Emerald Emerging Markets Case Studies

With your headphones on: go global or stay local?

Piotr Wjcik, Aleksandra Wasowska, Krzysztof Oblj, Mariola Ciszewska-Mlinaric,
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To cite this document:
Piotr Wjcik, Aleksandra Wasowska, Krzysztof Oblj, Mariola Ciszewska-Mlinaric, (2017) "With your headphones
on: go global or stay local?", Emerald Emerging Markets Case Studies, Vol. 7 Issue: 1,pp. 1-21, doi: 10.1108/
EEMCS-05-2016-0095
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 With your headphones on: go global
or stay local?
Piotr Wjcik, Aleksandra Wasowska, Krzysztof Oblj and Mariola Ciszewska-Mlinaric

Part A Piotr Wjcik is Assistant

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Professor at the Department

For three years Audioteka has benefited from having the first-mover advantage in the Polish of Business Strategy,
audiobook market. The company was founded in 2008 by Marcin, who was an experienced Kozminski University,
entrepreneur, and Bazej a sound engineer. Both sought to combine their complementary Warsaw, Poland.
skills and experience to start a business in the emerging industry. Three years after Aleksandra Wasowska is
inception, however, the company was facing a major challenge regarding foreign Professor at the Faculty of
expansion. Making a good decision was not an easy task. The founders had to decide on Management, Department
future companys growth options. Should Audioteka focus on the incremental growth in of Strategic and
Poland by using its modest resources, or rather go with the flow and expand abroad? International Management,
University of Warsaw,
How cool is that!?! thought Marcin Beme and took a sip of hot tea as he laid on the Warsaw, Poland.
terrace. He was spending a short 2011 winter vacation with his wife Kate in Zell am Krzysztof Oblj is Professor
See-Kaprun, at the foot of the Kitzsteinhorn Glacier, in the Austrian Alps. It was a perfect at the Department of
day for skiing with an amazing view of the snow-covered mountains. The sun was shining Business Strategy,
and it was fairly warm for the time of year. He felt he deserved this. He remembered very University of Warsaw,
well from one of the seminars for entrepreneurs that doing nothing from time to time fosters Warsaw, Poland and
Kozminski University,
creativity and brain recovery. And that is how they decided to take a break. The Company,
Warsaw, Poland.
Audioteka, was really taking off. He was hoping to recharge his batteries in the Alpine valley
Mariola Ciszewska-Mlinaric
and finally decide what to do, whether focusing on the home market is the best option for
is Professor at the
the company. With his headphones on, he wondered: Audiobooks are a fascinating Department of Business
phenomenon, the company couldnt have been created a few years earlier. We hit three Strategy, Kozminski
great waves of mobility: technological mobility, human mobility and content mobility. University, Warsaw, Poland.
Consumers want to have access to everything, quickly, and exactly when they want it and
[. . .] theyre ready to pay for this!

How it began
Marcin holds his MSc in Econometrics from the University of Warsaw, a BA in Financial
Mathematics and an Engineering degree in computer science from the Warsaw University
of Technology. He always dreamed of becoming some sort of businessman, although he
did not know what exactly he could do. After graduating, Marcin realized that companies
began at that time to experiment with technical solutions to link business offers from
different industries. He felt this was his chance, as he always wanted to do business and Disclaimer. This case is written
solely for educational
make his ideas become a reality. He gave it a shot and developed two start-ups, one of purposes and is not intended
which, was subsequently sold. The first was a tele-information company offering hardware to represent successful or
unsuccessful managerial
and software solutions of wireless data transmission for retail, banking and energy sectors decision-making. The authors
(machine-to-machine) which he subsequently sold. Marcin learned that telecoms are may have disguised names;
financial and other
powerful as partners and customers and can give scale to a business. The second recognizable information to
start-up was a media production company specializing in the production of entertainment protect confidentiality.

