Best Practices for International Expansion
- Pilot domestically to test & tune your GTM before going big internationally
- Relocate a strong existing sales engineer to the new office (this is possibly the most critical role to staff), especially if you sell to SMB/MM.
- ‘Soften the beach’ by raising brand awareness through comprehensive marketing (digital, field) before hiring a large sales team.
- If you sell very large enterprise deals, then you may need to relocate a co-founder or other senior executive. If you do not ordinarily close $1m+ deals, then moving these folks adds limited/no value.
- Hire a player/coach sales manager. Some requirements & expectations:
- Seek someone who is an evangelist with a ‘brand’ in the region
- By selling, they will learn from HQ how to position your product and localize as necessary
- They know ‘how to sell’ in the region
- They have relationships with key buyers
- They have relationships with key talent to add to your team
- They lower risk (to some extent) by proving out the value proposition in the region
- They should serve as an evangelist
- SMB vs. Enterprise:
- If you already sell to large, multi-national enterprises, then expand your footprint in new geographics
- If you do not already sell to large enterprises, then you are more likely to gain traction to SMB. Otherwise, it is very, very hard for a foreign company to succeed, especially if/when there are local incumbents.
- In many instances, partners are the best way to enter a new market. This is especially true in Japan, Latin America, and the Middle East.
Managing International Employees
If you intend to hire international employees but do not yet intend to form a local entity, you will likely need to engage a service provider to serve as your employer of record (EoR), handle payroll & taxes, provision benefits, and share advice. Firm include:
Selling in APAC
- While you can target large, multi-national companies with your direct (local) sales team, it is best to engage them as well as all other sized organizations via resellers.
- Events, webinars, etc. are not effective for generating demand in APAC. The best way to sell is to go right the top, hand-in-hand with resellers. 1:1 is best but intimate gatherings of true peer leaders (ex: executive breakfasts) are effective.
- Benefits of partnering with resellers:
- They have deep relationships with their existing customers.
- Many customers will only buy technology through their reseller partners.
- They speak the local language.
- They can transact in local currency.
- They transact on their paper and are able to absorb local preferences (like liability) better than most ISVs.
- APAC reseller considerations:
- At the start, you need to bring warm business to them and run the sales cycle.
- They will invest in sales & implementation capacity only if/when your product is in high demand. However, expect that you will need to manage implementation for several years.
- Typical reseller margins are 20% to 30%. Expect to pay a higher rate on business sourced by the reseller.
- Few if any resellers span multiple countries, even in SE Asia. Each country usually has 5-6 top resellers.
- Resellers in APAC generally do not require exclusivity
- Create partner tiers (ex. Platinum, Gold, Silver) based largely on how much business the partner brings to you. Higher tiers should earn higher margins. You may also expect that partners in higher tiers invest more in the form of certified reps, solutions architects, and project managers.
- Cultivate local referenceable customers early and often.
- Each country in APAC is different
- ANZ
- Many companies start here since it is a large, tech-friendly market. They speak English. They respect name brands in the US and Europe.
- Serve ANZ locally or out of Kaula Lumpur or Singapore.
- Transacting in USD may be OK
- Japan
- Many companies land here since it is a large tech-friend market. It is critical to have Japanese-speaking personnel and a Japanese-ready product.
- Transact in Yen but USD may be OK
- China
- Very difficult to enter.
- South Korea
- India
- Many SMBs but also extremely price sensitive.
- SE Asia (ranked by GDP) – In SE Asia, you generally need to sell to the founder / majority owner
- Indonesia
- Thailand
- Singapore
- Transacting in USD may be OK
- Vietnam
- Malaysia
- Philippines
- (Myanmar; Cambodia; Brunei; Laos)
- ANZ
Selling in LATAM
The default for selling into LATAM is to engage partners – distributors, VARs/SIs, or MSPs. This is especially true for outbound selling and essential for enterprise selling.
Remember to pilot domestically to test & tune your GTM before going big internationally.
If a company has a transactional, inside-sales, inbound-response sales motion, then one may still prefer to scale domestically. Native Spanish speakers (though not necessarily Portuguese speakers) are plentiful in most locales.
Nonetheless, hiring direct sellers in LATAM is an option for transactional, inside-sales, inbound response. I recommend Buenos Aires but the following are options:
Location | # Sellers |
Sao Paolo | 6.5K+ |
Miami | 3K+ |
Mexico City | 2K+ |
Buenos Aires | 1K+ |
Santiago | 826 |
Guadalajara (too small) | 307 |
Lima (too small) | 221 |
International Prospecting & Privacy2
When planning to sell internationally, consult advisors/lawyers with expertise on local privacy laws. For instance, some countries (ex: Singapore) restrict business dialing unless (a) you operate a local business entity and (b) individual reps are citizens or hold work visas.
Footnotes
(1) Disclosure: Papaya Global is an Insight Partners portfolio company
(2) All information on this site is intended to be educational and should never be taken as legal advice