Lean Internationalization - how to enter international markets without breaking the bank
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This presentation was created for a Lean Internationalization workshop held in Atlanta. The attendees of the workshop were Columbian and Peruvian firms, selected for their unique products, and attending the workshop to better understand how to enter and grow their business in the USA. For more information on succeeding in the USA please check: www.successintheusa.com or contact us via hello@katapultgroup.com.
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Lean Internationalization - how to enter international markets without breaking the bank
- 1. Lean Internationalization - Expanding internationally without breaking the bank By Jan Sauer, Partner @Katapult Group 2015 Copyright Katapult Group cc: WarzauWynn - https://www.flickr.com/photos/94246031@N00
- 2. Topics • Characteristics of foreign firms succeeding in the USA as noted by Katapult Group’s work with 300+ firms entering the US-market • Share a new methodology you can use to approach new markets with less risk: Lean Internationalization • Work a real-life case of North-American market entry using Lean Internationalization • Q&A’s and discussion 2015 Copyright Katapult Group cc: instragram.com/amirkuckovic - https://www.flickr.com/photos/12389767@N04
- 3. Katapult Group – global business builders WWW.KATAPULTGROUP.COM OUR BLOG: WWW.SUCCESSINTHEUSA.COM WE ARE "SERIAL ENTREPRENEURS IN-RESIDENCE". THE BENEFICIARY: OUR CLIENTS. LEAN BUSINESS BUILDING = OUR PROPRIETARY METHODOLOGY COMBINING DESIGN THINKING, LEAN STARTUP, SALES AND OPERATIONAL EXCELLENCE TO DELIVER TANGIBLE RESULTS FASTER. WE'VE DELIVERED IMPROVEMENTS, EXPANSION AND INNOVATION TO FORTUNE 100'S, GOVERNMENTS AND NON-PROFITS AND STARTUPS ALIKE. THEIR BUSINESS THROUGH THE USE OF STARTUP METHODOLOGY AND CADENCE, TECHNOLOGY AND RELATIONSHIPS. CLIENTS INCLUDE FORTUNE 100'S, GOVERNMENTS AND NON-PROFITS, AND STARTUPS. WE BRING PRAGMATISM TO INNOVATION AND GROWTH. THE RESULT: TANGIBLE AND SUSTAINABLE INNOVATION AND GROWTH DELIVERED FASTER AND AT A LOWER TOTAL COST TO OUR CLIENTS.
- 5. • Brazilian ERP going to N.A. • High complexity business • Long sales cycles (>2 years) • Owner = main deal maker today • Plan for expansion: • Send team of 4 Brazilian A-team members to N.A. He will still stay in Brazil including technical support, Acc. Mgt., Sales • Execute existing sales process from Brazil • Setup company, admin, etc. • Expend ~USD500,000 per year • “Calculates” to sell a product within 1-2 years = revenue ~500K • What do you think about this plan? (1-10 in the approach)? • What is important for survival? cc: Vitor Guerson - https://www.flickr.com/photos/98744226@N00 Background
- 7. Biggest pitfalls • Lack of Executive buy-in and support • Lack of support from the home organization (ex. Tech support) • Lack of focus • Everything vs ones strengths • All segments vs perfect customer • All USA vs logical scope 2015 Copyright Katapult Group cc: Old Sarge - https://www.flickr.com/photos/55241410@N00
- 8. Biggest pitfalls • Emphasizing the wrong things at the wrong time • Team is doing many non-important things • Non-competitive price/value • Thinking the product will sell itself • Forgetting the soft aspects 2015 Copyright Katapult Group cc: Old Sarge - https://www.flickr.com/photos/55241410@N00
- 9. Characteristics of firms that succeed in the USA • Segments: • Understands who their perfect customer is • Focuses on niche and expands from there (beach head approach) • Product / Service characteristics • Strong and differentiated along one relevant competitive dimension • Strong price-value balance • Focus is on succeeding with one solution before expanding the portfolio 2015 Copyright Katapult Group
- 10. Characteristics of firms that succeed in the USA • Organisation and team: • USA market is a priority for the CEO and Board of Directors • USA lead person is one of the company founders or an executive with 5+ years history at company and deep and trusted roots across the home organization • 24/7 attitude with an ability to execute on the plan but learn, change and adapt to find product market fit • Sees the US market as a marathon, not a sprint. Long term the US-market is considered a “must” • Dedicated person championing and supporting the USA mission in the home office on a daily basis • US-Founder = Heavily charged with customer engagement • Recruits help / Outsources less value added activities including admin, book keeping, etc. 2015 Copyright Katapult Group
- 11. Characteristics of firms that succeed in the USA • Financials and funding: • Well funded, financial runway for 24 - 36 months • Extremely lean operation until product- market fit has been found and can support scale the USA 2015 Copyright Katapult Group
- 12. Operations and people: • US leadership and the operation receives extraordinary amount of visibility and priority at home in the initial years • Higher degree of interaction between HQ and US-market office, I.e. meetings, visits, calls, other • Emphasize customer engagement pre- market entry and continue putting sales as the primary activity during growth of the firm • Focus is on small and frequent wins throughout the company building Characteristics of firms that succeed in the USA 2015 Copyright Katapult Group
- 14. A real life case to start the day • Brazilian ERP going to N.A. • High complexity business • Long sales cycles (>2 years) • Owner = main deal maker today • Plan for expansion: • Send team of 4 Brazilian A-team members to N.A. He will still stay in Brazil including technical support, Acc. Mgt., Sales • Execute existing sales process from Brazil • Setup company, admin, etc. • Expend ~USD500,000 per year • “Calculates” to sell a product within 1-2 years = revenue ~500K • What do you think about this plan? (1-10 in the approach)? • What is important for survival? cc: Vitor Guerson - https://www.flickr.com/photos/98744226@N00
- 16. Key principles of Lean Internationalization • Continuously rank and test the biggest risks assumptions • Do only the most necessary to achieve the above 2015 Copyright Katapult Group cc: Håkan Dahlström - https://www.flickr.com/photos/93755244@N00
- 17. Benefits of Lean Internationalization? • Primary benefit: Accelerate time to cash-flow positive • Accelerates time it takes to define the attractiveness of the US market, i.e. Go vs. No-go • Enter the US-market at at fraction of the investment • Higher chance of surviving Year One in the USA • Stronger foundation and increased odds for long term winning business 2015 Copyright Katapult Group cc: nicely85 - https://www.flickr.com/photos/23433155@N07
- 19. Our Brazilian ERP provider needs YOUR help! Let’s help him de-risk by using Lean Internationalization • Brazilian ERP going to N.A. • High complexity business • Long sales cycles (>2 years) • Owner = main deal maker today • Plan for expansion: • Send team of 4 Brazilian A-team members to N.A. He will still stay in Brazil including technical support, Acc. Mgt., Sales • Execute existing sales process from Brazil • Setup company, admin, etc. • Expend ~USD500,000 per year • “Calculates” to sell a product within 1-2 years = revenue ~500K • How would you tell him to approach N.A. using Lean Business Building? cc: Vitor Guerson - https://www.flickr.com/photos/98744226@N00
- 21. Frequently Asked Questions in relation to entering the USA • How to find partners to act as a consulting partners for our prospects and leads? • Cultural issues to take into consideration? • How to sell to Engineering Departments of Manufacturing Companies? I.e. how to reach and engage them, amongst others. • How to deal with the market and prove the value of your offer if you don't have a national success case (US) but you do have international success cases to present to customers? • What does it cost to get setup legally? • What are the biggest legal issues to consider? (We will do a separate seminar on Legal issues) • Where to setup our office? • Total cost of running the business