Net Profits Radio on the Talk America Radio Network
May 26, 2001
By Jim Wishner
Link to Talk America Radio Network
Jim Wishner: This is Net Profits Radio on the Talk America Radio Network. I'm Jim Wishner. [Today we're discussing] a virtual trade mission, with representatives from more than 50 companies and government agencies, who are participating through the end of this month to link software firms in India with those in the United States over the Internet. The mission began on April 16th and ends this coming Thursday.
In the United States, the mission is organized by Tradebuilders. You can find out more at www.tradebuilders.com. The mission is sponsored by Thelen Reid & Priest, Ernst & Young's India Business Group, Cvent, Caucus Systems, Challo, and DevelopmentEx.com Inc. [In India, organizers include the Association of Women Entrepreneurs of Karnataka, the Electronics and Computer Software Promotion Council under the Indian Government's Ministry of IT, and indiamarkets.com. Sponsors include the Karnataka Directorate of Industries and Commerce, and the Small Industries Development Bank of India.]
Elizabeth Vazquez is the President of Tradebuilders and she is on the line from Washington to talk about this unique effort. Thank you for joining us. First, could you please tell us, what is a virtual trade mission?
Elizabeth Vazquez: Hi. Thank you. It's a pleasure. A virtual trade mission replicates the process of a traditional trade mission where you have groups of companies in a similar industry going over to another country to meet businesses to discuss business opportunities. So we take that process that's been going on for many, many years and we use the Internet as a platform for them to do that same kind of networking inside what we describe as a sophisticated chat room, where you have facilitators in the background to make sure that those business relationships are developed.
Jim Wishner: I think we're all familiar with what a videoconference is, although they are still relatively rare, where you have a camera…on somebody and there are monitors around the room, and everybody can see each other even though they may be thousands of miles away. How does what you are doing differ…from that kind of stereotypical videoconference?
Elizabeth Vazquez: You are exactly right. A videoconference does connect people using a camera on both ends, and you can have several locations with cameras. We prefer to do videoconferencing on the Internet so that people can sit in front of their computers, looking at their cameras, and seeing the people they are talking with on their computer monitors. Unfortunately, right now in India, it is still illegal to conduct videoconferencing between India and places like the United States. So for this particular pilot virtual trade mission, we had to go to a more traditional videoconference environment where the participating companies, organizers, and associations went to a site in Bangalore and a site in Washington, DC. Then we linked them not over the Internet, but using the traditional videoconference telephone lines. That lasted for about an hour and a half, and it was a fantastic opportunity for the participants to put a face on the people they had been networking with in cyberspace for the past few weeks.
Jim Wishner: Is it still going on now over the Memorial Day weekend?
Elizabeth Vazquez: It is…The participants have requested that this pilot last until the end of the month. Originally it was going to end at the videoconference. But there were many links, connects, that were made through the videoconference and they wanted to be able to use the online conferencing platform to continue that networking and dialogue.
Jim Wishner: Tell us about Tradebuilders and what the company is and how it is using the Internet in the goal of International trade and communications.
Elizabeth Vazquez: Tradebuilders is a company that was founded with my business partner, Virginia Littlejohn, at the end of 1999 to help address some of the needs in the trade market space. There are a lot of companies, especially small and mid-size businesses, that have set up their websites without a deep understanding of the implications of a request that comes from, let's say Finland, for a good or service. They get the request, and they try to fulfill that request, without really realizing some of the implications of the trade they are involved with, whether it is taxes or tariff issues. So we provide a platform for businesses that want to take advantage of this whole globalization process and e-commerce methods, to put them online in a space that is focused on relationship development, and not just business leads that they then have to follow-up with on their own. It's like a protected environment where businesses in the same industry, let's say 50 from one country and 50 from another, are able to find each other, but they are also given the resources they need to understand the trade they are participating in.
Jim Wishner: I think a good way to approach this would be to look at a before and after model. I'm going to ask you why we need, or what the advantages of virtual trade missions, are. But first, let's talk about it [trade] as it is now done, or how it has been done in the past. Let's say I have an accounting software program, and I think it would work for government payroll, and the government of Panama is interested. Without virtual trade missions, how would I proceed to present this program to Panama and try to make the sale.
