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Researching A Country-Ignore The Headlines

When preparing to do business in a country with which you are unfamiliar or tangentially familiar, it is important to recognize the information asymmetry that you are starting out with. The temptation is to go online and learn everything that there is to learn about the country, which is actually what you should do with regarding the country’s history and political/economic structure. However, when it comes to more contemporary subjects like what is going on in the country today, one needs to be careful to not simply get caught up in the headlines. The simple fact is that media is a business, and they have to sell their product. The best way to do this is to sensationalize everything. In addition, most (if not all) media have some sort of social/political agenda, even if it is simply pushing the opinions of the ownership. What this means is that your source of contemporary news is going to be giving you some sort of skewed picture, influenced by a political/social/economic agenda of some kind. The point isn’t whether or not you personally agree with the agenda, but that what you are getting is a skewed picture which can lead you to sub-optimal conclusions.

An example from my career occurred at the beginning of the COVID pandemic, when I was very heavily involved in my bank’s Paycheck Protection Program (PPP) rollout. This was loan program that ultimately saved many small businesses in America. At the time, it had to be rushed out because the money needed to get to the businesses fast before they shut their door. April of 2020 was the most intense time of my professional career as a banker. This program was something that the news media was completely focused on, and they were portraying the rollout as catastrophic, confused mess, in which nobody knew what was going on. They weren’t necessarily wrong about this. But because it was done in the middle of a massive crisis and had to be done quickly (hours/days, not weeks), there was no way that it could possibly have been anything else. They media was using the problems to point fingers at people who they didn’t like, but this was unfair. More importantly, those of us on the ground could tell that we were gradually getting it together. In addition, the media started accusing big, connected companies of getting PPP loans, and leaving no money for the little guy. This picture was skewed to the point of inaccuracy or deliberate misrepresentation. While there were a very few companies that probably didn’t deserve to get what they got, almost all of the loans approved were to the sorts of companies that the program was mean to help. Watching the media skew the picture on something that I was deeply involved with taught me to be very careful with reading the mainstream media.

When researching a country, you should be researching non-news sites. Check out the information posted on government sites and those of industry trade groups. While these sites may also have an agenda, they have a tendency to be more public service than agenda-driven sites. This is especially true of industry groups, whose brand may end up damaged if they get a reputation for bad information.

Part of being able to do business in a place is to have a “feel” for the place. If you have been moderately successful in your business venture(s) up to this point, it is because you have a good “feel” for what you are doing, even if you don’t recognize it. As someone who has talked/worked with hundreds of business owners, what separates the ones who succeed from the ones who struggle is that they have an instinct for what will and won’t work. Often, they can ‘t even express it or prove it in numbers to an analyst, but it’s there. And time and again they turn out to be right in their assessments. Often, the same thing is true for those in banks who approve loans. It is their gut instinct, rather than the numbers themselves, that determines whether they approve a loan or not.

The fact is that while your instinct has contributed to your success up to this point, your instinct is a function of your existence for a long time in a particular country/culture/industry. Going into an unfamiliar country means that the environment in which you are operating will be unfamiliar and you likely won’t have that well-developed sense that you have in your home country. And if you try and develop that sense based on sensationalized headlines, your sense (or compass) will likely steer you wrong. Consequently, you need to try and move beyond the headlines. Talking to people who live (or have recently lived) in the country is something that is indispensable to your research. Note also that these really need to be people who have recently lived/worked in that country. Talking to a 50 year old who moved to the United States when he was 20, while interesting, isn’t going to help you much. Even if he goes back regularly to visit his family, he doesn’t have the true feel of the daily grind in that country as it exists today. Being able to talk to his family who is there and living it daily will be much more useful to you. And talking to people who do business there on a regular basis is even better. These are people who are making it work in the country that you are looking to business in. They likely have developed a sense of how things work there in some way. Having a couple of these folks on an informal team of advisors on an ongoing basis would be an invaluable asset to you if you actually try start to do business over there.

In short, researching a country means moving far beyond the headlines. While there is no way to get perfect information, involving people who have in-country experience in your research and not getting caught up in the sensational headlines will help you avoid some of the pitfalls. In moving beyond the headlines, you will have a clearer picture of reality and be able to put together a more effective strategy, and thereby increase your chances of success.

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