VentureOut Steps to Internationalization


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This presentation will expose you to research and trends about internationalization and bring these theories to light by discussing case studies of real companies. Suggestions for activities you can do TODAY to get your company global include opening up to your peers and customers to gather market feedback and process this feedback into improving you app, eventually with the goal of launching in new geographies.

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VentureOut Steps to Internationalization

  1. 1. VentureOut Time to Internationalize
  2. 2. Introduction What is internationalization? Testing the Waters Localization Building a Local Presence Key questions for Mobile App Developers
  3. 3. Internationalization Localization – Customizing your app fit the market you are serving Translation – Getting it into the right language(s) for the new market Building a local presence – Gaining traction in the new market
  4. 4. Testing the Waters Success in domestic market Beta testing Making a plan
  5. 5. Testing the Waters – Should you internationalize? Consider both in your home market and the international market Gather more information before investing in internationalizing This will save you time and money in your expansion efforts
  6. 6. Testing the Waters Step 1: Assess success in domestic market Examine your traction and success in your domestic market If you don’t yet have success in your domestic country, investigate why Work out those product/market fit issues in your home country before introducing the complications of an overseas market
  7. 7. Testing the Waters Step 1: Determine Product Market Fit (PMF) Defined: At least 40% of users say they would be “very disappointed” without your product or service. Survey your customers!
  8. 8. Testing the Waters Step 2: Responding to PMF findings If you find a Low Product/Market Fit amongst your customers Then interview more customers Learn which minimum set of features are most important to them Highlight this feature set and communicate it to the users clearly
  9. 9. Present your Company to other people (2 mins). Time to Go Global! You have $50 Dollars to spend. It costs $20 to make a presentation. If people choose to buy your app, the price is $10. See if you can make the sell.
  10. 10. • What were some of the things people were impressed about with your app? • Did any of the opinions surprise you? How did you do? • Will you make any changes to your app or the way you represent it online? • Did your presentation change after the first time you spoke? • Which was the favorite app you saw, and why?
  11. 11. Testing the Waters Step 3: Going global or expanding domestically You must decide between: Expand in the domestic market Such as developing a second app in your domestic market Explore the international market
  12. 12. News Byte Mobile apps products released quickly are better suited to mature markets Incremental improvement strategies emphasizing multiple sequential versions of the same app produced over substantial time periods are more suited to nascent markets. Analysis of 314,168 apps created by over 82,000 firms in Apple iTunes marketplace
  13. 13. Why the success of beta testing in nascent markets? In mature, developed markets customers may have more clear preferences compared to the nascent market. In nascent market there is lack of clarity about exactly what consumers would want. Advice: If you are in a developed market and thinking of a brand new product, expanding domestic business may be a wise choice. Advice: If you are in a developing market, test the waters and involve the community to see what they need.
  14. 14. Case Study: Angry Birds and Beta testing Success attributed to many beta users and beta versions: 100,000 in their VIP forums Released four versions from 2009 to 2011 Became the “2012 Best Selling App in Google Play” globally
  15. 15. How could you implement beta testing in your venture? What are your ideas for quick and easy tests you can do for your app? Is it possible to test different betas at different times? What questions will you ask your customers when you speak with them? How do you plan to reach out to your customers? How would you manage the information you receive from the customers?
  16. 16. Testing the Waters - What to consider when to enter a new market and how? First have a solid reason (and preferably more than one) to go to the international market Built on information gathering covered earlier Same business model will not automatically guarantee success in the foreign market Do quick, low cost experiments to test each aspect of the business model Adjust business model quickly for the foreign market
  17. 17. Testing the Waters Step 4: Create an initial plan Conversation with your team to get clear on your initial “hypothesis” about each of the following areas. What specific country to enter? What is the specific entry mode? Direct Sale? Partnership? Acquisition? What is the specific marketing approach? What is the specific revenue model?
  18. 18. Testing the waters Step 5: Select the Country Choose a country where Changes necessary in the product and business model are minimal Market is similar to your home country and where your app is already getting some downloads. Or that is based on your familiarity Ideal - You have several years work experience you are familiar with the local culture and the whole sales process already OK -You may have connections in the foreign market OK - There is information that convinces you that there are some opportunities there
  19. 19. Avoid this situation! “I think in the beginning we should not have opened an office in Taiwan straight away. On paper the Taiwanese market looked good. It was not until we were actually there and started doing business that we realized it was pretty hard.” – Entrepreneur on his first experience expanding internationally.
  20. 20. Selecting the Country: Importance of local partner Partner already has the sales channel Partner may be looking for some technology that doesn’t exist in the market Hire local staff who have internationalization experience before to do some on-site experimentation
  21. 21. Entering developed markets You might assume the largest or most developed market should be your first foreign entry If you’re in a country where technology and the market tend to lag behind Before trying to enter a more developed economy it may be better to go to other countries that are more similar to your own or where the market tends to be just a year or two behind. Occasionally, if you have a very strong technical team and a very unique product You may decide it is best to go to a more developed market.
