In June, the New Brunswick Export Awards recognized those companies that have achieved recent and/or ongoing success in developing new markets and expanding their global reach. Opportunities NB (ONB) wanted to pick the brains of some of those award-winning companies and learn more about their export success.

Smart Skin Technologies, this year’s Emerging Exporter of the Year Award winner, is a Fredericton development company that has created and commercialized a pressure sensing and mapping technology in the form of a thin stack of materials coupled with specialty electronics.

Smart Skin was originally the concept of CEO Kumaran Thillainadarajah. The organization’s technology was first created for use as a prosthetic glove/prosthetic touch sensor in 2008. The company has now moved towards becoming an exporter to the global food & beverage industry, specifically focused on packaging for bottles and cans.

The company’s market diversification has resulted in increased sales of 700 per cent in the past year thanks to increased export success in the U.S., Mexico, Germany, the UK, Belgium, and France.

ONB spoke with Kumaran Thillainadarajah.

ONB: What were the most significant obstacles that Smart Skin faced on the road to export success?

Thillainadarajah: Raising capital. We have a hardware component to our business, we’re not just IT software. Anytime you have to physically make something, it’s a lot more expensive than the cost of just software.

There are a lot of investors interested in IT, so anything that’s not IT can be a bit more challenging to raise capital for. But we’ve navigated those challenges and managed to raise over six million thus far. That’s a demonstration of just how capital intensive an operation like this is, and that’s an ongoing challenge. Until we are a highly profitable enterprise and don’t need to do that anymore, that’s going to continue to be a challenge.

For example, next year we’re going to be raising a Series B round. Even with the successes of Q1 Labs and Radian6, there is still a bit of a gap for Series B. If you’re raising an A round for three to five million, there are plenty of investors that will participate. If you’re looking to raise 10 million+, then you have to look outside the region. But there are entities like Build Ventures and the NBIF. However, a lot of investors here tend to focus on early-stage and Series A investing.

Are there any unique attributes of New Brunswick that helped Smart Skin achieve its export success?

Cultural certainly. Some people view starting a business in a place like New Brunswick as more challenging than in other parts of the country. I don’t agree with that, especially for starting a new business. Now, there is actually good access to capital in the grander scheme. More importantly, there is fantastic access to mentors and I think good mentors are more important than even access to capital when you’re starting or even looking to grow your business. Access to great entrepreneurs and people in similar fields, that’s crucial. One of the benefits of being in New Brunswick is that people are easy to access and are willing to help you, oftentimes without any other motive or incentive for them involved. They just want to see you succeed, which is quite refreshing.

There is a great ecosystem of mentors in New Brunswick. Any more that stand out beyond the ones we’ve mentioned?

There’s Planet Hatch, East Valley Ventures, etc. People are always willing to make introductions for you. It’s very easy to get access to those people you think can add value to your business and help you.

Were there any surprises you came across on the export journey?

Being an export company, I think one of the big challenges in Atlantic Canada is access to great international salespeople. (Note: This is something that has been previously identified. A regional strategy and action plan is in the works.) We’ve mitigated that by going outside, and hiring experts in our market in various regions. If you’re going to be an export company, at some point you have to build relationships with your customers. And your customers, by definition, aren’t here. So you have to go to that market and build those relationships. A good way to do that is to hire someone who’s from that market and who understands that region and can champion your product. They will build those relationships for you.

We tried doing that ourselves but we’ve learned that you need those experts, and you need them to be inside those regions where you’re selling. There’s a lot of cultural differences that you don’t pick up on when you just go and visit there for a couple of days and come back.

That was our next question. In preparation for export beyond Canada and the U.S., how important was understanding the culture of target markets? You’ve suggested it’s very important. Can you expand?

They are subtle sometimes, those cultural differences. If you’re not aware of them you may be unknowingly offending someone or giving them signals you don’t intend. That’s something companies should be keenly aware of in foreign markets. You have to be ready to do business the way they do business.

What’s next for Smart Skin?

Right now, one hundred percent of our business is in export. That’s because our customers are the world’s top brewers and soft drink manufacturers and those companies are unfortunately not headquartered in Canada. They’re mostly located in the US and Europe, so we’re going to be spending a lot more time building relationships with those companies in those markets. It’s about letting them lead us to where we need to go.

To wrap up, we’d like to get your single best piece of advice or tip for other New Brunswick-based organizations looking to see export success.

Go to your target market, you can’t do it from home. You have to leave New Brunswick and visit those regions you’re trying to get your product into. You have to get a good sense for the flavour of those regions, and of how to do business there. Start building strong relationships with customers in those regions

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Written by Jason Boies