How to scale tech business into new markets

Mitchell Pham:
Everything that we've proven successful back home may not work offshore. Of course you can't just fly in and then they never see you again obviously, but once you're present you really need to engage, that you actually pay attention to what is going on in that particular market. You genuinely care about the problems that they're facing and you have a deep belief that you're able to help them solve the problem, to actually contribute to where that particular country and that market is going.

Elinor Kasapidis:
Welcome to With Interest. I'm Elinor Kasapidis, chief of Policy Standards and External Affairs here at CPA Australia. Today, we're talking about what it really takes to grow a tech business beyond your home market, the exciting as well as the more challenging parts. Our guest is Mitchell Pham, FCPA, a tech entrepreneur and the director of CodeHQ, which is part of the Theta Group. He has decades of experience building software capability between Australasia and across the ASEAN region.

He's also played major leading roles across New Zealand's tech and fintech sectors and in strengthening business links between New Zealand and Asia. He was recently also appointed an officer of the New Zealand Order of Merit. So today from our Singapore studio, welcome Mitchell.

Mitchell Pham:
Thank you. Nice to be here.

Elinor Kasapidis:
Now before we get into the exciting part of growing a business, you're an FCPA and you've recently moved to Vietnam. Can you tell us a little bit about your career and what gave you the confidence to shift countries?

Mitchell Pham:
Great. Well, I was originally born in Vietnam. I came to New Zealand as a young teenager and had my education, university degree there. I then got together with some friends and we started our first tech company. This was a while ago, back in 1993. We didn't know, we didn't know which probably was a good thing because had we known how challenging building a business even within one market it was going to be, we might not have done it, but I'm glad we did.

And yes, we built that into a group of tech companies. We, 20 plus years ago, expanded into Vietnam to build a development capability there that then supported us to continue to grow and expand in New Zealand. We're now in Australia and we're looking at Singapore, Malaysia and also Hong Kong. So it is an exciting time to continue to grow a business across the APAC region.

Elinor Kasapidis:
That's fantastic. You got in at the ground floor, and with all the technology, you've cut your teeth doing everything. So it's fantastic to have you on the show because you have got that experience building technology businesses across borders. And I think we have a lot of entrepreneurs in Australia and across Asia who are thinking, "I want to jump in. I'm going to build an app. I'm going to build a tech company."

And so when they're envisioning going across borders, and Australia is a relatively smaller market, we have all of Asia at our doorstep, and then when you think about the connection across ASEAN countries in particular and the familiarity that people have in the region, some people can assume international growth. You just find a new market, hire a few people offshore and off you go.

So we'll use technology businesses as the core of this, but I think this is probably relevant to any kind of business. So what is different about scaling? So you started small in New Zealand and you've gone international. What are some of the challenges, but also what is the difference between a tech business and a traditional business?

Mitchell Pham:
My whole career has been involved with tech, so that's a good domain for me to share from, but I imagine that there's a fundamental difference, is that, with technology, because we can scale the technology itself across borders, it's actually the rest of the business where people are involved in systems and processes. And then every country has its own unique environment, ecosystem, regulatory jurisdiction. All of these things come into play. So the technology is actually a very small part of expanding offshore. In fact, if anything, with technology and because of technology, while it's easier to extend the reach, but the challenges of all of the disciplines that we take as a business actually I imagine would be the same as any other business.

And I think, fundamentally, one of the things I've learned a lot in operating across different markets is that it doesn't matter which market we're in, including our home market, it's easy to forget that the most fundamental currency of business is trust. And how do we expand with trust? That's the bigger question than with the technology. And because of the technology, if anything, tech businesses are more at risk, because with technology, it accelerate and it pushes and it scale both good decisions and bad assumptions faster. So that's the terrain that we work with when scaling a tech business.