DOI 10.1108/EEMCS-05-2016-0095 VOL. 7 NO. 1 2017, pp. 1-21, Emerald Publishing Limited, ISSN 2045-0621 EMERALD EMERGING MARKETS CASE STUDIES PAGE 1
 content. Marcin, at this time, was taught a lesson, that to succeed, you need to control
either the content (intellectual property) or the distribution channel.
Marcin was also a music and a book lover. Despite being involved in developing his ideas
and managing his own companies, he tried to devote every spare moment to classical
music and reading novels. At that time, he also became fascinated with new possibilities of
audio technology. When he met Blazej, a sound engineer working for Polish Radio, the two
men quickly saw the potential in their cooperation. What a coincidence, Marcin thought.
Our knowledge and experience complement each other. This can be huge!. They
discussed the idea to sell audiobooks from the Polish Radio archives as collections on CD
via the internet. At first glance, it looked pretty attractive although traditional retail stores
such as Empik and Merlin and mass merchant retailers (Media Mart, Tesco) could be
potential direct competitors, their main offer was music and movies. They also could serve
as a distribution channel. Marcin felt this was the right direction, but he was not sure about
the business model. He was aware of what the market needed and CDs seemed to be
outdated. He already was involved in a high-tech business and knew that the market was
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undergoing a technological change. Many companies in Poland had to adapt. Consumers

were increasingly aware of what was going on abroad The internet started becoming very
popular and the economy was booming. Implementation of new IT solutions was a part of
that. The idea of starting a new business in a non-existing industry kept Marcin awake at
night. It took several weeks before the idea began to take shape. One day, Kate was
looking on the internet for an audio recording of her favorite book. Finally, she found the
English version on Audible.com as an audiobook.
Audible was the first company that was providing this sort of service on the Web for
playback on personal computers (PCs) or mobile devices. It was providing audio content
by subscription or one-time purchase. Look, this is my favorite book [. . .] but in English,
she told Marcin. Bingo! This is what I was looking for, let me see this, he said amazed.
Thanks to his wife, Marcin quickly saw the potential to refine and commercialize the idea in
a purely digital form, allowing instant access and mobility to users. Filled with energy, he
showed the Audibles webpage toBazej. I dont see recordings for non-English speakers
[. . .], he said. And this is why we will fill this gap my friend!, responded Marcin.Bazej
was not sure what this had to do with their original idea of selling recordings on CD; he
believed this was different type of business and did not know how to proceed further. After
several meetings, the initial idea to sell audio content on CDs was dropped, and the
entrepreneurs focused on the creation of an internet platform selling audio in digital form.
Marcin began to search for already existing solutions and decided to transfer Audibles
business model onto the Polish market and took the leading role in the creation of the new
business. Soon after, he used his wide network of relationships to seek technical and
financial support. The entrepreneurs assumed that the business logic behind instant
access to such content as movies through the internet could be applied to audiobooks.
This meant selling files through a website. Both of them were confident that their new
venture could benefit from Marcins experience in his complementary businesses on the
intersection of new technology and entertainment.

Talking books taking off

It was obvious that to create the platform, the founders needed money. The first flow of
capital was possible due to European Union funds; however, the co-founders quickly ran
out of financial resources, so Marcin started to look for private investors and a technology
supplier to build the platform. In late Spring 2007, he managed to talk to his friend Janusz
then K2 Internets CEO (a big digital marketing agency). They met in a popular lounge bar
in Warsaw. Marcin told him that he had a weird idea and that he did not know how this
would turn out but he said he had some money and wanted to try.

