Voxel is a tiny company in a field of telecom giants. Yet even with a staff of barely 50, we have become a multinational service provider thanks to a few key decisions. One of those was to “move east” and set up an office in Asia.
The Background
Voxel is a managed hosting company that delivers high availability Internet applications. We got our start in 1999 providing Linux web hosting in the sleepy town of Troy, NY. We then moved the entire operation to New York. Over the next several years Voxel built out its IP network, moved into private datacenter facilities, opened interconnection points around the U.S. and got a toehold in the European market. But being a 24×7 start up, long nights and working weekends quickly stretched us thin.
We started dreaming of an awesome counterpart to our New York-based team that would work while we slept. But we were scared of what the “outsource” effect might do to our tightly-knit, local group of engineers. The last thing we wanted was a corporate culture where people only knew each other as names in a Global Address Book.
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By 2007, however, we realized we couldn’t provide the level of service we wanted (and our customers demanded) without expanding our operations. With a growing customer base and an increasing international demand, we needed a 24 x 7 x 365 “follow the sun” model not only for our support team, but also for sales and engineering. So we began the search for a new office location in a place that wouldn’t break our culture, or our bank.
The Search
Although we briefly discussed opening an office in Europe, our thoughts immediately turned to Asia. Europe had a large market, but it was spread across a myriad of countries, all with established (and strong) competitors.
In Asia, on the other hand, we found fast-growing economies, somewhat-lazy nationalized telecoms (we love those!) and huge population centers with strong demand for Internet applications.
To us, the choice was clear: If we had to pick one location (and, at the time, we could only afford to pick one), we would look east and head for Asia.
But Where in Asia?
Our goals were simple: We needed a country where we could establish both a network point of presence (PoP) and an office. We needed to cross-subsidize our operations team, network peering and sales activities to make the numbers work.
With only 20 employees at the time, we also prioritized a few other “must haves.” We needed to work and sell in English, wanted to operate under business practices and laws that were similar to those in the U.S., and required access to a strong local talent pool. Unlike most companies, opening an office in Asia was less about the cost/benefit line item and more about gaining the competitive advantages associated with an expanded operation.
In the end, our shortlist of possibilities came down to Singapore, Hong Kong and Japan.
Settling on Lion City
In the end, we finally settled on Singapore. Singapore met all our key requirements and, although not as natural a fit as Hong Kong from an IP network perspective (the Singapore market is slightly less competitive in pricing/flexibility), we felt it was a market that could utilize our services and we had the support of the local government.
Other pluses included the city-state’s top notch infrastructure, a rich local talent pool (with the immigration means to bring in skilled workers from outside of Singapore), a super friendly business environment and a very central location to other major business markets, such as Thailand, China, Australia, and Malaysia.
The Singapore government was instrumental in helping us navigate the complexities of setting up an office halfway around the world and providing access to the information and contacts to help us get started. We found ourselves learning a lot once we finally sat down in Singapore, but the government officials helped us every step of the way and we continue to have a good relationship today.
So What Went Wrong?
Although we’re happy with our choice to open a Singapore office, it wasn’t all smooth sailing. Costs were higher than we wanted — particularly data center, telecom and office space — and there was definitely a lack of local financing for foreign owned subsidiaries.
And, although not related to our Singapore choice specifically, growing a global team was and still is incredibly challenging. Startups like Voxel often operate with lean management, make quick decisions and move rapidly because employees are in tune with the intimacies of the product and the company. But when you start separating people by a 12-hour time difference and thousands of miles, communication and team management become vital.
Even though we knew these would be challenges before we opened the Singapore office, we still underestimated what it would take to solve them. Hint: We rack up lots of miles on Singapore Airlines!
As of Now….
Voxel is thriving in Singapore. Our Singapore office has almost 15 people spanning sales, operations, support, and software engineering, and we’re still hiring. In the past two years we have acquired almost 100 local customers, and 30 percent of our new sales now come out of the Asia-Pacific region.
Best of all, our customers always have access to an awesome, talented and dedicated Voxel engineer whenever they need help, providing around the clock support and turning all our customers into raving fans.
IDA — the Infocomm Development Authority of Singapore — has teamed up with VentureBeat to explore Singapore’s potential as an Asian launchpad in a series of posts that will culminate in a live video webinar. This sponsored post is part of that series. To read the full series and sign up for the webinar, go here. This article was written by Zachary Smith, COO of Voxel.
