Advice from a tech titan: Go global fast: CATA's National Spokesperson, Sir Terry Matthews has three words of advice for new Canadian companies: Go global fast.
March 24, 2015

Sir Terry Matthews has three words of advice for new Canadian companies: Go global fast. (CanadExport Magazine:DFAIT)

The serial high-tech entrepreneur has been practicing that mantra throughout his successful career, starting more than 100 companies so far, the vast majority with international markets. The Welsh-Canadian business magnate is particularly putting the “go global fast” strategy into action now in a series of foreign ventures for his investment management and holding company, Wesley Clover International, in locations from Istanbul and Jakarta to Mexico City.

Terry Matthews
Terry Matthews

“I am a global person, make no mistake about it,” says Matthews, who is based in Ottawa and took part in a recent interview with CanadExport magazine on a series of wide-ranging topics. They include the lessons he learned starting his first company, Mitel, his belief in investing in innovative ICT start-ups and in working with strategic partners, as well as some of the secrets of his remarkable success and the helping hands he has had along the way. At root is his passion for doing business all over the world.

“Barriers have come down, like it or not,” says Matthews, 71, who is chairman of Mitel and Wesley Clover. “Going global fast is an incredibly important thing to understand.”

Matthews was born in South Wales, studied electronics and came to Canada to work at chip-maker MicroSystems International in Ottawa. In 1972 he and Michael Cowpland, a fellow employee and British citizen, decided to start a company with $4,000, importing electric lawn mowers from the UK. Their company name, Mitel, was a contraction of “Mike and Terry’s Lawnmowers”.

The key to starting a company, Matthews says, is to “understand what customers want, rather than say ‘I have a good idea, and because I have a good idea, I'll follow it.’ A good idea to me is when a customer says they want something.” Timing is also critical: a shipping delay brought the first lawnmowers to Canada at the end of the summer, a major set-back in a cold climate, forcing the company to refocus, this time into telephony.

The next part of Matthews’ success was giving the people he works with “a lot of ownership,” he says. “You can understand with only $4,000 to start a company up, I didn't have a lot of money, and we had to work literally around the clock to make it last. The people who worked with us were paid in ownership shares,” which came to be worth a considerable sum as Mitel became a worldwide supplier of communication systems.

A major piece of advice for SMEs is to act professionally, whatever your size, and to have a local presence as you expand, Matthews notes. “Two friends of mine, one in the U.S. and one in the UK, very early on joined the company. I gave them the title of managing director in the UK and president in the U.S.,” he recalls. “Any clients would be given the impression that they have a local technology company. That definitely helped to drive the business.”

The company did remarkably well, with $250,000 in sales in the first year, $1.5 million in the second and $5.4 million the third, then “pretty much doubling every year after that,” he remarks. “After 10 years, each one dollar share in 1973 was converted to about $2.5 million. Many people became wealthy.”

Mitel went global in the first few years and Matthews remained in the telecom, ICT and networking environment, starting Newbridge Networks, for example, and eventually moving into cloud computing, mobile devices, broadband and business solutions.

“That's kind of my space. It happens to be a good space worldwide, because I don't know of anybody anymore that doesn't have a smartphone,” he says. “It's a worldwide phenomenon.”

Canada in particular has a “very fast-growing tech sector,” he says. “The grads that are coming out of colleges and universities are first-class. We have the raw materials and experienced people to do well in this sector.” The key is focusing internationally.

“Go global fast for me goes a bit like this: If you do well in Canada, or indeed if you do well just in Canada and the U.S., but another company is doing well throughout Europe, throughout Asia, and also enters the Canadian market, you're probably going to disappear, because the barriers are down,” he explains. “If you're Canadian, you need to be doing business in North America. Now you go a little further: London, Paris, Rome. You go a little further than that: There's Istanbul with 20 million people, there's Mexico City with 20 million people, there's Jakarta with 20 million people.”

He says that if a company is in a particular market before yours, “they've already cleaned out all of the distributors and some of the low-hanging-fruit clients. Then you can't get in. It's too late. You have to try another market.”

Each year Wesley Clover invests in about 10 young start-up companies, he notes. “By the time they are two years old, they've got products we can sell, typically in Canada and the U.S.” He next has them participate in Wesley Clover ventures in places such as Istanbul, Jakarta and parts of Europe, for example.

“There's an opportunity to go global today that you couldn't do 20 years ago,” he points out. Indeed, he “used various techniques” in the past to make his companies go global, for example signing a joint venture deal for Mitel in 1979 to become the biggest vendor in Mexico, as well as one in Beijing in 1980. He opted for joint ventures because the people who supplied communications equipment had a monopoly, and “you either worked with them or had no business at all,” he says. “You have to look at the conditions at the time and see what you can do to take the technology global.”

In today's environment, creating global start-ups means finding investment partners and academics in select foreign markets as well as support from local governments there, which encourage start-up companies in the form of grants and tax incentives. He then licences Canadian technology that's already successful in North America to these start-ups in places such as Istanbul, hiring new graduates there and creating new companies through a venture capital fund that he and local business people invest in.

The fund supports “a platform on which more solutions are built,” he says, a model that creates new start-ups in the local market. “The original company, the Canadian company, ends up helping to get a share of that market on the one hand, and acting as a mentor to the new company on the other hand.”

Matthews continues to participate in joint ventures and has a strong team of senior employees experienced in the ICT telecom networking arena with relationships around the world. “I take full advantage of that.”

Matthews, who in 2001 was conferred the honour of Knight Grand Cross of the Order of the British Empire, and knighted by HM The Queen at an investiture in Buckingham Palace, still believes in the importance of putting people in management on the ground in local markets. When he invests in a foreign company, he “could not be a cornerstone person and own it 100 percent. I can't do that. I have to go global and I have to work with partners. It's just in the blood.”

One piece of advice is to think of the U.S. as a domestic market and get there right away, because Canada is too small to support significant growth, he says. “I don’t think about the U.S. as foreign.”

He finds the assistance of the Canadian Trade Commissioner Service invaluable in global markets. “Our trade commissioners, they are really, really good. It just suits my purposes. They've had a lot to do with the success,” he says. “They are unbelievably good. They are experts in my sector.”

The TCS is particularly helpful in identifying the precise people to talk to in each international market, he notes.

“If I go to Singapore, if I go to Jakarta, if I go to Istanbul, if I go to Berlin, if I talk to our trade service people, I don't just have to go into the chief operating officer of a client. They say, ‘No, the guy that's making the decision, that's the VP so and so,’” he explains. “They know exactly where to go. There's no wasted time whatsoever…Boom, you connect.”

The TCS “are absolute experts,” he says. “I cannot speak about how good they are. Talk about not wasting any time.”

He says there are many untapped opportunities for Wesley Clover internationally, with one of his next stops planned for Manila and an eye on other fast-growing international markets.

“In my view you have to be global,” he adds. “Otherwise, you will get squashed by someone that is going global—and doing so faster than you are.”

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