PAGE 2 EMERALD EMERGING MARKETS CASE STUDIES VOL. 7 NO. 1 2017

 Marcin asked Janusz to create a system. It was warm, in May I remember sitting in a
fancy restaurant, Blue Cactus outside. We talked and he said that he wouldnt make this
system, he recalled: I became indignant when he said this. Hes my friend and he wont
make the system!?. But Janusz quickly added that he was ready to invest in the idea
because he liked it. He preferred to become a technology partner rather than being only an
IT supplier. It was something like an offside project, a spin-off to him, where his company
(K2 Internet) could use its competencies. At the end of 2007, the co-founders and K2
representatives met to decide on the details of the final deal and agreed to split the equal
shares between co-founders and K2 which become not only a technological partner,
creating the platform and providing IT support, but also served Audioteka with its
competencies, marketing support and office space. Soon after Marcin admitted, The
decision to start this business together with K2 was the best decision I have ever made
during the life of Audioteka. They gave us an incubator, and were able to focus on our
business; we had great flexibility and access to funds on hand. We felt we were in a nest.
Neither online music nor the audiobook industry existed at that time in Poland. It could have
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been seen rather as a niche market. If commercial audio recordings of books existed in
2006/2007, they were available mostly from bookstores and e-sellers whose business relied
on the physical distribution of tapes and CDs. Marcins partner (K2) took responsibility for
bringing the content together, provided some financing and a stake of 50 per cent in their
venture. Marcin initiated all the major milestones. The first thing needed to be done to start
the business was to create a dedicated website. From the outside, it looked like an e-shop,
but from the back-end, it comprised a complicated and novel IT solution such as file
protection protocol and accountability with publishing houses.
Another great challenge was to sign agreements with the latter to acquire content and solve
copyright issues. Audioteka was a bit of an instant hit, and Marcin did not lead this business
in a typical structured way, taught in MBA courses. Within a couple months of its launch,
Marcin needed to recruit new people. In the beginning, no formal analytical tools and
procedures were implemented. Such things as operational performance management,
financial data and calculation were not the most important factors for Marcin. He just looked
at them and made decisions. One of the employees stated: The motto of the office shortly
after inception was: just do it, since there were so many things to deal with, we could only
act. Marcin started to negotiate with rights owners (publishing houses) which took several
months and finally led to the acquisition of 120 titles to Audiotekas collection.
It was a demanding task though, as publishers were opposed to this initiative remarking
that [. . .] audiobooks are a threat to traditional books. Marcin had to change their
mindset. The founders realized that in time, this could become a serious obstacle, giving
them a reason to consider creating their own content instead of buying it from the outside.
This allowed Audioteka to launch a Web-based service in November 2008 and acquire 500
customers in the first couple of months. The approach taken at that time was purely
technological, as an employee said. We were building an ecosystem, a platform, an IT
solution which allowed us to scale this business. Content was not the issue at that time.
The year 2009 proved to be a pivotal year for the company. Over 50,000 audiobooks were
downloaded by users, but Marcin (who soon became a leading co-founder) was not fully
satisfied with the platform at that time. He wanted to change the way everyone paid for
audio versions of books. He also believed that Audioteka should change the perception of
the product in Poland (from the product for the blind to a fashionable commodity). This is
why the first online survey was launched to get feedback from users. One of the
respondents was a sailor and stressed that when having a night watch, the only thing he
can do is to listen to audiobooks. Such feedback gave the company a hint of how to
position and communicate its value proposition. Marcin wanted his employees to believe
that they are involved not only in this company development but also in the whole market
creation. We are building the whole industry [. . .]. Maybe audiobooks are not going to

VOL. 7 NO. 1 2017 EMERALD EMERGING MARKETS CASE STUDIES PAGE 3

 change the world, maybe we are not revolutionizing the business the way as Apple did, but
after all, in our little world, this is the same philosophy: to do something great. Why? To show
that we can do something great, here in Poland, and that we can expand, Marcin
remarked in an interview.

