Even with a global health crisis looming in the background, to expand their business internationally remains on the agenda of many tech entrepreneurs in Southeast Asia (SEA). In the first week of September, SEA-based companies such as PasarPolis and Livspace included international expansion plan with their latest funding announcement.

In fact, Harvard Business Review stated that despite the decline in merchandise trade, foreign direct investment (FDI), and international air travels, these numbers “do not signal a fundamental collapse of international market integration.” This allows companies to remain hopeful about their international expansion plans. But how can they get it right?

Supahands, an end-to-end data labelling partner for AI/ML companies, are basing their operations in Kuala Lumpur, but its clients are based in various countries –from neighbouring Singapore to the US to (even as far as) South Africa. To get to this stage, the company has gone through several steps that include strategy building and execution.

To understand the steps that startups need to take to expand internationally, in this deep dive series, e27 speaks to Greg Meehan, Chief Revenue Officer at Supahands.

He will explain the steps that include:

Is international expansion right for you?
Making a move beyond the sea: Market Review, Budgeting, Product-Market Fit, Human Resource, and Review
International expansion in time of the pandemic

Is international expansion right for you?

Meehan begins the interview by explaining that international expansion is something that a startup should consider ever since its inception. In fact, it should be part of the problem scope that they aim to solve with the solutions that they build.

“Why did you start the company in the first place? Did you start with a global or a local perception to solve a problem?” he asks. “You start to build with that in mind. When we started to build Supahands, we started with a global mindset.”

Also Read: Human-powered training data provider Supahands raises Series A funding

Another set of questions that startups need to answer is related to the reason why international expansion has to be in the picture. Is it because your competitors are doing it? Or is it because there is a market for what you are offering? For Meehan, the key lies in understanding what the market “tries to tell you.”

The answers to those questions will be crucial as companies weigh in the potential risks involved in expanding internationally. According to Meehan, there are two risk factors that need to be considered: Capital expenditure and the process that you will be building on.

If a startup enters a new market too soon, with a shaky foundation and an unoptimised process, they can expect to burn a lot of money –with no guarantee of success.

“We started to receive inbound inquiries that led us to believe that there is a big opportunity for us internationally. Then we need to factor in all the different kinds of costs –and that can be a big risk,” Meehan points out.

“For example, if clients want to buy from us. What would it mean if we had, like, thousands of leads come in overnight? Do we have the processes, people, and systems in place to cope with that? And then we need to start thinking about optimisation … and how we can position people for that. Having [both] the team and the [right] kind of mindset is really, really important,” he stresses.

Making a move beyond the sea

Once the founders are able to answer the questions, they can move towards the next stages of international expansion:

Market Review

Now that the startup has decided to expand internationally, how do they decide which market to start with?

There are two angles that a startup can approach here: They can do it as a company with an existing presence in one market that is aiming to widen its reach there, or as a completely new business launched in a foreign market. If the startup decides to go with the first option, then the first step they can take is to talk to their existing clients.

“Find out what led them to purchase your products in the first place. They are a great source of intel,” Meehan says, adding that from there the startup can see which kind of market they should be aiming for.

Also Read: Human-powered training data provider Supahands raises Series A funding

For startups who are going with the second option, what they can do is start their research online.

“Say you are building a CRM system for salespeople. Find out where these people are hanging out online and you go where they are and engage them,” Meehan suggests.

At this stage, founders do not even need to go for people in a specific market, as a sales VP in the UK will likely face the same challenge as those in other markets.

Budgeting

Budgeting starts with the founders figuring out the go-to-market strategy that they want to use when entering a new market: From opening an office, securing a referral partner, to hiring talents.

“How much budget you can allocate towards that expansion while still maintaining the growth that you’ve got in your current market as well?” Meehan gives the clue.

He also warns against experiencing a “false start” or a situation where a company sees a potential for growth in a market, but then they realise that it is all too soon.

Product-market fit

This is the part where it can get tricky, and Meehan advises startups to “listen to the people on the frontline” or those who interact with clients on a regular basis.

“What we look at here is the collection of this information. We speak to our marketing and product team as well, and feeding them back this information because you can start to see the evolution of your products and services as you grow, as the market matures,” he explains.

“A lot of the times it is like fitting a square peg into a round hole and having to feel your way through it,” he adds.

Meehan also reminds us that the market is changing really fast.

“Market research is a continuous thing and it is not done by just one person in the company … It is your entire business,” he stresses.

What about cases where startups need to localise their product to adjust to the market? Meehan brought forth the example of when Uber tried to enter the Southeast Asian (SEA) market, and their inability to quickly provide a flexible payment infrastructure for a cash-heavy market such as SEA.

“It all comes back to the elements of market research,” he says.

Also Read: Malaysia’s Supahands raises seed round from Axiata, 500 Startups

Human Resource

Regarding their point of how human resource matters during international expansion, Meehan says that the Supahands platform was built to be geography-agnostic. This means the company was built as an international business with the ability to work remotely.

“That is how we have always done our sales, engagement, and marketing,” he explains.

But in the case of its expansion to the US market, there were plenty of offline activities involved. Meehan and Supahands CEO Mark Koh travelled to conventions and meet with potential customers and even competitors in the country to get a first-hand understanding of the market and the strategy that they will need.

“We want to make sure that when we’re bringing people on board, we bring aboard bright people that are going to fit in the culture … that could represent us as a brand and a business externally as well,” Meehan elaborates.

To complete this process, Supahands took at least 12 months, but the company sees that as a necessary process to ensure the right candidate fit.

Review process

Lastly, how does one review the success (or failure) of an international expansion move? Certainly, it all comes down to the metrics, but listening to gut feelings is also important.

” … You’ve got these metrics but what does your gut tell you as well? So, you do a bit of a gut check … Yes, we have these numbers and metrics right in front of me and I will take note and trust the numbers, but I will also verify those numbers,” Meehan says.

But what about the pandemic?

At this stage, we see that there are elements of international expansion that will require founders to travel and be on the ground. But as the COVID-19 pandemic continues to rage on and affect international travels, this begs the question, will this be the end of our international expansion plan?

Meehan reminds us that there are also elements of international expansion that are being done virtually. For example, market research.

“The global pandemic really levels the playing field for businesses and startups in Southeast Asia that are looking to expand, because everyone is in the same boat now,” he says.

—

Image Credit: Supahands

This article was first published on September 4, 2020

The post How Supahands works with customer feedback to plan their international expansion appeared first on e27.

Source link