September 13, 2022 • 30 mins
The guest of this show is Topi Paananen, the CEO and Entrepreneur at Peikko Group, a Finnish construction company.
Topi has more than 20 years of experience in global business development, 17 of which in the family owned Peikko Group. He was also named by EY as an entrepreneur of the Year in Finland in 2020.
We will talk about:
- How to international markets can increase your revenue from tens of millions to hundreds of millions
- Why trust is one of the most important issues in doing business with Finns
- Why to enter multiple countries at once is a bad idea
- How not to be fooled by Finnish quietness
- What you need to know before negotiation with Finns
- And many more interesting insights…
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:00):
Hi, I'm Dmytro Shvets.
(00:06):
Your host at the Start Global Insights, where I interview local experts in different countries
about local insights and international expansion experience.
Today, my guest is Topi Paananen, the CEO and entrepreneur at Peikko Group, a Finnish construction
company.
Topi has more than 20 years of experience in global business development, 17 of which
(00:30):
in the family-owned Pekko Group.
He was also named by EY as an Entrepreneur of the Year in Finland in 2020.
Hyvapaiva Topi, mitta kuulu.
It's going very well.
Thanks, thanks, Dmitry.
It's going very well today.
The sun is shining in Finland and we are happy that the weather is today good.
So if the weather is good, Finns are feeling always okay, because the weather is...
(00:54):
Typically not good here.
Could you give a brief description of Pekko and your role in the company?
And if I have mistaken an introduction of your name or the company, also correct it.
Yeah, some description of our company.
(01:14):
It's a company doing work for the construction sector.
We are a producer of construction materials and our customers are builders, investors,
precasters of various kinds.
What we do is something out of steel.
(01:35):
We have certain columns, we have certain beams, we have certain connection items for frame
structures.
So many things that typically you don't see in your buildings.
They are there to hold up the building together, but you do not see them.
That's our business.
And Pekko is headquartered in Finland.
(01:56):
We have about 2,300 people working for us.
This year's revenue, we expect to have some 320 million euro revenue.
So in 30 countries, quite a small company to be so international, but still hoping to
grow bigger.
(02:17):
That's our object.
What is your role in the company?
You named yourself in LinkedIn as an entrepreneur at Pekko Group.
I think the titles are titles and if I would be promoting myself as a CEO or whatever,
that's kind of the way.
I'm basically the ambassador of Pekko, the forefront of Pekko to kind of lead hopefully
(02:40):
the company to the right direction.
My role is to manage the company as a family business owner.
I, of course, I'm both owner and the leader, which is a kind of double role, but so far
it has worked fairly okay.
So we have been growing in the last 17 years from 35 million euro company to the current
(03:01):
level of let's say 320 million euro company as an estimate for this year.
Was it always so that Pekko was global company or at some time you decided to be global?
Before I joined in 2005, we had some export activity already, but then there was a realization
that the products and applications could have some value add for the customers also outside
(03:26):
of Finland even more.
And then we started the globalization efforts back in 2005, I would say very aggressively
as well.
In our case, internationalization also meant that we need to provide the technical service
for our customers in the local language.
(03:47):
So we needed to have teams in other countries where we wanted to sell.
And then also in many cases we had factories.
So we are currently having some manufacturing activities in 12 locations.
So the closeness to the customers was kind of required.
So in our language, we are not talking about the export, we are talking about internalization
(04:11):
in many ways.
How do you think, you said that you increased your turnover from 30 million to almost 300
million within this more than 15 years.
Would that be possible if you stayed in Finnish market?
It depends of course, what is your business.
(04:32):
Of course, you can always sell many, many things for your local market.
But for us, it was kind of like a natural that we are believing on the beauty and the
extraordinary nature of our products and we want to spread the gospel of these products
all over the world, let's say.
And we have been focusing very decisively on certain applications, certain key strengths.
(04:59):
And that has been good for us in this conservative business of construction materials.
It has taken time, yes, but so far so good.
How do you go abroad?
Is there any roadmap or approach that you use when you select in new countries or you
decide that we will expand further?
(05:22):
Of course, you need to look on kind of the basic parameters of a certain country, whether
your products or services are needed there in principle.
And that, of course, we have been doing.
And then you need to do maybe a little bit of study around.
You need to visit possible customers, organizations, and then you just have to start activities
(05:47):
and then you will see whether you are there in the right time, whether the first persons
you are recruiting are actually good guys or whether basically you are making good choices
or bad choices.
And then fairly fast, you need to make the decisions on whether you increase or whether
you decrease that organization.
(06:09):
Sometimes it has worked, sometimes it has not worked.
It looks like a startup approach.
So you have a hypothesis if it will work and then you check it and then if not, then you
recheck it and redo.
How do you understand that this is the correct choice and this country is the one you should
proceed with?
This is a startup approach and with startups you have to be also fast to make moves in
(06:34):
many directions.
So you want to scale up, but you need to also scale down.
And I think the Ukrainian example of us was in one part of it was a failure because we
set up a small team back in 2007-08, but then if somebody remembers to those times in 2009,
(06:56):
the whole construction market was totally dead.
