First BIT has been working in the information technology market since 1997. Having started out as an official partner of 1C, today First BIT successfully completes automation of small and medium-sized company facilities, both in Russia and abroad. The Russia-headquartered company has branches in Ukraine, Kazakhstan, Spain, Canada and the United Arab Emirates. First BIT CEO Anton Dolgov shared with Invest Foresight some tips for IT companies entering foreign markets, the most important factors of a startup’s success, and digital transformation of companies and markets.
– A quick glance at the IT industry may give the impression that most successful Russian companies operating abroad such as Kaspersky are in the B2C segment, serving private individuals. First BIT opted for B2B. What are the specifics of international expansion when serving corporate clients?
– In fact, there are many Russian companies and companies of Russian origin that successfully operate in B2B. For example, the navigation and ship traffic control software developer Transas accounts for nearly half of the global market for navigational simulators, and its products are used by the Pentagon. There are many such examples. Kaspersky is a B2B company in many ways. In each business model has its advantages and disadvantages. In my opinion, it is even easier to enter the international market as a B2B supplier. After all, working in the B2C market, you should understand your customers and their mentality especially well. And when you enter another market, the users’ mentality is not always immediately and intuitively clear. In this sense, the B2B model is simpler: commercial customers in different countries and cultures are still very similar.
– How did First BIT start its foreign expansion?
– This story was about our ambitions. One of the company’s key values is “be the best, if anything at all.” We operate in Russia and what is Russia? It is part of a big world that accounts for 1.8% of the global GDP. You can limit yourself to the Russian market. Or you can at least try to expand to other countries. The worst thing is if you never try.
– How does the company decide to enter the market of a specific country?
– In many cases, our first foreign representative offices opened when the opportunity presented itself. Now we have a list of countries that we are aiming for. We are targeting these countries purposefully. For example, there is Malaysia. Our team travelled there to understand the local situation better and we realized that we are not yet ready to work there.
– The income per capita is very low. After all, we are interested in more expensive markets where personal income is higher than here. In Malaysia the income is about the same as here while expenses are higher.
– What other determinant factors are there?
– There are tons of factors. A country’s development rate, political stability, current changes in the country, including legislation. How many large companies are there? Is there any support for small and medium-sized businesses? Which industries are growing right now and how are they overlapping with the industries in which we are strong? These are the factors. It goes without question that before entering a specific country, you need to understand which product you want to offer. It is similar to war. You need to have weapons. Military metaphors are not a good idea, however… If you have no weapons while the others are armed it will not help you.
– From your experience, what advice could you give to startuppers?
– Advice should be given if there is a specific request. Generally speaking, I think that the time to market should be reduced. This concerns everything – from the plan to the launch of the product in the market, from a client’s request to the moment he starts using what he requested for, and from a new employee’s arrival to the company to him reaching the planned indicators. This is the main idea, and that’s what digital transformation is about.
– How is the digital transformation process actually unfolding?
– An important task is to change the company’s business model. We understand that we need different partners at different stages – for changing the business model; for working with business processes; and for creating added value. The latter stage requires startups. In my opinion, one of the key aspects of the fourth industrial revolution is partnership. As regards the business model, we are now actively cooperating with Moscow School of Management Skolkovo, with the Praktikum series of programs and the Praktikum-Shtab program. These guys are doing a good job: their work is about digital tools and change. And we are people of practice, which provides for a good symbiosis.
– You company has been on the market for over 20 years. What is its major achievement?
– Our main achievements are our clients and employees. When we started back in 1997, running a business in Russia was quite a different thing. Now the world has become transparent. We have contributed to this as well: every tenth company in Russia is our client. We would like them to continue working with us and be happy. Another achievement is our employees. We launched the business with three people, while today it employs over 5,000. Our aim is to have people grow, because it is unfortunate if they don’t. We have to educate people. And we have educated many strong workers.
– Robots may soon replace workers.
– There will still be people who build robots. Who come first – robots or people? People of course. This all is ultimately about people.
By Sergei Zhigarev