🎙️Launching a new country: methods and tips from Sean Haskins
🎙️Launching a new country: methods and tips from Sean Haskins

🎙️Launching a new country: methods and tips from Sean Haskins

Description

Interview of Sean Haskins, Expansion Manager @ Welcome To The Jungle and ex-Head of Expansion @ Heetch

Type
🎙️ Interviews
Category
Country Management
Meeting Date
October 29, 2020

Choose your market based on...

Your budget 💰

  • If the budget is between 500k and 1M€ : It is preferable to launch on neighbouring markets that require little or no cultural adaptation (Belgium, Switzerland, Luxembourg...).
  • If the budget is between 1 and 5M€ : You can launch in a European pillar to validate a European PoC. The objective is to prove that you are capable of launching a country. It is therefore necessary to define criteria (turnover, traction, volume of active customers, uses...) to validate the launch.
  • If you have a larger budget: It is possible launch in the US. An adequate product and a solid team are absolutely necessary.
💡
For a SaaS product, the choice of country is less based on budget since the deployment does not incur significant HR costs
"In my opinion, the best-case scenario is a partner, the co-founder who is not necessarily the most visionary but is a brute of execution decides to move to New York for two years.”

The preliminary study 📊

Before taking the plunge, an in-depth study of the market is preferable if time and money are available.

It should avoid hasty conclusions based on macro-economic indicators (market maturity, economic growth, GDP...) or on a simple mapping of the players.

Hasty conclusions to avoid:

⚠️
No player on the market = Gap to fill: an empty market can also mean that other players have already broken their teeth and that the market is not mature enough.
⚠️
Multiple players = educated customers: a market with multiple players can also mean that it is saturated.
⚠️
Your French customers abroad are pushing you to launch your product in a country where they are based: This is the feedback of a French person who already knows your product and does not put himself in the shoes of a foreign customer.

Calling on a firm to carry out market research?

It may be necessary to hire a firm to conduct the study, the goal being :

  • To put your product in the hands of real potential customers
  • Ask them how much they would be willing to pay for this product
  • To find out which products are similar to yours, also what they like or dislike about both
  • Compare the appeal of your product in different geographic areas for implementation
"If the study finds that of the three areas studied two are ideal, we need to release funds and launch both at the same time.”
✅
Advantage : Allows you to get closer to a statistical truth by interviewing a large number of potential customers
❌
Disadvantage : Can be expensive, often between 100k€ and 1M€. However, the price is to be put in perspective of the potential turnover on the targeted country.
"If the price of the study is 10 to 20 percent of your budget, it's worth it."

Sean's advice

🚀
If your product requires few adaptations (e.g. Slack), launch it everywhere and fast
⏳
You must be able to choose your market in less than 6 months
🏃
Start quickly and don't be afraid to leave even faster if it doesn't work

Quantify the success of the expansion

It is essential to define the success criteria of the expansion at 3, 6 and 12 months in agreement with the co-founders and investors to avoid any doubt on the success of the project.

The main metrics to look at are:

  • Monetization
  • Traction

Here is the decision matrix Sean used at Welcome To The Jungle: :

The 4 key focuses are to be studied over a year (with a report after 6 months) and are used to define whether the expansion should be stopped, continued or reinforced.

"Launching a country is starting a new company.”

Worst Case - <40% of achivement : Should we continue ?

Medium Case 40%-80% of achievement : What do we need to adjust ?

Best Case >80% of achivement : Can we invest more?

Decision Framework

CriteriasDescriptionKPIsResult

Measure quantitative evidence of market demand and speed of acquisition.

#Active clients: clients paying and non paying

Best Case >80% of achivement

Measuring customers' willingness to pay for your solution provides revenue predictability.

MRR accounting

Medium Case 40%-80% of achievement

Understand customer usage and satisfaction.

Churn volume %

Worst Case <40% of achivement

Understand the market potential and the type of customers we can target.

Track the Average Customer Value Feedback

Best Case >80% of achivement

The Launch 🚀

Hire a General Manager

The first recruitment is key. It is necessary to meet a number of candidates to become accustomed to cultural differences.

The profile sought should ideally have launched a number of countries with similar resources and solutions/products to those of your company, ideally with US experience.

To make the recruitment objective, you should define an evaluation grid of the objectives of the recruited profile at 3 months, 6 months...
⚠️
Do not choose an export project based on the person, otherwise you become dependent.
🇺🇸
Find examples of JobDesc, Scorecards etc. 🛠️ Key Roles Tool Box

🇺🇸 Focus on the US 🇺🇸

Launching in the US is particular, the distance and the cost of salaries are not negligible aspects. In spite of the cost that it can represent, having recourse to a recruitment firm in addition to all the other channels can be quite relevant. It allows to be quick and the company keeps the hand on the whole recruitment process.

"One of the co-founders would be ideal, if not one of the Sales (should be bilingual) looking for an adventure! Back Market chose the second option in NY and it's working out great.”

Manage the administrative, fiscal and social aspects 📑

Two options :

🏢
Subsidiary: The best model because it allows for employee oversight and revenue transfer to the parent company.
🏢
The branch office: In the case of an entity abroad but which does not generate income abroad (e.g.: support function or remote workers).

For the social and fiscal aspects, I recommend using :

a local firm that covers both areas to have a single point of contact.

OR

a European firm that can develop tax optimization models.

The HQ x Local relationship

Organisation

According to Sean, it's interesting to put your HQ into "international mode" very early on, in which France becomes one country among others. When the HQ is thought of in an international way, all global functions (finance, product, people, ops) are managed in the same way and are thought of with an international prism.

"Company investments (people, admin, finance etc.) should be in line with country ambitions.”

Focus on the Centralized organization model:

Advantages

✅
→ More scalable model. → Senior managers at headquaters have an overall vision and goals that are reflected in the execution of their team. It’s not only a French strategy. → Highly qualified profiles are needed mainly at headquaters; hiring issues at local level are minimized. → Local teams benefit from highly qualified managers: individual professional growth is enhanced and accelerated.

Disadvantages

⚠️
→ Omnipresence and control of the headquarters. → Reduced capacity for local market analysis. → A poorer adaptation model. → Risk of dual management by headquarters and local managers. → Increase silos. → Lack of agility (top-down situation ).
🔥
Want to learn more about the relationship between Headquarters and local offices ? We also tackled the topic with Fabrice at Odoo 🎙️Bonnes pratiques et échecs lors de l'ouverture du marché U.S.🎙️Bonnes pratiques et échecs lors de l'ouverture du marché U.S..

The management

A balance must be found between:

  • a remote monitoring of execution without being too oppressive in order to let the different country departments take ownership of the successes and be decision makers.
  • a control of the respect of budget and strategy.

Therefore, one should not underestimate the need for managerial follow-up since failure to do so can lead to churn of talents.

Internationalization also has a strong impact on corporate culture. The best way to promote the company's culture internationally is to ensure that candidates share the company's values while interviewing them.