So I was visiting in Kiev, I saw 15 building sites and there was no labor in one of these
months there.
And then we kind of realized that the timing, kind of the environmental impact was so far
kind of big at that particular moment that it made no sense for us to continue.
(07:23):
Sometimes these kind of things also happen, but yet we have had customers in Ukraine ever
since even though we have no own team currently.
Okay, interesting.
How do you think, is it important?
Like in your case, I see that you are taking a very active role in this internationalization.
(07:44):
As CEO, yeah, but more maybe as a business developer.
How do you think, like your personal opinion, is it important that for a small company or
a medium-sized company, the owner and the manager of the company takes a proactive part
in global expansion?
Should it be like a strategic priority for the company if they decide to be global?
(08:09):
Of course, it always depends on the kind of the capability of the entrepreneur with regards
to the language, regards to the many, many other things, availability from the other
points of view like family, et cetera.
But I see that if the decision-making capability has to be in the forefront, and then whether
(08:32):
this is an entrepreneur or somebody else, you have to make decisions then and there
when you meet the clients and the partners in the, let's say, foreign country.
And I think this is essential that there has to be people who are empowered to make decisions.
In our case, I have been myself involved.
(08:53):
I'm having fun with it to explore new cultures, to see new people.
Like during one of these visits, I was meeting you in those times in Kiev, which was fantastic.
But it's kind of like you have to have the time and the dedication.
And of course, if you want to internationalize, you have to have an objective and you have
(09:16):
to have the best resources to do that.
Very often I hear from Ukrainian exporters that let's do some expert.
If it works, okay.
If not, then we won't invest in that.
So they do not invest in internationalization beforehand.
There is such a mentality that you should first earn something and then invest in that.
(09:39):
Is it possible from your experience, is it possible to be successful at foreign markets
without proper preparation for that and investments in developing this direction?
I think in today's world, in most of the businesses, this is no longer possible.
So it's kind of like you come to see a customer and say that I'm just going to try now to
(09:59):
sell in this country.
Would you like to buy from me?
So this sales pitch doesn't work.
Obviously, it's important to get information from various countries and then kind of try
out things.
But if you need to go, you want to try for your best for a certain period of time with
(10:21):
a certain period of budget.
So you have to do it.
You have to make the trial in a proper manner.
But of course, you have to bet on money that you can afford.
That's also true.
And I would even say that too many times companies are starting in too many countries at the
same time.
(10:41):
So you have to go one country or one market at a time.
And then many times people are thinking about the country.
We should be actually in many cases, we need to apply that which city you are focusing
on.
If you go to Germany, you should be actually deciding on is it Berlin or is it Frankfurt?
Is it this or that?
You have to kind of, depending on the business, you have to be very selective.
(11:02):
But then that area you need to go in a proper manner.
So this is about the focus and the useful or efficient use of your resources.
Yeah.
And many times, I mean, as a worst example, I would say that there was a startup company
in Finland who wanted to sell a certain very innovative product.
(11:25):
And the first thing that they did was an exhibition in Dubai because the Finnish government supported
this exhibition presence.
And I said that you are crazy.
You are not even selling in your home country and you are going to Dubai.
Okay.
They didn't like my analysis, by the way, but I haven't heard about that startup either
(11:46):
afterwards.
Yeah, especially the Eastern countries that are very peculiar.
And you need to establish the network first and understand the mentality and all that
stuff.
Sometimes for a Finnish company, it's just good to start in Sweden or Estonia and go
(12:07):
forward with that.
Of course, depending on what your business is, that highly depends on your business.
But in many cases, the best possible customer is your next door neighbor as a first target.
How do you choose countries to expansion?
Of course, we are working in the field of, let's say, modular construction.
(12:28):
And we have a network of certain machinery manufacturers who are providing machinery
for this precast manufacturing technology.
So we are following up on which countries those machinery manufacturers are selling
their equipment.
And then, of course, we know that there is a potential when these technologies are there.
(12:49):
We are kind of following up on what's happening on the market.
So it's basically where is the possible demand?
That's where we go.
But we have also learned our lessons that it's not so...
We were, for example, seeing a lot of business, for example, in India.
(13:10):
But then, basically, there was not a single customer in India who were wanting to pay
their bills.
The customs duties were all of a sudden whatever they were.
It was impossible environment at the end of the day.
So even though some basic principles were very favorable, it was not working.
Clear.
And you have 30 countries in your portfolio.
(13:33):
And most of them are in Europe.
I see that you have business in Asia, in Africa, Middle East, North America.
What country is the most difficult or the region is the most difficult to enter?
I think in general, for European companies, the Asian countries are, of course, challenging.
(13:53):
That's because of the language, because of the even physical distance.
We have a factory in China, which can nicely support many of those countries.
But to really start business on those countries has been a challenge.
And it has taken us a long time.
Many of those countries are running very well at the moment for us, but it took much more
(14:14):
time than we thought.
What is the biggest challenge in this case?