Shift to mobile
Because of a change in the companys growth orientation, 2009 brought about cooperation
with Nokia. The firms mobile application (together with an audiobook) was pre-installed on
the Finnish companys 250,000 e52 model phones. This collaboration was possible thanks
to the entrepreneurs personal network. As he said: I knew a guy, who knew another guy,
whose company developed dedicated applications for Nokia. And he introduced me to
Nokia. Starting a partnership with Nokia was a conscious decision. Marcin, with his past
experience in telecommunications, knew that multinational corporations in this industry
could serve as a springboard for visibility and growth. Before he laboriously established
connections waiting for a long period of time for an answer. The relationship changed and
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now multinationals sometimes call him. As he explains, this is because of uncertainty:

Telecoms have deep pockets. They face a shift from voice transfer to multimedia. They do
not know exactly what to do, or how, so they listen to such freaks as me and buy my
vision. They noticed that pre-installation of audiobooks makes a difference. If people have
two similar mobile phones, they choose the one with an audiobook. And that is the value we
add [. . .]. The big guys GSM operators, mobile phone producers today they want us!.
Audiotekas logo appeared in Nokias commercials and all promotional materials. It was
risky, as developing a dedicated application for Symbian, financed by EU funds, did not
guarantee profitability. Happily for Audioteka, the decision turned out to be successful
which encouraged the leading co-founder to establish further cooperation with other mobile
producers (Apple, Android/Google) and operators (T-mobile, Orange, Play), repeating the
success. It also helped Audioteka to not only become visible to consumers but also change
their perceptions about the brand. Marcin emphasized: The cooperation with such players
as Nokia, HTC, Samsung, Apple, T-Mobile, Orange and Play has built our PR-marketing
position and given audiobooks a fashionable and ultra-modern image.
Even in 2008, it was perceived as a product for the blind [. . .] but we managed to promote
it as fashionable and modern content for mobile people, using mobile technologies. Even
if telecoms had changed their approach to audiobooks, I would have been left with a large
database of end users. [To put it bluntly,] I would not need them anymore. Audioteka made
a shift to mobile devices which triggered a redefinition of the companys business model
into a platform serving not only as a place of production and sale of audiobooks but also
offering a distribution channel to audiobook publishers. Marcin realized at that time:
Audioteka is a very special mix of these two things a mix that is very difficult to
characterize and copy. A lot of very good content without a very good and efficient platform
does not create value. A very good and efficient platform without rich content does not
create value either.

A note about the industry

In the first decade of the twenty-first century, development of information and
communications technology (ICT) showed big potential in increasing demand for new
media. Driven by the digital transformation, heavy users of audio had been commuters and
fitness enthusiasts who treated audiobooks as an alternative for radio, music and paper
books. A significant step for the industry took place in 2003 when Apple launched its Icons
music service and online iTunes music store, forcing the competition to follow. The online
service allowed users to download audio content (single files) and burn it onto CDs. In the
early 2000s copyright infringement was a concern, mostly because of Napsters
peer-to-peer free service. This situation created a market for legal music services that

PAGE 4 EMERALD EMERGING MARKETS CASE STUDIES VOL. 7 NO. 1 2017

 eventually would increase distribution of legal digital audio to the consumer. Similar or
slightly lower numbers could have been noted, respectively, in Western and Central and
Eastern Europe. Wireless and digital transmission technologies were growing and allowed
the user to download content directly to mobile devices. This market was worth $1.2bn in
2011 (Audio Publishers Association, 2012).

Super production
It was high time to move on with the content. Marcin understood that this is one of the major
issues in this type of business. In September 2009, the company launched its own
audiobook super-production (with 120 actors, dedicated music and sound effects) for the
first time. One of the important issues that Audioteka had to face at that time was the
relatively small number of audiobook users in Poland. Looking for effective means of
promotion, Marcin decided to invest in this super-production. As the company did not have
its own cash resources, the entrepreneur decided to lend the company his private money.
Kate was not happy but she understood that having an entrepreneur as a husband means
being in a relationship not only with him but also his ideas and passions. The idea was to
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capture public and media attention to promote the venture. The book that the company
chose was a best seller on the Polish traditional book market. According to the founder,
Audiotekas first super-production was the biggest event of this kind in Poland and Europe.
Few other super-productions were launched in the following few years, involving celebrities
from show business. This decision was dictated by the founders previous experience. He
was aware of the importance of content ownership and show business rules. Later that
year, Audioteka began to develop their own content with 300 audiobooks. Such a turn of
events and the leading founders attitude to the companys growth, his ambitions and his
emerging international vision, were in contrast with the second founders beliefs who
preferred to play safe at home (the service included only Polish titles!).

