“Never venture, never win!” — Sun Tzu, The Art of War
It’s about time to bring some science into localization. In this post I’ll present 4 steps you need to follow when bringing your tech product into any new market. It’s based on an interview I gave at China Business Cast, and it does reference China a lot, but it’s true to any tech company going into any new market (from B2C in Brazil to B2B in England).
I spend the last 3 years as Asia Pacific CEO for my company Leverate, taking it into several markets in the region, with focus on China. This is written with the benefit of hindsight. I’d be lying if I said that we were organized about going global. In fact, we made every possible mistake in the book- including most of those I will warn against. But in time, we learned to be more systematic. Over the last 3 years I became obsessed with the concept of taking your company global. I saw first-hand that it can create game-changing revenue streams, and how subtle it can be. I took every opportunity to speak with founders who were involved in similar journeys.
This post can be helpful for all your management, but especially to The Champion of your geo-expansion. Who is The Champion? The person who leads the expansion. In some companies it’s a regional CEO (me), in some companies it’s the founder/CEO, in some companies it’s the VP Sales who needs to crack a market before the company sets foot there. But there should always be a Champion.
Here are the steps of taking your company to a new market (say, China):
Step 0: make sure the market is right for you
There’s a good amount of homework to do before you expand into a new market, but I won’t cover it in this post. Why this is step 0 should be obvious: new regions are hard to enter and there is a big opportunity cost in choosing your next frontier. If (like us) you’re less rich than Uber, and live in a complex industry, you can only be serious about expanding to 1-2 markets in a given moment. So choose your frontiers wisely.
Step 1: make the perfect localization list (=wish list)
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” — Sun Tzu, The Art of War
A little planning won’t hurt. It’s common to see companies trying to enter a market without understanding what it takes to win there in the long term. That’s bad, because then you run the risk of bad business results, or (if you severely underestimated the effort) even entering the wrong market.
How to make this list? Take 1-2 days and speak to (1) potential customers or domain experts in the country (2) people who already took tech companies to the country (3) customers who already have business the country (have an American client who has a team in China? They would usually love to share their pains).
List everything that you need to change in your products to be strong at the new market. This includes both visible work (special features and special behaviors for this market) and invisible work (hosting, payments, mass mailing- the stuff that currently works in other markets and needs to continue working in the new one).
True, you don’t know everything now. You can get crazy and over-plan. Don’t. Don’t design features or systems. The point is to force you to understand what it means to be present in the country. Aim to have at least 10 items and don’t be surprised if you have 20-30. For each item, estimate how many man weeks you need to develop it. Keep it simple: use “small” (1 week), “medium” (4 weeks), “large” (8 weeks or more). This is a good exercise for stakeholders in the company.
Let’s pretend we’re Uber and look at a possible list when we want to enter China:
- iPhone app: add Chinese (Simplified) (size: small)
- Android app: add Chinese (Simplified) (size: small)
- Android app: distribute to top 5 local Android app stores in China (size: medium)
- Improve startup time of both apps in China from 14 to 3 seconds (size: medium)
- Driver app: add Chinese (Simplified), add Mandarin voice snippets (size: medium)
- Navigation: add Chinese mapping & navigation data from local sources (high quality) (size: large)
- Allow people to sign up with a WeChat account instead of email (size: small)
- Allow those people to paid via WeChat (size: small)
- Make sure those people get all receipts & comms through WeChat (size: medium)
- Make sure our receipt email uses template of local Chinese receipts (“fapiao”) (size: small)
- Driver sign up (web): test with 360 (local Chinese browser), translate to Chinese (Simplified), automatically validate that people provided a Chinese driver’s license during the process (size: medium)
- Make sure MailChimp can send to Chinese email addresses (qq.com, 163.com) (size: small)
- Website: launch Chinese version without Google Analytics- it’s blocked in China (size: medium)
- Copy the “refer a friend” module from the US to China market- supports growth (size: large)
Now it’s tempting to start talking about localizing operations (sales, marketing & customer service teams), because their work is extremely important and feedback from them is so critical to product decisions. Uber knows it really well. But I’ll keep it for a future post- for now let’s pretend the localization work is only done by product and R&D.
