Recently our CEO Rick Pizzoli and one of our strategic partners Intralink’s Alan Mockridge sat down — virtually, of course — to swap stories and share advice from their combined 50 years bringing tech companies to new international markets.
Rick is a San-Fran native based in Madrid helping startups and scale-ups take on Europe. Alan is a Brit based in San Francisco helping startups and scale-ups take on East Asia. They both understand the value of having people on the ground that know the culture and have the networks already in place. And they both have seen what makes for a successful launch in another country or continent.
We all know timing is everything. But how do you know it’s the right time to go international? Is there even a right time during a global pandemic?
Read on to learn how you know if your tech company is ready to go abroad — even if your team can’t travel with it. And be sure to listen to Alan and Rick’s entire conversation on remote sales and global expansion.
Both Intralink and Sales Force Europe specialize in bringing North American and European tech businesses to new international markets. They aren’t just importers of technology but of the innovation and ideas that back it. As cross-border consultancies, they specialize in global business development and sales outsourcing for startups, scale-ups and economic development organizations. Intralink sells to Japan, South Korea, China, and Taiwan, while Sales Force Europe sells across Europe.
The title of the webinar was “Remote Sales: How to reach your customers when planes are grounded.” That’s because Asia and Europe are more or less back to business. But only within each country. The next few months simply won’t see international travel reopening yet. But Alan and Rick are pros at getting this done on your behalf.
The first step in global expansion is deciding if it’s the right time. The European tech market has been up in all of 2020. And the Chinese tech market is set to eclipse the U.S. soon, while Japanese corporations are set to have a 16 percent growth in their tech investment. For most of Asia and Europe, it seems the markets are opening up faster than in North America.
But is it the right time for your tech to head overseas?
Tech companies look to sell abroad mainly for one reason — to increase revenue.
Remember, we call them tech solutions for a reason. You are trying to solve a problem for your target audience. If you’ve clearly communicated your unique solution, you’ve already had success selling that product with that value proposition in your home market. That’s the first sign you’re ready to take it abroad and translate it for new cultures, languages and markets.
Next, do you have reference customers? Be sure to capture not just quote-worthy testimonials from satisfied clients, but their feedback on your whole sales process. Can that success be repeated in a new market? Do you have a clear understanding of your customer base? And don’t forget to check if existing customers have partners or subsidiaries already present in other International markets — that’s an open door you won’t want to overlook.
Alan says, “Frankly the more success they have in their home market, the better. That proves the technology. That proves the business model.”
Then, you and your board need to reflect on if your systems and processes are ready. How mature is your technology? Is it ready for a broader audience? Can it stay resilient with a bigger customer base? How will cross-border data be handled? Can you maintain customer service and retention activities while you look abroad?
Rick says he typically has the same first conversation with prospective clients to qualify if your tech company is ready for European expansion:
You need to fully understand your current setup to be able to replicate or adapt it somewhere else.
Next, you need to figure out where you’re headed. Most of the time, budget constraints and conservative boards want to test out expanding to just one or two countries at a time. Then, when there’s traction and reference customers in those countries, you embark on a continental expansion.
Before even launching somewhere, you need to qualify if that country is a real opportunity, particularly for your niche and target customer base. A good place to start is scoping out the competition — or hire an in-place sales outsourcing team to give you that insider information. You need to know early on what the competition is like in your niche. They also have a feel for how the local economy is fairing and have a deep understanding of what enterprises are shopping for new tech solutions.
For Europe, London is a by-default launch pad, but sometimes there’s already intense competition there, while France, Germany or the Nordics may be more open.
That being said, there tends to be trends. Depending on your vertical, these are where you probably will want to launch in a new part of the world. If you’re a media, content or marketing app, Rick says UK is the best. If you’re in banking it may be Munich, London or Zurich. France and Italy have strong retail brands, while Germany is undeniable in automotive.
Alan’s team at Intralink is seeing a huge demand for renewable energy in South Korea. However, across Asia they witness the macro socio-political driver of the declining and aging populations pushing demand for deep tech related to manufacturing robotics and AI solutions for business process automation.
But of course these are rules of thumb and are fluid and ever-changing. You need sales representatives on the ground who have their finger on the pulse locally.
As Rick says, “Look at where your competition is — maybe both US and EU competitors have landed first in the UK so you want to try other European markets well before you go there.”
You may eventually want to launch in every European country, but, to start, you want to avoid oversaturated verticals and markets, while delivering a focused approach.
It’s essential to review your budget and funding runway. You don’t want to spread yourself thin. Start by reflecting on the metrics in your home market.
Rick says to ask your lead generation team how many contacts you need to build to get to marketing qualified leads (MQL). To sales qualified leads (SQL)? To opportunities? To deals?
Once you know how many people it takes you to build and deliver that kind of campaign in your home market, you can translate that for your target country. It’s about looking at what made you successful in the home country. Then replicating it — often with some tweaks — for the new markets. And then how to map it out across your new continent.
There’s no need anymore to spend a lot of money on local real estate. So your main cost in global expansion becomes staff. You have to be careful to not take on more financial and legal risk when hiring abroad.
The first hires in most countries are your sales representatives. Going through traditional recruitment takes an average of six months, plus upfront fixed costs and the medium-to-long-term legal obligations. Transplanting a sales rep from your home country is, even under normal circumstances, an uncertain bet and definitely a complicated move in today's environment.
By partnering with sales representatives already in place — like those at Intralink and Sales Force Europe — you are able to leverage their knowledge and network and increase your speed to new markets six fold. You also have a clear budget and contract. You can’t afford to have financial surprises down the line.
Sales outsourcing partnerships are typically single contract. This gives you the financial flexibility to move from one new market to another in response to market demand. With Sales Force Europe, your product can be in front of tech buyers in a new country in just four weeks.
Download our free ebook: How to Build Your International Go-To-Market Strategy.