Silver Spring Networks, a leading smart grid networking platform technology provider, knew international expansion was necessary for success. But the unique smart grid market forced the organization to be more reactive than proactive with its expansion strategy. “In the more traditional,geographic expansion route you consider new regions you want to target and often have more time to plan,” said Silver Spring’s Director of Shared Services and International Projects, AJ Bernstein. “But in our case, it often starts at the request for proposal stage, when a utility company in a country wants to learn more about our product and we need to figure out how to build a local business development capability as soon as possible.”
Combined with a sales cycle that can take multiple years, Silver Spring needed to be able to quickly set up significant infrastructure as needed, whenever an opportunity arose. With no more than a handful of staff in each location, the company did not have the scale or budget to support local back-end operations across multiple countries. Silver Spring quickly learned that even one or two employees can trigger significant compliance requirements and cause major operational headaches. “When we expanded into South America on our own, our first employee spent so much time on things like signing documents and running to banks that it became almost half of his day job,” Bernstein said. “We wanted our first employee on the ground to be focused on delivering for customers, working on what we hired him for, not spending time figuring how to open a bank account or negotiating with insurance carriers.” Because of the unpredictability of its international expansion effort, Silver Spring struggled to stay proactive in terms of tax and employment compliance. “We didn’t know what we didn’t know and were often playing catch up in terms of regulatory compliance,” said Bernstein.
The management of global service providers was becoming impossible, but continued international expansion was on the horizon. Silver Spring turned to High Street Partners to simplify the process. “When we contracted directly with providers in most countries, it was often very difficult to get quick responses,” said Bernstein. “We’d have to connect with several different people at multiple providers—banks, law firms, payroll companies, etc.—to get things done. HSP provides us with a single point of contact and a single point of accountability. HSP also has a much larger presence with these local providers and is much more likely to get a return call and prompt attention on critical issues.”
In addition to supporting existing international operations, HSP helped Silver Spring plan and execute its expansion into Hong Kong from the ground up, using both Advisory and Recurring Services. “They guided us throughout the entire process and we had a much better experience than we had doing it on our own,” said Bernstein. “There are certain processes, certain dependencies we just didn’t know. HSP did the advance work for us, providing insight into the landscape and helping us plan an appropriate budget for necessary activities.”
Additionally, Silver Spring takes advantage of HSP’s technology platform HSP OverseasConnect® to serve as a single resource global operations system of record. “As our global presence grew, we needed to have certain information readily available,” said Bernstein. “Who are our local directors? What’s our VAT number? What’s our registered address? We found a central repository for this information in HSP’s technology platform, as well as the ability to provide permission-based access based on job function. Our controls were maintained and critical information was readily available to the appropriate people on our team.”
Silver Spring has six overseas entities and plans to add three to four more annually. The company points to HSP’s support as the key to the success of its expansion efforts. Said Bernstein, “In the past, people thought differently about international expansion. You would wait until you were a mature company, maxed out on market potential in the U.S. and then you would move internationally, country to country. But now, for companies like ours, you go global from day one. And these companies are struggling mightily with how to go international out of the gate, with a small footprint and low costs, all while being compliant.”
Bernstein also attributes HSP’s products and services to Silver Spring’s accelerated market growth. “HSP allowed us to go global earlier in our maturity cycle, without huge investment. We’re much more nimble because we don’t need to create huge infrastructure and can instead focus on our business, not the back-end.”