Step 2: develop your MVL (=Minimum Viable Localization)
“The greatest victory is that which requires no battle.” –– Sun Tzu, The Art of War
The next step is easy: look at the above list and mark what’s absolutely necessary to be able to start (=have a product that doesn’t suck) in the country.
What’s “absolutely necessary”? 10% of the list? 20%? Nothing? An MVL, like an MVP, is an exercise in business priorities and minimalism. I like to push startups to very thin MVP’s (“if you’re not embarrassed by it- it’s not an MVP”). I encourage you to go for a thin MVL. No gimmicks, no nice to have’s- only must-have’s. Don’t be a perfectionist (why support 5 Android stores? Try 1!). Break down items (can we translate the user interface for drivers but leave them without voice snippets in Chinese?). Compromise (is it the end of the world if Chinese email services block our messages sometimes in the first month or two?).
If you make your MVL too fat (=more than what it should be), you’re delaying time to market. And this impacts revenues & learning- the things you’re really after.
If you make your MVL too thin (=less than what it should be), you will frustrate your first customers. This will create revenue loss, internal chaos, local team meltdowns and a bad reputation in the market (Asian markets are very sensitive to reputation). At Leverate we were eager to go to market in Asia in 2012, did a good job in sales & marketing, but underestimated how much latency our Asian customers had to suffer with the financial data that we deliver. And financial information is very, very sensitive to latency. What followed is that we lost our first clients and suffered a reputation hit. It took 2 years and a heavy investment (around 2m USD) to recapture the market.
If you’re a B2B company (or even a creative B2C), don’t waste your time while you work on your MVL- you can start interacting with the market and “short sell” (sell what you don’t yet have).
Step 3: launch and measure
Whatever it means in your company (B2B/B2C), now is the exciting time to go to market. Let your sales/marketing team strike and bring some customers home.
Your presence in the new country is still an experiment, and you should monitor it closely. Have a clear set of KPI’s but (just like in a startup) let them be the background for a qualitative conversation. Hold a “cracking China” meeting every 2-4 weeks and share where you stand with key stakeholders in all departments.
Step 4: iterate and develop more as you learn from leads and customers
“Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical.” –– Sun Tzu, The Art of War
The MVL blitz is over. Now get your team into a “roadmap mindset”.
At this point, we took many ideas from our “perfect localization list” and launched a Google spreadsheet that acted as our “localization roadmap” for the next 12 months. We added new ideas to the bottom and discussed priorities every month or two.
Like general roadmaps, this localization roadmap aligns all stakeholders and invites everyone to check it: the CS people in Asia, product managers who plan their next release and me as the regional CEO who works on a budget next year and want to understand the future impact on sales & retention.
Confession: as the Asia CEO, I first became emotional about this roadmap. I wanted everything to be delivered ASAP. But then I reminded myself that (1) product decisions are investments (2) a localization journey is like a product- you can invest in it forever (but you don’t have to).
Does the company really need to prioritize a nice-to-have for China over a general critical feature? No. We took it a step forward and learned to talk about roadmap items in terms of revenues. Whether it’s new revenues (“this new product can help us make 1.5m USD more every year”) or defense (“if we don’t develop this mobile app, we will lose 500k USD in yearly revenues”), most things can be quantified. So do it. It will help your case, or will help you understand that you don’t have a case.
Going global (whether as a startup or a scale-up), and testing results in a new market, is hard enough. It’s time to take the mystery out of the process and execute for minimum waste and maximum results.
This post gave 100% attention to product. It should help you to look at product work before/after launching in a new market. As I mentioned, a very critical part of going global lies outside the product, or rather around the product, in the actual offshore operation- sales/marketing people/CS. This will be the topic of the next posts.