The language or the distance?
What else?
I think it's, of course, the culture, the language and how to kind of get to the networks.
How to be, as we have our own teams, how to be in such a position that the good guys are
(14:36):
wanting to work for us in that particular country.
How to find good people for our team members.
That's kind of the challenge on how a Finnish company can find the best people in China,
for example, or the best people in Singapore or the best people in Korea.
How did you solve this challenge?
(14:58):
What was your solution for that?
You have to search, you have to search, you have to convince.
You have to find actually the people who are then able to believe on your products and
your services.
What would you say that this is like must have things when you're going global?
What is the most important?
(15:18):
I mean, everything starts from your offering.
So you have to have something which is unique, whether it's a product or service, which gives
some value for the customers.
I mean, if you are selling just something cheaper, that logic is not working in today
anymore.
You have to be able to sell something which is unique and then you are being heard.
(15:42):
Of course, there are industries where the price is a matter, but with price you can
actually sell.
And then if you sell with the price first, then you can go and develop the services as
well, et cetera.
But you have to have something unique in today's world.
And that's, of course, tough always, anywhere.
(16:03):
So the product and people, two parts of the successful export or global expansion.
Both and then you have to have people who believe on the setup, can communicate the
benefits of the products.
I mean, you need to have both.
And then in many cases, you need to have a long-term approach and funding to support
(16:27):
that so that these people can work with long-term results in mind.
But it depends on the business as well.
In software, you can easily make some fast track cases as well, comparing to finding
some channels for your physical products.
Okay.
Coming back to Finland, what is the general business culture in Finland, especially in
(16:51):
B2B?
Any peculiarities or how would you describe it from your point of view?
I think it's a culture in many cases.
It's fair.
So when people are respecting the agreements, people are even not needing to have an agreement.
There is a high integrity.
(17:13):
We are one of the least corrupt countries in the world based on the transparency international.
Of course, we have our own set of problems as well.
But particularly in the normal business-to-business relationships, I mean, there is not a single
case where somebody asks some money under the table.
So it's a very fair decision-making process.
(17:37):
But on the other hand, we are kind of like in an island, as many of the products are
coming via sea.
Somehow you cannot take the truck through St. Petersburg nowadays.
We are also having some long lead times and that's why the availability for physical
products is many times very important.
(17:59):
We respect the fact that there is availability.
We respect the fact that there is a local stock for many products, etc.
So the reliability of the delivery is extremely important for Finns in general, I would say.
But we do what we promise as a buyer, as a seller, sometimes even to the extreme, which
(18:24):
is stupid.
So there are always stories about the blue-eyed Finns who are too honest sometimes.
But that's the way we are in many, many cases, in good and in bad.
It is interesting how you came up to this honesty through the centuries of being Vikings
and warriors.
(18:44):
I think the main change happened kind of a hundred years ago, in the beginning of the
20th century.
I don't know where the change is happening.
We are in Baruski, we are in Chuhnas.
So we are kind of like stupid idiots based on the Russian terminology as well.
So we are kind of idiots, a little bit of naive idiots, trusting idiots in many ways
(19:10):
as an agent.
But on the other hand, it's very easy for other people to do business with us and that
has also created kind of the business atmosphere what we have today and the success what we
have today as well.
There is a high trust on society as well.
So if you think about just the vaccination results on Finland, we are one of the highest
(19:35):
in Europe that everybody is obeying and looking what the government is doing.
The government is also functioning well.
So there are many, many kind of symbols which are also leading to the fact that the ease
of doing business is very good in Finland.
I think I do understand that because we actually started our sales in my company mostly to
(20:00):
the Nordic countries and in Finland as well.
And we were really amazed how transparent our potential clients and when we agreed to
buy, so we sold our services and Finns said like, okay, let's start, give us the invoice
we will pay.
And we were like, come on, an agreement.
(20:20):
You need agreement.
You need to write down all that stuff that is actually obligatory in Ukraine from the
Ukrainian point of view of legislation.
But I was really amazed how easy they trusted the company they didn't know.
And this approach actually built up my approach in business.
(20:44):
You understand how much more easy it is to make business in such a transparent way.
And in this case, both parties earning much more and in long term.
So if you're delivering what you promise, then it means that you can proceed further.
You can get good references.
You can enlarge your business in this country as well.
(21:06):
But if you do not, so if you just get your money and disappear or do not deliver what
you have been promising, then okay, you earn once, but that's it.
And I think that your phrase about the trust from Finnish people is also not about trusting
to the person who lied first time.
(21:29):
So you won't trust him the second time.
You're completely correct, and then there is this other thing that if you fail, if you
kind of talk bullshit about your deliveries, if you are not fulfilling your commitment
for one reason or the other, you are nobody.
(21:49):
So it's kind of like you.
And typically also the Finns are also very bad at giving kind of feedback, negative feedback.
So they more or less that they failed, bang, that's it.
So they are also kind of a little bit of short term in that sense that if somebody is failing
(22:11):
or telling some lies during the process, then basically this is not the person or company
to talk with any further and that's it.