Elinor Kasapidis:
So it's not just about the product, you have your operational processes, you have your human capital, you've got to have the trust and build the brand, the reputation and the relationships in the new market. I love the idea of good decisions and bad assumptions. They travel faster and they scale more. So this is a bit more than just a simple market entry strategy. And it's really around what are the fundamentals that a business needs in order to be able to jump the border or to scale up overseas. So in your experience, what gives way first? So we'll focus a little bit on the challenges because quite often the opportunities are just there within reach. So what are some of the things that a company can trip up on when they think about expanding overseas?

Mitchell Pham:
I think, inevitably, everything comes down to execution. The opportunities are great. The strategy might be brilliant. The plan may also be robust as well, but the moment you hit the market, that's when all of your assumptions get tested. And so I think one of the first things that we have to leave behind is the embedded assumptions in how the company currently operates and even ... Not just even, but especially if we're really successful in our home market, we get embedded in the way we do things and the way we see things and the way we think about things.

Yeah, so the first international market will really hit us hard and stress test that straight away. Everything we assume, everything that we've proven successful back home may not work offshore, right? And so I think what I've learned there is that the leadership mindset to accompany international expansion has to be focused on adapting. I think that's quite key. All the strategy and everything else, but ultimately at the execution level, the leadership mindset has got to be about how do you take the current operational capabilities and you scale that. Whether or not it's sales, it's marketing, it's distribution, but also quite critically your people, right?

And especially if you need to tap into resources in an offshore market to be able to deliver on your product or being able to support your customers in the region, you have to be more present. So you need to build a team there. All of these things will really stretch your operating model that you're probably already very good at and very comfortable with back home.

Elinor Kasapidis:
So execution eats strategy for breakfast I think is one of the expressions. So you can have the best strategy in the world, but when you execute, you assume nothing and it's that adaptive mindset, really being flexible and being able to respond to the challenges that come up.

Mitchell Pham:
I think there's also something else too in the sense that, because you're new to a market, actually you need to also give yourself some room, right? It's okay to not get it right at first. You just have to start somewhere and then be open and listen and tune in to the market feedback and how your partners, your people, your customers respond. And if it doesn't work, then that's okay. That's part of the journey, right? So yeah, don't beat yourself up if your first attempt doesn't work.

Elinor Kasapidis:
And we all know that growth, the biggest growth often comes from mistakes or missteps. And by learning from that, you actually refine your strategy and you can actually find the new opportunities and new ways of doing things. And so let's say you've got teams and you mentioned actually hiring people on the ground in another location. So you've got teams spread across countries, you've got your product quality and the ability to move quickly, especially in a technology business I imagine is quite important. So how do you manage that disparate spread-out people and the differences between the different markets that you're operating in?

Mitchell Pham:
I can talk about this for days actually, but let's just first frame it so that it's very, very clear. I believe that all technology companies are people business, right? And that's what I've learned over the last 30 plus years working with and in technology domain. And so I think the culture of how you build an international business has to really accommodate the different ways of doing things in different market, different mindset that different people in different countries bring into the business. All of that will enrich the company, but also give the local knowledge and experience and insights into the business.

Also it's really important that we take a one-team approach in my experience where you might be distributed across multiple countries, but essentially, you are one company, one team. And you might operate slightly differently in different place, but the way your team work together, come together as a distributed team need to be treated as everyone's operating under one roof, everyone's inside a tent, "How do we take all of the differences and combine them together into something that works really well, but also something that will give the business an advantage that it didn't have prior to becoming an international operation?"

Elinor Kasapidis:
We could explore that, like you say, for a long time, but I think it's also around that cultural diversity and the equality of voices will actually end up giving you a business advantage, that you'll know the markets that you're operating in. Do you find that sometimes you have a different offering in different countries depending on the markets? So like you said, you can go from your home market into a new one, but in fact you've got to adapt. Is there also a feedback to the originating country where you learn things from the other markets and that you can actually improve your offering from the original country?

Mitchell Pham:
Oh, very much so. And as I'm leading our current expansion activities across multiple markets, I'm very, very quickly learning to tune into each market. Specifically, part of the challenge is how do we work with partners and customers in Australia, in Singapore, in Malaysia, in Hong Kong and being able to do that seamlessly with our New Zealand business and the development centre that we have built in Vietnam and how does that all work together as one seamlessly, but engage and being presented and also the way we do business and the way we build and nurture relationship with customers and partners in ways that are very specific to each of those markets, right? That's part of the challenge.

