IT in Emerging Markets
Discussion
Hello all
Does anyone on here have any experience of setting up companies in emerging markets, particularly IT service providers?
My potential partner and I (both currently competent IT professionals, but not particularly business-savvy) are keen to get into a particular market that we believe could earn good money. The country in question is developing quickly but I don't really want to name it just in case. Perhaps I'm being overly paranoid.
We'd be looking to provide a full range of IT services; including hosting, support and development, and hopefully be able to provide employment for local people eventually. My potential partner was born in this particular country and holds a current passport, will be visiting for a few months soon and will check a few things out whilst over there. We both have good contacts over here in the UK, so I believe we'll have purchasing power when it comes to procurement of hardware, and even sub-contracted services.
We believe that currently, most if not all services are procured from a neighbouring country. So our USP could potentially be that we are seen as 'local' and 'one of us'.
I've bumbled along for too long now in my career, and want something that I can get my teeth into.
I'm sure this will be challenging on many fronts, so hopefully you lot can give me insight on what we can expect to be our biggest issues? Maybe someone can recommend a good book?
Many thanks!
Does anyone on here have any experience of setting up companies in emerging markets, particularly IT service providers?
My potential partner and I (both currently competent IT professionals, but not particularly business-savvy) are keen to get into a particular market that we believe could earn good money. The country in question is developing quickly but I don't really want to name it just in case. Perhaps I'm being overly paranoid.
We'd be looking to provide a full range of IT services; including hosting, support and development, and hopefully be able to provide employment for local people eventually. My potential partner was born in this particular country and holds a current passport, will be visiting for a few months soon and will check a few things out whilst over there. We both have good contacts over here in the UK, so I believe we'll have purchasing power when it comes to procurement of hardware, and even sub-contracted services.
We believe that currently, most if not all services are procured from a neighbouring country. So our USP could potentially be that we are seen as 'local' and 'one of us'.
I've bumbled along for too long now in my career, and want something that I can get my teeth into.
I'm sure this will be challenging on many fronts, so hopefully you lot can give me insight on what we can expect to be our biggest issues? Maybe someone can recommend a good book?
Many thanks!
Edited by Arese on Tuesday 13th July 13:32
Hi. Spent first 10 years in UK, then last 17 years exclusively in 'emerging markets', within the IT field, although focused on one industry sector mainly.
You need to be less paranoid, which country ? and we (collectively) will see what experiene or advice we can offer. If my neck of the woods (Central/Eastern Europe), then happy to help or provide opinions.
Big Ant
You need to be less paranoid, which country ? and we (collectively) will see what experiene or advice we can offer. If my neck of the woods (Central/Eastern Europe), then happy to help or provide opinions.
Big Ant
big ant said:
Hi. Spent first 10 years in UK, then last 17 years exclusively in 'emerging markets', within the IT field, although focused on one industry sector mainly.
You need to be less paranoid, which country ? and we (collectively) will see what experiene or advice we can offer. If my neck of the woods (Central/Eastern Europe), then happy to help or provide opinions.
Big Ant
Ant (may I drop the 'Big'?) You need to be less paranoid, which country ? and we (collectively) will see what experiene or advice we can offer. If my neck of the woods (Central/Eastern Europe), then happy to help or provide opinions.
Big Ant
Thanks for the reply. The country in question is Botswana.
Botswana - blimey, you'd need to run operations locally, as the travelling to & back would destroy any value created. Nice neighbours...
I can imagine, this will be similar to Ukraine/Belarus interface with EU countries (new and old), so be prepared to win business thru your own USP....which in theory may be sufficient, but also you will need "other services", to motivate the buyers to take the brave decision of buying from you guys.
Botswana - long way south. I looked briefly at Angola, due to relations with passport carriers, but the travel distances and poor flight distances and costs made any speculative 'punts' high cost.
My advice....book up a 7-10 days "look & see", try to schedule some productive meetings, exploratory...and then decide. When you're on the ground, you'll soon feel what the market needs, and demands from its suppliers.
Good luck. Ant
I can imagine, this will be similar to Ukraine/Belarus interface with EU countries (new and old), so be prepared to win business thru your own USP....which in theory may be sufficient, but also you will need "other services", to motivate the buyers to take the brave decision of buying from you guys.
Botswana - long way south. I looked briefly at Angola, due to relations with passport carriers, but the travel distances and poor flight distances and costs made any speculative 'punts' high cost.
My advice....book up a 7-10 days "look & see", try to schedule some productive meetings, exploratory...and then decide. When you're on the ground, you'll soon feel what the market needs, and demands from its suppliers.
Good luck. Ant
Currently operate at various levels in Romania, Bulgaria Saudi Arabia, Kuwait, having a sniff at Azerbaijan and Basildon so well versed in emerging markets.
There is one critical bit advice I'd give and that is to sign up with UK Trade and Investment (Passport to Export). It's free!. You can then access a host of support services and funding. They operate trade missions and have highly efficient sector teams in the country that can often leverage a whole lot more than you'd ever hope to achieve on your own. They also offer an OMIS service (Overseas Market Information Service) - basically a research service available at various levels the most expensive being £2k. They are worth much much more!