Elizabeth Vazquez: That's actually a good example because let's say that is your product, and you are based in India, and you want to sell that product in Panama. You have a few different options in terms of traditional ways of selling that product. You could travel over to Panama and pay the $3,000 or $4,000 or $5,000 it would take to make that trip. You would spend approximately a week to two weeks away from your office. And you would hopefully be able to introduce yourself to the right person within that government organization, or the right team who are the decision makers, so that you minimize the number of trips you will have to take to return to close those deals. Or, you could have stayed in India, but found a representative in Panama. This is a real challenge because oftentimes this is the way trade is done. It's very opportunistic. Someone has a cousin, or a friend, or a potential connection who may be able to get them to the right trade partner or potential client in the other country. But that can be a very time consuming and uncertain way to build business relationships. Another option would be to try to find the right business broker in that country who is in the business of finding those kinds of clients. But that is the same kind of challenge as finding the client yourself. You have to find the right broker. The person you trust, whose rates are reasonable, and who can deliver on the service they are providing.
Jim Wishner: It is tough. And there are a lot of cultural things involved too, I believe.
Elizabeth Vazquez: Absolutely. Language is a major issue. You can be in front of the best client, where they have a need for your product or service. But that does not necessarily mean that you are going to use the right kind of cultural opening statements, talking through the deal, and certainly closing it. Sometimes it is in the details, whether or not those deals get done. And in a lot of cultures, relationships are everything. If they do not trust you, if you do not have the right references, they simply will not do business with you. Or if they do, it will be for a very simple contract oftentimes, so that you can build up that relationship to a much larger contract. So it is something that requires a real commitment to that particular market segment.
Jim Wishner: We are coming up on a break, and I want to give you some time to explain what the advantages of your system are, but let me just pick up on one quick point on the cultural differences there. Are you saying that the Internet in some way diminishes those cultural differences and language barriers and some of the, for lack of a better term, human things that can foul up negotiations?
Elizabeth Vazquez: I think you are exactly right. But, it depends on the type of Internet service you are talking about. The Internet in and of itself does not make things more humanistic, in fact it can do the exact opposite. I think the platform that we offer is uniquely designed to develop relationships and trust and cultural understanding.
Jim Wishner: Okay Elizabeth, let's pick up on that point when we come back…
Jim Wishner: This is Net Profits Radio on the Talk America Radio Network. I'm Jim Wishner. Elizabeth Vazquez is with us. She is the President of Tradebuilders, which is a Washington, DC, based company which arranges virtual trade mission to allow business people to have contacts and opportunities over the Internet. There is one going on right now between the United States and India. It's a software trade mission. You will find out a little bit more about that coming up. But Elizabeth, first, in the last segment I asked you …to tell us how trade missions are currently done without the Internet. Now could you talk us through the process of how it is done on the Internet? The example I gave you is that I am an American company and I have a software program I think would work very well in terms of bookkeeping and accounting on the government level, and I'm interested in making some contacts in Panama. How would I do it now through Tradebuilders?
Elizabeth Vazquez: Let's say we have a virtual trade mission in the next month and it is focused on the software industry in India and Panama. A traditional trade mission would probably focus more on larger corporations that offer products, and not necessarily software development, for example, by a smaller size firm. So I think a virtual trade mission helps to even the playing field, because we can have many businesses of all sizes participating in this virtual trade mission. And instead of the ability to showcase just a product with a photo, business services can really show off their abilities inside a virtual trade mission, where the focus is on networking and on relationship building. It provides a platform for them to sell themselves to the other participants. A traditional trade mission can cost anywhere from $2,500 to $15,000 depending on the length of the mission and the location. Whereas a virtual trade mission [is much less]. This current pilot is only $100, because of development of the platform and [testing] the quality of the process. So it is basically the cost of a long distance phone call. Clearly in the future, the trade missions will be slightly more expensive.
Jim Wishner: Do companies see traditional trade mission as sort of a necessary evil, a cost of doing business?
Elizabeth Vazquez: …Virtual trade missions in no way should be considered something that replaces traditional trade missions or face-to-face events. [They provide] a very valuable and important networking and business development opportunity. Where a virtual trade mission on the front end can help businesses is to identify solid business opportunities, so that when they do go over to that country they already have, let's say, a letter of intent, or memorandum of understanding, of what they want to do with those two or three or four businesses that they have already identified relationships with, or developed relationships with. So that when they are there, they can actually close the deal. They can do their due diligence, see the firms that they are talking with, or the plants, do some inspections, and feel more comfortable with doing larger deals.
Jim Wishner: That is interesting. You do not see this as something supplanting the traditional face-to-face?
Elizabeth Vazquez: Not at all.
Jim Wishner: Augmenting it.
