CASE STUDY: Remote Control – MANAGING ACROSS MILES

Not many chief executives running multinational business have the luxury of making their first phone calls of the day from their home office while still in their pyjamas. There are probably not that many who start work before 6am. Zeacom’s Miles Valentine does both as part of his role running company which develops and sells business communications products internationally.
Zeacom is in the unified communications (UC) market, which means providing single interface for managing all your business communications (phone, Skype, email, mobile phone, instant messaging, fax etc).
This technology enables Valentine to sit at his Orakei home office and work as if he is in the US office. The people he calls in the US have no idea he’s downunder as the call goes via Zeacom’s California-based network and spits out that local code as caller ID.
Valentine has strong history in the industry, having founded independent telephone reseller Telephone Technology in 1988 – start-up he grew to become $12 million company and the second largest interconnect company in New Zealand. Five years later he sold the business to Ubix Business Machines. At loose end, and with strict restraint of trade provisions in place, he founded Zeacom in 1994 aiming to develop world-class computer telephony integration software. He succeeded. Since Zeacom’s first customer purchased its flagship product Q-Master, in 1995, Valentine has led the company’s expansion to Australia, Asia, the US and Europe. Zeacom now serves over 2200 organisations across 24 countries. At any one time, there are over 75,000 business people using Zeacom software.
In January 2000, Valentine relocated with his wife and young family to Southern California to manage the company’s growth in the US. Intending to stay for one year, they finally came home last December and Valentine’s time is now split between Auckland and California.
Last year Zeacom took out the Supreme Award at the annual AmCham Awards (which celebrate business between New Zealand and its second largest trade partner, the US). The judges said the key to Zeacom’s success was twofold: proving its product at home before heading offshore, and taking on strong New Zealand investment partners to fund the expansion. (Zeacom has been venture capital funded since 1999 with ACC and AMP both holding stakes.)
It’s something Valentine strongly advocates for other Kiwi businesses looking to go global – that, and making sure they have plenty of funding.
“It costs lot to get into the US so we took the venture capital in purely to fund the growth,” Valentine says.
“We initially raised too little, as most New Zealand companies do, and ran out of money in just few months so we had to go back and raise more.”
Zeacom first branched out to Australia, heading there in 1996. “We learnt what we thought we needed to know, made the product better, and then went to the US.”
So why did he target the US as the main overseas market and base, instead of the more favoured Europe?
Because it is English speaking, big market, relatively close and, at that time, the systems platform was compatible with Zeacom’s technology.
Before emigrating, the company undertook research – by sending channel manager from New Zealand to live and study the US market for several months. This experience showed strongly that Americans want to see commitment from new companies entering their space. “You get asked, ‘so you moved up here?’, and ‘what about your wife and family?’. They would quiz you to actually check,” Valentine says.
He felt there was definite requirement to be present – something he believes New Zealand companies underestimate when going Stateside.
“They’re [US customers] about to make dollar investment buying your products and they won’t do that if they think you’re not committed and aren’t going to be there. I think that’s really important thing.”
Once ensconced in California’s Orange County – chosen because its West Coast location makes time zones easier to navigate and because it’s close to Los Angeles International Airport and not “ridiculously expensive” – Valentine embarked on steep US-learning curve.
Lesson one: litigation and insurances. “It took me about nine months to find out that we, as company, had to insure an employee’s car to and from work because if anyone has an accident going to or leaving work, we as company can be liable. It’s very real. I knew number of people who were put out of business while I was there.”
Lesson two: Americans do things very differently depending on the part of the country you’re in. “East Coasters are very direct while the Californians will never tell you no – you’ll walk away thinking ‘wow that was great meeting’ and then nothing,” Valentine says.
“So you call them up and they don’t return your call. That’s how they say no. That said, nobody ever returns your call. If you’re ever prospecting, this is fundamental difference; you can never as sales guy make cold call. You have to do it through networking. The way to get call is be able to ring up and say: ‘Hi Ellen, it’s Miles. I’ve been given your name by Catherine’. Then you get through. Perhaps.”
Quickly picking up on local ways, Zeacom was soon selling nationwide.
Valentine decided to hire American staff, explaining there was no advantage to being Kiwi when selling software. “Americans do not want to know that your development team is, in their minds, 24-hour plane ride away.”
He says the US customers loved dealing with the New Zealanders’ directness, accent and honesty, but distant development seems risky in their minds.
Despite there being no advantage in owning up to Kiwi roots, Valentine kept his R&D team in New Zealand – Carlton Gore Road in Auckland’s Newmarket – for cost reasons.
“It’s cheaper here and there’s no capital gains tax which is very significant from shareholder’s point of view.”
And despite the well-voiced skills shortage here, Valentine says Kiwi employees are second to none and he hasn’t found it difficult to recruit and retain good staff locally. From an experience viewpoint it’s little different as they haven’t necessarily got the bigger world experience – but that’s something he works on. Zeacom staff get travel and work exchange opportunities as part of their development programmes.
“As much as anything it’s building the awareness that in anything they do, they can’t just think ‘New Zealand’. They’ve got to think globally.” Which is another lesson he believes local companies going global need to be aware of.
Valentine recounts an example of the size relativities where, at the start, Zeacom products had space for 999 entries (a key part of Zeacom’s offering is to integrate databases) while their American customers were looking to work with 90,000 contact entries.
“It’s such different scale and that’s taken little while to get.”
Valentine has also noticed distinct differences between managing American and New Zealand staff saying Kiwis have well developed sense of scepticism and healthy lack of respect for hierarchy.
“The CEO in America is God. When the CEO says we’re going to do this, no-one questions it. Over here, I get no respect from anybody really, and that’s fine. Americans are much more structured in their responses, an American would never challenge me in meeting.”
Asked whether it really is like it appears on the telly shows with employers randomly barking at workers “you’re fired”, Valentine laughs that there’s lot more truth in that than people think.
He claims not to have adopted that style, saying it is one reason the Americans like working with Zeacom and its less formal, open door policy.
With around 110 staff, Valentine says there’s good balance of culture but does admit to slight ‘them and us’ feeling depending on which office (ie country) you’re in. His approach has been to work at softening the edges of both little, to the extent where Zeacom’s American vice-president knows not to give barked orders to the Kiwi sta