Tips For Taking Your Startup Talents To London, Or L.A.

It's Tech Week in Los Angeles, every day spawning dozens of events, panels, tours and much else (including the 10th anniversary of Westside Digital Mix tonight in Santa Monica). There are nuggets of wisdom to be gleaned from many of the gatherings, a chance to check out companies' offices, and an even chance to connect in person with investors, partners, entrepreneurs who can bolster your network across a notoriously vast and diffuse city.

Among the more intriguing events Tuesday was a gathering at the Santa Monica headquarters of normally secretive Snap.com, co-sponsored by London & Partners, the economic and tourism development wing of the UK's capital city. The focus: how to take your company from Los Angeles to London and beyond, or vice versa.

The panel of four women featured a venture capitalist, tech innovation executive in the world's biggest music label, and the North American head of an international events company, all moderated by a managing director of a UK-based accountancy firm.

Taking a company from Los Angeles to London, or into any new market, entails a lot more than just hiring a few people, renting an office, and signing some forms. To begin with, you better have your business and business model locked down, said Shamin Walsh, managing director of BAM Ventures.

"You don't want to build on a leaky faucet," Walsh said. "It's a sign you're not prepared if you haven't nailed your business model. Sometimes, expansion is a way to mask those problems."

Cristina Pimintel, director of new digital business & innovation at Universal Music Group, said her office is working constantly with the label's local operations in 60 countries to review would-be tech partners. When companies approach UMG with tech and innovation ideas, they need to be smart about the markets their pursuing.

Pimentel, who also announced she's been running a startup incubator within UMG on stealth mode the past couple of years, said she routinely consults with local operations to understand how a tech idea might roll out in that market, and benefit the label and its artists.

"If they're looking to go into a certain market, we'll take them to that market, then get feedback from our local office," Pimentel said. "We rely on those internal resources. They've seen what works, and are able to translate it. Companies are able to experiment based on what they were already doing."

RSM UK Managing Director Sam Day,. the moderator, said she's noticed more tech companies are beginning international expansions far sooner than in the past, where they might wait until, say, a Series D fundraising round.

"What is driving (a company's expansion decision)?" Day said. "Are there tax incentives, grants? If you're doing products, (success) completely depends on what you're selling. Sometimes (a company) goes into 10 countries at once, and it's completely mad."

Local differences really matter too, even between seemingly similar cities such as London and Los Angeles, with a shared language, diverse populations, strong technology sector, and gateway status for their respective continents, Walsh said.

And those differences are "really nuanced," Walsh said. "We have a Canadian (portfolio) company that is perpetually befuddled by nuances of the U.S. market." Those challenges aren't any better when you head to a different hemisphere.

OnePlan North America Operations Director Rachel Klasey, who formerly worked with the Los Angeles Clippers in building their just-opened stadium, said the companies she deals must learn new tax and regulatory regimes when they head to a new country, a learning curve that can be steep.

But also, Klasey said, "people have an opinion about how they want to use your product," which may be different from how it was used in your previous markets. You have to be able to adapt to a new group of consumers and their needs.

If an American company is heading to the continent, Day warned, you better just accept that many Continental workers in countries such as France and Italy won't be around for the month of August, period. They're on vacation, and they're not taking calls. Or texts. Or Slack messages.

"Just ask your August questions in July," Day said. "That is the culture. You're not going to change it; just embrace it."

It's worth asking one simple question when pondering whether to expand internationally, Walsh said.

"It's almost like, 'Why?'" Walsh said. "Are you just expanding to expand? How much time did you spend researching that market (versus) understanding why you want to expand?"

When companies tell Walsh they're looking to expand, she said she wants to see both the demand for company products and the efficiency with which the company is run.

Are they, for instance, spending on national or even international marketing for a product that's only available regionally, or mostly appeals to a specific demographic slice?

"Is there some kind of organic growth?" Walsh asked. "You have all these resources to spread yourself thin, but you don't really have much depth anywhere."

Most of all, the panel said, get out there and meet people.

"Warm intros" are so much more powerful and productive than cold calls. Connecting with potential investors, employees, partners, and others works a lot better when you're not relying on an algorithm to open a door. Which means there's still going to be reason for more Tech Week events for years to come.