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International startup expansion Wayra jul/14

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Tips and lessons for startups looking for international expansion

Tips and lessons for startups looking for international expansion

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  • 1. International startup expansion Wayra, Jul/14
  • 2. Fábio Póvoa
  • 3. $mart money  Money:  Seed, angel and follow-on  Hands-on work  AARRR growth / Mkt experiments / Biz dev deals  Strategy, operating experience & best practices  Networking  Raising money: series A early efforts
  • 4. My past global experiences
  • 5. Why go Global ? Who went ?
  • 6.  Massive home market  One language One (& stable) currency Legal system
  • 7. Maximize chances for international expansion: 1. Lay growndwork right from the start 2. Launch with an owner, strategy and plan 3. Apply key principles and best practices
  • 8. Lay down the groundwork right from the start
  • 9. Make the company’s mission GLOBAL from the outset.  To organize the world’s information and maket it universally accessible and useful.  To bring inspiration and innovation to every athlete in the world.  To make the world more open and connected.
  • 10.  Mix in some international DNA  Make localization mandatory for senior PM / engineering hires.  Recruit board members / advisors with international perspective  Track relevant development overseas  Inbound traffic by country  Emerging players  Local partners Team building
  • 11. Make right coding choices  Localization should be upfront priority  Localiz. = adaptability to different languages and regions WITHOUT development time  Consider crowdsourcing your label translation  Kick off your community efforts with a global user base  Obvious: customer facing. But do not forget revenue- related systems  Billing, payments, accounting  Leverage local players for in-country specifics  Take Iugu for example
  • 12. Protect your IP  Register trademarks and domain names in the top 10-20 world economies  You don’t want to invest in building a killer global brand only to find someone registered it before you in Russia  Make sure your IP protection plan covers you worldwide  Check out WIPO (World Intellectual Property Organization)
  • 13. Time check & questions Up next: Planning: developing a global strategy
  • 14.  You’re a  consumer Internet co., and a German partner offers you a deal  enterprise sw co., and your sales guys land a Japanese customer to make the quarter  It rarely turns out well:  Markets may have limited potential  Cost to serve may be higher  All of a suddent:  Customer commitments get missed  Sales sold: product people, not involved, have to deliver  International expansion just turned into a bad name International by accident: tale of a disaster
  • 15. Going global: make it deliberate & strategic Craft an explicit, well-communicated, company-wide international strategy that will act as your Co.’s True North as you cross the border  Address 5 key topics: 1. What’s our goal ? 2. What countries will we focus on ? 3. With what products ? 4. How we will go to market ? 5. What’s our operation model ?
  • 16. No one – aside from VCs and the former Soviet Union – requires 5 year plans to forecast a series of unknowns. Plans are generally a piece of fiction, and conceiving them is almost always a waste of time. What is our goal ?  Big, specific, measurable and inspiring objectives that will set the bar for the rest of the strategy  Qualitative ... “No. 1 player in mobile gaming in the top 5 world mkts by 2025”  ... quantitative “Generate 50% of our revenue from outside Brazil by 2030”  My suggestion: make it both!
  • 17. No one – aside from VCs and the former Soviet Union – requires 5 year plans to forecast a series of unknowns. Plans are generally a piece of fiction, and conceiving them is almost always a waste of time. Which country/ies?  This is your most important decision  Think through on a set of criteria that defines an attractive market  Language, GDP, pop. (per capita), competition, prod mkt fit, localization efforts, smartphone/broadband penetration, customer/partnership leverage  + your company biz model specifics.  Start a quantitative, data-driven analysis (aka spreadsheet)  Weight different criteria accordingly  Analysis suplements judgement (China example)
  • 18. With what products?  Product  Unless you are a very horizontal product (say Twitter, Facebook, Google), you will need prod. requirements + plans for every mkt you enter  Allocate founder / prod mngmnt / engineers / resources
