MacTemps: "hire the people you trust."(Little Big Corp: The Smaller Company Goes Global)(Adventure Capital)

In 1986, John Chuang and two fellow Harvard undergrads started a little storefront business that let students use computers and a laser printer to finish reports, papers, and resumes. The printer was too pricy for the trio to buy outright, and Chuang and his partners were soon introduced to the complexities of business: "To Finance that $5,000 printer, we had eight guarantors and a five-month application process," he recalls.

Chuang soon noticed that there was a need not only for machines, but for people to run them as well. So, in 1987, he launched MacTemps, which specialized in placing temporary workers who knew how to use computers. The company moved into quarters formerly occupied by a firm called Dominex, the Eggplant King. "Dominex was the largest importer of eggplants into the United States," says Chuang. "They used that room to demonstrate how versatile the eggplant was - how you could fry it or boil it." Long after MacTemps moved in, "you could still smell ancient eggplant when the steam heat came on."

But before long, Chuang and his colleagues could detect the scent of success as well. The need for people with computer and desktop publishing skills was skyrocketing. Companies were embracing flexible employment concepts that made temporary and contract workers more attractive. And MacTemps grew: By 1997, Chuang was president of a $106 million-plus company that was operating in 35 markets, and MacTemps had opened additional business units focusing on providing clients with Web-development experts and art directors, illustrators, and other creative talents.

It was good timing and good business, but Chuang notes that much of the company's growth has actually been "somewhat spontaneous" - a description that applies to the company's entry into international markets, as well.

MacTemps opened its first overseas office, in London, in 1992, because Chuang knew someone who was moving there, and because it was the "least scary international market," notes Michael Smith, the company's vice president of international markets. But, within a few years, the company had begun to take a more planned approach to its international business in order to take better advantage of the sizable opportunity it saw there. "The staffing industry is actually larger and growing faster in Europe than in the U.S.," says Smith. "Latin America is coming on really fast, and so is the Pacific Rim. Eventually, Japan should probably be our No. 2 country after the U.S. - if not our No. 1 country."

In the mid-1990s, MacTemps used a combination of acquisitions and new offices to increase its international reach to nine cities, including Toronto, Sydney, Tokyo, Amsterdam, and Paris. Two more offices are about to be opened in Germany and Singapore, and the company plans to launch at least six other overseas locations in the coming year.

As MacTemps grows internationally, Smith spends much of his time dealing with the complications of doing business overseas. "We're focusing a lot on infrastructure - finance, marketing, IT - because there's a lot to do there. And we always have some hurdles to overcome as we go to any new country, especially in the area of payroll law, which is especially tricky in Europe." The nature of its business and the relatively small size of its offices gives MacTemps fairly low overseas startup costs; a bigger issue is the time that it takes to navigate varying rules and regulations. "There are just more bureaucratic hoops to jump through, so an international office takes something like nine months to go from a twinkle in the eye to the first sale." That may not sound long, but a domestic launch typically takes MacTemps about three months. In the past year, the company has been working with Deloitte & Touche to help sort through tax, accounting, and start-up expansion, according to Chuang.

MacTemps also has to contend with a number of differing business practices and protocols. "In the U.S. and many countries, people just order up temps. When we place a temp in Japan, our people personally introduce them to the client, and this is usually followed by four or five more personal visits. In France, we need to sign a contract for every assignment; if the contract is for two weeks and then the client wants the temp to stay an extra week, then we sign another contract for a week. In Germany, we think we will position ourselves almost as a rep for freelancers," says Smith.

To deal effectively with each market, the company relies primarily on local managers, rather than on sending expatriates overseas. "There is a lot of reliance in our system on the local person, because we are not trying to come in with a cookie-cutter mentality," says Smith. "We are going in with very different philosophies and strategies in different countries. My goal is not to be the person who sets our strategy in Japan or France or Australia, but to hire and help the person who does that. So we hire a local person, and we teach them about our company - what works in other places and what doesn't work in other places. They synthesize that with what they know about their country, and with our help, they develop and implement the strategy they think will work there." While the company has systems and procedures to ensure that its temporaries have top-notch skills and that operations are run efficiently, "we think you fundamentally have to hire people you trust, and then you have to believe in them."

Smith says that MacTemps could move faster and open more international offices simultaneously, but instead chooses to target a few markets at a time. "We decided we want to have our cake and eat it too, by expanding and increasing international profitability year by year. In other words, we aren't going to open in 40 markets and tank our international bottom line for the next two years." And so far, so good, he adds. All international locations are in the black, save two opened just a few months ago. London has become one of MacTemps' leading markets. And international business this year will account for 10 percent of the company's profits. "Last year it was 9 percent, the year before it was 8 percent. Since the company is growing around 40 percent a year, we are really playing catch-up that way. My goal is to have our international business accounting for 25 percent of the company's operating profit in 2002. Longer term, it may be 50 percent. That's sort of the holy grail, but I think it's really possible."