Toomas Talts: If your company wants to export, you have to go and make an effort on foreign markets

What does Codeborne do?

Codeborne makes tailor-made software. We mostly come to the rescue when out-of-the-box software fails to fulfill business goals, which is to say when the client’s work processes are more diverse than the abilities of ready-made software or when the integration of existing information systems fails. The fields of application of tailored software vary a lot. They can be applied to Internet banking, energy information systems, the lending systems of banks, the settlement systems of gas companies, healthcare solutions, set-top box software, the software for production lines in large factories, complicated digital signing, cryptography solutions, and more.

How fierce is an international competition in your field of activity?

In the strictest sense of the word, we don’t consider anyone a competitor. If there are two good restaurants on the same street, it doesn’t have to be the case that business is booming for one of them and the other is on the brink of bankruptcy. If one of them grills a really good steak while the other one makes amazing tuna, they both have a place. We focus on doing our job to as high a degree of quality as we can. The way I see it, a high-quality product will always find a market, and we do everything we can to produce high-quality software.

What drove you to go on international visits?

Exports make up around 60% of our turnover. But we work a lot for Estonian clients as well; it’s probably true to say that everyone in Estonia uses at least one information system designed by Codeborne. Also, we currently have markets in Russia, Japan, Norway, the United States, the Czech Republic, and to a lesser extent, elsewhere as well.

For initial negotiations and then system-building in subsequent stages to go smoothly, we meet all of our clients face to face. In our experience, the client has to be present for us to design complex systems and agree on their functionality and interfacing. That’s why we go on international visits fairly often.

Why did you choose Japan as your target country?

Our first visit was just a coincidence, to be honest. On the one hand, the delegation included a bunch of people from Estonia who spoke to me, and on the other hand, the visit had a great programme and its clear purpose was to do business. That’s very important to me. Visits can vary – they can be trips designed to expand your horizons, or they can be courtesy calls or whatever. The visit to Japan was more about being as practical as possible. We met with several companies and discussed very openly how we could be of benefit to one another. The meetings all erred towards the practical. In several of them, we focused quite deeply on the potential details of software solutions. It was all very much straight to the point. Those discussions led to us instigating real projects. We’re now on our fifth project with our fourth client in Japan.

How big was the role of a fact that you went to Japan as part of a delegation in signing the first contract?

Hard to say. Business on foreign markets isn’t about a minister opening doors for you and you simply lapping up the results. The presence of high-level people is indeed very important in Japan, and Asia as a whole. It seems to me as though the Japanese sense that being part of a national business delegation and accompanying important people demonstrates an entrepreneur’s respect towards their partner and their contribution to the business relationship. It’s definitely a step that contributes to the development of the relationship. It’s an indication that you didn’t just roll up to try your luck, but that you’re prepared, committed, and focused. That sort of serious attitude fits the Japanese mentality, it seems to me. On the other hand, it’s worth keeping in mind that no foreign partner will sign a contract with you just because you’re in the same circle as some high-level politicians. You still have to hold negotiations and reach agreements on your own.

What are your expectations when you go on an international visit?

I think going into a visit with huge expectations or demands isn’t the most rational approach. I went to Japan to see how business is done there. I didn’t have any expectations whatsoever that I’d return with a contract. I mean I worked hard to achieve that, and it’s great that it turned out that way. A visit is a fantastic opportunity to learn how business is done in other parts of the world and to gain some initial contacts. That leads to regular negotiations, as is the case in business generally.

In your opinion, how important is it that Estonian companies go on international visits?

Visits are definitely important because doing business is serious work. You have to make an effort if you want to succeed. Meeting with potential local partners and presenting your product or service to them is crucial. On top of that, some things can only be discussed face to face. That said, to me, it’s not only important what you do but how you do it. Companies considering going on international visits should have a clear understanding of what they’re going to say there. Some potential clients will only be interested in the solution or service you’re offering. Others will want to look you in the eye to determine whether you’re the right person to solve their task.

From what you’re saying it sounds as though it’s worth going on visits if you have a distinct understanding of the strengths of your product or service.

With products, people often fall into the trap of thinking that you have to have something ready. Since we deal with software development, I often hear people talking about ready-made products. That’s a slippery slope for me. I often see products that are indeed available, but they don’t work for the client the way they’re supposed to. The problem with a ready-made product is that if there’s a client with individual needs but also some ‘universal’ product that’s supposed to solve the tasks of lots of different clients, then the solution lies either in really complex systems that try to solve everything or, on the contrary, solutions that are all about the lowest common denominator. We don’t discuss the parameters of our solutions with our clients in Estonia or on visits, but rather the business tasks the clients want solving. Once that’s clear, we then see what sort of system we’re going to build. It’s not like it has to be some magic product, after all. The point is solving the client’s problem. Whether that’s done using a special solution, a product or just a consultation becomes clear in the course of the job.

How do international visits contribute to improving Estonian entrepreneurship and the country’s economic environment?

They have a positive effect for sure. You can’t do without them. It’s naive to think that people are desperate to come to Estonia in search of partners. Any entrepreneur who wants their business to grow has to be proactive and find opportunities on their own. Sure, you might get lucky and be dealt a good hand, but you can’t count on it. If your company wants to export, you have to go and make an effort on foreign markets.

Would you recommend participating in visits to other Estonian entrepreneurs?

Yes, definitely. Of course, you need to make sure which companies are earmarked for visits and who in the delegation you can team up with so that together you have more to offer the client. Boosting exports should be a question of professional dignity for Estonian entrepreneurs.

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