  • 19. Go to market strategy  Your value prop. might dictate strategy:  Mobile app (app store penetration, or telco partnership)  Enterprise: direct sales force or channel partner  Freemium: seed top 10, and then target most succesful ones with direct sales  Local clones: buy or build decision  Rule of thumb  Beware of single partner reliance  Avoid joint ventures
  • 20. What’s our operation model ?  In the rush to launch overseas, this is the most overlooked question  What functions will be hold centrally x what will we do locally (thus hire !)  See Google x Facebook strategy for Brazil, for instance  Movile: VAS & PlayKids  Key issue: have a common tech platform and clear command structure  Op. Model drive organization structure decisions.  In most cases, a matrix works best: centralized consistency + efficienty tied to localized customization and execution  Aim for low overhead & rapid execution
  • 21. LOT’s of work, hein ? As the CEO: sponsor, assign someone passionate & independent to do it. Up next: Ownership &
  • 22. Day to day gets in the way  In a startup, there is always more TBD than available time or resources  In high-growth companies, core domestic business will consume most of mngmnt’s attention and the support of company functions  Going global thus needs to be a LONG-TERM project that demands SUSTAINED effort  International aspirations will go UNFULFILLED unless  started with an explicit strategy  adequate resourced  led by an exec with ability, authority and time
  • 23. Assign an owner from the get go: his/her role is to:  Be the voice of international on your team and throughout the company.  Become THE expert on overseas trends, competitors, mkts, partners, users, customers  Get out of the office: visit key overseas mkts, gain 1st hand knowledge and build reputation and relationships, set up productive, efficient visits for you & other members  Represent the company at overseas industry events  Lead the development of the international strategy  Lead discussions and negotiations with partners  Recruit and lead a small global startup team  Potentially manage the initial startup in the 1st several
  • 24. Ideal candidate:  Not your sales guy (or your domestic growth ...)  International experience, English / Spanish, knows the company well, seen as passionate, credible and impartial by the rest of the team  You trust to speak at conferences / represent at negotiations  Has time for frequent international travel / to live abroad  Given demands, no day-to-day operating responsibities  Typical challenging role for a domestic biz dev mngr
  • 25. A startup within a startup:  One is really hard, two in parallel is ... a growth necessity. The visible. And the invisible: Staff + Funding Visible can’t be ignored. But there is great temptation to ignore the invisible. “We have a great team, they will figure it out and get it done” is a big mistake Remember: if it’s unfunded, it’s not going to get done.
  • 26. As the CEO:  Look for ways to make it clear to the company that going international ia a critical priority for you personally  Involvement builds commitment. Take time to get buy –in from managers: they are/will be overloaded. Make it THEIR plan  Assign a small support team at HQ  Make it count: eading a biz dev should be a huge challenge &
  • 27. Remember to treat International as a startup: • Be realistic in setting schedules and milestones: it will take longer • Be prepared to live with a startup financial profile: several years of losses before profitability • Report on International biz separately from domestic. Similar (or steeper) growth profile, but years behind • Be ready for exceptions for corporate policies. Ex. Compensation for top overseas hires • Make sure everyone’s perf. Objectives and incentives encourage global rollout.
  • 28. (cont.)  Take time zones into consideration. Your work hours may be their sleep time.  Bring overseas hires for a month at HQ to soak up culture, value proposition, products and personal relationships.  Send out regular progress updates. A live video feed / high res TV + connection for calls works great.  Make it fun and celebrate success. Launch Global ops with themed party.  Protect and nurturel International business. Avoid compromising it after domestic revenue shortfalls or
  • 29. 1. No corporate champion / accountability. 2. Lack of commitment / understanding from the rest of the company 3. Reactive approach 4. Failure to dedicate resources (e.g. product development, support) 5. Cut back international projects to save the P&L 6. Treat overseas markets as another BU / state. 7. Rely excessively on an overseas
  • 30. If you’re really serious about having an impact and delivering a great return for yourself & investors, you have the obligation to build a global company.
  • 31. fabio@povoa.com

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