Birth of Daxtra, Asia and marketing – Sergei Makhmodov @Daxtra – Part 2
It starts from the way you construct your pitch, it starts from the way you do the market research and approach clients. And obviously, it ends with the software being able to satisfy the cultural aspects of the clients in each of the territories.”
This follows part one of my three-part talk to Sergei Makhmodov about recruiting trends, Daxtra’s beginnings and APAC expansion, A.I. and new technologies. Sergei is the Managing Director of Daxtra Asia and a founding partner of the business.
Steve: What were you doing prior to joining Daxtra?
Sergei: I was working for Robert Walters for about four years as a recruitment consultant.
Once I accidentally bumped into Steve and Andrei who had just finished their PhD theses at the University of Edinburgh. They had developed a very cool technology based on “computerized text understanding”, as part of their academic research at the Language Technology Group of the University, and this was a software that could – for instance – read, understand and summarize an article and then tell you what this article is about.
After some brainstorming, we decided to work together and develop this system further to assist recruiters, who at the time had a very manual task of creating database records from the incoming CVs. In my company at the time, there was a small army of data entry administrators, and obviously, automating that process would make recruiters’ life easier and dramatically reduce costs. That’s how it all started.
Bear in mind we’re talking about 2002 when we were starting this up in the UK. The technology was very novel at the time.
The UK, as you know, is a very agency-driven market in which we enjoyed excellent growth avoiding any need for external investment. In 2003 we had an office in London, then in 2006, we set up a US operation. And in 2011, we setup in Hong Kong to service Asia-Pacific which is currently the fastest growing market for Daxtra.
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Steve: Tell me a bit about the experiences you’ve had setting up a business in Asia?
Sergei: It was not dissimilar from our experiences in the UK when we set up there. Initially I was on my own in a small office in Central, Hong Kong. We then hired an account manager, then a sales person. Where we are now 5 years later… we have ten people working for Daxtra Asia, we opened an office in Shenzhen last year and are in the process of setting up in Japan and Australia.
Steve: Name some key APAC challenges?
Sergei: Languages and cultures. Initially, it was a major challenge for us to analyze documents written in double byte languages – Japanese, Chinese – and we are constantly working on improving the accuracy across all supported languages. But these have been in production for some time now. We’re also parsing in Bahasa and are developing Thai and Vietnamese linguistic parsing as well.
Steve: Do you get worried by the fragmentation in the APAC marketplace?
Sergei: When you are a startup, it’s very important to focus on a particular geography, to allow you to grow the cash flow. Once you have the cash flow, you can start planning to go into new territories. At least, this was our experience, and it worked.
Steve: Which would you say is the most technologically-advanced APAC country in terms of using recruitment software?
Sergei: Australia, Singapore, Hong Kong… and China is catching on very, very rapidly. I think Japan is a very established recruitment market, and the companies there are using some of the latest technologies.
Steve: Have you had to adapt to different marketing techniques?
Sergei: From the marketing efforts perspective, definitely yes. It starts from the way you construct your pitch, it starts from the way you do the market research and approach clients. And obviously, it ends with the software being able to satisfy the cultural aspects of the clients in each of the territories.
I think the cultural difference is the main obstacle that one needs to realize. It is pretty difficult for a foreigner to sell in China or in Japan without learning a fair bit about their culture. Best route is to hire local people to do this for you.