When you work for an open source ERP (enterprise resource planning) software company, there’s a unique value of community-mindedness involved, over and above the usual profit-making premise of a business.
xTuple has such a mission: to help small business grow profitably (any business — really — from the one that’s outgrown QuickBooks® to the enterprise that can’t afford SAP or Oracle, or any number of other proprietary business software vendors out there). And we help in not just one, but at least two ways:
- Implementing our software products — powerful, easy-to-use and affordable open source ERP+CRM (corporate/customer relationship management) to run their business, of course, and
- Sharing our experience through outreach, helping to educate developers on next generation software programming and to teach entrepreneurs about global sales and marketing
To help fulfill our outreach and educational mission component, I participated in Virginia ExporTech™ at the ODU Business Gateway in late May as part of the “Market Entry Strategy” panel along with Chris Machut, chief technology officer (CTO) at Netarus, makers of HoistCam™, to talk about international business development with entrepreneurs in xTuple headquarters’ local Norfolk-Virginia Beach region.
Virginia ExporTech™ is a program of GENEDGE Alliance, whose mission is to enhance the productivity and technological performance of Virginia manufacturing and industry. GENEDGE is affiliated nationally with the National Institute of Standards and Technology's Manufacturing Extension Partnership (NIST MEP) network of over 60 centers nationwide. Virginia’s program is part of NIST MEP’s national ExporTech™ acceleration and export assistance program.
xTuple’s Global Market Entry Strategy
Open source is the how, not the “why” of what xTuple software is and does. It’s also the reason we are today a global company with tens of thousands of users worldwide. At the core of xTuple’s product offering is PostBooks® — the free and open source software (FOSS), downloaded by millions of companies all over the world, from solopreneurs to large business. PostBooks® is business management software with fully integrated accounting, CRM and inventory management, and even some light manufacturing, translated into about 30 different languages, including multi-currency functionality.
So our international business model — on the marketing side — consists of casting a huge net of awareness all over the world with our free and open source software.
How does xTuple give away such powerful software for free?
At a certain point in the life of a company, you have needs that exceed the free and open source ERP version, and your business requires advanced functionality to continue to grow. Enter the commercially-licensed Editions of xTuple , designed to provide growing companies with seamless scalabilty. xTuple’s commercial software offerings enable PostBooks® users the ability to move to a commercial Edition (including Distribution, Manufacturing or Enterprise) by running a simple upgrade script.
How else do we bring xTuple ERP software to small businesses all over the world?
One of the first things I did when joining xTuple a decade ago was to develop and nurture a VAR (value-added reseller) channel of partners. People who’ve used the free and open source software in their own distribution or manufacturing business represent the perfect opportunity. The technology is cool and cutting edge and naturally attracts people who want to sell, customize and/or introduce other similar businesses to open source ERP. More so, experienced operations managers, familiar with the problems associated with their typical distribution or manufacturing ERP software, are a perfect fit for the xTuple Partner Program.
When deciding to launch xTuple’s ERP into a global marketplace, we were very deliberate in the development of a profile — asking ourselves “what does the most successful VAR look like?” — in terms of demographics, of course, and also experience in technology and deployment or implementation methodology. We communicate those “best partner attributes” and also create a feedback loop with regular evaluation — and rewards — to high-achieving organizations and individuals.
How do international partners learn best practices using xTuple software?
“How to” is a common phrase here at xTuple. We intentionally provide lots and lots of content online, more every day — in the form of manuals and guides, videos and tutorials — for self-service education on xTuple products.
See xTuple University for user-guided learning
CTO Chris Machut of Netarus, who just happen to be graduates of the first Virginia ExporTech™ class, talked about the company’s accidental entry into international markets, which was predominantly driven by inbound inquiries from people around the world performing online searches for “wireless camera system*.”
*Netarus makes HoistCam™, an easy-to-install and use backup camera for heavy equipment which puts “eyes in the back of the head” of operators.
Netarus has two models for their sales channel: (1) distributors who stock the product (currently all in UK) and (2) dealers who handle installations, service and support.
Here are some key takeaways I caught from Chris’s comments on how to succeed at mass market penetration in international business — many of which align with xTuple’s own experiences.
- Social differences necessitate collaborating with someone in-country to facilitate conversations in a culturally sensitive manner, not to mention ensuring you get honest information on critical business elements, such as taxes and duties.
- Regional cost sensitivity often demands price breaks be granted by region, just to make inroads into a specific market.
- Partner exclusivity is often a powerful motivational tool or “carrot” when offered — and/or when revoked — especially if the partner is marketing locally and developing needed product localization and meeting set goals, such as sales volume or stocking levels.
- Marketing face-to-face, developing personal relationships, is invaluable; utilize international trade shows when available (and do them at least three times.
- Require 100% payment up front, wire transfers only, with no terms and no credit cards. Why? There’s no legal recourse available to you internationally.
- Consider international air freight carrier DHL for shipping product under 50 pounds, especially for their detailed documentation services included. Foreign sales require lots of paperwork, varying greatly by country and region.
- Oh, and Skype, for free video calling, is essential for selling outside of the U.S. <<we couldn’t agree more!
Here is a complete video recording of our panel, including questions and answers:
Virginia ExporTech™ Market Entry Strategy with xTuple and HoistCam/Netarus