Business at the speed of slow

By Hamish Edwards, January 21, 2008 @ 9:34 am

Londoners refuse to be rushed by an upstart from the colonies, but you can do business at British pace

[Offshore]

Picture this: I’m sitting on the tube under Piccadilly Station and going nowhere. It’s 35 degrees in here and my temperature is steadily rising as I watch the minutes tick away before my meeting with the chief financial officer of one of London’s biggest banks—a meeting that took weeks to arrange in the first place. If I miss this meeting, I could wait months for another chance. But the tube isn’t moving. It’s one of the joys of doing business in London.

Patience is the greatest virtue for the Kiwi entrepreneur when setting up offshore. I’m setting up the first offshore office of Xero, the online accounting company. I’ve been here for two months and I’m learning the local ways.

My initial priority is meeting potential partners and establishing the credibility of our product. Business networking is everything for us because Xero is a network economy product. Our competitive advantage is the connections we open up—between businesses and their banks, between business people and their advisors.
That means setting up in a new market is an exercise in connecting with the professionals who will be part of the Xero network—banks, accountants, business advisors—well before our small business customers come aboard.

In New Zealand, establishing the right relationship with a company is a straightforward process: email the appropriate person, set up a meeting with them—usually over coffee—and off you go. But in the UK, multiple levels of middle management mean you first need a meeting with a senior manager at C-level (that’s ‘C’ for ‘chief’). If you impress this bigwig, he or she will instruct one of an army of middle managers to conduct a feasibility study and prepare a business case. Once this is done, the ‘C’ can make a decision. But where something in New Zealand might take a month or two, in the UK it will probably take six months or longer.

And you won’t get a meeting with a ‘C’ unless you get an introduction from someone they know and trust. If the C-listers you target hear about your business from multiple sources, they’re more likely to make time to see you. The upshot of this is that you have to network really hard, know exactly what you want and not get distracted.

On the positive side, UK businesses are used to overseas companies entering the market and are open to new ideas. Many larger companies have partnering programmes for ‘outsourcing innovation’, so if you take time to understand the process of partnering you’ll find it easier to work with them. But partnering with a UK business requires you to think big. They want to see large growth predictions and a substantial upside for their business. My advice: discard your typical Kiwi understatement and add four or five zeros onto everything.

There are other lessons I’ve learned the frustrating way too.

• There’s no point trying to contact someone after 4.30pm because Brits consider the working day done by then. Likewise sending emails in the weekend or after hours.
• Doing business on a Friday afternoon is definite no-no—people are either unwinding in their local or driving to their country house.
• Don’t expect immediate responses from people. Sometimes it can take two to three weeks to hear back from someone on an email that has action points in it.
• Business in the UK is very expensive. Take your cost estimate and triple it.
• Security is paramount—even querying a phone bill involves facing six security questions and you’ll be refused a “hello” unless you answer all six correctly. The best example of this is credit card numbers being sent over the Internet in three parts—card, activation and password codes.
• All major legal and business documents are still sent by post or fax. Really.
• Even the most mundane tasks take time—your Internet banking will only be connected six weeks after your account is opened.
• The good news is that there is a process for everything, so once you’ve learned the process you can figure out how to work it.

And as for that meeting and being stuck in the tube: I did make it, albeit slightly frazzled. My lesson from that day is to always allow two hours for travel time contingenciess for really important meetings. If you get there early, you can always sit in a cafe and plan your next assault on a C-lister.

Hamish Edwards is a co-founder and executive director of Xero, an online accounting company for small businesses that listed on the NZX in 2007. This is the first article in a series about his UK experience