The Portuguese SME Trap

When I first started working with SMEs in Portugal I was told this was a very difficult market. I wasn't told the reason and just accepted the challenge. I've always seen opportunity where most will find big challenges and for the first few months of building Grafema's first product for SMEs I even felt that it was easy to work with this customer.

But as I started to try to scale the business and left the super close call-me-anytime customer relation, I found out a completely different reality. The truth seems to be that most Portuguese small business owners rely too much on that type of relation and have a really hard time accepting processes.

The more I tried to create processes for the company, the more friction I got from these customers. And it even got to a point where I was almost disrespected by doing so, because they're so used to the old way of delivering services that they won't understand they can't control the relationship as they want.

Most Portuguese small-business owners are in fact workers with an incorporated company, but do not have a business. They lack processes, methodologies and predictability. This creates a lot of friction when they deal with a business that is trying to build those systems.

And the worst is that they work based on emotions. If you're delivering a great service, you'll be invited to their wedding, but wait till the moment you miss the first email or they find the first bug. They will too often transfer their fears, anxiety, lack of patience and irritation to you, and ignore logic, because they don't see their company as a business but as their own extension.

We're trying to solve a huge problem for SMEs but it's been really hard to match the perceived and the delivered value. That's not on them, it's on us. If they can't see enough value, it's only ours and our product's fault. But recently I've been finding less and less energy to create a better product for a market that will treat you based on their current emotions.

I still believe there's a great gap to be filled with Portuguese SMEs but maybe the reason is that most startups just realized the same as I did and went rather to work on a more mature market. I think if you have the energy to push it until the scaling phase with a great product, you'll find your gold. But if you lose that energy in the middle of building the business pre-scale, where you're still the one dealing with toxic customers, you're very likely going to find yourself in the same place as me — wondering if this market is still worth the pain.