Our Famous overseas expansion

It was at the beginning of the year 2014 when our CEO Honza Kuba and Tom Skacel (COO) set for a journey to Boston trying for Granton to expand overseas. Carry on reading to hear them reminisce about this great experience.

T: The whole affair started in Prague in Jecna where our Granton project was being presented at the Czech Invest in order to gain a grant. We’ve noticed already there that we didn’t fit the classis firm category that focuses on the concrete product or service like wood distribution or IT software. We appeared there somehow as consultants and were told that we didn’t fit the box but it made sense to them what we were doing hence we gained a spot in the program.

H: We got the grant at the end and went to Boston (other destinations were LA, Singapore or Israel) - which was sort of a first disappointment, because Boston specifically focuses on research and science but it’s missing our kind of “business hub”.

The goal of the grant was to expand the company’s presence and if possible, establish an oversees branch. The base for creating our business was in Cambridge, precisely we were set in the Cambridge Innovation Centre community.

The first problem there was that it was an open space hub – very noisy, almost impossible to have meaningful meetings. And the second one was that we ended up in an American environment and didn’t know who to contact or what to do. There were two consultants arranged to assist us. They were supposed to guide us and direct us as where to and what not – Christa, seventy-year-old lady and even older seventy-five-year-old Robert Gottlieb. The issue was they didn’t have a clue what kind of company Granton was. They were constantly pushing me to give them clear vision and presentation about our products and services. I was trying to explain myself again and again and they convinced themselves again and again that I was lost cause. (laugh)

On top of that we were a lot smaller company than we are now. When I said that our turnover is one and half million dollars, Christa made a comment that every plumber made that there and that made it little bit clearer for us. I didn’t have a precise product that I wanted to sell; I spoke foreign English although it was ok English, but after a while everybody asked during a small talk whether I was from Russia.

In a meantime I was trying to create connections in Boston. CIC organized some kind of meetings. When Tomas arrived, we were going to these seminars at the MIT premises. There was always a guest speaker who successfully created some start-up, talked about his life story and answered followed up questions. The most common one was:

T+H: WHAT DOES INOVATION MEAN TO YOU? (laugh) – just the simple speechmaking kind.

H: Czech Invest organized for us to make a presentation at the banking IT systems event in New York in May held at the Czech House. So, we actually needed to create some presentation. Consultant Robert arranged some girl who asked for 3,5 thousand dollars for 7 slides which I thought was ridiculous. Due to this disagreement that led to an argument with Robert, the cooperation between us and team Robert + Christa was over. At the end, I gave the overpriced presentation at the event in front of around 100 people. From my point of view, it was a terrible embarrassment.

T: It wasn’t embarrassment. First of all, we were somewhere towards the end of the program so the audience was tired, second of all, we really didn’t fit in the concept of the companies that were presenting there.

H: The outcome and the realization was that if you wanted to do business there, firstly you needed to set up a branch there and sort out the legislation around working visas. And really have the money to do all that even though you might lose it. Until all that happens nobody would even talk to you.

Once all that would be in place, we could realistically start to generate potential leads. The real issue started there, you were in the unknown environment, you weren’t born into the baseball and basketball culture, you didn’t understand precisely the meaning of the Super Bowl until you experienced it. The only possibility is to either have a genius product or connections to someone who would pull you in and say: “These guys might be foreigners, but they are really good.”

T: We repeatedly told them we’ve been working for T-Mobile and they were saying “that’s nice” but that’s in Europe, it doesn’t count here. You need to have some business in America and then somebody would pay some attention to you.

H: Precisely, in their eyes, America means the whole world. So, when you are heading to the American market, you are heading to the entire world’s one. Those start-ups that are there, their goal is to become worldwide. That was another factor that we weren’t prepared for, financially nor mentally. There was also that fact that I had little children at home, wife and a house. I had quite well functioning Granton in Czech Republic which Tomas was helping me to look after and also we had clients and people there….In America we had nothing.

T: I’d like to add to it, that the final wakeup call and the decision that the Europe is closer for us and it made a lot more sense, came after we returned from the States and were slightly depressed. Depressed from the fact everybody seen every idea as “the one-million-dollar idea” and everything was about innovation and to be innovative and everybody were like telling us: “You have a great idea!” But nobody wanted to give us any business.

The last moment of hope came where we got connected with a muscly guy called Glen, who was formal senior manager at Microsoft or Accenture. He was very supportive of our idea, he could see the potential, said he would help us and had lot of contacts. He wanted us to create some presentation with him and afterwards he would introduce us to like six companies in the Silicon Valley. So, it looked like we were heading to America after all. For some reason he started to ask for quick deposit for the presentation and we sent him the money. Presentation, money nor Glen has been seen ever again.

H: The money just disappeared – 8 thousand dollars. We quickly realized how fragile we were in this big world we had no experience in. There were things you see straight away that were out of reach. Firstly, the fact our people can’t work there. Secondly, you are in the environment where people knack on others because of a too hot drink in a cup, so you have to be protected about everything.

T: Your first employees have to be lawyers before you can start anything.

H: Exactly. And those people have such high hourly rates so it is incredibly difficult to find your way in and thirdly the connections you need. That Glen is a proof how you can think you found great contact but in fact it is some douche bag whom you lost money to.

Our verdict was that there was no sense in overcoming all those hurdles but instead focus on our experience and do the business right here and well in the Czech Republic. Maybe even trying to do it in the European Union where those legislative barriers are minimal. After all this realization we’ve started to build Granton Iron and professionalized it here. We decided it was better to build up robust organization first here in the Czech Republic and go from there.

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