The dilemma
And now Marcin is lying on a terrace in a deck chair in the Alps with a charming view
on a mountain with the sun overhead. Hes thinking about the road Audioteka has
undertaken and about the path it can follow to flourish and become no. 1 on the market.
Marcins ambitions were (in his own words) to build something bigger than Poland.Bazej
wanted to own a Web business where he could work all his life, having a stable monthly
income, while Marcin has always pursued something big and become successful in
business. As a result, this led to some tensions between them. One of the managers
explained this as follows: All the big projects involving cooperation with big partners have
been initiated by Marcin. He thinks about Audioteka in global terms [. . .] I think it was a
consequence of their different thinking. They were simply on different planets. The one was
interested in having a small business, where he could work until the end of his life, having
a stable monthly income. The other thought completely differently, dreaming about building
a big business. There was an exceptional opportunity for Audioteka to grow fast. Both
technology trends and changes in consumer perception of audiobooks indicated that the
audiobook industry has potential to develop dynamically in the coming years. A turn of
events seemed to confirm this.
Marcins phone rang. It wasBazej. Hey, whats up?, Marcin picked up the phone. Why
didnt you tell me that you talked to a new publisher? How was it? Any good news?,Bazej
asked. For a time being, Marcin tried to explore the idea on his own. He was testing the
water in regards to new markets and spoke with a potential partner (a publisher). He was
just being curious. He felt that he needed to do this but not engage others in this just yet.
Uhm [. . .] nothing big. I met this guy 2 weeks ago accidentally. Thats all, Marcin replied.
Ok then, I thought it was something you wanted to talk to me about. We need to have a
beer. Bayern play against Real Madrid in the Champions League. Call me, when youre
back in Poland,Bazej stated and hung up.

VOL. 7 NO. 1 2017 EMERALD EMERGING MARKETS CASE STUDIES PAGE 5

 Marcin knew this state of uncertainty cannot last any longer. He felt he needed to talk with
his partner and the rest of the newly formed team, but for now, he wanted just to relax
before going back to business life. In the evening, Marcin wrote to all Audiotekas team to
organize a meeting upon his return. When he got back, he kicked off the meeting of the
growing Audiotekas team in a cramped conference room in the companys headquarters,
located in the Mokotow districts business park, to announce his plan. We cannot wait any
longer and count on the growing potential of our home market, he started. Competition
will emerge rather sooner than later and were not going to have the audiobook market to
ourselves anymore. We need to act as soon possible or get eaten by sharks and by sharks
I mean definitely bigger players like Empik or Merlin. Similar technology is being probably
developed, so we need to bear that in mind. Marcin glanced atBazej expecting an
objection. What do you mean?, askedBazej. We need to look around for possible options
of going outside Poland, if we want to grow, explained Marcin.Bazej opposed: Audioteka
is not a scalable business we sell audiobooks in Polish. So what is scalable here?
Nothing. Lets focus on our market, its big enough. It will be worth more and more, lets
capitalize on that. Our platform is not even working properly and we have to develop it first
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before thinking about going abroad. Marcin argued: Mobile technologies are growing
and the potential client base worldwide has doubled in the last couple of years. People
need such a service and we are gonna give it to them anywhere they are. How much
would that cost?, askedBazej. Maybe a couple of hundreds of thousands, guessed
Marcin. Youve got to be kidding me! Look at our finances, where are we going to take this
money from? We cannot afford this! You havent even considered additional marketing and
sales costs. We know nothing about any foreign country in terms of its audiobook market.
With whom will you be talking to? How do you plan to conquer other countries!?,Bazej
exclaimed in an irritable voice. Calm down, we will figure this out. Just trust me, if we dont
take the next step, well give into the market to more experienced ones here, said Marcin.
He noticedBazejs eyes narrowing. He wasnt surprised. Id also like to meet some
candidates to lead this, he continued. Its not only your company!,Bazej shouted,
slammed the door and left the room. Everyone, including Marcin, was in deep shock and
couldnt believe how these two friends working together in harmony until then were getting
into such an argument.
Considering two different visions of both founders about the future of the company, a
dilemma emerged. What actions should Audioteka pursue if it is to grow? Was foreign
expansion the best option for the company? Should Audioteka stay local or rather go
global, taking into account that it offered titles only for Polish-speaking customers? If so,
why, where and what entry mode should it pursue, considering the high risk and uncertainty
of the business and newness of the market?

