The Beauty Parade: Finding a Business Partner Abroad
Do first impressions lie? On paper, the company looked impressive. Out of the six potential partners that we’d shortlisted, and that I’d travelled to Mumbai to meet, this one looked the best on paper. Rajesh, the young CEO who came to meet me at my hotel looked the part too – immaculately dressed, well spoken, and clearly well organised, as he laid out paperwork and photos on the table in front of us.
All was well until I said “So where’s your office? Let’s go there”.
This was about 20 years ago. I was actually searching for software talent, aiming to find an established team of well qualified developers that we could work with to deliver a large project that we’d conceived and specified in some detail. Previous experience had taught me that, whilst first impressions of course count, second and third ones are more important. The persuasive sales pitch was only good enough to get to the next step – I needed to see the team in action with my own eyes. The CEO seemed reluctant, making a range of weak excuses, but I prevailed.
His driver was waiting outside, in what was a relatively posh car at the time. I’d been to Mumbai often, so wasn’t fazed by the surroundings or the traffic. It was quite normal to get stopped in traffic by the Dharavi slum (still the biggest in Asia). I was, though, rather surprised to be told that this was our destination. These days tourists are taken for walks through the slum, but not then, so it was my first true experience. I was more or less pulled by the hand through a maze of alleyways and finally through an unmarked, unremarkable door and up a rickety staircase. I found myself in a large, dusty and cobwebbed attic, with row after row of tables with ancient sewing machines, the only light coming through some sort of rooflights.
It would have made a great set for a horror movie – and we weren’t that far from Bollywood studios – but it definitely didn’t cut it as a software development office. Rajesh, though, was undeterred. He assured me that he’d been bequeathed this space by an uncle and was going to redevelop it into what he said would be the most modern software office in Mumbai – just as soon as he had a client. The fact that there was no mains electricity – and it looked to me like it would have to be stolen from a supply hundreds of metres away – didn’t put him off at all. But it did me!
And those photos? Ah, they were of another office, one that he was going to model his new one on.
So on to the next beauty parade contestant. Again, looked good on paper. This time, not even a raised eyebrow about going to see the office – that was all part of the plan. Two brothers, who’d introduced themselves as the owners of the business, whisked me off to an impressively modern office building in Nariman Point, probably the most upmarket area of Mumbai at the time. In fact, I remember my first reaction as “how much is this going to cost me!”. The reception desk in front of the lift exit had a sign above it for an insurance company. “This is because we do a lot of work for that company”, the brothers told me. “Don’t worry, we will put another sign with your name when we sign the contract”. Frankly, I cared little for signage – I just wanted the project completed – but I let it go. The man on reception clearly knew the brothers, but definitely didn’t kow-tow to them as if they were the bosses, as I’d have expected in that environment.
At least this was a real office. A dozen or more desks, all with computers and people working at them. I was moved quickly to a meeting room off the side, but not before it I’d got a glance at the desks and noticed that everyone seemed to have a stack of handwritten forms in front of them – definitely not what I’d have expected for software developers.
“Oh, these are our data entry clerks”, said one brother. “The developers are in another room”.
“Can we go there?”, I asked. “No, I am sorry, it is a secure area, you will understand”.
“Oh. Where is it, down the corridor?”
“No, it’s in another building”.
“What projects do they have that are so secure that I cannot see them at work?”.
They now got flustered, but it wouldn’t have mattered what they had answered. I’d already concluded that this was another “wishful thinking” business. Looking around the meeting room we were in, I spotted a small stack of literature about insurance and the company name I’d seen above the reception desk embossed on a diary. They’d clearly borrowed the office.
Well, that was over 20 years ago now. Do things change?
Several years later, in 2007, I went in search of a partner for a customer service office in Shanghai, China. Around that time, many clients of ours, big multinationals, were very excited about the opportunities in China and were busy creating joint ventures and opening factories and offices there. It was the other side of the world for us, we couldn’t easily cope with the time difference and we didn’t speak Chinese – so the idea was to find a partner who could handle customer queries for us, do translations, and things like that.
