Herty Tammo: When you’re on a visit and smell what’s in the air, you understand whether the market is worth investing in
Herty Tammo, who has been part of national business delegations on visits to Japan, the United States, Denmark, and Sweden, is one of the founders of the start-up accelerator and investment company Startup Wise Guys.
“As a co-founder of the company, I’ve gone on international visits primarily for two reasons,” Herty explains. “First, to expand our network and thus raise money for our fund, which invests in start-ups. My second aim was to help the companies in our portfolio to expand their business.” He says that international visits contribute to the development of relationships with potential foreign partners, while the connections that Estonian entrepreneurs make on such visits among themselves are also important. “There have been quite a few occasions where people have gained investors, mentors, and partners among the other members of the delegation,” he says. “You spend a lot of time on a visit with other Estonian entrepreneurs, and the conversations you have with them are often really valuable.”
Visits open doors
Herty is convinced that international visits help open doors. The life of an entrepreneur is fast-paced and the reality, unfortunately, is that you don’t get many opportunities to talk to contacts in the country you’re interested in. This makes state support more important. “What I remember from our visits to Japan is that local partners were often invited to receptions as well,” he recalls. “That’s a great way to build relationships, and needless to say Startup Wise Guys made the most of that opportunity!” Herty adds that being part of a national business delegation helps potential partners trust in you. “At the moment we’re working on joint projects with a Japanese organisation called JETRO,” he explains. “We developed a partnership with them after our visits. In their particular case, I’m certain that us being part of the prime minister’s delegation was a very strong argument in favour of them choosing us as partners.” If the company’s own country takes them seriously, the target countries are likely to do the same. “If the state has decided that a company’s worth taking along with them, that reflects credibility,” he feels.
Herty has benefitted from the state’s support in both Japan and the United States. He believes that Estonian companies do need support, especially if they’re trying to expand to large countries. “Based on my own experience, I can say that being part of a national delegation is important, especially in the case of Japan, because it’s a country that’s difficult to enter,” he explains. “Things move slowly and there’s just so much bureaucracy. In overcoming certain hurdles and doing business in Japan, state support is priceless.”
He recalls how former prime minister Taavi Rõivas introduced them to the Japanese company Rakuten, with whom they’re currently in negotiations. “I asked Taavi at a meeting with Rakuten to introduce me to its founders, and we’ve been in touch with the company ever since,” he says. “It’s a great example of how being part of a national delegation on a visit makes it easier for potential partners to trust you, and much easier for you to talk to companies there.”
Managing expectations is the key
Thorough preparations are important for an international visit to be as successful as possible. For example, it’s important to make a list of key contacts on the target market you want to talk to. “Prepare proper presentations and arrange meetings outside of the programme,” Herty recommends. He says that personally planned meetings with potential partners can prove decisive. The state plays an indirect role in their arrangement as well. “If you’re planning meetings and point out that you’re part of the prime minister’s delegation, for example, it does contribute a lot to the likelihood of the meeting taking place,” Herty says.
However, he stresses that even if entrepreneurs do everything they can, there is little point in hoping for overnight success. “Visits have taught me that things take time and constant effort,” he cautions. “There’s usually no point expecting hacks or quick solutions. Entrepreneurs have to understand that international visits help open doors, from which you then have to foster contacts yourself.” In Herty’s view, entrepreneurs need to understand that the state is primarily of help in boosting their credibility. Most of the work in gaining contracts and partners has to be done on your own. “If you go on a visit with the expectation that something will happen straight after it, then sorry to burst your bubble, but examples like that are very much the exception rather than the rule,” he says. “But visits do help to lend you credibility. Even at subsequent meetings there, if you mention previous conversations with the country’s representatives. What I want to say is that the visits themselves don’t serve anything up on a silver platter, but thanks to them, you’re taken more seriously, and that’s important.”
Visits give you a chance to familiarise yourself with the target market
Herty feels that one of the most valuable aspects of visits is the chance to expand both your network and your horizons. Entrepreneurs gain an overview of foreign business culture. Understanding and accepting that a market is not right for your company is also valuable knowledge. “There’s absolutely no point investing time and resources in a market that offers no actual potential,” Herty cautions. “Getting to know the local business culture and talking to the country’s representatives will help you understand whether it makes sense to press ahead. Visits allow you to smell what’s in the air in foreign countries and work out whether the market’s worth investing in.” He also has a personal experience to share. “That trip to Japan helped me understand that there are virtually no family offices in Japan of the sort that usually invest in venture funds,” he explains. “The way things are structured is simply different there. Knowing that helps me plan our activities a lot better.”
He adds that international visits are similar to national meetings in that the goal of most conversations is to reach a mutual understanding with potential partners. Unfortunately, interests often don’t overlap in a way that makes cooperation possible. “But the reality is that if you don’t talk to people, you won’t find that one person you could do something awesome with,” he adds. “Someone once said that the biggest risk you can take is not to take a risk. If you don’t go abroad, don’t talk to people, and don’t establish connections, your company won’t grow. When it comes to the activities of Startup Wise Guys concerning our visits, there’s been a definite return on our investment: both financial gain and indirect benefits in the form of relationships. We’ve gained quite a few investors and mentors from those trips.”
International visits create unforgettable memories
Herty says that expanding to foreign countries is hard work and that the visit programmes are intense. However, that doesn’t mean that fun and memorable moments don’t happen along the way. “Taavi Rõivas liked going jogging, and many people from the delegation went with him,’ he recalls. “The group was Taavi, his advisers, and some of the delegation members, including me. I remember well jogging in Central Park in New York, with members of the US secret service alongside us and Estonian bodyguards in front and behind. That’s how we got our exercise done in Manhattan – extremely well guarded! It was a surreal experience that’s still etched in my memory.”
In conclusion, Herty says that going on international visits is vitally important for the development of Estonian entrepreneurship and the country’s economy. “The more entrepreneurs go and get to know foreign markets the better,” he says. “The Estonian market is small. If you don’t go abroad, you’ll likely end up a nice little lifestyle company that bakes bread or cuts hair. Those sorts of entrepreneurs are much needed as well, don’t get me wrong, but you don’t build up and develop entrepreneurship from that. Bigger business can only be done by going abroad. There is no other option.”
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