Berlin is a good place to consider the politics of partnering. Just a block away from the city's Mauer Park is the office of Fork Unstable Media, a Web development and design agency. It's in an interesting neighborhood that is a sobering reminder of how international affairs affect business life. That's because "mauer" is German for "wall", and the park commemorates the Berlin Wall that until 1989 made this area part of what was then known as East Berlin.

Fork's offices are standard-cool loftspace. One wall of the conference room is a garage door. Some offices are separated by simple glass walls; other workstations share large sunny rooms. It looks like the kind of place where you'd find talented young people playing loud music and pushing technology to the limits — sometimes for pay and sometimes just to see if they can crash the technology. And that's exactly the kind of place it is.

It also is the kind of place that not too long ago, when U.S. agencies set out to conquer the Old World, was a natural target for purchase or partnership. Fork's experience with American suitors provides two lessons to American firms doing business overseas: Be aware of the uniqueness of local markets as you expand globally, and focus on your core abilities, partnering to obtain expertise that falls outside that core area.

Failure on these two scores is why many U.S. agencies have closed their European offices and gone home. The collapse of the e-business market in the U.S. was another reason, but still, says Manuel Funk, a partner at Fork, "It’s really hard to adapt an American business model to Germany." And the same applies to German companies in the States. Last year, when every U.S. agency wanted to rush into Europe, Fork had a lot of purchase offers. "We talked to practically all the network agencies," says Funk. But no deal was made.

"Most of them thought it was just as easy as buying a German company and renaming it," says Funk. "Their first mistake was to put Europe in one pot — "Okay, we entered Europe with an office in London" and after a couple years discover that London is not Europe. Then they came to Scandinavia or Germany, and it's very different. There are so many differences just between northern and southern Germany." Another mistake, Funk says, was "very centralized companies with management in New York" trying to tell their European offices how to do things.

Partnering is a way of life for Fork. Its creative and branding staff works with in-house designers and programmers. For tasks lying outside these core activities, it partners with a number of outside specialists. Fork's strong points are Web design, Java-driven interfaces, and brand development—strengths that have led to a five-year relationship with Nivea. Other clients include Mannesmann (now Vodafone), German cigarette maker Davidoff, Lufthansa, Hotwired.com, and DaimlerChrysler.

Germany’s government is encouraging the emergence of Berlin as Central Europe’s media capital. Fork is part of a steady flow of media companies from nearby Hamburg into Berlin; the government provided moving assistance. Co-founder David Lindermann even appears on the cover of a city brochure [above] devoted to business partnerships.

And yes, the mix of programmers, marketers, and artists resembles Silicon Alley's, but the business culture is different, says Funk. "There are parties and other networking events in Berlin and other German cities, but it's a different style than in New York, because Americans are more open."

Fork bridges some of these cultural gaps with a staff from many countries; it even maintains an office in New York’s Williamsburg district. But Funk dismisses any idea that it is attempting to run an "American office"; instead, the U.S. office is for meeting clients and feeding into the staff in Germany. In the end, it's a German company he and his partners are running, but they tap into global talent. That's a nice mix.

Associate managing editor John Zipperer can be reached at zipperer@iw.com.