Gateway to the Baltic States and points East with Martins Tiknuss | Gateway & Partners #20
More countries off the usual business radar.
Latvia, Lithuania, Estonia…. Most business people don’t know much about them, except they were long ago part of the USSR, and are popular for weekends away in summer months.
In this podcast, Oliver Dowson talks to Martins Tiknuss, CEO of Gateway Partners, based in Riga, Latvia, about business opportunities across all three of the Baltic states, and also in Bulgaria, Romania and less travelled but rapidly emerging countries such as Georgia and Moldova.
Martins and his team advise firms in those countries on how to expand internationally and equally help overseas companies build businesses and take advantages of opportunities in all those countries.
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OLIVER: I’m with Martins Tiknuss of Gateway & Partners from Riga in Latvia. Welcome to the ‘Growing Through International Expansion’ podcast, and welcome to London.
MARTIN: Hello, pleasure to be here.
OLIVER So tell us a little bit about Gateway & Partners and what you’re looking to achieve.
MARTIN: So Gateway is now already a 14 year old business helping companies in the internationalisation and export reach sectors, and we now have offices in seven countries. We have all the three Baltic countries, and then we have Romania, Bulgaria, Moldova and Georgia as existing offices. The two basic product groups where we work with companies are either the market research side of the business, where we search for information, analyse and give it to management for decision making – for example, what’s happening in the market, who is who in the market, is there potential to enter and should the company enter. And then of course we do these things vice versa, when somebody wants to enter countries where we have offices, then we do everything on the ground to understand what’s there.
OLIVER: So you help them get set up and you help them explore the market?
MARTIN: Yes, but mostly from the point of view of understanding what’s the market in their product range, who is already there, who’s the competition? What do they have to deal with in terms of specialities of the market politics or laws or anything else.
OLIVER: Is there a big difference between the countries? I mean, I have visited all those countries, but I think a lot of people here will think that everything from the Baltic states down to Georgia and Armenia are all very similar, but of course they’re not.
MARTIN: So the surprising thing is also for ourselves, as we are exporting our own service as well, this service of helping companies with market research and then partner research. We have offices in Latvia, Estonia and Lithuania. I would think that you know we would clearly understand each market, and it would seem that they are exactly the same, but the three Baltic countries, as close and as small as they are, are each playing a totally different game. In each market there’s different things that are important to sell your product. So, for myself, selling consultancy in Estonia, there is more outlook and outreach towards a kind of a referencing and saving time and saving money for the businesses. In Latvia it’s more having the edge in terms of “I know more than the company does” and they will buy if there is some co-funding, and then in Lithuania, it’s as cheap as one can go – if I’m cheaper than his human resource then I will be considered to do X again. So while it kind of seems that the countries are the same, the Baltic countries, each one has a different outreach in terms of what they value and what they will buy.
OLIVER: That’s really interesting, because I mean it’s only a three hour or less drive between each of the capitals.
MARTIN: Exactly, you have to look at the history where which influences have there been over the course of history, so the countries have been under different rules at different times.
OLIVER: Absolutely, I think one of the things for businesses from here, people from here, it’s the “world less travelled”. So although there are people who go to Latvia, Lithuania, Estonia, get them down to somewhere like Georgia or, then you’re getting very few visitors at all and very few people are actually going to see it. So, of course that’s a completely different world, a completely different race, there’s no real comparison.
MARTIN: Yes and no. When I go to these countries, and especially the Eastern Europe bloc which has been under the Soviet bloc for many years, that’s where there is a certain similarity in certain age groups of people. The reality check is that when you go there you actually see that everything is pretty much happening the same way, people are the same. There are details which are different, so the culture, cultural values and other things which are changing.
OLIVER: So you’re here in London at the moment, what are you hoping to find here? What are you looking for?
MARTIN: So, here I’m looking for two things. I’m looking for partners with whom I can actually offer more of a product, more markets. I have my presence in Europe but I don’t have presence in Africa, I don’t have presence in Asia. And the markets to which I’m expanding my offices to, Ukraine and Russia, demand these directions, so if I want to offer the product, I need to have more stable things on the ground there. So that’s one block what I’m looking for and the other one is of course, I’m looking for consulting partners for whom I can be the execution resource, I can be the execution resource sitting in Riga, sitting in Baltics having a cheaper labour force on the execution side in terms of the hourly rate and covering 47 countries of the world with 15 languages which I have in the office.
OLIVER: OK, so if I at International Corporate Creations had clients here who are interested in your region, you and your team can actually help, actually do the necessary research and find, sort things out on the ground for them?
MARTIN: Exactly, and that’s where you have your company. You have your ability for a certain product range and then with this type of cooperation you can offer a bigger range. At the moment there is no interest to actually come into the UK market for Gateway as a company and have a presence. I would rather look for partnerships with already established consulting entities in this market then offer extra which they haven’t been able to offer before.
OLIVER: Sure. In terms of companies from the countries where you’re already active, looking abroad, looking abroad looking to maybe export or to set up operations in other countries. What are the ones with the most interest, the most outward vision? What type of companies have an outward vision for that?
MARTIN: In Eastern Europe, of course it’s a very production-oriented area of the world. We have a very strong food industry, which is very innovative in terms of the outputs which they can produce and in terms of the qualities that they can actually achieve, so a very effective price quality ratio. There’s also furniture, metalworking construction materials and printing industries. I would say the driver now is in the ICT industry with different technological elements, both software and hardware, and these companies are very active in going out and trying to offer services to the world. The pharmacy industry is also a strong player in all of these Eastern European blocks, so these are the ones that would most benefit.
OLIVER: There is certainly a lot of skills and opportunity for businesses that want to work with software development and I.T. there because I was up in all the three Baltic countries and for that matter Belarus as well last year, looking for a client for opportunities for development there and I was very impressed by the range of skills available and the amount of personnel available.
MARTIN: Yes, but it’s now becoming quite a severe problem in terms of the human resource element. We don’t have enough I.T. people
OLIVER: You can’t breed specific I.T. people.
MARTIN: Yes, and then what we notice in the latest period is that the I.T. companies are starting to not just offer development resource, they’re actually starting to focus on their product, developing a product and then trying to push it in the market. This is definitely something that’s growing and somewhere also your businesses can come and play a big role, because those products need active direct sales, not partnership sales or distributor sales, they need actually the content they need to be visible all across the world. So these industries are actually becoming a potential client also for what you do.
OLIVER: Great, that’s really interesting Martin. Thank you so much for joining us on the ‘Growing Through International Expansion’ podcast and good luck with your meetings here in London.
MARTIN: Thank you.
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