So you can also lose the trust also in a simple way or fast way and it will be difficult for
you to understand what happened because the Finnish person is just making the judgment
(22:37):
based on these trust issues, let's say.
So if you are failing with deliveries, you need to really with Finnish clients, you have
to tell in advance that, by the way, we all of a sudden have issues and we have a new
schedule, etc.
So pre-information on these issues is extremely vital with Finnish people, Finnish customers.
(23:00):
Taking into account this transparency and openness, how easy it is to approach potential
clients in Finland in a cold way.
If somebody will write you on LinkedIn as to the CEO of an international company in
Finland, how would you react?
Would you answer and give them what they want or is it difficult to approach in a cold way
(23:26):
or not?
I think it's perfectly okay to approach, but of course you have to have some story and
I'm being approached by multiple Ukrainians even via LinkedIn almost every week.
And I'm always replying, but then what is the unique, what one wants to offer, that's
always sometimes a question mark.
(23:47):
When with LinkedIn you are having kind of the problem that you are just sending mass
emails.
So I think the problem with the cold calls is that they are done in a mass way and then
you kind of approach nobody.
I would say particularly if the Finns who are in need of this trust, you have to really
(24:08):
personalize your message.
Show that you have actually studied the website and show that your service or product could
fit to the company in question.
Of course there are companies who are kind of locally oriented and they may be more or
better approached via networks, but I think we also see that not the whole wisdom of the
(24:30):
world comes from Finland.
We understand that and that's why we are quite open to talk with people from other countries.
I think it's good and particularly in the software side of things, I think Ukraine has
a very good reputation and I would encourage Ukrainian software developers to contact possible
(24:51):
Finnish clients.
I think that would be good, but even there, there is a need to also travel and then as
a second step or third step also meet the clients and have the own references in good
cases.
I have seen cases where I have been approached by different companies, but they are not able
(25:13):
to describe what kind of references they have done for other customers.
So I think the references are very important for me and I think generally in Finland.
People want to see something concrete.
People are not wanting to believe on some talk.
They want to understand what this company has really done.
(25:35):
And you said that even if you can approach online as the first step, but then it is important
to have this personal meeting.
We are talking about after Corona world at the moment and meetings are appreciated at
the moment.
This is a trust-based society.
The face-to-face meeting is the one which is increasing the trust.
(25:56):
The trust building can start via video, but I think later on, an Ukrainian company if
thinking about doing business in Finland, they should have big enough clients that they
can also afford to travel.
How do you build your network in Finland?
Are you going to some special places or meetings, conferences or what is the way of doing that?
(26:22):
Yes, of course in our business there are industry associations which we are very active as well,
but I think the physical meetings with the customers are the key at the customer's premises.
In our case, we are inviting a lot of people to our factories.
We are having a factory towards open houses, etc.
(26:45):
So this is kind of our way of communicating.
The role of exhibitions is very limited in Finland and I would say the world of exhibitions
is starting to be over, I would say, unless there are some key global exhibitions like
some German large exhibitions which everybody within that industry is visiting.
(27:08):
When you are doing negotiations with Finns, is there any point that you should pay attention
to or what is the meeting culture in Finland?
What you should know before?
One thing that some non-Fins are doing is a mistake.
When the Finns are quiet, they can fool you around with the quietness.
(27:29):
The Finns have a very good capability to be quiet for a long period of time and you should
not be irritated or worried or anything like that.
They can be just quiet.
There was one Austrian company and they made a big mistake.
The buyer was just quiet and then the price went down and down and down.
(27:52):
You have to bear the quietness.
There is not always the necessity to say anything.
Also the trick that some buyers are using because they can be quiet and then they can
make the seller very uncomfortable.
So you need to bear with that.
You have to be on time.
Time is really respected so you have to be punctual.
(28:12):
Not maybe as punctual as the Swiss are but you have to be punctual.
It's a part of this trust culture that if you agree then you are there.
I have had customer meetings that we have agreed three weeks ago.
The meeting time, exact time, nobody has communicated anything in between and then we just appear
in that time point on that particular location.
(28:34):
Is it common to have a long small talk before talking about the business or you can go straight
away?
I think a small talk is very short many times because it does not exist.
In a way it's okay to also have a small talk.
It's perfectly okay but typically the Finns are very subject oriented and they go directly
(28:59):
to the business.
But I think it's also good to have a small talk and I think with the teams particularly
I'm missing sometimes that there is no small talk.
People are just not even interested in the other person.
So we should create small talk culture and I'm respecting that many times when somebody
has the time to ask a question.
How are you doing?
Thank you Topi for the conversation.
(29:20):
Maybe the last question to you is what would you advise to Ukrainian exporters in their
global journey or maybe in entering Finland?
Just do it.
I think in many cases people are thinking too much and you need to just start doing.
I think there are no great strategies and great business plans and market studies.
(29:44):
Sometimes you just have to go and see the possible clients and then do it.
With good intentions, with the energy and drive you can achieve a lot of things.