And I think what I find is what I call the shared context, right? So our team between New Zealand and Vietnam needs to understand the overall context that we operate and engage and deliver good outcomes. But at the same time, we need to understand the context of the partners and the customers in each different market. And that context has to be shared back to the teams across New Zealand and Vietnam. And so that everyone inside the same tent approach is really important while it's treating each different market with its own unique dynamics.

Elinor Kasapidis:
I love that, the shared context. And so you've got this business spread across borders. You are working with your people to develop this shared knowledge, this shared context.

And I can imagine you're sitting there as the CEO or even the CFO and you have all these ideas, you have innovation happening. There's a risk of being spread too thin. You talked about being forgiving and being prepared to encounter challenges and to make mistakes. As a business, how do you allocate your attention to making sure that the product that you're offering is keeping up with the pace of change, that you're taking advantage of the new technologies like AI, but also that you're looking at the global market or a distributed team across borders where you're taking risks?

What keeps you up at night? How do you even resolve where you allocate your energy, your attention? Do you have to do all three? Because I can imagine for many, it's easy to retreat into what you know, what feels safer, "It's not worth taking the risk. Let's just focus on the product." So how do you keep the momentum of the organisation and the decisions about where to go next with that vision, I guess, in terms of growth?

Mitchell Pham:
This is an interesting area where I feel very strongly about enabling the organisation to actually do all three by giving it a very strong level of governance and putting in place guardrails, so that people and business units, technology departments can support experimentation, can try new things, new ideas. The organisation can do that right across the board, so that it's not just one team, one unit. Everyone in the organisation can do that because the technology can support the business in so many different areas, in so many different ways. So the way to go faster is to actually ensure that there's more governance in place, right? And that's why the guardrails are really important and that's how you go faster without breaking things or even worse breaking everything.

Elinor Kasapidis:
And that's always the fear, isn't it?

Mitchell Pham:
Yeah.

Elinor Kasapidis:
And in addition to your own business, you've actually consulted and advised a range of other entities and other businesses. Are there any examples or case studies of where you've seen things being done well, but also some examples of the errors? You talked about too many assumptions. Do you have any sort of things that can bring that to life?

Mitchell Pham:
One example of where things have not turned out very well for a business that I was aware of, they went to Asia for low-cost resources, but without the governance in place. And that's where what was intended as a good idea did not work. And it set the business back, not just cost, but time to market in terms of product because they actually failed to pay attention to really work out how to best engage. They went to market with the economics, but not the execution.

Elinor Kasapidis:
And so that's the complexity of what might be called offshoring or outsourcing. If you come at it with just a dollars and cents point of view, I'm going to just ... And perhaps a short-termism mindset.

Mitchell Pham:
Short termism. Absolutely.

Elinor Kasapidis:
Whereas if you are actually invested in a location, if you're invested in a market, it really is around the commercial decision to do it through a partner or to do your own team is one thing, but it's actually either way.

Mitchell Pham:
Either way.

Elinor Kasapidis:
You need to really build the relationship with the partner over time. You need to understand who you're hiring. And then in terms of governance, you can't just set and forget. Is that right?

Mitchell Pham:
That's it, that's it.

Elinor Kasapidis:
You have to have that ongoing and maybe drop in, make sure that they're happy, make sure that they're delivering. It's all of those sorts of lessons.

Mitchell Pham:
Yes. And make sure that there's a model that actually works seamlessly between your internal team and the partners team offshore and the right level of governance required to ensure ... You treat that as your business, right? How would you govern your business? You wouldn't just send stuff out and then it will come back, right?

Elinor Kasapidis:
Thank you for sharing those examples because it really highlights the need to think before you jump. And so we have a lot of entrepreneurs in Australia who are looking to Asia in particular for a new market and vice versa. In Australia, there's a lot of demand for Asian products and services. So for a small-to-medium enterprise in the technology space, where do you think they could start?

