago, we started organizing conferences that we call Artez Interaction. They aren't really about us, though. They build a brand for us, but they're a forum for charities to share best practices with one another. Wherever we hold them, we fly in experts from other parts of the world so our clients can get a global perspective for their work.
We started with these in Toronto, and we've taken them on the road. We've offered them in Washington, San Francisco, London and Sydney, and we still do them every fall in Toronto. We've also taken our message online. Our communications team organizes dozens and dozens of webinars every year on all sorts of topics of use to fundraisers, and we archive them on our website. Thousands of organizations have benefited.
It's marketing, and it contributes to thought leadership and to the common good. It's not just a U.S. story; it also allows us to talk to the right people in the U.S. without spending undue amounts of money.
How are the U.S., U.K. and Australian markets different?
It's important to understand what stage of development each market is at. In the U.S., it's more competitive for us. There are businesses in the U.S. that are similar to us, and they're larger. We're going into their territory and challenging them by talking to what they would consider to be their natural customers. The situation is different in the U.K. and Australia. There is some local competition, but it is not as developed. We found Australia a very comfortable market to do business in because the scale of the charities and what they were doing was very similar to Canada.
How about the U.K.?
We started with a reseller, and we're still working with a reseller. It's worked well, because the reseller does have scale. They have enough feet on the street and are able to grow the business at an acceptable pace. We built a really trusting relationship with this partner, and it feels like a team effort in that market.
This article has been edited for length and clarity.
By Sean Fine
Originally published in www.bwob.ca.