Scaling up creativity. Finpro Luovimo company internationalization story. More info at http://www.finpro.fi/luovimo/scaling-up-creativity

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08 June 2012
SONGHI – HOW MARKET FEEDBACK CAN CHANGE PRODUCT
STRATEGY
The story of SonghHi shows the importance of hearing the market feedback when drafting
the product concept and go-to-market strategies. It also demonstrates how product
development and international sales tend to take more time than expected.
SongHi is a fun and engaging virtual community service where members can easily create and
share their musical tweets, musical greetings, and songs with friends as well as interact with
real life artists - all this in a social, game-like environment. The love and passion for music is the
founding stone in SongHi Entertainment’s mission, and the company strives to make it possible
for everyone to start interacting with music, in a fun, easy and social way.
When SongHi joined Luovimo, it was in a pre-revenue face, employing around 20 people.
SongHi is a typical born global company, where the service offering is internationally scalable
from the very first beginning. The drivers for internationalisation that SongHi was facing were
the limited size of the home market as well as the short time window to internationalise the
company before new technologies and high competition disrupt the business model and earning
logic.
SongHi’s challenge was to bring forward several major development projects at the same time.
In one hand the product needed to be finalised and further risk financing to be ensured. On the
other hand market development and establishing of partnerships with major record labels and
other players of the gaming and music eco-system were high on the priority list.
At Luovimo SongHi’s target was to investigate the potential of the German, Italian and Spanish
markets as well as to find suitable partners from the music industry. In the beginning of the
project SongHi finetuned its value proposition together with the local Finpro experts to respond
to the requirements of each market. Finpro’s local consultants then analysed the ecosystems on
each target market and identified potential partners for example among record labels, digital
music platform providers and radio stations.
SongHi’s representatives made a fact-finding trip to each market, and all the interested partner
candidates were visited together with local Finpro consultants. Finally learnings were wrapped-
up in order to define the following steps.
The feedback received from the markets was extremely valuable, and it had a direct impact on
the company’s concept and product development as well as on the go-to-market strategy.
SongHi has first positioned itself in the ecosystems of gaming and virtual worlds. The market
feedback clearly showed that the area was extremely crowded with several well established
players. SongHi’s core competence seemed to be in making and sharing music. That
competence was now brought to the center of the product strategy.

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08 June 2012
SongHi’s original go-to-market strategy included partnerships with major record labels. During
the Luovimo project it became evident that record labels were still in the middle of the paradigm
shift caused by the triumph of the digital music. Consequently, they were relatively slow in
committing themselves to completely new business models and earning logics – especially with
a newcomer like SongHi.
The new go-to-market strategy has its focus on online gaming environments where clear
synergies can be found.
One major learning of the Luovimo project was the importance of size. SongHi soon realized
that it is very difficult to get the interest of the potential partners unless you have the critical
mass of users to bring into the partnership.
While getting the market feedback SongHi continued the product development to add sticky
features to the offering. Another major learning was that even though it is of utmost importance
to get feedback from potential users and partners, you have to be careful not to present in a
“sales-mode” a product that is still in an early stage of development. In such a case it is better to
proceed in a “discovery mode” to get feedback to be used in the product and strategy
development.
Read the 7 findings in internationalizing creativity from Luovimo companies at
http://www.finpro.fi/luovimo/scaling-up-creativity