Mitchell Pham:
Asia's very big.

Elinor Kasapidis:
Yeah, and it's not one thing, is it? It's many different cultures and countries and locations, markets.

Mitchell Pham:
Absolutely. And some of the smaller markets in Asia are bigger than New Zealand and Australia combined, right?

Elinor Kasapidis:
Exactly.

Mitchell Pham:
So there's plenty of room there for opportunity. I think the first thing I would do would be to decide where you have the most or are most likely to have the credibility, what I call the right to win, right? That you're able to back yourself up, that you're able to come into the market even though you're new, you're brand new in that market, but you're able to come in a way that you can demonstrate, "Hey, I've proven myself elsewhere in Australia perhaps and now I would like to actually take this product or service or whatever it is here," into whatever market in Asia, "because we believe that we can really help make a difference."

I think the moment you start taking that first step, what I've learned before is that you start to figure out very, very quickly something that I would call relevance, right? So part of this right to win isn't just how good you are, how good your product or service is and all of that, but how relevant can you be in this market? And in terms of building relevance, what I've learned is a little formula called presence plus engagement equals relevance. And by that, you need to be present in the market. Of course, you can't just fly in and then they never see you again obviously. But once you're present, you really need to engage, right? Present plus engagement equals relevance.

And engagement means that you actually pay attention to what is going on in that particular market. You genuinely care about the problems that they're facing and you have a deep belief that you're able to help them solve the problem or close the gap or make those improvements and whatever to actually contribute to where that particular country and that market is going, right? So it'd be part of building whatever that market is trying to build. So then the market start to see you as, "Okay, well sure, you're a Western company, but you've come here not to," what's the word, "exploit or actually not to extract value, but rather you've come here to co-create value."

Elinor Kasapidis:
Love it.

Mitchell Pham:
I think, if we go with that mindset and we look for the problem, we get to really understand it and then actually take part in solving the problem, right? Then you start to get treated like one of them. And one example that I can think of, around about 10 years into establishing our operation in Vietnam, we got really involved into, we're a tech business, we're very involved in the tech industry and ecosystem in New Zealand, so pretty much, it was quite natural for us to do that in Vietnam.

We care about that whole ecosystem because that's where our Vietnam people operate in. So we take part and join the industry associations and really be part of it, not just to sell or not just to attract talent per se, but to genuinely care that we now have an operation in that ecosystem, so we must care about our ecosystem, right?

And year 11, we receive a really prestigious industry excellence award in the market that didn't really know us very well initially, right? And so what that award told us was that, "Okay, we're now finally accepted as one of them," right? And that's where you then get a different level of commitment and investment from everyone you deal with in the market because they now know that you are not here temporarily, that your exit plan is, in three years, you sell the company and run away. So their investment into relationship with you is going to be a long-term one, right? So again, that mindset has to come with that market entry strategy as well. So even though it's the first step, those things are going to be important to figure out.

Elinor Kasapidis:
And congratulations on the award and in the discourse around business that at the public level, we talk a lot around ESG, particularly the social value that businesses can create. And even in the theory, economic theory is now shifting from that very transactional profit-driven approach to a more embedded relationship and an ongoing investment in the countries in which businesses operate. So it's great to hear you bring that to life and that it takes time. An exit strategy is not necessarily the right thing to enter a market with. It's, "We're here to really build and grow together." So that's great.

Mitchell Pham:
Especially in Asia. I think the three words I would share from learning about operating an Asian market is trust, respect and longevity. Because businesses in Asia think multigenerationally. If we take this brilliant Silicon Valley concept of three-year exit and make billions and, "We'll see you later," that tends to not give you the depth of relationship that you need to win in Asia.

Elinor Kasapidis:
And so that's the strategy piece, isn't it really? And I think, look, those three words I think should be valid across the world. It really is, like you say, business needs to form part of economic growth and be part of the economic infrastructure. So those are really practical and helpful ways of thinking. And so into the bigger picture, let's go forward. So like we mentioned, it's not in and out. It's about relationships. So for those that do make the jump across the borders, what will be the difference between the ones that succeed and the ones that stall or potentially even fail?

