Aussie Women in the Global Arena – Our New Report

Our second report for Women in Global Business is out and about. It results from a survey of 400+ Australian businesswomen, many of whom run their own internationally-engaged business.

The report can be downloaded here, or over here.

In summary, we found that there is a large, active group of women-owned businesses operating across varied foreign markets. These are typically young, small-medium-sized enterprises, founded within the past 4-8 years. They have been very quick to embrace global opportunities.

Over two-fifths (42%) internationalised within 12 months of start-up, and 81% within the first 5 years. A third of these organisations (33%) earn more than 50% of their sales revenue internationally. Expanding overseas has been a key success driver for these women-owned businesses. Almost two thirds (62%) report sales growth of more than 10% over the past year. Over a third (35%) report sales growth of more than 40%. These numbers are even higher for organisations that have internationalised in the past five years, with 52% reporting sales growth of more than 40% in the past year. Foreign sales growth of more than 100% was reported by 16% of the women-owned businesses.

Almost a fifth (19%) of the women-owned businesses also reported growth in employment numbers of 10% or more over the past 12 months, with 4% more than doubling their headcount. Again, employment growth was even higher for firms in early stages of internationalisation. Of those who have internationalised within the past 5 years, 31% reported growth in employment numbers of 10% or more over the past 12 months, with 9% more than doubling their headcount.

Australia’s female international owner-operators do not fit the stereotype of young, brash entrepreneurs. Rather, these female success stories are overwhelmingly baby-boomers (62% are 50+ years of age). They are very well-educated (78% hold a bachelor degree or higher). They bring a wealth of life and business experience to their start‐ups. Half (50%) have worked overseas in previous organisations, typically for five or more years, often in the USA, UK, China or Singapore.

Australia’s women-owned businesses have already achieved significant success overseas, with the majority (51%) operating in five or more foreign markets, and a quarter in ten or more. There is a strong appetite for further expansion with 74% indicating they are seeking to expand into new markets, and none intending to scale back their global reach.

The most common first locations for expansion by women-owned organisations were the USA (14%), NZ (12%), UK (9%) and Japan (8%). China has been on the rise in recent years, accounting for 13% of first entries in the past five years. Asia is by far the most common region for first expansion, up from 40% of firms who first went international 5 or more years ago to 47% of firms who internationalised within the past 5 years. The big drops have been in Europe (down from 20% to 11%) and Oceania (20% to 13%).

Later this week I’ll summarise our findings on the Aussie international businesswomen employed in senior strategic roles.

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I guess this makes it a Good Beer Year

Melbourne is about to celebrate Good Beer Week – a festival of beer-related events showcasing the output of Australia’s burgeoning microbrewing industry (plus some folks across the from NZ, the US, Japan etc).

Microbrewing startups are popping up across Australia in startling numbers, introducing a much welcomed diversity of flavours, styles and business models to our decidedly bland duopolistic beer market (I find myself uttering that duop_ word far too often around here).

One considerable barrier to even more entrants (and their subsequent growth) has been some nasty excise (i.e. taxation especially reserved for such vices as alcohol) imposts that impact most severely on small brewers. Here’s a pretty comprehensive explanation of the problems faced (courtesy of RMIT student TV – head to about the 3 min point for the specifics):

Put simply, small brewers pay a huge whack of tax (in the vicinity of 25% of value) at the point of production (indeed, within 7 days of brewing) rather than sale.  This is a huge cashflow constraint on these businesses. The very small brewers have had some minor relief whereby up to $10,000 per annum would be refunded (but only to a production threshold of 30,000 litres).

Last night’s Federal Budget finally saw a move in the right direction, with that refund increased to $30,000 per annum and the eligibility threshold removed. This will make some small difference in terms of the capacity of such craft breweries to expand and achieve something like minimum efficient scale.

You may have noted that the RMIT vid is from 2007.  The battle has been a long one for these guys, and the concessions relatively minor. Last November, a national industry association was finally formed, and perhaps this helped get some movement in Canberra (it’s worth noting this change costs a paltry $2.5m per annum in government revenue).

I’d love to see the Aussie Craft Beer Industry Association become as wide-reaching and influential as their US counterpart (especially because they gather some excellent data on sales growth and relative scale that is sadly missing in Australia). This small win speaks to the import role of lobbying (case in point: small wine-makers in Australia have had much more appealing rebates for years – perhaps it helps to be in rural seats and to have no shortage of owners from the legal community?).