Remember that in such markets, it's rarely their own money that they are spending (with the exception of the Middle East). Quite often it will be EU/UN/World Bank or other donor programme funds so you need to know who your client is and who is paying the bill. They are rarely the same.
Also, worth remembering relative worth. Average monthly salary in Eastern Europe is less than €300. Need to take this into account when pitching a fee of €5,000 and above!!
IT's not my area but would suggest that the Middle East is well worth a look. At the moment, they really don't get it ..or IT! We have very senior government contacts who have official emails ....@gmail.com or hotmail.com There is simply no culture of internet usage but is emerging as a priority need.
HTH and Good Luck
There is one critical bit advice I'd give and that is to sign up with UK Trade and Investment (Passport to Export). It's free!. You can then access a host of support services and funding. They operate trade missions and have highly efficient sector teams in the country that can often leverage a whole lot more than you'd ever hope to achieve on your own. They also offer an OMIS service (Overseas Market Information Service) - basically a research service available at various levels the most expensive being £2k. They are worth much much more!
Remember that in such markets, it's rarely their own money that they are spending (with the exception of the Middle East). Quite often it will be EU/UN/World Bank or other donor programme funds so you need to know who your client is and who is paying the bill. They are rarely the same.
Also, worth remembering relative worth. Average monthly salary in Eastern Europe is less than €300. Need to take this into account when pitching a fee of €5,000 and above!!
IT's not my area but would suggest that the Middle East is well worth a look. At the moment, they really don't get it ..or IT! We have very senior government contacts who have official emails ....@gmail.com or hotmail.com There is simply no culture of internet usage but is emerging as a priority need.
HTH and Good Luck
big ant said:
Botswana - long way south. I looked briefly at Angola, due to relations with passport carriers, but the travel distances and poor flight distances and costs made any speculative 'punts' high cost.
I'm there right now with an O+G company and have been given the option to set up a local company doing exactly this... for me, the biggest problem is actually getting equipment into the country, duties and customs delays are ridiculous.There's a huge need here though and serious money to be made, I imagine Botswana will be the same.
Gents, thanks for the replies.
He's heading over there in September, probably for around six months to see his family. My current contract ends in October, so hopefully I'll be able to get over there then as you suggest and put some feelers out. Hopefully T will have by then been able to make a few contacts, and perhaps set up a few meetings.
Thanks for the heads up with UKTI. I'll have to think about this carefully, as originally we thought about setting up a company in Botswana and operating through that, so I assume the UKTI wouldn't be able to help us. I'm already a Director of a UK Ltd company (just one unfortunately), so perhaps we could trade through that somehow. Maybe my Ltd company 'owning' the Botswana Ltd company or something? Or at least 50% of it, and then T could own the other 50%?
You make a good point regarding the relative worth. Our target market would be, initially at least, small to medium companies. Maybe companies backed by the government, maybe even government organisations and/or schools etc. We've a lot to think about.
I have thought about the Middle East before, but assumed that with all the money out there the IT market would be swamped.
Going back to Botswana for a moment. I've found one company that seem to be possibly occupying a similar space to what we would want. AccTech. It'd be handy if I could find a list of their clients
big ant said:
Botswana - blimey, you'd need to run operations locally, as the travelling to & back would destroy any value created. Nice neighbours...
I can imagine, this will be similar to Ukraine/Belarus interface with EU countries (new and old), so be prepared to win business thru your own USP....which in theory may be sufficient, but also you will need "other services", to motivate the buyers to take the brave decision of buying from you guys.
Botswana - long way south. I looked briefly at Angola, due to relations with passport carriers, but the travel distances and poor flight distances and costs made any speculative 'punts' high cost.
My advice....book up a 7-10 days "look & see", try to schedule some productive meetings, exploratory...and then decide. When you're on the ground, you'll soon feel what the market needs, and demands from its suppliers.
Good luck. Ant
We'd definitely be running things locally. My potential partner (I'll call him T from now on!) has family in Gabarone so hopefully we'd be able to base ourselves there in the early days before moving to a proper commericial premises. Perhaps there's a Gaborone Business Park I can imagine, this will be similar to Ukraine/Belarus interface with EU countries (new and old), so be prepared to win business thru your own USP....which in theory may be sufficient, but also you will need "other services", to motivate the buyers to take the brave decision of buying from you guys.
Botswana - long way south. I looked briefly at Angola, due to relations with passport carriers, but the travel distances and poor flight distances and costs made any speculative 'punts' high cost.
My advice....book up a 7-10 days "look & see", try to schedule some productive meetings, exploratory...and then decide. When you're on the ground, you'll soon feel what the market needs, and demands from its suppliers.
Good luck. Ant
He's heading over there in September, probably for around six months to see his family. My current contract ends in October, so hopefully I'll be able to get over there then as you suggest and put some feelers out. Hopefully T will have by then been able to make a few contacts, and perhaps set up a few meetings.
