Small Business Owner Takes His Green Energy Business Global

When Nick Blitterswyk cofounded Urban Green Energy, (UGE) a small vertical-axis wind turbine company, in 2007, he had one market in mind: the United States. But after setting up a factory in China and offices in New York, an odd thing happened. The company's first order came from Australia.

It wouldn't be the company's only overseas business. In fact, as it grew, orders began to pour in from around the world: Lebanon, Spain, South Korea, Colombia. By early 2011, the company had sold its signature vertical-axis wind turbines to customers in 47 countries. Blitterswyk estimates that nearly 50 percent of the company's business comes from overseas.

In four years, UGE has grown from three U.S. employees to 20. And it has nearly 100 Chinese employees. That kind of growth is rare among U.S. small businesses. In fact, of the country's 28 million small businesses, only 250,000 are exporters, according to Richard Ginsburg, the senior international trade specialist and public affairs officer at the Small Business Administration's Office of International Trade. And of those, 58 percent only export to one country, usually Canada or Mexico.

But as UGE's success shows, with the right products, a little bit of luck, and some international connections, small businesses can expand quickly across the globe -- all on their own.

Blitterswyk grew up on a provincial park in British Columbia, and he had always been fascinated with green energy. He came up with the idea for UGE after he moved to New York to work as an actuary. "I didn't feel fulfilled," Blitterswyk says. "I wanted to do something that made a difference."

Blitterswyk zeroed in on vertical-axis small wind turbines, an industry that was just getting off the ground at the time. UGE's signature product is the Eddy turbine, a piece of almost alien-looking technology with three metallic blades that curve and swoop upward around a slender axis. The smallest Eddy stands at just under 6 feet tall; the largest reaches 15 feet. The company's customers have ranged from a foreign military and U.N. peacekeepers to U.S. homeowners, thanks to the Eddy's small size and versatility.

Peter Asmus, a senior analyst with Pike Research, a clean-technology market research firm, says the small wind sector in the United States struggled initially because of government subsidies for more popular solar energy initiatives. That has changed in recent years with federal tax incentives.

According to Asmus, many in the alternative energy industry remain skeptical of vertical axis technology, such as that used by UGE. But Blitterswyk saw only opportunity. He says small wind looked especially attractive because of a lack of competition. "I looked at other [small-wind] companies and wasn't excited about what they were doing," he says, adding that he envisioned a better way to both create the product and operate the company.

Asmus says one of the main weaknesses of the technology has been structural integrity -- vertical-axis turbines are top-heavy, meaning they endure a lot of stress when winds are heavy. To address this, UGE's turbines use the company's patented dual-axis technology, which Blitterswyk says significantly increases their durability. The technology, he says, also allows the turbine to function in complete silence, with almost no vibrations.

Though Blitterswyk always planned on targeting the U.S. market with his product, the company set up a factory in China to save on production costs. In fact, UGE had an initial advantage that few other small businesses have -- Wendy Liu, a cofounder and Blitterswyk's wife, is Chinese-American. The company's other cofounder, Yun Liu, is also Chinese. Their connections and cultural knowledge helped the company maneuver through governmental red tape, and, in 2008, they secured a free land grant from the Chinese government for a 25-acre factory near Beijing.

Blitterswyk says he believes the factory became the "first seed" in expanding globally -- and he's probably right. Shortly after the Beijing factory opened, the company received that first order from Australia.

For many small businesses, the first international order is the most important step. As the SBA's Ginsburg notes, most U.S. small businesses simply don't understand the value of taking their business global. "The number-one barrier to trade is the psychological acceptance that global business is necessary," Ginsburg says. In fact, he adds, two-thirds of the world's purchasing power -- and 96 percent of its customers -- are outside the United States.

"That psychological barrier was already broken," Blitterswyk says, because thanks to the Beijing factory and the order from Australia, "we were already shipping internationally."

The company also hired employees from around the world. Its design engineer, for example, is Chinese but grew up in the Philippines. One of its salespeople is Japanese. "We have a very diverse workforce. Our office is kind of a United Nations office," Blitterswyk says.

Though Blitterswyk says the company never planned to specifically hire an international team, it always favored people who were multilingual. Case in point: UGE had very little business in Latin America prior to hiring Mateo Chaskel, a native of Colombia. An engineer by training, he also became the go-to person whenever the company needed to deal with clients in Latin America.

"I feel that being able to speak in Spanish and also being able to deal with [distributors] on a more personal level has helped a lot," Chaskel says. That personal connection adds trust to a relationship when neither the distributor nor the seller has met face to face, he adds.

Chaskel reckons that, just four months in to 2011, the company has already surpassed its sales in Latin America for all of 2010.

But Blitterswyk also warns that companies that plan on global expansion need to be very careful whom they partner with. He says that many of the company's foreign distributors asked for exclusivity -- to essentially become UGE in those countries. Though the company experimented with this early on, "It never worked out as we expected," he says. "It's really like a marriage. It's not to be taken lightly."

Blitterswyk points to UGE's attempt to expand into England and Europe. The company set up an office in London in 2009 but was forced to close it after just one year. "We had an issue with systems and information sharing," Blitterswyk says. "Which meant the London office wasn't always up-to-date, and also we sometimes tripped over each other's toes."

In fact, the company's sales in Europe have actually increased since the London office closed, and it began handling those transactions through its New York office.

Part of that success comes from good logistics and marketing. UGE tried many carriers with "very limited success," Blitterswyk says, until they found C.H. Robinson, a third-party logistics provider. That partnership has helped UGE expand within foreign markets, Blitterswyk says. The reason is simple: When products arrive undamaged and on time, customers are happier and give more referrals.

For marketing, the company uses Google Ads and Microsoft adCenter, and it also puts out press releases that specifically target foreign markets. But a lot of referrals have also come from free, online directories. Blitterswyk says he’s a "big believer" in free marketing.

But as Chaskel emphasizes, language skills, marketing, and good partnerships only go so far. The real recipe for international growth is simple: Make a quality product. "A lot of it has to do with the products we offer," Chaskel says. "We've been able to expand significantly due to customer satisfaction and word-of-mouth."

And that, Blitterswyk says, has been the key to UGE's growth, both nationally and internationally. "If you have the best product and it's not too easily replicable, then your customers will come."