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November 2, 2004 

Hostway

 Q&A: Founder John Lee of Chicago’s Hostway on Web Site Localization 11/2/2004
The mission of Going Global is to educate and inform Midwest technology companies on what local technology companies are doing internationally so other firms can learn from the successes of like-minded peers.


CHICAGO – John Lee is a founder and is the vice president of marketing at Chicago-based Hostway, a provider of Web hosting services and managed services to some 300,000 customers.

In 1998, Lee joined Hostway President Lucas Roh and a few others to form Hostway with a mission to provide hosting services to an emerging market of small and medium-sized businesses looking to establish an online presence.

Lee is currently responsible for guiding new customer acquisition and brand-building initiatives for Hostway’s global operation. Prior to joining Hostway, Lee worked as a researcher in gene therapy at the University of Chicago. He graduated with a bachelor’s of arts in biological sciences from the University of Chicago in 1993.

He sat down with international expert Michael Muth to discuss Web site localization, double-byte character sets and how well a business education from the University of Chicago prepared him for working in multiple countries.


Michael Muth: It appears that you recruit resellers differently in different countries. Why?
John Lee: There are different reseller programs. It’s very much like our product strategy. The superset is the same and the local managers pick and choose. They’re particular to their markets.


MM commentary: It’s important to note that selling and reselling is also different in each country.


MM: What other kinds of partners have you sought in these countries?
JL: There are three kinds of partners. Co-marketing partners are typically more local. Technology partners are more global. The third group of partners fill the expertise gap (such as marketing agencies). They are more localized than global.

The great thing about having a global operation is that we can take the best of the lot and apply either locally or globally as the market needs dictate.


MM commentary: Even as successful as they’ve been, Hostway still depends on both global and local partners to grow.


MM: What have you learned from abroad that you’re implementing here in the U.S.?
JL: The biggest learning comes from serving multiple sets of customers. As a company, we are developing a culture of examining problems from multiple angles. Since we’re serving a diverse set of customers (each with unique needs), we have to.

The tangible benefit from all this is that we have an organization that’s better adapted to thrive in multiple environments.


MM commentary: Take, for example, a software engineering division. Developers become more globally focused. They code differently. They don’t hard code everything. It’s not that important if you’re domestically focused.


MM: Your U.S. site has a different look and feel. Any reason for that?
JL: The feel is consistent. The main branding components are carefully preserved. However, the look is up to the local managers.


MM commentary: Hostway recently launched a more customer-focused version of its Web site in the U.S. Depending on the appropriateness to each marketplace, the foreign subsidiaries may or may not adopt the same look and feel.


MM: If you’re a virtual business, why incorporate and have a physical presence in each?
JL: I get asked this question a lot. There are technological and cultural needs for hosting companies to establish direct physical presence. These needs aren’t going away any time soon. The data latency between countries is still a problem.

The best solution is to locate the data center in the country or geographically contiguous region you are serving. More important, customers demand localized support and each market demands localized sales and marketing execution.


MM commentary: The internet is still not quite there yet. If you are a customer hosted in the U.S., your experience will be degraded if you’re accessing the site from across the world. While the technology problem will be solved eventually, it hasn’t been solved just yet.


MM: Why did you obtain local domain names rather than use country subsites?
JL: It was important in showing our commitment to the local market. It was important to show we know that not everything revolves around dot-com.


MM commentary: Though we expect dot-com domain names for all businesses here, .co.uk is the norm in the U.K. and country domain name extensions in other places. Companies from other countries get dot-com domain names to appear American. If you want to appear local, using the local convention is one way to do it.


MM: How did you do the localization of your Web sites? Internally or did you farm it out?
JL: In each location, we have Hostway employees who are local to the region. They are responsible for the marketing and sales initiatives. They are in turn responsible for the Web sites. Of course, the actions are globally coordinated.


MM commentary: Like many professional services these days, there are advantages and disadvantages to farming these things out. The advantages to keeping localization inside include knowing the business from the inside and maintaining tight control. The disadvantages include a lack of an objective outside point of view and focus when employees have other responsibilities in addition to localization.


MM: How do you provide support and documentation in local languages?
JL: Support documents are 100 percent translated. They are modified to fit local needs. Call centers are not localized.

MM: Do double-byte character sets create problems for you in Korea?
JL: Double-byte character sets are not a problem.


MM commentary: Double-byte character sets are not a problem for Hostway because they’ve anticipated them. There are many other companies that have not anticipated them.


MM: Why does the order of the task bars change by country?
JL: Market differences determine how the Web site is structured. It’s controlled by the local staff. They know what’s going on there. The superset is the same. How it’s ordered is controlled by the local staff.

MM: Why no e-commerce offering in Germany and Australia?
JL: They are slated for the first quarter of 2005.

MM: How well did the University of Chicago prepare you for doing business in five countries?
JL: I appreciate what I learned at the University of Chicago more now than then. It taught me how to think.

Hana Gray, the president of the University of Chicago while I was there, told us to “doubt everything” and question those assumptions, question our projections and separate facts from opinions. I believe this helped us avoid the dot-come hype and stay true to the course that resulted in a company that’s fundamentally sound.

MM: How has being headquartered in Chicago helped or hurt your international expansion?
JL: Chicago is an incredibly diverse place. We have access to a culturally diverse talent pool, which is important in building a global operation. Chicago has the advantage of the classic Midwestern sensibilities of low tolerance for [incompetence]. There’s also a certain seriousness to Chicago. That helps with our credibility, too.


MM commentary: I can verify Chicago’s diversity as reflected by Hostway’s employee base. When I took a tour of Hostway’s operations center on State Street, I noticed nameplates with names that seemed to be from many different ethnicities.



Disclaimer: Hostway is an advertiser with ePrairie


Michael Muth is managing director of GATA, an international business development consultancy that helps technology companies build international partnerships. He can be reached at mike@intlalliances.com.
Click here for Muth’s full biography.

Previous Columns:
Q&A: Founder John Lee of Chicago’s Hostway on Growing Globally (10/26/2004)
International M.B.A. Guide to Moore School of Business, Thunderbird (10/12/2004)
Your International M.B.A. Guide to Northwestern, Loyola University (10/5/2004)
Entrepreneur’s Guide to International M.B.A. Programs in Chicago (9/28/2004)
Q&A: Prairie Angels Founder Bob Okabe on Diction, International Cities (9/7/2004)
Q&A: Prairie Angels Founder Bob Okabe on International Adaptation (9/1/2004)
Q&A: Prairie Angels Founder Bob Okabe on Managing U.S. Subsidiaries (8/24/2004)
Q&A: Origin Ventures Founder Steven Miller on Investments, Angels (8/17/2004)
Q&A: Origin Ventures Founder Steven Miller on the Canadian Way (8/9/2004)
Q&A: CPCP Founder David Baeckelandt on Multilingual Importance, Mentoring (8/3/2004)
Q&A: CPCP Founder David Baeckelandt on Japanese Disclosure, Due Diligence (7/27/2004)
Q&A: Chicago Pacific Capital Founder David Baeckelandt on Overseas Funding (7/20/2004)
Q&A: ADVIZOR Solutions CEO Doug Cogswell on the Art of Partnering (7/13/2004)
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Q&A: CEO Terry Howerton on Why Chicago, Ukraine Made FastRoot (6/22/2004)
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