Elizabeth Vazquez: Exactly. Even if it is on the backend. Let's say there is a traditional trade mission from one country over to another country, into Panama, and they have met each other for the first time. One of the challenges they face is the follow-up once they leave the country and go back home, and they have been away for a week or two weeks. They have to deal with the business that has piled up [back home] since they left, and the urgent issues they have to deal with. So a lot of relationships that are developed through those traditional trade events, whether it's a trade show or some type of industry conference, the follow-up is really critical in terms of success rates for helping to justify the time and cost of that trip. So if they can use a virtual trade mission on the back end to continue developing those relationships and closing those business deals, then…it is a very valuable service and opportunity for those businesses.
Jim Wishner: Alright, Elizabeth, will you stay with us for at least one more segment?
Elizabeth Vazquez: Yes.
Jim Wishner: This is Net Profits Radio on the Talk America Radio Network. I'm Jim Wishner, back with Elizabeth Vazquez who is the President of Tradebuilders, which arranges virtual trade missions. One is underway right now between software companies in the United States and India. We will find out more about that in just a bit. Elizabeth, talk about the human aspect of this now. When you make a deal with somebody-whether it's just on a one-to-one basis or on a government-to-government basis-don't personality and personal contact play if not the major role, at least a major role? I think I could site you some instances in diplomacy where [that was true]. And aren't you going to lose this when you do this on the Internet?
Elizabeth Vazquez: I think you are absolutely right because at the end of the day, trade is about relationships. It's about people trusting other people to deliver on the promises they make. And so people have to find a way to use the latest technologies, whether it is on the Internet or off the Internet, to help identify those business opportunities in a more cost effective, time effective, way. Once they have identified those business opportunities, then oftentimes the important [thing] in terms of actually closing those deals is meeting that person. So what we try to do is take out some of that time and financial resource that it often requires to find those business opportunities, and instead…direct them to the right company that is looking for exactly that product or service, or…joint venture opportunity.
Jim Wishner: Here is something that came to mind earlier when you were talking about some of the cultural differences, and how you are using the Internet in an interesting 21st Century way, to overcome some of those differences, and that has to do with bribery. We know in many parts of the world, bribery is a part of doing business, it's a part of the culture, the business culture, whether it be getting to see the right person or making a deal. It has to do with the salary scales of some of the public servants, in some countries. And I am not here to pass judgment on any other country's way of doing business. But this bypasses, does it not, that whole cultural ethos in other countries? I guess a number of questions come out of that. Number one, is there some resistance to this? And number two, is that a part of this at all?
Elizabeth Vazquez: Well, it's interesting. We strive to always build really unique public-private sector partnerships and alliances through these virtual trade missions. So for this particular virtual trade mission, as you mentioned, we are working with several different corporations and governments. In India, we are working with governments at the national level, and also at the local and state level, who are involved in guiding the participants on how to develop these business relationships without going through some of those middle steps. It can cut right through that. We also work with business associations that we have been working with for years, that we trust, and these associations know their members. So it helps us to qualify the participants so that we know when they get together to do business together, they have already had a level of qualification and background check. Once those relationships are developed, I think you are exactly right, it does help to cut out some of the extra costs that you were not aware of in that market, if you did not have the opportunity to develop relationships and know their network, the business or company that you want to do business with. This really helps to simplify that process and take out some of those, as you say, unanticipated costs.
Jim Wishner: Elizabeth, when we come back, I want to find out a little bit about Tradebuilders, how the company got its start, why it decided to use the Internet. And also I'd like an update from you, if we could, on that…virtual mission, that is underway right now...between the United States and India...Can you tell us what it's all about?
Elizabeth Vazquez: This particular virtual trade mission is an opportunity for businesses, mostly software developers in India, to find business opportunities with companies in the U.S. Some of them in the U.S. are also software developers who are looking for joint venture opportunities, but we also have firms here in the U.S. that provide market entry services, that provide legal services, and accounting services-all of this being very complementary for buy-sell relationships, joint ventures, and even some potential investors.
Jim Wishner: First of all, can I assume since India does not observe Memorial Day, is the conference still going on at this time?
Elizabeth Vazquez: It is. And that is really the beauty of using an online conferencing software platform, where people are able to go into this networking space, and use the help of facilitators, to identify these business opportunities and develop these company relationships. But it doesn't have to be real time, and that is really important when we talk about international trade and contact opportunities because of time zone issues. In the past, people had to really go out of their way to set up…conference calls for very specific times, not always ideal times, sometimes very early in the morning, sometimes very late at night. Whereas, this process allows these companies to go into this networking space to connect at times that are convenient for their schedules, and then the next day the participants in the other country can see what was said inside that space, and then comment.
