Expanding into the U.S. was a no-brainer for Polar Mobile.
The Toronto-based company, which builds and supports mobile applications for media organizations, had made solid progress on its home turf. A year after its 2007 launch, the company had a strong showing of Canadian clients, including big magazine names Macleans and Canadian Business.
“We started off with the goal of taking advantage of growth of smart phones and how these mobile devices were changing from phones to media consumption devices,” says Kunal Gupta, one of the six founders, all University of Waterloo graduates. “We wanted to mobilize magazines and make them easy to consume from handheld devices.” The payoff for the publication would be twofold: more readers, plus a new advertising stream.
Polar's founders have hands-on business experience among them, but all of their formal education backgrounds are of a technical nature, making business strategy their biggest challenge. But they knew instinctively that expanding south of the border made sense and so started trying to grow in that direction soon after their launch.
“We recognized that Canada is the right market for us to build traction and momentum and to learn,” says Mr. Gupta. “But to really grow, we have to go to markets outside of Canada.” Breaking into the U.S. market took about six months. “The challenge was the sheer scale of company we were targeting and not being as experienced in selling,” he says.
Today, Polar's U.S. business accounts for about 40 per cent of its revenue and includes media giants Time, Sports Illustrated and Business Week. Polar opened a New York office earlier this year to stay close to its U.S. business.
The question the founders are asking now is, what's next?
“At this point, as a small software company sitting here in Toronto with a recently opened presence in New York, how do we grow our brand globally?” asks Mr. Gupta.
Polar, which employs about 25 people (up from six a year ago), is on the fence about where it should concentrate its efforts.
“When is the right time for us to go beyond the U.S. market?” says Mr. Gupta. “I've had people say, you need to win the U.S. completely before going beyond because it's distracting. And I've had people say you should plant the seeds and grow outside of the U.S. now because chances are people aren't serving those foreign markets.”
Addressing this challenge is key to the company's success. If they don't come up with a solid strategy now, Mr. Gupta fears they won't be leaders in their market.
“We would have to deal with additional competitive pressures,” he says. “The market we're serving now is a new market. And like any new market there's a window of opportunity. If Polar is not able to capture the market in that window, then it's going to be difficult to conquer and win that market at a global scale.”
What the experts say
Polar is on the right track, says London, Ont.-based Theo Ward, an independent export promotion consultant and senior associate at Global Links Network, a consulting firm specializing in global business facilitation.
“They have rightly identified the fact that their window of opportunity in U.S. is very small and quite finite,” he says. “They will be up to their neck in competitors in six to 12 months.”
Tackling the U.S. market was the right move, but the company shouldn't hesitate before going beyond, he says.
Paul Butcher, president and chief operating officer at Ottawa-based Mitel Networks, a provider of communications solutions to companies around the world, has led his company through several international expansions, including in Asia, the Middle East and Africa. He agrees that cornering the U.S. market is vital to Polar's survival but that it should move forward on other international markets, only if it can afford it.