That's how it goes and then you will see whether your product and service is applicable or
not.
That's the best market study that you make a sale or you don't make a sale.
(30:04):
Thank you.
Thank you for being with me at this show.
Thanks a lot and I wish all the best for Ukrainian and for Ukrainian exporters in particular.
Thank you.
Trust me, I can do better.
Hi, I'm Dmytro Shvets.
(00:06):
Your host at the Start Global Insights, where I interview local experts in different countries
about local insights and international expansion experience.
Today, my guest is Topi Paananen, the CEO and entrepreneur at Peikko Group, a Finnish construction
company.
Topi has more than 20 years of experience in global business development, 17 of which
(00:30):
in the family-owned Pekko Group.
He was also named by EY as an Entrepreneur of the Year in Finland in 2020.
Hyvapaiva Topi, mitta kuulu.
It's going very well.
Thanks, thanks, Dmitry.
It's going very well today.
The sun is shining in Finland and we are happy that the weather is today good.
So if the weather is good, Finns are feeling always okay, because the weather is...
(00:54):
Typically not good here.
Could you give a brief description of Pekko and your role in the company?
And if I have mistaken an introduction of your name or the company, also correct it.
Yeah, some description of our company.
(01:14):
It's a company doing work for the construction sector.
We are a producer of construction materials and our customers are builders, investors,
precasters of various kinds.
What we do is something out of steel.
(01:35):
We have certain columns, we have certain beams, we have certain connection items for frame
structures.
So many things that typically you don't see in your buildings.
They are there to hold up the building together, but you do not see them.
That's our business.
And Pekko is headquartered in Finland.
(01:56):
We have about 2,300 people working for us.
This year's revenue, we expect to have some 320 million euro revenue.
So in 30 countries, quite a small company to be so international, but still hoping to
grow bigger.
(02:17):
That's our object.
What is your role in the company?
You named yourself in LinkedIn as an entrepreneur at Pekko Group.
I think the titles are titles and if I would be promoting myself as a CEO or whatever,
that's kind of the way.
I'm basically the ambassador of Pekko, the forefront of Pekko to kind of lead hopefully
(02:40):
the company to the right direction.
My role is to manage the company as a family business owner.
I, of course, I'm both owner and the leader, which is a kind of double role, but so far
it has worked fairly okay.
So we have been growing in the last 17 years from 35 million euro company to the current
(03:01):
level of let's say 320 million euro company as an estimate for this year.
Was it always so that Pekko was global company or at some time you decided to be global?
Before I joined in 2005, we had some export activity already, but then there was a realization
that the products and applications could have some value add for the customers also outside
(03:26):
of Finland even more.
And then we started the globalization efforts back in 2005, I would say very aggressively
as well.
In our case, internationalization also meant that we need to provide the technical service
for our customers in the local language.
(03:47):
So we needed to have teams in other countries where we wanted to sell.
And then also in many cases we had factories.
So we are currently having some manufacturing activities in 12 locations.
So the closeness to the customers was kind of required.
So in our language, we are not talking about the export, we are talking about internalization
(04:11):
in many ways.
How do you think, you said that you increased your turnover from 30 million to almost 300
million within this more than 15 years.
Would that be possible if you stayed in Finnish market?
It depends of course, what is your business.
(04:32):
Of course, you can always sell many, many things for your local market.
But for us, it was kind of like a natural that we are believing on the beauty and the
extraordinary nature of our products and we want to spread the gospel of these products
all over the world, let's say.
And we have been focusing very decisively on certain applications, certain key strengths.
(04:59):
And that has been good for us in this conservative business of construction materials.
It has taken time, yes, but so far so good.
How do you go abroad?
Is there any roadmap or approach that you use when you select in new countries or you
decide that we will expand further?
(05:22):
Of course, you need to look on kind of the basic parameters of a certain country, whether
your products or services are needed there in principle.
And that, of course, we have been doing.
And then you need to do maybe a little bit of study around.
You need to visit possible customers, organizations, and then you just have to start activities
(05:47):
and then you will see whether you are there in the right time, whether the first persons
you are recruiting are actually good guys or whether basically you are making good choices
or bad choices.
And then fairly fast, you need to make the decisions on whether you increase or whether
you decrease that organization.
(06:09):
Sometimes it has worked, sometimes it has not worked.
It looks like a startup approach.
So you have a hypothesis if it will work and then you check it and then if not, then you
recheck it and redo.
How do you understand that this is the correct choice and this country is the one you should
proceed with?
This is a startup approach and with startups you have to be also fast to make moves in
(06:34):
many directions.
So you want to scale up, but you need to also scale down.
And I think the Ukrainian example of us was in one part of it was a failure because we
set up a small team back in 2007-08, but then if somebody remembers to those times in 2009,
(06:56):
the whole construction market was totally dead.
So I was visiting in Kiev, I saw 15 building sites and there was no labor in one of these
months there.
And then we kind of realized that the timing, kind of the environmental impact was so far
kind of big at that particular moment that it made no sense for us to continue.
