This week I had the pleasure to interview our CEO, Ville Hakala on his trip to US. What better way to learn about the Sofi US market entry than talking directly to the man who spent a few months doing precisely that.
The following Q&A was conducted at the Sofi Filtration office in Espoo, Finland.
Ville Hakala (VH) Sofi Filtration CEO
Constantin Buda (CB) Marketing Manager
CB: You spent a few months in the United States launching Sofi Filtration business there. Why the US market? Why not something geographically closer?
VH: Simply put, the US water market is 80 times bigger than our domestic, Finnish market. During the past 4 years, Sofi Filtration has worked to establish a solid network of US water experts and channel partners that was vital to entering the US market and any new region really. We wanted to leverage that existing network as a base for the US entry.
CB: How did you approach the US market entry?
VH: There were a couple of key developments prior to our commitment with the market expansion. An obvious one is that we waited until we had our US patent application filing accepted and proven. That was completed in 2016. During same year, we started networking and marketing our technology to strategic end-users and channel-to-market partners. Steve Gluck, PhD, and a former Fellow at the Dow Chemical Company helped us with building the awareness and connected us to many decision-makers in the US water market. This approach validated our initial assumption that the US market has water treatment needs where Sofi Filter fits. As a next step, we are starting a series of field demonstrations with our technology.
CB: Where did you set shop?
VH: In our strategy, we acknowledged the oil & gas industry as one of the first industries for Sofi Filtration to approach. The state of Texas gathers most of the companies active in oil and gas and Houston is where Sofi’s operational office has been set.
CB: What worked and what didn’t work for Sofi?
VH: The global and US water treatment needs are large and diverse. From experience, I can safely say that there is no “one solution” to solve all these issues. Sofi Filtration has done extensive testing in both Finland and in the United States to narrow down the market verticals we want to focus on and where our technology can bring the highest ROI.
I’d say that one of the key takeaways is that the US shouldn’t be treated as one single market. The country is big and divided into states, each one with its industries and treatment challenges. The focus should be on geography and industry segments. Don’t try to be everywhere at the same time. Instead focus from day one. Succeed or fail and move on.
CB: How difficult do you think it is for a Finnish clean-tech company to enter the US market? What are some do’s and don’ts?
VH: The US culture is pretty straight-forward. You need to be able to sell the magic of your solution in a very limited time. I can recall a few times when I needed to have answers readily available and a drilled down pitch to get to next phase. It also really helps to have a local competence such as a well-known and respected industry expert. In our case, Dr. Steve Gluck was the expert who was many times sitting in the room for the first meetings or attending calls.
It is also worth mentioning that more often than not you leave a meeting with very positive feeling, which may not result in anything concrete. US business culture often projects positively in most interactions, which may be a contrast to the experience in Europe. Regardless, you’ll learn soon enough if there is a potential for a future collaboration or not.
CB: Water filtration and clean-tech is a big topic and industry. What specific industry segments are you targeting in the US?
VH: Industries such as mining, oil & gas and power generation industries with a clear ROI approach have been the best fit for Sofi Filtration. Other sectors, such as municipal waste water treatment is considered as “future potential” for the Sofi technology. We have a number of channel-to-market partners in the United States, and I want here to mention Encotech based in Pittsburgh, Pennsylvania. They are operating throughout the United States and offer solutions for various water treatment cases. They have an early adopter mindset and have gone to great lengths in order to work together with Sofi Filtration on building a full-scale Sofi Filter system to meet the US standards. The first demonstrations are taking place soon with clients from the oil & gas industry.
CB: What is next for Sofi Filtration US?
VH: I’ve recently spent 3 months with Cimbria Capital to work on Sofi’s US market expansion plan and investment case. The collaboration has been really fruitful and the work continues. Cimbria’s team is experienced and they have a vision on bringing Nordic water and agriculture technologies to the US market. This is the path that Sofi Filtration is taking right now and we hope to partner with them for long-term market expansion. We’ve also set-up Sofi Filtration Corporation, a US sister company of Sofi Filtration, which deals with the US clientele. This Sofi US hub makes it easier for US clients to deal directly with us and simplifies daily operations such as invoicing. Anything we can do to make things easy for our clients is worth the effort.
We are now in the early stages of the demonstration phase and have really enjoyed the ride so far. Looking forward to the road ahead.
CB: Thank you Ville.
VH: My pleasure.
For more information about our US expansion, please get in touch with us directly using our contact form.