Winners of the ‘International Business of the Year’ at the Sussex Business Awards 2023, co-founders of Hyve, Jon Lucas and Jake Madders, spoke to Platinum about growing a global business and opening new offices in the USA and Germany
Can you share the journey of Hyve’s international expansion and what inspired it?
Jake: In the early days of Hyve, back when there were only a few employees, we dreamt of opening offices in other parts of the world. We always had a global vision for the company, but we did not have the money to do it, and we didn’t want to have investors to answer to, so we decided our growth had to be organic. We always had the USA and Australia in our sights, so we invested heavily in marketing for specific global locations in an attempt to gain business in those regions.
Why the USA and Germany?
Jon: The time for the USA’s Hyve office came when our client portfolio in the region had expanded to the point that we recognised the need for a local team to support these clients. During our frequent trips to the USA, we saw the potential of the country’s large and dynamic market. We felt that we could be an active and important part of it.
Jake: Brexit prompted us to open a European office to reassure clients in the UK and Europe that we can continue to service them seamlessly. As the largest economy in the EU, Germany was a clear choice. We considered several locations, including Frankfurt and Munich, but ultimately chose Berlin as the HQ. The city is similar to Brighton and is also a major IT hub in Europe. Another factor was that our former employee was relocating to Berlin and was happy to lead our operations there.
Tell us about the challenges and lessons you learned from expanding internationally
Jake: We actually started expanding internationally in 2017, with our first office in California. Motivated by our shared “American dream”, Jon and I wanted to replicate the Brighton office on the Pacific Coast. But our dream of settling in California did not come true. Los Angeles proved to be exceptionally costly, and hiring people was challenging. We also didn’t expect the Californian tax rates and the salary range to be so high.
Jon: After our setback in California, we dedicated more time to analysing the country’s business landscape and understanding its nuances. So far, Austin, a new emerging tech hub, has been a great fit for us. The time difference is manageable, the tax situation is favourable, and we are successfully building a community of like-minded people.
Jake: For Germany, the main chall-enge has been the language barrier. When we decided to branch out to the country, we assumed that English is widely used. However, all administrative, legal, and professional content is in German. So now, for our Berlin office, we’ve focused on hiring native speakers or those who are fluent in the language.
Can you share more about the company’s adaptation to new markets?
Jon: We are still adjusting to these two new markets, as each region has unique characteristics. For instance, Germany is quite bureaucratic when it comes to starting a company and hiring employees. The German government is very strict when it comes
to employment laws. We are currently in the process of understanding these crucial elements.
Jake: Although the markets in the UK and USA may appear similar, they have fundamental differences when viewed from the inside. The American market is much bigger and provides more opportunities. Initially, we found the business mentality quite contrasting there and had challenges recruiting people who shared our ethos. Now, we prioritise selecting like-minded members for our US office.
Do you have any advice for companies planning to expand internationally?
Jon: My primary advice is to have an allocated budget, as global growth requires substantial financial resources. A dedicated budget will also give you the confidence to commit to the venture fully.
Jake: Money alone won’t guarantee success. You must also prioritise the research of each market you plan to branch out to. When setting up an office in a new country, it’s crucial to understand the local market and try to operate like a local business. Hiring local people will help with this.
Tell us more about Hyve’s plans for the future
Jake: The USA and Germany are two immediate priorities now. After laying the groundwork in these regions this year, we are prepared to take big actions in 2024. We are also considering expanding into Australia and the APAC region. But this is the long-term plan. Australia has always been a desired destination; however, we need more time to analyse and monitor the market.
Jon: We had always dreamed of expanding Hyve globally, and we turned our dream into reality in 2023 by opening new offices in Austin and Berlin. Despite rapid growth, we also maintained the unique Hyve spirit and company ethos, which was also a great success. We look forward to the opportunities and experiences that 2024 will bring.
www.hyve.com