(07:23):
Sometimes these kind of things also happen, but yet we have had customers in Ukraine ever
since even though we have no own team currently.
Okay, interesting.
How do you think, is it important?
Like in your case, I see that you are taking a very active role in this internationalization.
(07:44):
As CEO, yeah, but more maybe as a business developer.
How do you think, like your personal opinion, is it important that for a small company or
a medium-sized company, the owner and the manager of the company takes a proactive part
in global expansion?
Should it be like a strategic priority for the company if they decide to be global?
(08:09):
Of course, it always depends on the kind of the capability of the entrepreneur with regards
to the language, regards to the many, many other things, availability from the other
points of view like family, et cetera.
But I see that if the decision-making capability has to be in the forefront, and then whether
(08:32):
this is an entrepreneur or somebody else, you have to make decisions then and there
when you meet the clients and the partners in the, let's say, foreign country.
And I think this is essential that there has to be people who are empowered to make decisions.
In our case, I have been myself involved.
(08:53):
I'm having fun with it to explore new cultures, to see new people.
Like during one of these visits, I was meeting you in those times in Kiev, which was fantastic.
But it's kind of like you have to have the time and the dedication.
And of course, if you want to internationalize, you have to have an objective and you have
(09:16):
to have the best resources to do that.
Very often I hear from Ukrainian exporters that let's do some expert.
If it works, okay.
If not, then we won't invest in that.
So they do not invest in internationalization beforehand.
There is such a mentality that you should first earn something and then invest in that.
(09:39):
Is it possible from your experience, is it possible to be successful at foreign markets
without proper preparation for that and investments in developing this direction?
I think in today's world, in most of the businesses, this is no longer possible.
So it's kind of like you come to see a customer and say that I'm just going to try now to
(09:59):
sell in this country.
Would you like to buy from me?
So this sales pitch doesn't work.
Obviously, it's important to get information from various countries and then kind of try
out things.
But if you need to go, you want to try for your best for a certain period of time with
(10:21):
a certain period of budget.
So you have to do it.
You have to make the trial in a proper manner.
But of course, you have to bet on money that you can afford.
That's also true.
And I would even say that too many times companies are starting in too many countries at the
same time.
(10:41):
So you have to go one country or one market at a time.
And then many times people are thinking about the country.
We should be actually in many cases, we need to apply that which city you are focusing
on.
If you go to Germany, you should be actually deciding on is it Berlin or is it Frankfurt?
Is it this or that?
You have to kind of, depending on the business, you have to be very selective.
(11:02):
But then that area you need to go in a proper manner.
So this is about the focus and the useful or efficient use of your resources.
Yeah.
And many times, I mean, as a worst example, I would say that there was a startup company
in Finland who wanted to sell a certain very innovative product.
(11:25):
And the first thing that they did was an exhibition in Dubai because the Finnish government supported
this exhibition presence.
And I said that you are crazy.
You are not even selling in your home country and you are going to Dubai.
Okay.
They didn't like my analysis, by the way, but I haven't heard about that startup either
(11:46):
afterwards.
Yeah, especially the Eastern countries that are very peculiar.
And you need to establish the network first and understand the mentality and all that
stuff.
Sometimes for a Finnish company, it's just good to start in Sweden or Estonia and go
(12:07):
forward with that.
Of course, depending on what your business is, that highly depends on your business.
But in many cases, the best possible customer is your next door neighbor as a first target.
How do you choose countries to expansion?
Of course, we are working in the field of, let's say, modular construction.
(12:28):
And we have a network of certain machinery manufacturers who are providing machinery
for this precast manufacturing technology.
So we are following up on which countries those machinery manufacturers are selling
their equipment.
And then, of course, we know that there is a potential when these technologies are there.
(12:49):
We are kind of following up on what's happening on the market.
So it's basically where is the possible demand?
That's where we go.
But we have also learned our lessons that it's not so...
We were, for example, seeing a lot of business, for example, in India.
(13:10):
But then, basically, there was not a single customer in India who were wanting to pay
their bills.
The customs duties were all of a sudden whatever they were.
It was impossible environment at the end of the day.
So even though some basic principles were very favorable, it was not working.
Clear.
And you have 30 countries in your portfolio.
(13:33):
And most of them are in Europe.
I see that you have business in Asia, in Africa, Middle East, North America.
What country is the most difficult or the region is the most difficult to enter?
I think in general, for European companies, the Asian countries are, of course, challenging.
(13:53):
That's because of the language, because of the even physical distance.
We have a factory in China, which can nicely support many of those countries.
But to really start business on those countries has been a challenge.
And it has taken us a long time.
Many of those countries are running very well at the moment for us, but it took much more
(14:14):
time than we thought.
What is the biggest challenge in this case?
The language or the distance?
What else?
I think it's, of course, the culture, the language and how to kind of get to the networks.
How to be, as we have our own teams, how to be in such a position that the good guys are
(14:36):
wanting to work for us in that particular country.
How to find good people for our team members.