StevieBee said:
Currently operate at various levels in Romania, Bulgaria Saudi Arabia, Kuwait, having a sniff at Azerbaijan and Basildon so well versed in emerging markets.
There is one critical bit advice I'd give and that is to sign up with UK Trade and Investment (Passport to Export). It's free!. You can then access a host of support services and funding. They operate trade missions and have highly efficient sector teams in the country that can often leverage a whole lot more than you'd ever hope to achieve on your own. They also offer an OMIS service (Overseas Market Information Service) - basically a research service available at various levels the most expensive being £2k. They are worth much much more!
Remember that in such markets, it's rarely their own money that they are spending (with the exception of the Middle East). Quite often it will be EU/UN/World Bank or other donor programme funds so you need to know who your client is and who is paying the bill. They are rarely the same.
Also, worth remembering relative worth. Average monthly salary in Eastern Europe is less than €300. Need to take this into account when pitching a fee of €5,000 and above!!
IT's not my area but would suggest that the Middle East is well worth a look. At the moment, they really don't get it ..or IT! We have very senior government contacts who have official emails ....@gmail.com or hotmail.com There is simply no culture of internet usage but is emerging as a priority need.
HTH and Good Luck
Basildon?! There is one critical bit advice I'd give and that is to sign up with UK Trade and Investment (Passport to Export). It's free!. You can then access a host of support services and funding. They operate trade missions and have highly efficient sector teams in the country that can often leverage a whole lot more than you'd ever hope to achieve on your own. They also offer an OMIS service (Overseas Market Information Service) - basically a research service available at various levels the most expensive being £2k. They are worth much much more!
Remember that in such markets, it's rarely their own money that they are spending (with the exception of the Middle East). Quite often it will be EU/UN/World Bank or other donor programme funds so you need to know who your client is and who is paying the bill. They are rarely the same.
Also, worth remembering relative worth. Average monthly salary in Eastern Europe is less than €300. Need to take this into account when pitching a fee of €5,000 and above!!
IT's not my area but would suggest that the Middle East is well worth a look. At the moment, they really don't get it ..or IT! We have very senior government contacts who have official emails ....@gmail.com or hotmail.com There is simply no culture of internet usage but is emerging as a priority need.
HTH and Good Luck
Thanks for the heads up with UKTI. I'll have to think about this carefully, as originally we thought about setting up a company in Botswana and operating through that, so I assume the UKTI wouldn't be able to help us. I'm already a Director of a UK Ltd company (just one unfortunately), so perhaps we could trade through that somehow. Maybe my Ltd company 'owning' the Botswana Ltd company or something? Or at least 50% of it, and then T could own the other 50%?
You make a good point regarding the relative worth. Our target market would be, initially at least, small to medium companies. Maybe companies backed by the government, maybe even government organisations and/or schools etc. We've a lot to think about.
I have thought about the Middle East before, but assumed that with all the money out there the IT market would be swamped.
Going back to Botswana for a moment. I've found one company that seem to be possibly occupying a similar space to what we would want. AccTech. It'd be handy if I could find a list of their clients
Edited by Arese on Wednesday 14th July 11:54
Bear in mind you'll get paid in local currency, which will probably be a lot less than what you can get in the UK e.g. £750 day consultancy in UK may be 3 months salary elsewhere.
I previously setup dsitribution channel for a security company in South Africa for UK company. Hit this problem, no way could we do a direct conversion from sterling to Rand so had to discount substantially.
Issues with bribes, different business techniques, wanting to deal with locals only etc became a problem! Also, the infrastructure just doesn't exist in some places - it was quicker to send a file on USB key via courier pigeon that copy via broadband!
I previously setup dsitribution channel for a security company in South Africa for UK company. Hit this problem, no way could we do a direct conversion from sterling to Rand so had to discount substantially.
Issues with bribes, different business techniques, wanting to deal with locals only etc became a problem! Also, the infrastructure just doesn't exist in some places - it was quicker to send a file on USB key via courier pigeon that copy via broadband!
Arese said:
Thanks for the heads up with UKTI. I'll have to think about this carefully, as originally we thought about setting up a company in Botswana and operating through that, so I assume the UKTI wouldn't be able to help us. I'm already a Director of a UK Ltd company (just one unfortunately), so perhaps we could trade through that somehow. Maybe my Ltd company 'owning' the Botswana Ltd company or something? Or at least 50% of it, and then T could own the other 50%?
If that's the route then UK TI is must. They will know the right ways to set up a local company and in some these regions, you have to partner with a local firm and there can sometime be tricky tax laws that lawyers will charge for, UKTi won't. www.ukti.gov.uk
Arese said:
I have thought about the Middle East before, but assumed that with all the money out there the IT market would be swamped.
If it is swamped, it's with poor companies. I'd focus on Saudi Arabia, Kuwait, Libya rather than UAE.Gassing Station | Business | Top of Page | What's New | My Stuff