Once the work is underway for a global-ready stack we can turn to making a plan for how to use the stack. This is the Woof of our weave. This will take deep data dives to figure out where we should launch what we should launch how we should launch it. This is usually a combination of deep dives into data, an understanding of the company’s tolerance for risk, and a through assessment of the product’s chances of success by understanding the market and competitors. In this discussion I use market and country interchangeably. Global markets come with a lot of extra overhead. You have to profits or invest them in the markets they were garnered, address transfer pricing issues, and create a whole new set of internal-facing processes to manage the work. So knowing there is revenue and that revenue can both offset the cost of development and the expansion of the company footprint is essential to understanding the viability of a new market.
The Data
Use data
To understand the potential of a new country I always start with any data the company has. Who is already using the product? Logs from the language chooser, IP address data, languages used for searches, support contacts, and data compiled by regional offices provides a lot of valuable insights and will help drive your understanding of addressable markets. This will help decide between countries within a region that use the same languages. It will also help decide where you might need to operations, sales, and marketing teams.
Demographic data
It’s important to understand the revenue opportunities of a market to ensure it will offset the costs. Also demographic data is useful for pricing, positioning, and adapting your solutions to achieve product-market fit. Another good use of demographic data is to understand which languages you will need to support in any given market. There are few markets where a single language can help you realize sustainable growth. Due to migration (forced and deliberate) there will almost always be more languages to support other than the official languages. In the US it is a given for products to support Spanish. In India, you might need to support 5 different languages besides English to make your product viable.
Demographic data is also inportant to understand the revenue opportunities from support specific languages. As any company assumes if you are doing business in the US, You may be able to roll out your product in Canada (though you are required by law to support French in Quebec), Australia, UK, New Zealand, and Singapore. But each of these countries has its own privacy and regulatory environments that will also figure into the costs of operations in the country.
Keep the lights on (KTLO) data
Whenever you spin up new markets there will be a series of costs that need to be understood. There are costs for creating entities, doing taxes and supporting operations in a country. There are technical costs for running servers, supporting privacy laws, and segregating data. There are legal costs for incorporating getting vendors and supporting infrastructure. This data is valuable to understand what it will cost you to work in a country and maintain operations.
Summary of data
The data will help drive the right decisions but the interpretation of the data is not all you should consider. If that was all you considered then Chinese, English, and Spanish would help you capture 50% of the world’s online sales potential (according to the T-Index). But of course that is not the only consideration.
Corporate Strategy
Most companies have an overarching company strategy informed by the goals and principles of the parent organization. For example, the company may decide that the requirements of doing business in China are against the company principles of protecting user privacy. Or they might decide to boycott a nation due to their immigration policy or humanitarian record.
The strategy could also be that they want to leverage staff and assets they acquired and grow their footprint and brand in specific countries. Or it could be a strategy to create regional hubs to further investigate opportunities the region has to offer for the existing portfolio. And of course where ever new regions arise there are opportunities to expand the product offerings through the current portfolio or through acquisition and integration.
If there isn’t already a set of mandated countries for expansion I usually recommend specific countries for specific regional expansion. In Europe I’d recommend Ireland due to their tax benefits, participation in the EU, and their proximity to the UK. I’d recommend Brazil or Mexico for a Latin America base. Both are populous countries and staff to support all of Latin America will be easy to find there. For Oceania I’d recommend Australia to support Australia and New Zealand, and for Asia I’d recommend Korea or Japan. Or operations in Singapore could be used to support both Asia and Oceania. Supporting MENA is always more difficult and many companies don’t even try. Supporting Arabic is often a deal-breaker for tech stacks so corporations just write it off. Many companies that try to support EMEA will group the Middle East and Africa with Europe and run operations out of France.
Product opportunities and competitive landscape
Besides data and corporate strategy the roadmap for international expansion can be driven by products. For example language learning products geared towards business people might do better in countries where there is a large urban population with international corporate presence. Or clinical trial products might do better in nations that have clear clinical trial standards, strong medical training, pharmaceutical companies, and a history of clinical trials. The right conditions for a product or corporation are essential to ensure they can find product-market fit.
A competitive landscape of a market can also tell you a lot about whether or not the country is a good fit your product or portfolio of products you want to launch. Are there other companies in the market doing something similar? If so how is your product differentiated? Are the companies home-grown or imported? Are they doing well? What is their reveenue? Are they public or private? Are they profitable? Will you be able to overcome the headwinds of being both foreign and new to a market? Is the market saturated? Does the demographic data tell you something about how to get at the market?
Conclusion
At the end of this exercise of data-driven planning informed by corporate strategy and product opportunities we should have a pretty good idea where we can expand, what we need to do to be successful, and why this is a good opportunity for the company. But now we have to execute. This means teams will have to decide on what order we want to launch something and what changes we have to make to accommodate the sensibilities of customers and the regulations of the market. In the next blog entry I will look at what it takes to launch a country and create a templated process to make it possible for a company to launch, sustain, and grow a product in a new country
