Needs of Global Start-up companies (Deliverable 2) GlobalStart wp1 Studies Deliverable 2 Needs of Global Start-up Companies Table of contents p
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3. InternationalizationKnow-how/technologyThe basic capabilities in the laser technology were developed already before foundation as a result of extensive research at the University in Tartu, thus main research is done locally, partly with the help of the Tartu University’s staff. Some products are tailored to the specific needs of foreign customers abroad, in this case close cooperation takes place. MarketFrom the foundation of the company until 1991 the company’s major customers were public research institutions in the former Soviet Union. From Estonia’s independence onward the shift to the Western and Estonian markets has occurred. Evgeny Berik played the primary role in establishing contacts with foreign companies. Right after the independence of Estonia, the company started reorienting to western markets. When establishing first contacts with foreign customers, the chief manager faced strong feeling of distrust towards his company. It is likely that many other Eastern European companies dealing with high technologies have had the same experience in early 90s. Later, as the image of Estonia improved, the company faced other problems. Together with the quick growth of Estonian economy, also grew the prices, forcing the company to increase its prices. This however was a problem for European customers, who expect relatively stable prices. Internationalization caused additional costs for the financing of required certification of the products. Physical distance from European technological centres and attractive markets causes problems for the company. Estla gradually becomes oriented on customized service than production. To maintain necessary close relation with client, company need to have regular and personal contacts with its clients. Unfortunately personal contacts are difficult to maintain from Tartu (Estonia). StaffOnly Estonian employees are involved. TTO supportEstla is associate partner of a Tartu Science Park (TTO), the company was founded earlier that the Science Park. The TTO support is limited to the information sharing about industry current trends, publications, and research. The company has permanent contacts/cooperation with several members of TTO. Evaluation of TTO support. University’s TTO – Institute of Technology - has not been very helpful so far. The Institute lacks the employees, who could quickly and skilfully evaluate specific technological projects. The Enterprise Estonia (business support agency) programs had also relatively low value for the company. Enterprise Estonia programs are to a large extent oriented at low-risk and stable-profit projects. These projects are expected to be profitable over the short-term. Thus applying for the support of its high-technology research projects, Estla has difficulties in fulfilling Enterprise Estonia criteria.
References: Company’s homepage. 1. Profile and background 5D Vision is an information technology company that was founded in 1999 as a spin-off from the previously established company called Kuvarnet. The founders were Andres Janno and Kristjan Adojaan, both former employees of Kuvarnet. The initial business idea was to create web pages, offer IT maintenance, and sell computer hardware and software. Activities in creation web pages became later more sophisticated, the company focused on developing advanced properties of web pages, presuming strong potential in the field. The company also enhances its portal to support, maintain, and monitor client activities through the usage of web pages. The major competitive advantage of the company is the strong customisation of the services to the needs of the client. The company was initially funded by owners equity amounted for 40 000 EEK. In 2002 it received grant from Estonian Enterprise of about 100 000 EEK, which was spent on the market research for entering US market with one particular project “eFormular”. For further financing, the bank loans will be considered. The turnover for the year 2004 was approximately 2,8 million EEK. There are two customer segments: a) companies with 10-50 computers, b) companies with very specific software solution needs. Both segments consist of organisations from very diverse fields, including public education and municipal institutions, production companies and other; the market is restricted to the Tartu County. Up to now the company has 15 contracts in IT maintenance: 3 for production companies, 2 for municipality, 1 for Agriculture University, and 9 for private companies. The contracts in different software production projects amount to 30:. Most of the clients were found through the personal contacts of the founders, and through the recommendations of the existing clients. When established, 5D Vision had 2 employees who were the founders. The company did not have an official office until 2002. In 2002 two founders of the company (at that time the only employees) decided to move to Tartu Science Park. The major reason was the favourable price of premises available at the Science Park. Later the company has also benefited from Park’s help in establishing contacts in Estonia. Operating at the Science Park the company started to grow, employing additionally 5 people in 2-year period. Most of new employees were at first the trainees invited from the Tartu Vocational Centre. The two founders of the company are now responsible for general managing, product development, and finding new customers through personal contacts. Both managers have higher education. The person responsible for the product development has a Master degree in science education, and currently is a PhD student at the University of Tartu, Faculty of Biology and Geography. The contacts at the Faculty have been helpful in gaining several clients, for example in the field of biotechnology business. The managing director is expected to obtain Master Degree in Entrepreneurship and Technology Management in 2005. The company has several partners. There are contracts with whole sellers for selling computers to the end-users and also with large Estonian IT company, which produces computers. Another important partner is a company in the UK, which supplies remote control software to 5D Vision. Additionally, there are stable contacts with local Vocational Centre, through which company obtains trainees and future employees.
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