Jim Wishner: Do you have any way of knowing, at this point on the Memorial Day weekend, if any business arrangements reached in the virtual trade mission that is going on right now?
Elizabeth Vazquez: As a matter a fact, there are already businesses that are doing deals together. Some of them are discussing the purchase of software services…Right now...a U.S. company is talking with an Indian company about building some office space in India. There are some Indian companies that are working with local market access companies in the U.S. about finding representation. We have some joint ventures happening for bidding on contracts. We have some legal services that have been requested, in both countries, for assistance in the other respective countries. So it is very exciting.
Jim Wishner: Let me ask you a chauvinistic questions? I guess, chauvinistic from the point of view of the United States. We tend to maybe believe in our own press clippings too much. But, is it a two-way relationship here? We presume that much of the software that is produced, is produced in the United States and used around the world. Whether it be Windows software or Office software, or any of them. Is it a two-way street? Does India have software products of interest to U.S. companies?
Elizabeth Vazquez: As a matter a fact, India, and specifically cities like Bangalore, are considered like our Silicon Valley. They have some of the most sophisticated software development firms in the world. And they are really some of the global market leaders on developing software products, but they are moving up the food chain, from basic software development services, into the development of products and also systems integration. And so it's an amazing and dynamic market that has explosive growth right now…U.S. companies that are having to cut back on their spending and on their new hires can really benefit from the opportunity to outsource some of their technology requirements, whether it be call centers, or database management and development, to places like India to save a lot of resource [costs] back at home.
Jim Wishner: Tell us about Tradebuilders. You mentioned that you have a partner, and your firm started in 1999. Where did the idea to do something like this come from-and this is a pretty big deal, to do something like this on the Internet-and how did you get it to work?
Elizabeth Vazquez: Years ago, my business partner, Virginia Littlejohn, had thought of the concept of doing a virtual trade mission, but this is when people where still using very unsophisticated bulletin boards, postings, for business opportunities. And we had a request from one of our clients, IBM, which at the time had been contacted by a business in Malaysia that was looking for…business opportunities in new markets. But clearly IBM was not in the business of doing business brokering, and so as their consultants they asked us to come up with a creative way to address this challenge. So we developed this concept of a virtual trade mission, by finding a conferencing software platform that people could access on the Internet, without having to have the software, but instead just going online and going into the space. And having it be intuitive enough, that people who were new to the Internet could understand it and use it. So that is how the concept was developed, and that first pilot virtual trade mission was done between Malaysia, Canada, and Singapore. We had huge success. We had government involvement, corporate involvement, and we were contacted by those same entities in other countries about doing virtual trade missions with those countries. And it was at that time that we thought maybe this would make sense as a business model in and of itself, to do nothing but virtual trade missions.
Jim Wishner: What about uses beyond business? I mean we are talking about trading goods and services now. What about to exchange ideas and to exchange knowledge and …understanding.
Elizabeth Vazquez: In fact, it is interesting that you mentioned to exchange knowledge, because as these knowledge-based economies develop, they really have to become more creative in how to market those services, that intellectual property, to other locations in a way that is protected, and in a way that really showcases their abilities. It is not as simple as trying to showcase a product that people can touch and feel and use. So, I have no doubt that things like virtual trade missions will become a very normal part of developing relationships in general, whether it be for businesses, or with organizations, associations, or universities. There will be so many more opportunities in the future as the Internet develops into, or is used more, as a relationship development tool, instead of an advertising tool.
Jim Wishner: Here is the bottom line question for you. What is the consequence, and I am sure you have thought about this, you have to have thought about this, what's the consequences of all of this for international trade and international relations in the 21st Century?
Elizabeth Vazquez: I think the opportunity it creates for developing relationships that are based on mutual understanding, trust, and respect for the businesses in all economies-I think that the potential is truly exponential for this concept and this process. We feel very fortunate to be…one of the leaders in this area.
Jim Wishner: Alright, Elizabeth, thank you very much. Best of luck to you. And good luck in the ongoing mission this holiday weekend between the software makers in the United States and India.
Elizabeth Vazquez: Thank you very much.
Jim Wishner: Elizabeth Vazquez is the President of Tradebuilders, which arranges virtual trade mission to allow businesses to have contact, person-to-person, company-to-company, over the Internet. I'm Jim Wishner, and Net Profits Radio continues in three minutes with a Memorial Day salute on the Talk America Radio Network.« Back to Press