Growing Business by Going Global

*All figures are estimates, in U.S. dollars.

Hottest U.S. Exports
In 1992 the United States sold $7.5 billion worth of goods to China, up 19% from 1991.

Aircraft and parts:

Imports from the U.S., 1992 $2.1 billion

Projected expenditures, 1993-2013 $40 billion

Computers & power-generation equipment:

Imports from the U.S., 1992 $1.2 billion

Projected expenditures

for computers, 1993-1996 $4.3 billion

for power generation, 1993-2018 $40 billion

to $100 billion

Telecommunications and electric machinery:

Imports from the U.S., 1992 $464 million

Projected expenditures, 1993-1998 $29.7 billion

*Source: Statistics from the U.S.-China Business Council, based on data from the U.S. and Foreign Commercial Ser-vice; China's State Statistical Bureau and Ministry of Foreign Economic Relations and Trade; and the Aerospace Industries Association

NOT SO INNOCENT ABROAD

By Robert A. Mamis

With the homes they'd pledged for seed capital on the line and the seed running thin, Sureyya "Ray" Ciliv and Robin Hillyard, engineer-founders of a software start-up outside Boston, planned to test a business basic: Sales generate cash. However, another business basic intervened: a stock-market crash. Infant NovaSoft Systems Inc. (nÉe NovaCad) was down to its last $250 when the panic of 1987 hit, reducing its chances of attracting risk capital to nil.

CEO Ciliv and chief technical officer Hillyard didn't dare begin marketing from scratch here without resources. So they decided to begin marketing from scratch overseas without resources. Novice owners of a nearly broke company, they nonetheless had an asset nobody abroad did -- the latest technology in computer-based engineering-document-management systems. They would prove their product could sell and then ride that momentum back to the United States.

"When you market in the United States," Ciliv notes, "you have to advertise and do PR and attend large trade shows -- all of which costs money. Then you have to build a sales organization, but salespeople don't become 100% productive for maybe nine months, and that's also a cost. The usual routine is to make an investment, then wait for a return. But if you don't have the cash to make that investment, obviously, you don't have a choice." Accordingly, he invested what remained in NovaSoft's treasury in a ticket to Europe.

The strategy called for the establishment of distributorship agreements with, Ciliv says, "solid, well-staffed companies that already had sales forces and support organizations in place and were dealing with the kind of companies that would be our target customers." Ciliv began in Rome. "Italians would be open-minded and spontaneous," the Turkish-born Ciliv had theorized.

His instincts were right. In July 1988, hardly two months after NovaSoft had begun operations, he closed a deal with Italcad, a large Italian distributor of computer-aided-design and computer-aided-manufacturing equipment. It wasn't a hard sell, Ciliv says. The company even gave him a quick $100,000 up front. "It was supplying other products and could anticipate the appeal of ours within its customer base. Any kind of agreement -- even a royalty advance -- represented little risk to it; essentially, it had already done the market research." Within weeks, Italcad had placed NovaSoft systems with Fiat.

Buoyed by that debut, Ciliv convinced a big-name computer manufacturer at a large trade exhibition that running his software would show off the manufacturer's hardware to good advantage. While Ciliv was thus presenting a NovaSoft program at a Hewlett-Packard booth in Germany, international conglomerate Siemens, based in Munich, happened by. The company arranged to send a representative to NovaSoft's U.S. facilities to evaluate the technology. "That," Ciliv recalls, "was unnerving. We were just a handful of people working out of a dinky office in the back of a warehouse. I was afraid the guy would turn back, but he came in and announced, 'I don't care about your size -- extraordinary technology comes out of ordinary offices.'"

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