I’d only been to China once before, as a tourist, and that had been a least a decade earlier. The change and pace of modernisation was amazing, at least on the surface. I quickly found out that, backstage, smaller businesses had a lot of catching up to do.
And, while the culture might be a world away from that of India, I met the same situation of aspirational businesses and borrowed offices. Coming from the West, one’s initial assumptions still are that everything there is government controlled. Far from it – there are no end of small businesses, and in many cases like the ones I described before, not so much startups as those aspiring to start up at your expense.
However, there was one potential partner that looked different, simply because they were clearly large and established. They also already handled customer service for several big US companies. It even went by a good Chinese name, “Great Wall”. They had a sales representative in New York who had handled my initial inquiry. He wanted to negotiate the service there and then, and seemed very surprised when I said I would go to Shanghai and look for myself. In fact, he kept telling me that it was completely unnecessary to travel, and he could handle everything.
Great Wall had real offices with its name plastered on every wall. I and my colleague were walked through a large open plan office full of industrious young people tapping away at computers. There were charts on the walls, and someone studiously updating stats on a whiteboard. Surely this one was the real deal?
It was real all right. But it was also downright scary.
We were taken into a meeting room which was bare apart from a long table with at least 10 chairs on each side, and motioned to sit in the middle on one side. We sat in silence, looking at each other for a while – until a line of 6 men, all in matching and rather shabby black suits, filed in, followed by a fierce-looking, elderly, short and rotund lady, who sat in the middle, directly facing me. It felt like something out of Kafka.
The spokesman – who turned out to be the only one who spoke English – introduced the team. The lady, we learnt, was the boss. He made great pains to insist that she supervised everyone and everything. Sitting opposite her, I was feeling pretty supervised myself. Everything I said had to be translated and relayed to the boss, and everything she said was translated back. Nobody else spoke a word or moved a muscle. Intransigence personified, six times over.
I don’t know how satisfied their US customers or the Chinese staff of those JVs were with the customer service they got from Great Wall, and they may well have been – and still be – very efficient and effective; I just knew that there was no way we could work with them, and I couldn’t wait to get out. The English-speaking executive walked me out, and told me that he and his boss had great respect for me because of my age. I didn’t feel old then. If I went back now, they’d probably think I was Methusalah.
Fake businesses and offices haven’t gone away. In some ways, the scam has just got more sophisticated by taking advantage of more modern business developments.
Recently I was in Dubai making business arrangements for a client. Amongst other things, he needed an accountant. I’d had good experience with a business that I had worked with there before, so asked for a recommendation. The said accountant called within minutes, and was eager to meet – at my hotel. I looked up his website, and found him on LinkedIn, as one does, and he certainly seemed to have respectable credentials. Sticking to my usual policy, I refused a meeting at the hotel, and asked to come to his office instead. A lot of hesitation ensued… but of course, I could come to the office, but it would be difficult for the next two days, wouldn’t it be better to meet at the hotel today instead? No, I said, let’s meet at your office in a few days’ time.
When I got the address, I checked it on Google Maps, which is always a good idea these days – and sure enough, it was serviced offices. Well, lots of businesses use those, so that’s not necessarily a problem. The office he showed me into had 5 desks, four of them occupied by others, apparently staff who were working. My suspicions were raised further, not only because they were all using laptops, but because there was no paper on the desks and no filing cabinets. Now, I’m a great believer in paper free offices, but have you ever seen an accountant’s office without paper?
These days, it’s easier than ever to dissimulate having a successful business. Websites can be created easily and cheaply. Serviced offices can be rented by the hour. Out of country and out of area phone numbers can be got, using Skype, for a few pounds or dollars.
So, if you’re serious about doing business with someone, particularly in another country where you’re not going to have day-to-day oversight, you need to check them out in person. As the Americans say, “lift the hood and kick the tyres”. Don’t rely on the word of a local representative in your own country. Don’t accept meetings at hotels. Don’t believe what you see on a website until you see it for yourself.
Not all that glitters is gold.
To discuss how this is relevant to businesses planning or active in international expansion, contact the author Oliver Dowson [email protected]