‘Local presence always helps’
Gerard Mulder is CEO of the fast-growing Dutch AI-software company textkernel, backed by Main since 2020. After expanding in Europe, textkernel took hold of the North American market by acquiring its major US-competitor.
About Gerard Mulder
- Has been an executive in high tech companies since 1999 (DELL and others)
- Chief commercial officer and co-owner of textkernel in 2015, CEO since 2020
About textkernel
Amsterdam-based textkernel is a worldwide market leader in HR data collection and machine learning analysis. The company has two areas of expertise:
- Its software collects data from worldwide (public) sources for job matches, CVs, applications and so on – and parses the data points into real life, actual data streams
- It also parses and analyses non-public workforce data for individual companies (like Manpower and Bosch) and their workforce, past, present and future
Why venture abroad?
‘For textkernel, the opportunity has been international from day one. The Netherlands was always a fairly small home target market. However, there is a much more important aspect to consider. As a standalone service, our software has very little value-add. It is a so-called foundational technology. The software needs to be connected to or integrated with other systems.’
What is the value in textkernel’s proposition?
‘Firstly, our software does a great job of analysing data from all kinds of sources and thereby adding real value. Secondly, the bigger the data pool, the better the ability to analyse. We are able to generate the best possible picture of what is happening in the recruitment market globally, how the demand and supply in the job market are interacting.’
‘Therefore, we need to be with our international customers and we need to access their data globally to be able to optimise sales. Once we realised how these two aspects of our business interact and coexist, we started exploring opportunities abroad very quickly.’
What is the biggest barrier to entry?
‘When it comes to internationalising a business, to us and probably a lot of other companies, the language barrier is the biggest threat and issue to address. It is not just about the language, it is about how you present yourself.’
‘Almost from the beginning, we had an English-language website. English is the language of international business. By presenting ourselves as an international company, we immediately got enquiries and opportunities from abroad.’
‘We also made sure to internationalise our software platform – currently we have it available in over 30 languages. That is just basic good practice.’
Where to begin?
‘Without even a single international office, we started signing clients across Europe and in the United States. After that, we started making more deliberate moves. First, we considered the United Kingdom, but the competition there is very high in our field.’
‘We also considered the United States, but this is such a big and competitive market to penetrate and be successful in. We therefore decided to take an opportunistic, wait-and-see pragmatic approach.’
How did that work out?
‘We settled on Germany as a base. We started off with a German website and with me learning the German language. I went there myself and started building a partner network for the company. That worked well – and after some time, we also opened an office there. We found that we could do direct sales in Germany without harming our existing partner relationships. There are many different ways to implement and to sell our product overseas.’
‘After Germany, we turned our attention to France which we went into with a similar strategy. First, we started with a partner network. Afterwards, we opened an office there.’
‘We then started looking at the US again. We knew from the beginning that it would take a large investment. You simply need personnel in the US if you don’t want your team to work late in the evenings, because of the time difference. What we didn’t really understand beforehand, is how different the US is in an operational sense.’
‘You think you understand the US because you are so used to American movies, songs and so on. But the way they do business, is very different. Americans are a lot less loyal. They are really willing to entertain ideas, but they quit just as easily. When you are not around to manage, it becomes almost impossible to be successful.’
How did you overcome these difficulties?
‘Long story short, last year, with funding from Main Capital Partners, we bought our main competitor in the US: Sovren. This is a company that is strong, well equipped to parse down CVs and it has important clients on its roster. It has a really good product and we are able to learn from each other and cross-sell each other’s services.’
Internationalisation strategy examples
Want to know more? Main has broken down all the steps to a successful internationalisation strategy for software companies in its recent whitepaper. We discuss the three key questions that need to be addressed before developing a strategy (why, what; and where and how?). In the whitepaper, you will also find internationalisation strategy examples and cases from leading experts in the software industry.
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