Maia Haag, noted expert speaks at Internet Retailer Conference about her company's international expansion and what factors companies need to consider before expanding internationally.

1. by
maia haag
co-founder and president
how we did it: 2 approaches for expanding abroad

2. how do you know when to expand internationally?

3. what are the pitfalls?

4. but first, who is I See Me?

5. we sell personalized children’s books

6. made one-by-one for each child

7. our customers experience the joy…

8. …of making a child feel special

9. a few examples of our books…

10. animals bring letters
to spell your child’s name in rhyme

11. in this award-winning personalized storybook

12. your child’s name is incorporated into the text and illustrations

13. your child’s face can even become part of the illustrations

14. we sell here….

15. iseeme.co
m

16. and here…

18. and we’ve received coverage here…

20. so one day our team asked

21. should we expand internationally

22. NO, not yet

23. the U.S. opportunity is enormous

24. expanding internationally would take our eye off our core business

25. all good points, especially since our team was smaller then

26. but then a competitor began aggressive global expansion

27. and the time was right for us to examine the opportunity more closely

28. why expand internationally?
• faster growth
• exploit your company’s technology or know-how
• extend the sales life of existing products
• diversification
• less vulnerability to changes or events
in specific regions
• find markets with different seasonal fluctuations

29. why not?
• operational complexity
• risk of neglecting the domestic business
• can overwhelm the organization; stakeholders across the
company have to carry more responsibilities
• need to meet foreign regulations and standards—complexity
• financial commitment

30. why did we decide to move forward?

31. the risk of losing market share
outweighed the downside of adding complexity to the organization

32. when should a company expand internationally?
• financially stable with positive cash flow, or at least solid financing
• good base of business in the domestic market
• adequate financial and management resources to keep the local market
going strong while expanding
• you’ve developed some initial traction in the country you’re considering
• when 25% or more of your business is coming from international markets,
then it’s definitely time to scale

33. where to enter?

34. small- to medium-sized companies typically tackle countries with
a large number of target customers
and a high level of disposable income:
U.K.
Canada
Australia
France
Germany
Japan (but it’s culturally unique)

35. focus on low-hanging fruit

36. 1) Where have you already had success?
• look at your own sales data
• your google analytics > audience > geo > location
• google’s global market finder

37. 2) How much estimated opportunity there is in that market?
• market size for your product
• competition
• is there a gap that’s not satisfied by a local company?
• do a SWOT analysis
• favorable socio economics
• stable political environment

38. 3) How easy will it be for your company to do business in that market?
• do you have a working knowledge of the language and culture
• high broadband and mobile penetration
• shipping infrastructure
• accessible payment infrastructure
• ability to get the supplies you need
• relatively easy regulatory and tax requirements
• banking systems

39. what if more than one country looks good?

40. further narrow down the countries by….
too early to enter: market for product doesn’t exist there yet
too late to enter: too many competitors, market saturated
too small: won’t grow to a size that’s worthwhile
too culturally-specific: will only grow to fill a country; can’t cross borders

41. Case study #1: I See Me! enters the UK

42. Why the U.K.?
+ our books are in English
+ the culture isn’t radically different
+ the market size offers enough opportunity
+ buyers are online, ecommerce is strong
+ reliable shipping infrastructure
- many competitors in our space
- their economy has been struggling

43. Step #1: we wrote a business plan

44. Step #2: obtained consensus with leadership team and
our company’s owners around the expansion plan

45. determined who within I See Me! would be responsible
for each element of the plan

46. Anglicized 43 books and “colouring” books

47. created a UK storefront
(using the Magento ecommerce platform)

48. enabled online payments in GBP
(using Wells Fargo merchant services)

49. set up a bank account in the UK to minimize
impact of exchange rate fluctuations
(more paperwork than a mortgage)

50. integrated with a UK printer/fulfiller
(no inventory required)

51. determined shipping rates and methods

52. updated our back-end systems to enable orders and reporting in GBP

53. developed a marketing plan

54. researched VAT in UK,
as well as income tax laws

55. launch!

56. what worked:
the entire infrastructure for ordering, receiving cash,
fulfilling, reporting, providing customer service
(ok, there were a few bumps)

57. what didn’t work:
harder to obtain new customers than we’d forecasted

58. what we like
about our
U.K.
expansion
we own the end-customer
healthy profit per order
leverages our intellectual property
low capital investment other than marketing

59. what do we wish we’d done differently?

60. should have spent even more time upfront explaining “why” and addressing concerns
everyone had to make this happen on top of their regular jobs

61. should have planned for an even higher cost to acquire a customer in year 1

62. should have created a test order for every
single product we were launching…
not just a test order for each book format

63. should have sent an employee
to the printer/fulfiller in the UK
for a week, for quality control

64. should have realized that since we appended /en-gb/ to the end of our URL,
we needed to update the links in our Google Shopping feed

65. the good news
our cost to acquire a customer is steadily coming down

66. Case study #2: I See Me! partners with a distributor in France

67. Unlike in the U.K., where we went direct-to-consumer,
in France we partnered with a distributor
they do the marketing
they own the customer
they print and fulfill each order
we receive a commission

68. they translated some of our books into French

69. we updated our software to render personalized books in French

70. we set up access for our partner to print our personalized books

71. what we like
about our
partnership
in France
they already have customers
no marketing investment on our end
very little involvement from our staff post-launch
the commissions are incremental profits
The size of the opportunity (smaller country) matches
the size of our investment to get it started (smaller)

72. the downside:
we just receive a commission on each order
it will take time to build the # of orders enough to amount to substantial revenues/profits

73. Case study #3: I See Me! partners with a distributor in China

74. they translated some of our books
into Chinese

75. we updated our software to render personalized books in Chinese

76. we set up access for them to print our personalized books

77. and similar to our French partnership….
they do the marketing
they own the customer
they print and fulfill each order
we receive a commission

78. what we like
about our
partnership
in China
no marketing investment on our end
very little involvement from our staff post-launch
the commissions are incremental profits
The size of the opportunity (larger country) matches
the size of our investment to get it started (more work to update our software in Chinese)

79. the downside:
we are very early entrants into this market…have to educate consumers
it will take time to build the # of orders enough to amount to substantial revenues/profits
but…
the upside in China is tremendous

80. parting thoughts
• find a country that’s not overly saturated with competition…but that is
aware of your product/service category
• the more time you spend upfront planning, the more successful you’ll be
• keep reminding the company what the end-goal is
• be prepared to invest more in marketing and sales than you think;
it’s a new venture