When you know your SaaS is ready to expand to new markets
Let’s face it, Americans have a poor reputation abroad. People assume we are close-minded and only want to see our country strive for greatness, even if it’s at the cost of others. It’s simply not the best environment for business expansion — at least for companies that don’t have an international growth mindset.
Fortunately, if you are a Software as a Service (SaaS) or business software or app, you live and work online, so you already have a global thought process, even if you’ve only been based stateside. There is no doubt as we become increasingly connected and globalized, there are excellent business opportunities abroad. Today we talk about how to grow your business into a global one, and how to learn from the mistakes of those before you.
You might be ready to take your business abroad if…
You know your niche
Sure, you’re a highly popular app for businesses all across America. But which businesses are using you most of all? If you don’t know where you’re most favorite — usually a combination of industry verticals like banking or healthcare and horizontals like human resources or accounting — you’re not ready for new markets because you don’t know enough to make a smart sales strategy.
Are you the inventory tool for university textbooks in the U.S.? That’s where you should start in whichever country you choose. You don’t want to cast your net too wide so you are just targeting the most popular bookstore in the country.
Make sure to have ready case stories and examples from your largest, most-proven customers. Say you are the point of sale tool used at all of Danny Meyer’s restaurants around the world. Sure, no case story would be complete without touting your presence in a Michelin star restaurant, but you want to focus on how Shake Shack saved time and money with your POS because you’re going to want to reach out to some local, higher quality fast food chains in your expansion.
You understand where you should go
Want to hear another stereotypically American business choice? Opening a headquarters in London!
“People naturally buy local, so the mistakes that many American tech companies make are they put an office in Dublin or London and they expect to take over Europe,” said Rick Pizzoli, founder of Sales Force Europe, Europe’s leading sales accelerator.
Every European business development call starts with London or maybe Dublin. But these cities could be more SaaS-saturated than even the Silicon Valley. Most of the rest of the world thinks they are the keys to Europe, while Europeans look at London as a stepping stone to the U.S. Sure, sometimes the major cities are your target markets, but not by default.
Also remember, it’s not always about the number of people trying your product — India is a continent so you’re always going to have a lot of trials from that area, but your conversion rate may not match the population. On the many SaaS teams I’ve been on, the best B2B lead generation came from two places — Oz (Australia and New Zealand) and the Netherlands. I’m not exactly sure why, but in both these areas, we would have a much smaller adoption rate, but often a 50% conversion rate from trial or demo to a long-time customer. These SaaS companies would usually give a lot of support automatically to trials in the U.S. and UK, but both of those markets were over-saturated by the competition and didn’t have half that conversion rate.
As you consider making a push for another country or continent, really get to know your current user base, and then where are your website and app traffic coming from. Then get to know your competition. Where are they? Where are they not? Is there an app just like yours with a 90 percent market share in South Africa? You want to skip launching there next. (But keep them on your radar because you never know the partnerships that can come in the future.) Want to make an international business plan? Start with what you already know.
You have a foothold on the local business culture
Europe is one continent, not one culture. There are about 50 countries and 50 languages present on that continent alone. If you’re looking at European business development, you need to start looking at it in pieces.
First, the language. There’s no doubt that English is the international business language, but it’s more welcome in some parts than others. Northern and Western Europe have a lot of smaller countries with unique languages, so the Nordics and Benelux join Ireland in using English in most professional transactions. German-speaking countries and Portugal fall somewhere in the middle — they usually have proficient English, but still prefer their native language for negotiation. Spain, France, and Italy expect you to speak their languages and even prefer locals that speak Catalan or Napolese.
And it’s not just about the language you speak, but how you position and sell your app. Mediterranean countries still playing catch up from the financial crisis find “least expensive” and “saves money” excellent selling points. The lands of Volvo and BMW aren’t looking for the cheapest route to anything; they want proven track records, security and stability, so lead with your testimonials and big-name brands in marketing to them.
Countries with high tech adoption rates like China, Japan, and the wealthier parts of the Middle East typically want insiders who speak their languages but are looking for proven track records elsewhere.
Now you can hire full-time boots on the ground, but that takes money, local recruiters, b4szf and so much time to get up and running. If you use a service like Sales Force Europe, you get experienced locals that are already selling SaaS in the area, who can accomplish a lot more out of their cultural knowledge and professional network in just a couple days a week.
That’s what they did with journalism engagement tool Livefyre. Sales Force Europe hired one full-time person who, among other things, negotiated a $300,000 contract with Time Out magazine in the first three months. Three years in, the international leg had ten full-timers driving $10 million in annual revenue before the SaaS was acquired by Adobe.
Experienced locals are much better at selling your product than any of your staff you try to transplant.
But what about you and your SaaS? Have you found business opportunities in other countries? Share your tips for business expansion in the comments below!