SaaS International Expansion: Where to Start?

Growing into international markets

Expanding into new markets is essential to growth of a SaaS business. How do you pick the best market(s) for your initial international expansion?

This article explores where to start if you’re looking to grow internationally. The examples used reference North America and Asia Pacific, but based on my experience beyond these places, the general principles should work well in other regions around the world.

Small bets approach

The small bets approach involves looking at the low-hanging fruit in your expansion. This is where you want to start. It will allow you to dip your toes into a new market relatively quickly without the need for conducting very lengthy research and investing a lot of resources.

Look at existing customers

The first step is to look at where you already have customers. Say, for example, you are selling primarily in the US, but you might have some opportunistic customers in other countries that have found you and came to you, proving that there is a demand for your software in that market and it eventuated in a sale.

Don’t forget indirect customers

It is also important to look at countries that use your solution in certain countries, even though the contract might be out of your ‘typical’ market(s).

For example, a company that does manufacturing software might have a customer with a contract signed in the US, but this customer has subsidiaries/operations in countries like mainland China or Malaysia where that software is used. China and Malaysia are where the indirect customers are and could be a great choice to consider expanding into.

Critically analyse past international opportunities

The next thing to look at is the international demand for your software. This means looking at where some leads and opportunities developed outside of your main market. Using the same example of primarily selling in the US, what were the other countries where you have had inbound leads from? If there were opportunities that didn’t eventuate, what were the reasons for this?

If there is international demand, but your opportunities don’t lead to anything, it could be because your product isn’t suitable for that market. If opportunities continue to not eventuate, critically think about why they didn’t eventuate it. Could it be because it’s not a fit for the market, or maybe you didn’t put the right resources behind those sales cycles?

Look at partners

In addition to looking at your direct sales, it is also important to look at your alliance/channel partners. Have a chat with a partner that you trust and is possibly a global company, and ask them about which markets they believe your products could potentially be suitable in.?

You could also ask your partners to have them set up some introductions with their contacts in those markets, such as their local offices or their sister companies, to find out if they think your product is suitable for their market and if the partner would be interested in working with you. Their desire in working with you and selling your software is potentially a great indicator of how successful your software might be.

Every alliance/channel partner is different, so it is ideal to speak to more than just one partner in a particular market. Partners have different priorities and ways of doing things, so try to invest the time and resources in speaking to a few to gain different perspectives and find one that aligns with your organisation.

Evaluate competitors’ presence critically

A lot can be learnt from your competitors, including where they have successfully expanded into and why. However, just because a competitor expands to a particular new location, that doesn't necessarily prove a successful expansion opportunity. Many SaaS companies can potentially throw a lot of resources and burn through a lot of money trying to expand and not get anywhere (although this will perhaps change as funding is now more difficult to attain than it used to be). They might open an office in a particular country just to shut it down after a year or so because it didn’t produce results, and then a year later, try to do it again.?

If you analyse a competitor and see they have been actually succeeding in another market, try to understand why they were successful. Chances are you might be able to successfully expand into that market as well.

Think similar markets?

Another thing to explore is looking at additional markets that are like your main market in a way that's relevant to your SaaS solution. For example, if your main market is the UK and your SaaS software is in the legal space and is built around the UK legal system, countries with a similar legal system or framework like Australia may be a very strong and natural fit for your SaaS software.

Don’t overlook existing resources

The last step is to look at resources that you already have that might be helpful with a particular market, especially human resources. If you have someone in your organisation in the US who is in a revenue-generating role and has connections in Indonesia, this could be very beneficial. Leveraging their partners and their ability to speak the language could form the basis of a side project to determine whether your product could be offered in Indonesia and whether there is any interest or demand with the use of very limited resources.