Markus Kurch joined Crealytics as Chief Operating Officer in 2013. He was given the important task of internationalising the online marketing specialist’s business. Today, Crealytics has offices in New York, London and Berlin. In this interview, Kurch and HTGF Partner Romy Schnelle talk about their successes and setbacks and explain how the analytical approach adopted by the search engine advertising (SEA) specialist might serve as a blueprint for other founders seeking to internationalise their business.
Romy, HTGF has held a stake in Crealytics since 2009. Had the internationalisation of the business been planned from the start?
Romy: Right from the start, Crealytics was available as a software solution for search engine advertising in various languages. You could therefore say that internationalisation was in the company’s DNA. In addition, Crealytics had acquired an international client at an early stage in the shape of fashion label Asos. In 2013, we were already managing 15 markets for Asos. And we had a very international team, even back then.
So how did things get started?
Markus: At first, we conducted a thorough analysis of our business and decided that we should primarily concentrate on major clients. This was more in line with our orientation as a company and was also the better business model.
Romy: That’s right, we took a clear decision to focus on targeting big companies as clients. We called it “elephant hunting”.
Markus: And, of course, we studied the international markets very closely in order to decide where we wanted to expand. We contemplated the idea of Brazil and South East Asia, but naturally also considered Europe and the USA. At the same time, we made English the official language of the company. This enabled us to be closer to clients and to attract excellent personnel from around the world.
In the end, you opted for an office in London. Why not South East Asia or Brazil?
Markus: As mentioned, we were looking to target major clients. So we did our research on the markets of these various countries. Online retailers or brands are crucial clients for us. In many South East Asian countries, however, there is just one dominant player in each country. We would have had to handle the various retailers differently in each country. That would have been a really inefficient way of doing things. And in China, Google – which was our major focus back then – was not particularly well-established, despite there being many providers there. We even sent a colleague to Brazil just to test the waters, but after three months we realised that there aren’t enough major clients there for our business.
And in London, you already had a client in the shape of Asos.
Romy: That’s right. But I just want to emphasise that the move to open up an office in London was not based on a random decision. It was instead the result of an in-depth analysis that Markus just alluded to. This is something that start-ups which go abroad should take to heart. And they have to know that even then, not everything will work out immediately. This was certainly the case at Crealytics.
Romy: We didn’t have any luck with the first Chief Sales Officers we hired in London, although they could have been considered top hires in terms of expertise and experience.
Markus: We had top-quality candidates, but unfortunately it didn’t work out on two occasions. We learnt that we definitely need to send someone from Germany to the city where we’re opening an office. That’s why our founder and CEO Andreas Reiffen upped sticks to New York with his family.
In 2014, you set up an office London; in 2016 one in New York. What was your approach there?
Markus: I’d studied in the USA and also written my dissertation about German companies in the USA in cooperation with the German Chambers of Commerce Abroad (AHK). The AHK was therefore a good first point of contact. It also runs a five-day programme (STEP NYC) for start-ups. Through this programme I was able to make the relevant contacts and meet headhunters. We also took part in the German Accelerator programme. However, our CEO didn’t yet have a visa and therefore couldn’t be there for the official start of the programme in July.
So what did you do?
Markus: We sent an intern who’d been with us for a month. He was subsequently going to work full-time for us for four years – and now he’s just set up his own company. And we hired a Chief Sales Officer from New York before our official launch in the USA. Neither of them knew the company particularly well at that stage and yet they had to introduce Crealytics on their first day of the German Accelerator. Our CSO would later jokingly say: “I did what every red blooded American would have done, I made it all up.”
And did things start to pick up in the USA from that point onwards?
Romy: To be honest with you, the first two years in the USA were a bit quiet. Things had been different in London, despite the initial recruitment problems. In this kind of situation, it really helped that Crealytics kept us investors in the loop and in the end, they delivered. Trust is key in these situations.
Markus: You should also know that it took us six to nine months before we secured a client. What’s more, nobody had heard of us in the USA. I recall that we had the chance to pitch to Staples. At that point, we’d perhaps only been active in the USA for six months. I’m still convinced that Staples knew back then we were the best provider for them. But, of course, we were the riskiest option. We were just a wild start-up from Germany up against other established providers. So that didn’t work out at the first attempt. Today, however, Staples is one of our biggest clients.
So the message here is that internationalisation requires time, patience and perseverance?
Romy: Yes, in addition to reliability and the ability to build relations and look after clients. These are the basics in life really. But they’re really important ingredients for the internationalisation of a business. And don’t give up on one market too quickly to go looking for the next one.
Today, Crealytics generates one third of its sales in the UK, one third in the USA and the rest in Europe. So the internationalisation drive was a success. How did your collaboration contribute to this success?
Romy: Good cooperation is important. This isn’t just the case for internationalisation. When we decide to invest in a start-up, we focus on a specific target to work towards. There’s no one perfect strategy, meaning it’s important to exchange ideas. What’s generally important, however – and this is the foundation of our cooperation with Crealytics – is to always adopt an approach of mutual respect and appreciation. Especially in challenging times.
Markus: That’s right. We were always able to speak openly with HTGF, particularly when things weren’t going well. It’s not about just communicating when things are going well; you have to have an honest discussion about future plans and together analyse what steps to take next. This is something that has been a great help – even beyond our internationalisation drive.
Markus and Romy’s five tips for all start-ups looking to internationalise their business
- Ask yourselves why you really want to internationalise your business and whether this is something you can implement on an organisational level. Define clear goals and make sure to time things right.
- Analyse your target markets very closely and consider which country promises truly relevant business for your company. Don’t aim to do too much at once. It often makes more sense to set up in just one other important market rather than opening up five offices at once.
- Keep in close contact with your office abroad, for instance by getting an experienced member of your management team to take up a permanent position in the new office.
- Make sure to take on the right people where your offices are located. Are they a good match for your company and the culture of your business? Are you launching with a good salesperson or a partner who will sell your products?
- Make use of suitable programmes that will support you in internationalising your business. Invest time in setting up a local network, which you will then need to look after. And don’t forget that for all your perseverance, you’ll also need to show a bit of patience.