That's kind of the challenge on how a Finnish company can find the best people in China,
for example, or the best people in Singapore or the best people in Korea.
How did you solve this challenge?
(14:58):
What was your solution for that?
You have to search, you have to search, you have to convince.
You have to find actually the people who are then able to believe on your products and
your services.
What would you say that this is like must have things when you're going global?
What is the most important?
(15:18):
I mean, everything starts from your offering.
So you have to have something which is unique, whether it's a product or service, which gives
some value for the customers.
I mean, if you are selling just something cheaper, that logic is not working in today
anymore.
You have to be able to sell something which is unique and then you are being heard.
(15:42):
Of course, there are industries where the price is a matter, but with price you can
actually sell.
And then if you sell with the price first, then you can go and develop the services as
well, et cetera.
But you have to have something unique in today's world.
And that's, of course, tough always, anywhere.
(16:03):
So the product and people, two parts of the successful export or global expansion.
Both and then you have to have people who believe on the setup, can communicate the
benefits of the products.
I mean, you need to have both.
And then in many cases, you need to have a long-term approach and funding to support
(16:27):
that so that these people can work with long-term results in mind.
But it depends on the business as well.
In software, you can easily make some fast track cases as well, comparing to finding
some channels for your physical products.
Okay.
Coming back to Finland, what is the general business culture in Finland, especially in
(16:51):
B2B?
Any peculiarities or how would you describe it from your point of view?
I think it's a culture in many cases.
It's fair.
So when people are respecting the agreements, people are even not needing to have an agreement.
There is a high integrity.
(17:13):
We are one of the least corrupt countries in the world based on the transparency international.
Of course, we have our own set of problems as well.
But particularly in the normal business-to-business relationships, I mean, there is not a single
case where somebody asks some money under the table.
So it's a very fair decision-making process.
(17:37):
But on the other hand, we are kind of like in an island, as many of the products are
coming via sea.
Somehow you cannot take the truck through St. Petersburg nowadays.
We are also having some long lead times and that's why the availability for physical
products is many times very important.
(17:59):
We respect the fact that there is availability.
We respect the fact that there is a local stock for many products, etc.
So the reliability of the delivery is extremely important for Finns in general, I would say.
But we do what we promise as a buyer, as a seller, sometimes even to the extreme, which
(18:24):
is stupid.
So there are always stories about the blue-eyed Finns who are too honest sometimes.
But that's the way we are in many, many cases, in good and in bad.
It is interesting how you came up to this honesty through the centuries of being Vikings
and warriors.
(18:44):
I think the main change happened kind of a hundred years ago, in the beginning of the
20th century.
I don't know where the change is happening.
We are in Baruski, we are in Chuhnas.
So we are kind of like stupid idiots based on the Russian terminology as well.
So we are kind of idiots, a little bit of naive idiots, trusting idiots in many ways
(19:10):
as an agent.
But on the other hand, it's very easy for other people to do business with us and that
has also created kind of the business atmosphere what we have today and the success what we
have today as well.
There is a high trust on society as well.
So if you think about just the vaccination results on Finland, we are one of the highest
(19:35):
in Europe that everybody is obeying and looking what the government is doing.
The government is also functioning well.
So there are many, many kind of symbols which are also leading to the fact that the ease
of doing business is very good in Finland.
I think I do understand that because we actually started our sales in my company mostly to
(20:00):
the Nordic countries and in Finland as well.
And we were really amazed how transparent our potential clients and when we agreed to
buy, so we sold our services and Finns said like, okay, let's start, give us the invoice
we will pay.
And we were like, come on, an agreement.
(20:20):
You need agreement.
You need to write down all that stuff that is actually obligatory in Ukraine from the
Ukrainian point of view of legislation.
But I was really amazed how easy they trusted the company they didn't know.
And this approach actually built up my approach in business.
(20:44):
You understand how much more easy it is to make business in such a transparent way.
And in this case, both parties earning much more and in long term.
So if you're delivering what you promise, then it means that you can proceed further.
You can get good references.
You can enlarge your business in this country as well.
(21:06):
But if you do not, so if you just get your money and disappear or do not deliver what
you have been promising, then okay, you earn once, but that's it.
And I think that your phrase about the trust from Finnish people is also not about trusting
to the person who lied first time.
(21:29):
So you won't trust him the second time.
You're completely correct, and then there is this other thing that if you fail, if you
kind of talk bullshit about your deliveries, if you are not fulfilling your commitment
for one reason or the other, you are nobody.
(21:49):
So it's kind of like you.
And typically also the Finns are also very bad at giving kind of feedback, negative feedback.
So they more or less that they failed, bang, that's it.
So they are also kind of a little bit of short term in that sense that if somebody is failing
(22:11):
or telling some lies during the process, then basically this is not the person or company
to talk with any further and that's it.
So you can also lose the trust also in a simple way or fast way and it will be difficult for
you to understand what happened because the Finnish person is just making the judgment
(22:37):
based on these trust issues, let's say.
So if you are failing with deliveries, you need to really with Finnish clients, you have
to tell in advance that, by the way, we all of a sudden have issues and we have a new
schedule, etc.
