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Pieter van Schalkwyk
AS CEO of XMPro, Pieter van Schalkwyk has led the growth of one of the most exciting IoT solutions companies in the North American industrial market – growing against major incumbents with its focus on cost-saving action.
A mechanical engineer from Pretoria, Van Schalkwyk founded FlowCentric – a leading workflow solutions company – in Gauteng, before launching XMPro in Sydney in 2009. In 2014, he made the dramatic decision to move the company to Dallas; one of several bold leaps the company has made in adapting to, and helping to shape, the new and dynamic IoT landscape.
After just two years of operation in the U.S., it is already listed on “Top 20 most promising” lists for both IoT and Business Process Management (BPM). Last year, its applications saved one oil & gas customer $8 million in six months – partly, by actively alerting technicians to predicted faults, and dramatically cutting the number of field inspection trips.
To get there, the CEO has had to make a series of decisive actions based on hard lessons learned on his entry into the U.S. market. In an interview with SABLE, van Schalkwyk described some of the lessons he learned in this remarkable journey; lessons with key importance for other South African tech entrepreneurs seeking access to U.S. customers.
Can you explain the business rationale for your journey from South Africa to Australia and then the USA?
We were based in Sydney for two years. We developed a product which is really for large scale enterprises – and we realized that, really, Australia is not too different from South Africa in terms of large businesses. There are only 22 million people. And having moved to Australia, we received a lot of inquiries out of North America – so we tried figure out how to do business from there. But one key lesson we learned was: if you want to do business in the U.S., you need a base of operation in that country.
What kind of mindset change is needed to enter North American markets?
It takes a completely different mindset. Of all the lessons we learned in Australia, very few of them were transportable to the U.S. market. There is an entirely different way of doing business here; its much more aggressive. In South Africa, you really have a protected market. It may seem tough to compete, but, by comparison, its like taking candy from a kid, in my opinion. Over here, the kids are grown up, and they hit back. Its also important to be really realistic about where you are.
Given the daunting challenges, why is the U.S. worth the effort?
Growth. This is where its at.
What was the fundamental business model change that you needed in coming to the U.S.?
We tend to be everything to everybody in South Africa and Australia, because the markets are small and the competition limited. But in the U.S., you just have to specialize. We found that we had to choose a market – we are now focusing on industrial asset-intensive organizations where the ROI is significant. Here they can use our systems to predict when things are going to go wrong.
Were there any game-changing resources for XMPro, which you could not have acquired in South Africa?
We are now a Gartner research firm client – a whole bunch of other good things happened as a result of that. We became a Cool Vendor in 2012, and, with each innovation we created, we began to receive inquiries. We proceeded to grow from there. In order to be differentiated and validated, a lot of companies rely on Gartner technology insight and research perspectives. But, it’s really expensive for a start-up in South Africa to afford Gartner.
What is the importance of networking and mentorship in entering U.S. markets?
This was another big learn for us in the U.S. We are now a Microsoft partner, and we build on their technology. Microsoft sees the value in our products and is promoting us to key accounts. Now, its pretty easy to find the right Microsoft guy in South Africa; in the U.S., finding the right guy at Microsoft in Seattle is a lot harder. You need to build up strategic alliances and relationships. Networking and coaching are critical for entrepreneurs landing here. If you can find a good coach for doing business in U.S., or a business network, entrepreneurs should go that route - that’s where organizations like SABLE can perform a critical service.
Have you maintained a presence in South Africa?
We run a development office in South Africa, because of the resource cost. The culture here makes it quite easy to outsource functions to other countries. And we don’t have to do the product engineering here – on top of the fact that there are some pretty smart skills around in South Africa. I think South Africans are really strong in technical areas. We have a development office with a team of software developers based in Centurion. But our product development, sales teams and service consultants are all here in Dallas.
About Pieter van Schalkwyk
Pieter van Schalkwyk has been the CEO of XMPro since 2009, and carries more than 15 years of experience in developing business performance management solutions. In his role at XMPro, he and his team uncover unique ways of dealing with the deluge of big data from databases, systems, and more recently, smart sensor devices and the Internet of Things (IoT). XMPro's IoT application platform helps organizations take real action on real-time IoT data and is especially suited to Industrial IoT (IIoT) applications. Pieter has led XMPro's R&D team to architect and build an innovative IoT software platform that enables companies to more easily develop custom IoT software applications that are specific to their business and that they can’t buy from a vendor “off the shelf.” His experience as an engineer has equipped him to lead the development and marketing of our IoT Application suite. While he lives in Sydney, Australia, he spends most of his time in the U.S. and Europe talking to customers, engineers and developers on innovative ways to leverage IoT and the XMPro platform to create the next IIoT “killer app.”
Other Expert Views:
Q&A with Piet Barnard and Dr. Andrew Bailey, Piet Barnard, Director, Research Contracts and Intellectual Property Services, UCT and Dr. Andrew Bailey, Intellectual Property Manager, Research Contracts and Intellectual Property Services, UCT