  22. 22. Example of Tiered Market Entry A U.S-based mobile device wireless chip company decided their second country entry should be a “tier-one” country (like Japan and Germany) because “they have the largest market for mobile applications” As a young company they lacked credibility and tier-one countries wouldn’t meet with them New priority to enter“tier-three” country first (like Taiwan) Use the Taiwanese customers as references to enter “tier-two” countries (like Korea). Use those accounts to enter “tier-one” countries, like Japan.
  23. 23. • Do you feel you are ready to go to a new country? Which market will you enter? • If so, why? • Which countries are you looking into, and why? • If not yet, what will your steps for growth include?
  24. 24. Step 6: Test your prototype Translation is only the first step to creating a localized prototype Watch out for other changes in the user experience or to the business model
  25. 25. Localizing your Product Step 7: Marketing Process for User Acquisition  What marketing strategy should you experiment with to get your initial customers?  Is there any local influencer/social media that may help?  Try to contact those who are influential in social media and see whether they can try your product and write something about it.  Initiate some campaigns/lotteries on Facebook or some local social networks.  Search engine marketing is buying advertising online  Search engine optimization is free if you can get your search result to be higher in the Google search results.  Start from the least costly experiment and try one by one quickly.
  26. 26. Choose your actual venture or a cause or idea that is near to you Homework: Create a marketing campaign for your cause! Create a full-out marketing campaign. Goal: To get as many customers as you can to leave their email at your splash page. Potential tools: • LaunchRock – Easy to build splash page • Twitter Report on the success and what you learned. • Facebook Due one week from today. • All Social Media • Blogs and articles Start making your campaign at (TIME) (Perhaps all together in a room as a separate part of the workshop)
  27. 27. Localizing your Product Step 8: Getting the first paying customers Convert users into paying customers. Try different methods Keep track of which way works better and which doesn’t work well Keep doing the marketing methods that are working Try to learn why other methods do not work
  28. 28. Types of Revenue Generating Models In the U.S. up-front payment up front to download software has been successful In China free downloads, with fees for add-ons, virtual goods, or upgrades is popular Subscription models or advertising-based models are also possible Observe what is working in that market for other apps and Experiment with customers to find a revenue model that fits the market and your product
  29. 29. Localizing your Product Step 9: Calculating return on investment Calculate how much money you spent in acquiring one paid customer Estimate how much revenue your customer will bring you over the time period they will be your customer If the average amount spent to acquire a customer is less than the value over the customer’s whole lifetime You may have found relatively inexpensive and effective means of attracting customers If not, you will need to spend time determining another marketing and sales strategy or an alternative business model
  30. 30. Building a Local Presence: Timing and Priority After your first entry experience, reconsider the timing of each country entry Which step/country should go before others Several very similar countries you can enter with minimal changes Countries may appear similar on the surface, but have many differences
  31. 31. Special considerations for mobile apps Effort involved in selling apps across borders is relatively low Low barriers may make entrepreneurs overoptimistic about the international market May assume that internationalization will be easy, but that is not the case Instead, please take time to think through it
  32. 32. Key Questions for Mobile App Internationalization What specific country to enter? Ideally, you have some work experience/connections there, which either make you familiar with the market and the whole sales process or already have some distribution channel for your product, What is the optimal entry mode? Direct sale? Partnership? Or acquisition? You need to understand the market well enough to figure out how to enter Can you sell directly? Are there local app stores you need to develop for?
  33. 33. Key Questions for Mobile App Internationalization Which marketing strategy to apply? Start with the least costly ones Run a sequence of potential experiments quickly Keep track your customer acquisition costs to find out the most efficient one Reach out to blogs, press, and social media that have high ranking in the entry countries among your target demographics
  34. 34. Key Questions for Mobile App Internationalization Which marketing strategy to apply? If your app gradually gets high Average Revenue Per User (ARPU) or Average Revenue Per Daily Active User (ARPDAU), consider buying high quality traffic to see if you can lift your application to the top of the charts High quality traffic is when the lifetime revenues from a user are greater than the cost of acquiring that user To reach the top of the paid/free charts requires you to build a great relationship with the app store's representative
  35. 35. Building relationship with app store’s representative Initiate a conversation with the app store’s representative Explain that your company is trying to enter an international market Ask for advice Establish rapport with the representative, because next time you summit your app, they know how you have improved.
  36. 36. Key Questions for Mobile App Internationalization What is the whole sales process? How does it work in the entry country? Adapt distribution methods to the local market, which means working with local application stores and developing pre-loaded applications in partnership with mobile phone manufacturers. What are the payment differences between the domestic and foreign customers? Understand the culture and adapt their revenue model/pricing strategy to the local market accordingly.
  37. 37. References  Bingham, C. B., Eisenhardt, K. M. & Davis, J. P. (2006). Unveiling How and What Firms Learn From Heterogeneous Experience: The Internationalization of Entrepreneurial Firms. Academy of Management Annual Meeting Proceedings.  Bhardwaj, N. What is the best way for a mobile game or app to gain international traction? Retrieved October Date, 2013 from  Davis, J. P., Muzyrya, Y. & Yin, P. L. (2013). Innovation strategies in entrepreneurial firms: market maturity and killer apps in the iphone ecosystem. INSEAD working paper.  Li, X. (2012). Mobile applications: Content localization is not enough for foreign developers. Retrieved October, 2013 from  Rialpa, A., Rialp, J. & Knight, G. A. (2004). The phenomenon of early internationalizing firms: what do we know after a decade (1993–2003) of scientific inquiry?. International Business Review,14(2005):147-166