By Orrin Klopper, EO member and CEO of Netsurit
When Netsurit decided to seek an opportunity to expand into the North American market, networking with our colleagues at Entrepreneurs’ Organization was the logical first step in finding a like-minded company in the US.
Everyone at Netsurit is driven by our mission of supporting the dreams of the doers. Finding a potential business partner that understood this core part of our culture was a primary goal as we explored different options for how to best enter this new market.
Supporting the dreams of the doers also drives Netsurit’s approach to understanding client business goals. Once the deeper dreams and goals of our customers are clear, we can work together to meet those objectives.
I have been an EO member since 2004. I thought contacting US-based EO members would be a great route to finding a partner that complemented our organization. At the end of 2015, I met Scott Wilson, CEO of Marathon Consulting and an EO New York member since 2012. We immediately struck up a friendship.
As we progressed through our due diligence process, it was clear that Marathon and Netsurit shared the same foundational beliefs in the value of putting people before profits. Both Netsurit and Marathon have long followed an “Employees>Clients>Profits” approach to doing business:
- Put smart employees in challenging roles, and they are happy to come to work and provide outstanding service to clients.
- Users who receive consistent VIP-level service from our engineers become long-term clients who refer colleagues.
- This virtuous circle provides a stable path to profitability as a company.
Once it was clear Marathon was aligned with the unique culture we’ve built at Netsurit, we looked for corresponding strengths and expertise that would create a stronger overall organization. Netsurit’s core competencies overlap Marathon’s opportunities for improvement and vice versa. It became clear that a merger would make both organizations more effective.
A presence in North America and South Africa benefits our clients, too. Clients in both markets can now rely on true 24/7 IT support and maintenance from our engineers. Marathon’s entire team has been retained to ensure clients can benefit from the added knowledge the Marathon team offers. This investment in Marathon also supports our long-term vision for growth by ensuring continuity during the merger process.
While I wouldn’t discourage fellow EO members from considering international expansion or partnership opportunities, it definitely was a complex undertaking.
One key lesson: Come to an early agreement with your potential business partners on business and accounting terminology. If we had spent more focused time and effort at the beginning of the process creating a shared understanding of accounting principles for valuation and other business vocabulary, we would have been able to expedite our deal with Marathon.
Another takeaway was the value of a smart legal team. While it can be maddening to see the lawyers going back and forth during negotiations, the investment from both sides in intelligent legal guidance has paid off in the peace of mind that comes from knowing the deal has been thought through from every angle.
Merging with the team at Marathon is a milestone in the growth of both companies, and I am proud that it came from our shared involvement in EO.