Tips and lessons for startups looking for international expansion

1. International startup expansion
Wayra, Jul/14

2. Fábio Póvoa

3. $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

5. My past global experiences

10. Why go Global ?
Who went ?

12.  Massive home market
 One language
One (& stable) currency
Legal system

13. 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

14. Lay down the groundwork right
from the start

15. 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.

16.  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

17. 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

18. 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)

20. Time check &
questions
Up next: Planning:
developing a global
strategy

21.  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

22. 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 ?

23. 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!

24. 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)

25. 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

26. 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

27. 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

28. LOT’s of work, hein
?
As the CEO:
sponsor, assign
someone
passionate &
independent to do
it.
Up next:
Ownership &

29. 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

30. 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

31. 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

32. 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.

33. 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 &

37. 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.

38. (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

39. 1. No corporate champion /
accountability.
2. Lack of commitment / understanding
from the rest of the company
3. Reactive approach
4. 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

40. 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.

41. fabio@povoa.com