Part B
De kuju, nashledanou![1] said Marcin when leaving the office room. Audiotekas new
vice-chairman was paying a working visit in Czechs headquarters in Ostrava in Spring
2013. He was replaced few months earlier by ukasz Kosman a former Audiotekas
Account Manager and head of system development. Newly appointed CEO was a 26-year
old graduate of Warsaw School of Economics and MBA diploma holder with a three-year IT
and financial experience gained in Poland and Singapore. When foreign expansion
opportunity appeared, Marcin decided to resign from CEO position and focus on
internationalization of his company. ukasz become responsible for domestic operations.
While waiting for an elevator, Marcin realized that already three years had passed since he
split with his former co-founderBazej and took charge of Audioteka himself. He regretted
that their joint endeavor ended up this way, but Audioteka moved forward since then.
Somewhere deep inside he wanted to be this way. In fact, this was one of the reasons of
conflict between him andBazej. Before, Marcin never declared loudly that going global was

PAGE 6 EMERALD EMERGING MARKETS CASE STUDIES VOL. 7 NO. 1 2017

 his ambition. But there was a big hope: What if?. And it happened. The notion that our
product is not an audiobook but a platform was eye-opening. We just need content. In the
end, its relatively easy, Marcin said once in an interview. These words were still
resounding. This turned out to be the key for the business. When Marcin understood this,
he was ready to pitch redefined business model of a platform offering access to
audiobooks at numerous conferences to find new investors and partners. At the backstage
of a 2010 conference that took place in Berlin, Marcin had a chance to talk with several
people in the corridor. Some businessmen from different countries approached Marcin,
who got interested by him when presenting Audioteka on stage. One of them, Milo from
the Czech Republic was the most specific and both were talking for a long time. He put
Marcin in contact with another guy, who was the owner of the largest book distributor in the
Czech and Slovak Republics, and basically it clicked. It was the moment when the founder
started to think about Audiotekas further development. Based on this conversation, Marcin
decided to seize the opportunity and materialize coveted foreign expansion.
In January 2011 he went to visit him in Prague. Sometime later he recalled: The Czech
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Republic was a deliberate choice, but entering a foreign market required conducting
marketing activities and making common recordings, step by step. Marcin remarked: You
cannot invest immediately a million zloty in recording audiobooks. If it didnt work, we would
withdraw. Czech market seemed to be a risky but significant step in Audiotekas life that
time and potential partner was a major book distributor. Marcin explains the reasons behind
establishing a joint venture in Czech Republic: The partner took upon itself to finance our
new venture. Secondly, its close, and I knew we would have to travel there. If I started from
Australia, travel costs would kill me. Third, its a small country but it has a great reading
culture. 4,5 book per head. In Poland its half of it. In Germany also around 4. Its simply a
protestant country which reads.
Audiotekas partner was responsible for financial side of the project and partners
relationship management. It served as a guide both in financial and operational terms, thus
mitigating the internationalization risk. On the Audiotekas side was content development.
To effectuate this, it was crucial to establish contacts with key partners (local publishing
houses, acquiring copyrights and creating a catalogue of audiobooks). Service was
launched on November 2011. First 300 audiobooks were offered through the platform a
similar solution to one in Poland a website in the Czech domain Audioteka.cz hosted in
Poland. The company carried out minimal product adjustment and resource adaptation.
After a year, the business reached a breakeven point.
At the same time, Audioteka got its first round of capital financing. Giza Polish Ventures, a
sister company of Giza Ventures Israeli fund, invested 440,000 for a 20 per cent stake in
Audioteka. Getting cash injection was a turning point for the company. Marcin admits that
Audioteka has for five years been like a pack of students: I was running and the rest of
people was running after me breaking their legs. International investors started to help
structuring the whole business (strategy, performance metrics) and wanted to formalize the
management process by dividing it into areas such as accounting, finance and law. One
of the employees admitted that time: For many years, Audioteka was a purely visionary
business, it was hidden in Marcins head. Now it is getting materialized. Finally, with the
help of Giza Ventures, Audioteka started to develop managerial processes, instead of
solving problems all the time. ukasz, the new CEO recalls: Marcin has never run this
business in an analytical way, has never made decisions based on data [. . .]. He just
looked at things and made decisions. So this is a different approach. I am trying to
understand our strategy and make decisions or change some decisions. There are aspects
that simply dont lie in Marcins area of interest such as financial results and their
calculations. These are things that are more my responsibility. Giza is interested both in
vision and in performance, so Marcin talks with them about vision [. . .] while I take care
about the way we do this. Marcin admitted this: Audioteka is entering a difficult phase; we

