This is the first in a series from Vision & Execution expanding on research we did in fall 2014 about what does it take for an international company to be successful in the U.S. In each case Vision & Execution was retained to assist at some point in the process. We hope you will find these interviews illuminating as you go forward with your U.S. expansion.
International Entrepreneur Interviews – KiWi – Oscar
Tomas Posker, Co-founder & CEO, Oscar Tech, Ki-Wi Digital s.r.o.
Petra Adamik, Co-founder & Business Development Executive at Ki-Wi Digital
Mack: What inspired you to expand to the US market?
Adamik: We were clear early on that we wanted to come to the US because of the size of the market and the opportunity it represented. We also were inspired by the Silicon Valley culture and wanted to experience it first-hand. We were impressed with how hard-working Americans are and that the technology is on a higher level than we were seeing in the Czech Republic.
Mack: Was it always your intention to be a global company and what did becoming a global company mean to you?
Posker: We knew we wanted to become a global company but we really didn’t know what to expect. We wanted to learn what it would take to succeed in other markets and other cultures.
Mack: How did you go about deciding where to expand first and why do you chose the region you did?
Adamik: We really didn’t consider any other regions to expand to other than the US. We were achieving sales in Europe and China organically but our main focus was on the US. Once we decided we were ready to come to the US we found the CzechAccelerator, a new Czech Republic initiative. They only offered two locations: Silicon Valley and Boston so Silicon Valley was our obvious first choice. We ultimately reapplied to the program and participated in the Boston program to understand the differences between the East and West coasts. It’s really the old Broadway adage if you can make it in New York you can make it anywhere although in this case if you can succeed in the US you can succeed globally.
Mack: What was your initial vision and timeframe was for achieving success in the US?
Posker: The Czech program we participated in was a six month program. We initially thought that within the six months we participated in this program we would be able to close at least one sizable customer or secure a partner who could represent our product.
Mack: How well has reality matched up with your expectations?
Adamik: Six months was simply not enough time to meet our goal. We worked with Vision & Execution during the first six months and what we learned from that partnership was how to refine our value proposition and to really understand the challenges retailers, our customers, were experiencing and how we needed to be able to solve their problems. What we learned from this process is that our hardware and software solution for digital signage was not a good fit for the US market. Despite not being a good fit for the US our digital signage business is growing 40% annually as we expand further in Europe and China.
Mack: How important are local resources to becoming successful in the US?
Adamik: The use of local market resources is critical to your success in the US. All of the Czech companies that have made it in the US used local service providers to gain local market knowledge. It is budget driven unfortunately; we would have liked to have made greater use of local resources.
Mack: How much did you need to change your original vision for your company to take advantage of the scale of the US market?
Posker: We actually had to completely change our strategy for how to create a US presence. The “know how” we acquired during the six month period of the CzechAccelerator program inspired us to create a new product line leveraging our existing technology and expertise that addressed an unmet need in the US market – technology for the older population. This new product, Oscar, is a remotely managed smartphone and tablet app which provides easy communication among seniors and family. By developing a software only solution we found something that was more scalable and easier to sell. Despite having a year of experience with the US marketplace between the six months in Silicon Valley and the six months in Boston we still continue to experience some surprises. We had many rounds of pilot tests with our Oscar app with lots of customer feedback to finally achieve a good product market fit. We ultimately succeeded and were recognized by winning TechCrunch’s first Radio Pitch Off on Sirius XM radio
Mack: What was the most surprising difference between what you thought would happen and what you experienced?
Posker: We were really surprised by the quick decision making and speed of doing business that we discovered in the US. We had to learn to move a lot faster. Despite the speed of business we also learned that it always takes longer than you think. It took longer to refine our Android version until it was commercially viable and then again it took longer than expected to have our iOS version ready especially when we didn’t think it was critical to enter the market since there are more Android phones.
Mack: To enter the US market, how did you obtain the necessary financial resources and were they adequate?
Adamik: The CzechAccelerator program helped underwrite some of our expenses in the US however we only received those funds after we completed the program. The main funds came from a Czech Republic angel investor. We knew this investor before we came to the US and based on what we learned and achieved while in the US we ultimately received two rounds from this investor. The rest came from profits from our main business of digital signage. We would have liked to have had more financial resources to enhance our sales and marketing efforts.
Mack: How quickly did you expect to generate revenue from your U.S. expansion and do you meet your expectations?
Adamik: With our Oscar service we expect to achieve first revenue within 3 months of going live in the app stores.
Mack: Based on where you expected to be by now, how successful have you been in your attempt to enter the U.S. market?
Adamik: I would say we’ve been pretty successful thus far. Ki-Wi Digital was recognized as the most successful CzechAccelerator 2011-2014 participant. Because of the TechCrunch award we were mentioned in a Time Magazine article on senior apps. This publicity has helped us move beyond business development activities and we are now ready to scale our sales nationally.
Mack: What do you think was the most effective thing you did in planning to enter the U.S. market?
Posker: We adapted to the US culture and experienced a mind shift. It was a lot to take in the first six months we were here. It helped immensely that we began working with Vision & Execution immediately. Because of the guidance we received from Vision & Execution we became more customer centric, more open to tackling challenges that customers face. We also learned a lot about how to present our business in a more succinct way and focus on what is most important to the audience we are addressing.
Mack: Based on your experience, would you still have tried to enter the U.S.?
Posker: Definitely! We’re still here and going strong. We’ll be launching our iOS version of Oscar at TechCrunch 2015 on September 22, 2015.