So pre-information on these issues is extremely vital with Finnish people, Finnish customers.
(23:00):
Taking into account this transparency and openness, how easy it is to approach potential
clients in Finland in a cold way.
If somebody will write you on LinkedIn as to the CEO of an international company in
Finland, how would you react?
Would you answer and give them what they want or is it difficult to approach in a cold way
(23:26):
or not?
I think it's perfectly okay to approach, but of course you have to have some story and
I'm being approached by multiple Ukrainians even via LinkedIn almost every week.
And I'm always replying, but then what is the unique, what one wants to offer, that's
always sometimes a question mark.
(23:47):
When with LinkedIn you are having kind of the problem that you are just sending mass
emails.
So I think the problem with the cold calls is that they are done in a mass way and then
you kind of approach nobody.
I would say particularly if the Finns who are in need of this trust, you have to really
(24:08):
personalize your message.
Show that you have actually studied the website and show that your service or product could
fit to the company in question.
Of course there are companies who are kind of locally oriented and they may be more or
better approached via networks, but I think we also see that not the whole wisdom of the
(24:30):
world comes from Finland.
We understand that and that's why we are quite open to talk with people from other countries.
I think it's good and particularly in the software side of things, I think Ukraine has
a very good reputation and I would encourage Ukrainian software developers to contact possible
(24:51):
Finnish clients.
I think that would be good, but even there, there is a need to also travel and then as
a second step or third step also meet the clients and have the own references in good
cases.
I have seen cases where I have been approached by different companies, but they are not able
(25:13):
to describe what kind of references they have done for other customers.
So I think the references are very important for me and I think generally in Finland.
People want to see something concrete.
People are not wanting to believe on some talk.
They want to understand what this company has really done.
(25:35):
And you said that even if you can approach online as the first step, but then it is important
to have this personal meeting.
We are talking about after Corona world at the moment and meetings are appreciated at
the moment.
This is a trust-based society.
The face-to-face meeting is the one which is increasing the trust.
(25:56):
The trust building can start via video, but I think later on, an Ukrainian company if
thinking about doing business in Finland, they should have big enough clients that they
can also afford to travel.
How do you build your network in Finland?
Are you going to some special places or meetings, conferences or what is the way of doing that?
(26:22):
Yes, of course in our business there are industry associations which we are very active as well,
but I think the physical meetings with the customers are the key at the customer's premises.
In our case, we are inviting a lot of people to our factories.
We are having a factory towards open houses, etc.
(26:45):
So this is kind of our way of communicating.
The role of exhibitions is very limited in Finland and I would say the world of exhibitions
is starting to be over, I would say, unless there are some key global exhibitions like
some German large exhibitions which everybody within that industry is visiting.
(27:08):
When you are doing negotiations with Finns, is there any point that you should pay attention
to or what is the meeting culture in Finland?
What you should know before?
One thing that some non-Fins are doing is a mistake.
When the Finns are quiet, they can fool you around with the quietness.
(27:29):
The Finns have a very good capability to be quiet for a long period of time and you should
not be irritated or worried or anything like that.
They can be just quiet.
There was one Austrian company and they made a big mistake.
The buyer was just quiet and then the price went down and down and down.
(27:52):
You have to bear the quietness.
There is not always the necessity to say anything.
Also the trick that some buyers are using because they can be quiet and then they can
make the seller very uncomfortable.
So you need to bear with that.
You have to be on time.
Time is really respected so you have to be punctual.
(28:12):
Not maybe as punctual as the Swiss are but you have to be punctual.
It's a part of this trust culture that if you agree then you are there.
I have had customer meetings that we have agreed three weeks ago.
The meeting time, exact time, nobody has communicated anything in between and then we just appear
in that time point on that particular location.
(28:34):
Is it common to have a long small talk before talking about the business or you can go straight
away?
I think a small talk is very short many times because it does not exist.
In a way it's okay to also have a small talk.
It's perfectly okay but typically the Finns are very subject oriented and they go directly
(28:59):
to the business.
But I think it's also good to have a small talk and I think with the teams particularly
I'm missing sometimes that there is no small talk.
People are just not even interested in the other person.
So we should create small talk culture and I'm respecting that many times when somebody
has the time to ask a question.
How are you doing?
Thank you Topi for the conversation.
(29:20):
Maybe the last question to you is what would you advise to Ukrainian exporters in their
global journey or maybe in entering Finland?
Just do it.
I think in many cases people are thinking too much and you need to just start doing.
I think there are no great strategies and great business plans and market studies.
(29:44):
Sometimes you just have to go and see the possible clients and then do it.
With good intentions, with the energy and drive you can achieve a lot of things.
That's how it goes and then you will see whether your product and service is applicable or
not.
That's the best market study that you make a sale or you don't make a sale.
(30:04):
Thank you.
Thank you for being with me at this show.
Thanks a lot and I wish all the best for Ukrainian and for Ukrainian exporters in particular.
Thank you.
Trust me, I can do better.
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