VOL. 7 NO. 1 2017 EMERALD EMERGING MARKETS CASE STUDIES PAGE 7

 are transforming a start-up into a regular enterprise. So we have to give this enterprise a
structure. To do this, I would need to have different competencies. Im an entrepreneur, not
an executive, and I really find the executive job boring. So Ive hired a guy who is better
than I am, and hes now the chief executive. This way, I can do my job in the foreign
countries.

Getting things done

Taking the company to the next level coincided in time by an accidental turn of events.
Barely seven months after Giza entrance, something odd happened. On a hot day in June,
Agnieszka, Audiotekas content manager, had a meeting with a businessman interested in
recording the audiobook version of the Torah. In a casual small talk, the businessman
mentioned having business contacts with one of the major car manufacturers in the world.
Agnieszka mentioned Marcin about the discussion. At that time, Marcin got a new idea of
creating a car application for audiobooks. She gave me his business card and said: Not
sure, if its going to work out. He seems a little crazy. But four days later Marcin and the
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businessman were in Paris, presenting Audioteka to one of the major car manufacturers.
The businessman turned out to be the owner of a company developing, among other
projects, IT applications for the French car manufacturer.
Marcins gut feeling was that cars are key for the audiobook market. His new business
partner introduced Marcin to the senior managers of the car manufacturing corporation and
helped to convince them that Audioteka was a viable company. Soon after, both sides
signed a very lucrative contract which allowed the Polish firm to pre-install its software in the
vehicles sold in France and Spain. They were extremely happy, as that was more than they
wanted. It meant a huge opportunity for the start-up and an even bigger responsibility.
Audioteka was absolutely not ready for this type of endeavor, but Marcin believed he would
manage as the solution was almost ready to scale.

