Globalization is creating new and better opportunities for innovative software companies. In general, companies are good at developing new products, but often lack the skills to make them internationally known. Unfortunately, not many have serious medal chances! The globalization process is gathering pace all the time and in the case of the software industry it is galloping along.

We have all heard the stories of companies that crash into the market like a bolt from the blue and in the space of a few years have revolutionized the field. These companies have laid the golden eggs that others have bought up at astronomical prices. Unfortunately, however, all too few companies are in the running for top international prizes. What could be the explanation for this lack of success?

Do we have the ambition?

In the world of sport, we all know what is required to gain a top place on the podium with a gold medal around your neck. The sportsmen and women we are sending to the Olympic Games in London in 2012 currently have had their noses to the grindstone for years already: they have devised strategies and trained hour after hour; they have been coached, the competition has been analyzed; new training methods have been developed and weeks have been spent in training camps; and they have constantly raised their sights. In short, they have worked long and hard, but always with a plan, with an aim and a purpose. When the Games begin and the day arrives when all their energy is to be spent, a gold medal will most of all reflect the efforts they have put in over the years and the quality of their preparation.  Software companies that are doing well on their domestic market may not have the ambition or seem to have the potential to reach further out, even though a large number of them do in fact possess products with an international potential. ‘Going for gold’ would in fact be completely realistic, but the necessary ambition and a recognition of this potential are lacking. When we go international, we are playing away. We have no home crowd to back us up, our opponents are tougher (and bigger), the game is played in a different way and we find it hard to communicate with the other players. Maybe even the rules have been changed. If we have not done our homework properly, we get eliminated in the first round.

The International League

So why do most software companies think that moving from the domestic league up into the international league is no big deal? Without proper training. Without a well-prepared plan. Without a trainer. Without any knowledge or experience of the challenge facing them. Unfortunately, the whitened bones along the trail reveal that most of those who attempt the journey face terrible ordeals. Ambitions come to naught and many years of financial success are thrown away – in the worst case, the company is forced to close. If a company does have international potential and ambitions, the job has to be tackled professionally. In the world of sport, Olympic gold medals cannot be bought. In the same way, an injection of capital is not the secret behind realizing international ambitions. In fact, if the company is not ready to go international, raising capital will only create further and greater problems. So when we plan to go international, the basic raw materials are brain power and sheer hard work. First we have to set our present enterprise in order, then make a plan for internationalization and then single-mindedly pursue this goal. And if we want to get on the podium, there are a number of maxims we can be guided by.

Four pieces of god advice

The first piece of good advice is to be totally honest with yourself and accept the true identity of your company. You will only be cheating yourself if you make the company out to be more than it is. Forget about smart slogans and concentrate on what skills and capabilities the company can offer to create added value for customers. This is all about the approach to real work done in the company on a day-to-day basis – an approach which must be able to be scaled up to play the international game. The second piece of good advice is to have a clear understanding of what added value the company’s products create for customers and what precise needs they are meeting. The time has long passed when customers invested in new technology simply because it was new. Customers’ investments are based on sound financial considerations focusing on the added value they can create for their business. If we have a sound grasp of our customer value proposition and can document results through solid customer references, then we have come a long way. The third piece of good advice is that when evaluating how ready we are for internationalization we should be looking at organizational, technological and marketing factors. Market analysis have to be made of demand and the competitive situation and, not least, input is required regarding the purchasing behavior of potential foreign customers and cooperative partners. Only this information can tell us whether our international solutions really hold water.

Plan of action

When all preparations have been made and we have chosen a ‘go to market’ strategy, we need to devise a plan of action that ensures focus, efficiency and dynamic flow from ‘the first whistle’. This is where the fourth piece of good advice comes in: test, test and test again. Try out concepts on a small scale first before investing large sums of money in building up organization and marketing. It is both easier and more fun to gear up when things are running according to plan than to gear down because we cannot live up to expectations. It is far too expensive and precarious to move forward unless we are well equipped for the task. Those software companies that make their preparations in a professional way are the ones that survive on the global market and the ones that return a tenfold harvest on their arduous preparations. Let the skilled and well-prepared sportsmen and women we are sending to the Olympic Games in London be that source of inspiration that fires us to realize our ambitions regarding internationalization.

This article was co-written with Nils Kierkegaard and appeared in the Danish newspaper Børsen on Februar 2, 2008.  The text has been slightly edited for this blog post.