Mitchell Pham:
Well, first of all, let me clarify that failure is part of the journey.

Elinor Kasapidis:
Good to know.

Mitchell Pham:
It really is about learning from failing and pivoting and picking ourselves up.

Elinor Kasapidis:
So many CFOs would be like, "Oh, no, it's going to cost us so much money," so you need to build in a bit of a buffer, don't you?

Mitchell Pham:
Yes. And we need to have a different relationship with failing, right? So even if you're a big business, let alone a startup, in the brand new market and you are not known, you are a startup. You're just a big startup, right? So you need to really adopt that mindset that, "We are going to experiment and learn before we fully commit to building a big factory or registering the company and all of those things," right? Just go in to learn first before anything else. And actually, that is a good segue into answering your question. The winners, I believe, are not the ones that have the best tech or the best processes or the best intellectual property protection, all of those things are really important back home.

In the brand new market, the winners are the one that can learn faster than their assumptions fail, right? That really is, especially in today's very rapidly evolving technology landscape. So it's a really interesting thing to see, because in Asia, there is this longevity culture, trust and everything that takes time to build. But at the same time, it's happening in parallel with very, very fast-moving technological advances and how new emerging startups come through and everything else. AI accelerates everything else as well. So it really is a combination of that where you've got to take that mindset while at the same time really invest into that long-term relationship in the market, right?

And so really when you're first in a new market, you don't have to try and be the best of anything, the best product, the best services, whatever. You just need to be a little bit better than everyone who's doing okay in order to start winning business, winning confidence, winning the right to be there or buying a bit more time to prove yourself to the market. So it's actually just an organic process really.

Elinor Kasapidis:
That's been such a great wide-ranging conversation and I think you've touched on lots of different aspects. So there's trust, there's the adaptive mindset, being prepared to fail and also the long-term side of things. And you've really emphasised the value of relationships, human capital and execution over strategy. And so really it's around when you're actually in the market, how are you building that shared understanding, the shared context? So before we wrap up, what's just the one thing for someone who's been on the journey, who's still on the journey, is there anything you wish you had known earlier before you made the first jump?

Mitchell Pham:
Actually firstly, I'm glad I didn't know a lot more when I made the first jump.

Elinor Kasapidis:
The bravery of you.

Mitchell Pham:
Otherwise, I might not have been brave enough to do that, but over the years, I think consistently expanding and operating internationally, especially with Asia particularly between ANZ and ASEAN region. Personally, it was a leadership journey. I think it's of growth and learning and development. So I have been proven wrong many times. I have faced up many mistakes, but every time, I learn really important lessons. So reflecting back on that I think is a really good opportunity to really develop patience, to develop curiosity, to reinforce discipline behaviours about how we do business, how we learn, how we adapt.

And it actually makes you realise how important it is to intentionally build trust, because whenever you don't do that, you inevitably fail. And I think, last but not least, one thing that has always been true right through my entire career is that I have never succeeded on my own and I don't think that will ever change, right? So success in international expansion rely a lot on the networks, the people, the advisors, the support ecosystem, even government channels that can help, the industry colleagues that you have, the people, the teams behind you within your organisation and also your friends.

We have friends in different countries, and so when we're trying to expand business into those countries, we will need those friends, right? So I think, for me, the biggest word that sums up all of my learning through that journey I think is humility because we need everyone else around us.

Elinor Kasapidis:
What a fantastic place to finish. So, Mitchell, it's great to see somebody who brings the heart and the human into business and I think you've shared your insights from your time over decades now, building that business and making the leap, so that others can follow in your footsteps. So thank you so much for taking the time to join us today.

Mitchell Pham:
Thank you, Elinor. I've really enjoyed this.

Elinor Kasapidis:
And so for our listeners, thank you for joining us today. Please subscribe to With Interest and share this episode with your friends and colleagues across the business community. Until next time, thank you for listening.