Business a la French
Decision to eventually expand into French market was in line with Marcins principle of three
simple rules: of internationalizing with partners (based on the Czechs lesson), choosing
potential markets where Audible is not present and where Audioteka could be number one
after three to six months. Audible is strong in Germany but isnt in France. Marcin remarks:
[Audible] is weak there. Im stronger as I have a contract that Audible doesnt. [French car
manufacturer] pulled us. We declared to be the audiobooks supplying service wherever
they go. This allows us to scale in a simple way. Audioteka was in a favorable position
since it already cooperated with Orange, HTC and Nokia on the Polish market.
Soon after signing a contract with the French automobile company, Audioteka made an
offering to HTC and Nokia in France. Imagine entering to France with pre-installations on
Orange phones and French automobiles. I dont need to do anything else as Im doubly
anchored there. These partnerships are tools to do that, remarked Marcin. So Marcin was
convinced that Audioteka needed to have a partner like in the Czech Republic to
accomplish its objectives. Marcin was seeking French publishing houses from Poland to
talk with. But these attempts were unsuccessful. French companies did not want to talk
to foreign unknown Audioteka.
On one of the meetings, with the rest of the Audiotekas team, at Warsaw headquarters to
discuss the companys partner acquisition strategy, the CEO began by setting the context
of the French business culture: When making a deal in France, the first thing that you need
to do is, when sitting at the table, eat a croissant, repeat it 50 times and then you can
continue with the business stuff. Marcin nodded affirmatively and said: French are
different [. . .]. They even wanted to have our servers there, not to let out the French national
good and we have to remember that France perceives French literature as a cultural
essence. So what do we do?, asked Agnieszka. We need to rethink our partner

PAGE 8 EMERALD EMERGING MARKETS CASE STUDIES VOL. 7 NO. 1 2017

 acquisition model. We made a mistake about France, its different than we thought, replied
Marcin.
He realized that accessing French publishing houses should focus on overcoming their
unwillingness related to lack of trust and national pride. Marcin did not give up. While
figuring out how to solve this problem, he was constantly looking for new contacts to French
publishing houses. Finally, he found Guillaume, a representative of a French publishing
house. After few face-to-face meetings, Marcin decided to open up a subsidiary in France
and offered Guillaume the job of a country manager, initially on a probation period.
Guillaume proved to be effective, so Marcin and ukasz, after consultations with both
investors Giza and K2, offered him a yearly contract.
Audioteka had to bear the fixed cost of the French country manager, which was not funny
money for the small company. Although risky, this seemed to be optimal solution for
Audioteka not only in the face of inability to establish contacts with French publishers but
also due to a favorable tax rate (in France, it is 5 per cent, while in Poland, it amounts for
23 per cent). This move turned out to be successful. Audioteka France was officially
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established on January 2013. More and more French companies were willing to cooperate
and soon the content (several hundred titles) was ready to be released via Audioteka.fr
website.
Audioteka was lucky and benefited from a mammoth media affair. When first audiobook
recordings in France, a journalist called one of the French publishing houses. An employee
responded that they have signed a contract with Audible, having Audioteka in mind. Her
words were published and she had to deny her own words. She made a huge mess
because they dont want to make a deal with Audible. They chose us and this will carry
news to the world, Marcin recalls the situation. Marcin admitted: Business model relying
on telecoms and cars usually works, as these are simultaneously tools allowing to listen. So
far we have giant two-digit conversions, while internet-based businesses takes out 1 or 2.5
per cent, and we have two-digit conversion out of our partnership and this a slight shock.
And now, Marcin is going back from Ostrava to Audiotekas Warsaw headquarters sitting
in a train, admiring the view outside the window. Things are going in the right direction.
Going abroad with the product was a good choice and so far, well executed, thought
Marcin. As expected the Czechs audiobook market grew and Audioteka was getting more
and more benefits of its presence there. But Marcin also knew that hes playing now high
stakes as Audioteka is operating now in two foreign countries and needs to grow further to Keywords:
fulfil the shareholders expectations. How should I proceed now with Spain? I need people Entrepreneurship,
to help me there [. . .], Marcin felt he cannot sit back and relax when such opportunities International business,
emerged. He was always dreaming about international success and now its getting to Online shopping/electronic
materialize. commerce

Notes
1. Means Thanks and see you! in Czech.
2. See at www.vikingshaveclub.com/ (access 18 October 2016).

Reference
Audio Publishers Association (2012), available at: http://independentpublisher.com/article.php?
page1611 (accessed 6 April 2016).

Corresponding author
Piotr Wjcik can be contacted at: pwojcik@alk.edu.pl

VOL. 7 NO. 1 2017 EMERALD EMERGING MARKETS CASE STUDIES PAGE 9