Most importantly, I hope this excise shift fuels even more growth in the diversity (and success) of local brewers… so this Spectapular can be even larger next year.

Want to bargain together?

This story from the New York Times piqued my interest and has got my pondering the international transferability of a potentially profitable business idea.

The brainchild in question utilises social networking and web-based communities to build consumer bargaining power in negotiating cheap deals with retailers.  Now that in itself is not a particularly new idea, as buying clubs have existing before both online and off.

But this time round the business (here it is a mob called Groupon) focuses on using scale (and thus the promise of considerable bump-ups in customer traffic) to win over smaller scale suppliers of products and, increasingly, services.

This coalition building on both sides of the buy-sell equation helps to shift this intermediated relationship from one of virtual bullying (i.e. “If you all back me, I’ll go and squeeze every last penny out that nasty retailer/supplier by playing them off against their hapless competitors”) to almost an altruistic act of matchmaking and local boosterism (“Let’s all hang out and help out that nice new entrepreneur down the road build up some clientele… but at a group discount”).

In a world of Facebooking, Tweeting and web-based micro-entrepreneurs, how long until someone starts knocking on doors around Melbourne promising such love-ins?

(I eagerly await a comment now telling me of such a start-up).

Fastest start-up in history?

I love this tale from Aussie blogger Ben Rowe about setting up a new web-based business. He went from conception to execution in 4 hours at the cost of $25 (not including labour – but it was a Friday evening, so probably free).

He taps into several staples of the web 2.0 zeitgeist – Twitter, t-shirts, outsourcing and tailored e-commerce.

His idea? Printing twitter posts onto t-shirts. Or, in fact, coming up with a neat design for the shirts and getting someone else to print on demand if an order comes through.

There doesn’t seem to have been any orders yet, so it remains to be seen whether this is a viable business (although there haven’t been many expenses yet anyway).

Ben has also noted that it turns out he wasn’t first to market. Will first mover advantage squash him?

Or will the market power of the existing on-line t-shirt giant Threadless see them win out with this little diversification/product-line extension?

What can Ben do to achieve a sufficient point of difference in the market?

The International BS Book Club IV – Brewing up a Business

You may have noted a more than passing interest in beer around here. I do tend to drink a bit of the stuff, but I am also intrigued by the emergence of smaller, craft brewers in recent years.

While in Copenhagen back in 2007, I stumbled across this book at an excellent microbrewery that I frequented on more than one chilly afternoon. I raced through the front half over a couple of visits, and subsequently ordered my own copy on my return to Oz. And finally I got back around to finishing last week.

The book is an autobiographical account from Sam Calagione, founder of one of the US’s most successful small-scale breweries, Dogfish Head. This brewery (motto: off-centered beer for off-centred people) was, at one point, the smallest commercial brewery in America. It has subsequently expanded considerably, with a strong focus on extreme beers (which can mean high alcohol, lots of hops, odd flavours or all of the above). Such a story is certainly worth hearing.

Calagione is a one-time college lit major, and clearly has an inquisitive mind, an ability to digest and apply ideas, and a strong capacity to weave a coherent tale. This book thus becomes much more insightful than the typical business bio one sees on airport bookstore shelves.

I’m not usually one for motivational stories of entrepreneurship, simply because I find such works tend to lean towards mis-attribution of cause and effect (especially through the lens of hindsight e.g. I did this and I think it worked, so you should do the same) and often showcase highly idiosyncratic experiences.

This book falls for few of those traps and instead offers strong analysis and a clear message for budding brewers and niche businesses more generally. Calagione integrates a lot of pretty mainstream strategic management concepts (environmental analysis, the importance of unique resources, value chain decisions, specialisation, diversification) and explains them in a non-academic, non-technical fashion, fleshed out with fascinating (and often outlandish) tales from the brewing coalface.

Calagione has a pretty neat take on his experience, and the lessons for entrepreneurs. He considers what he does alt.commerce (as in alternative, like alt.country music). His business is all about expanding a niche. The firm succeeds by delivering a truthful and resonant product and experience (i.e. customers become fans and advocates). By the end of the book, Dogfish Head is still fielding more orders than they can supply (despite considerable expansion), and has certainly become a cult producer of beer, rum and soap(!), as well as running three restaurant/brewpubs. Offering $20 beers becomes viable!!

I can highly recommend this book to budding entrepreneurs, strategic management professors and beer-nuts (the aficionados, not the snacks). For more on Dogfish Head’s extreme brewing see this excellent article from the New Yorker magazine, and this video interview: