So, your software or SaaS company is ready to expand internationally. But what should be a time of excitement can often end up a source of overwhelming frustration.
Many consultancy firms will tell you that extensive desk research is the only right way to approach international growth. That’s months of meticulous planning as you verify the pros and cons of each potential region for expansion.
But we see it differently, in fact, some of our most successful affiliated expansions have been largely opportunistic.
That’s not to say you shouldn’t do desk research, but should it always come before opportunistic thinking? Let’s talk it out.
The right place at the wrong time
Let’s face it, you can spend years developing your product offering and still find yourself in the right place at the wrong time. That’s why desk research is still so important; not just to locate the right region, but to ensure the market is ready for your product.
“At one of my previous companies, we had a wonderful IP-based video service, but it was a good seven years early to market,” says Mats Ferm, CEO at Monterro portfolio company Palette Software. “To get expansion right, it takes a well-developed sense of timing. I believe we failed to ask the right questions at the right time.”
Mats’ experience is not unique. You may have a great product, but failing to read the market, understand demand maturity, and locate the right region at the right time can prove unfortunate.
With that said, we’ve often found that desk research works best following opportunistic thinking. And together, they’re a recipe for success.
The right questions to ask (at the right time)
To mitigate many of the unknowns associated with international expansion, it can be tempting to expand into a region that shares your language, time zone, and culture. But this isn’t always the smartest move.
In fact, finding the right region can fall on the most incidental of factors. For example, one of your customers may already have a strong presence in another region, and can provide local references or help introduce you to the right people.
“You can waste months doing desktop research or paying consultancies to find the perfect region – economically and geographically,” says Gustav Lagercrantz, Monterro CEO. “But it can be faster and more rewarding to be opportunistic and grab upcoming opportunities.”
Once you’ve identified a potential opportunity (something we can help you with in our Opportunity, not proximity blog), you’ll need to begin your desk research. And for a good starting point, try asking the following questions:
- Have we really understood the customer needs? Is there anything we miss in the product today (such as important API integrations)? You need to make sure you have a Minimum Viable Product for the market before expanding.
- Do we have references, good ones?
- Do we have a go-to-market strategy that works?
- How mature is our market in this new region? Is there demand?
- How does the eco-system for your product work in that region?
- Is the market large enough? You don’t need to know exactly how large it is.
- Are there other competitors that already have penetrated the whole market in the new region?
- Do we have the right people to represent us in the new market? Do we have any contacts we can use?
- Are there any cultural differences we need to be mindful of?
- Are there any international regulations or laws that may impact us?
An opportunistic success
For Monterro portfolio company and pharmaceutical data manager Viedoc, expansion into Asia Pacific regions had been difficult due to time zones and cultural differences.
Luckily, one of its founders had a strong understanding of the Japanese market and some valuable connections. By chance, the company had an ideal opportunity to expand East.
“We met with a key opinion leader in Japan and after a number of meetings, he started to endorse us. And the rest is history – we now have more than 200 customers worldwide,” says Mats Klaar, CEO of Viedoc.
Branch out with confidence
By asking the right questions before you start your expansion, you can save a lot of time and money otherwise spent moving into the wrong market, at the wrong time.
We understand there’s a lot to consider here, and it’s only natural that you may face complications along the way, but remember – we’re here to help if you need us.
To discuss the benefits of global business expansion and how to best identify the right region, please don’t hesitate to get in touch.
Want to know more? Download our e-book on international expansion.