International startup expansionWayra, Jul/14

Fábio Póvoa

$mart money Money:

Seed, angel and follow-on

Hands-on work AARRR growth / Mkt experiments / Biz dev

deals

Strategy, operating experience & best practices

Networking

Raising money: series A early efforts

My past global experiences

Why go Global ?

Who went ?

Massive home market

One language

One (& stable) currency

Legal system

Maximize chances for international expansion:

1. Lay growndwork right from the start

2. Launch with an owner, strategy and plan

3. Apply key principles and best practices

Lay down the groundwork right from the start

Make the company’s mission GLOBAL from the outset.

To organize the world’s information and maket it universally accessible and useful.

To bring inspiration and innovation to every athlete in the world.

To make the world more open and connected.

Mix in some international DNA

Make localization mandatory for senior PM / engineering hires.

Recruit board members / advisors with international perspective

Track relevant development overseas Inbound traffic by country Emerging players Local partners

Team building

Make right coding choices Localization should be upfront priority

Localiz. = adaptability to different languages and regions WITHOUT development time

Consider crowdsourcing your label translation Kick off your community efforts with a global

user base

Obvious: customer facing. But do not forget revenue-related systems Billing, payments, accounting

Leverage local players for in-country specifics Take Iugu for example

Protect your IP Register trademarks and domain

names in the top 10-20 world economies

You don’t want to invest in building a killer global brand only to find someone registered it before you in Russia

Make sure your IP protection plan covers you worldwide Check out WIPO (World Intellectual

Property Organization)

Time check & questions

Up next: Planning:

developing a global strategy

You’re a consumer Internet co., and a German

partner offers you a deal enterprise sw co., and your sales guys

land a Japanese customer to make the quarter

It rarely turns out well: Markets may have limited potential Cost to serve may be higher

All of a suddent: Customer commitments get missed Sales sold: product people, not involved,

have to deliver International expansion just turned into a

bad name

International by accident: tale of a disaster

Going global: make it deliberate & strategic Craft an explicit, well-communicated,

company-wide international strategy that will act as your Co.’s True North as you cross the border

Address 5 key topics:1. What’s our goal ?2. What countries will we focus on ?3. With what products ?4. How we will go to market ?5. What’s our operation model ?

No one – aside from VCs and the former Soviet Union – requires 5 year plans to

forecast a series of unknowns.

Plans are generally a piece of fiction, and conceiving them is almost always a waste

of time.

What is our goal ? Big, specific, measurable and inspiring

objectives that will set the bar for the rest of the strategy

Qualitative ...“No. 1 player in mobile gaming in the

top 5 world mkts by 2025”

... quantitative“Generate 50% of our revenue from

outside Brazil by 2030”

My suggestion: make it both!

No one – aside from VCs and the former Soviet Union – requires 5 year plans to

forecast a series of unknowns.

Plans are generally a piece of fiction, and conceiving them is almost always a waste

of time.

Which country/ies? This is your most important decision

Think through on a set of criteria that defines an attractive market Language, GDP, pop. (per capita),

competition, prod mkt fit, localization efforts, smartphone/broadband penetration, customer/partnership leverage

+ your company biz model specifics.

Start a quantitative, data-driven analysis (aka spreadsheet)

Weight different criteria accordingly Analysis suplements judgement (China

example)

With what products? Product Unless you are a very

horizontal product (say Twitter, Facebook, Google), you will need prod. requirements + plans for every mkt you enter

Allocate founder / prod mngmnt / engineers / resources accordingly

Go to market strategy Your value prop. might dictate

strategy: Mobile app (app store penetration, or

telco partnership) Enterprise: direct sales force or

channel partner Freemium: seed top 10, and then

target most succesful ones with direct sales

Local clones: buy or build decision

Rule of thumb Beware of single partner reliance Avoid joint ventures

What’s our operation model ? In the rush to launch overseas, this is the most

overlooked question

What functions will be hold centrally x what will we do locally (thus hire !)

See Google x Facebook strategy for Brazil, for instance Movile: VAS & PlayKids

Key issue: have a common tech platform and clear command structure

Op. Model drive organization structure decisions. In most cases, a matrix works best:

centralized consistency + efficienty tied to localized customization and execution

Aim for low overhead & rapid execution

LOT’s of work, hein ?

As the CEO: sponsor, assign

someone passionate &

independent to do it.

Up next: Ownership & commitment

Day to day gets in the way In a startup, there is always more TBD than

available time or resources

In high-growth companies, core domestic business will consume most of mngmnt’s attention and the support of company functions

Going global thus needs to be a LONG-TERM project that demands SUSTAINED effort

International aspirations will go UNFULFILLED unless started with an explicit strategy adequate resourced led by an exec with ability, authority and

time

Assign an owner from the get go: his/her role is to: Be the voice of international on your team and

throughout the company. Become THE expert on overseas trends,

competitors, mkts, partners, users, customers Get out of the office: visit key overseas mkts,

gain 1st hand knowledge and build reputation and relationships, set up productive, efficient visits for you & other members

Represent the company at overseas industry events

Lead the development of the international strategy

Lead discussions and negotiations with partners

Recruit and lead a small global startup team Potentially manage the initial startup in the

1st several countries. Develop a playbook out of the experience

Ideal candidate: Not your sales guy (or your domestic growth ...)

International experience, English / Spanish, knows the company well, seen as passionate, credible and impartial by the rest of the team

You trust to speak at conferences / represent at negotiations

Has time for frequent international travel / to live abroad

Given demands, no day-to-day operating responsibities

Typical challenging role for a domestic biz dev mngr

A startup within a startup: One is really hard, two in parallel is ... a

growth necessity.

The visible. And the invisible: Staff + Funding

Visible can’t be ignored. But there is great temptation to ignore the invisible.

“We have a great team, they will figure it out and get it done” is a big mistake

Remember: if it’s unfunded, it’s not going to get done.

As the CEO: Look for ways to make it clear to the company that going international ia a critical priority for you personally Involvement builds commitment. Take time to get buy –in from managers: they are/will be overloaded. Make it THEIR plan Assign a small support team at HQ Make it count: eading a biz dev should be a huge challenge & promotion

Remember to treat International as a startup:• Be realistic in setting schedules and milestones:

it will take longer

• Be prepared to live with a startup financial profile: several years of losses before profitability

• Report on International biz separately from domestic. Similar (or steeper) growth profile, but years behind

• Be ready for exceptions for corporate policies. Ex. Compensation for top overseas hires

• Make sure everyone’s perf. Objectives and incentives encourage global rollout.

(cont.) Take time zones into consideration. Your work

hours may be their sleep time.

Bring overseas hires for a month at HQ to soak up culture, value proposition, products and personal relationships.

Send out regular progress updates. A live video feed / high res TV + connection for calls works great.

Make it fun and celebrate success. Launch Global ops with themed party.

Protect and nurturel International business. Avoid compromising it after domestic revenue shortfalls or product slips. It will send a message to all

1.No corporate champion / accountability.

2.Lack of commitment / understanding from the rest of the company

3.Reactive approach4.Failure to dedicate resources

(e.g. product development, support)

5.Cut back international projects to save the P&L

6.Treat overseas markets as another BU / state.

7.Rely excessively on an overseas partner or JV

If you’re really serious about having an impact

and delivering a great return for yourself &

investors, you have the obligation to build a

global company.

fabio@povoa.com