Should we go global?

This is a frequent question entrepreneurs and executives face when their businesses start to grow. Most SaaS products are built on the premises which can solve a pain for a large addressable market. There are potential users for the product in so many places that it's difficult to define where to start.

Remember your pitch, right? When you're telling investors how big the addressable market is for your startup around the globe...

Deciding when it's the right time to make that move might be tricky, but it shouldn't always be like that.

Most SaaS companies offering SMB or B2C products will have customers from other countries even before localizing their offerings - mainly if the product was built in English from the get-go. Start off by looking at your own customer base, and identifying where your international users are coming from. This cohort of international users can serve as a valuable proxy to analyze which market you have a better product-market fit.

From this point, create a spreadsheet listing the countries with more users. Adding columns with population, GDP, internet penetration, unemployment rates, number of businesses, inflation, language, or any other metric that is relevant to your business. It will help define the priority markets for your potential expansion. Try not to make it too big of a list, conquer the World one market at a time.

Knowing your priority markets, research customer care information to identify what these users have been saying about their experience with your product. Are they complaining about pricing, product features, or payment methods; look for any source of feedback that might have been registered in care tickets or just talk to the agents directly.

Now it's time to define a Minimum Loveable Product (MLP). If you're not familiar with the concept, go to this article. Ex- Y Combinator, Sam Altman stated,

“It’s better to build something that a small number of users love, than a large number of users will like.”

At this point, your business already passed the MVP phase on its core market, there's no point in going back to that stage when going international. Instead focus on finding the MLP, what it's required for a small number of customers in a new market to love it, and scale from there.

Grab all the information available from different sources and plot it into a spreadsheet to help weigh the different factors and assess what is missing in each priority market. I suggest creating a score for each item in the list, building up to a percentage to achieve 100% MLP. Don't forget to map out local competitors, and how they compare to your product in terms of features and pricing.

Plan your GTM (go to market) by focusing on the countries with higher MLP first, expanding first to places that speak the same language can be the most-effective way. There's no need to invest heavily in localization, you can use the same customer support structure. Eventually, there won't be a need to bill in a different currency. That's the ideal scenario. But quite often the markets with higher potential will require a more thorough process.

Let me use one example to illustrate.

Imagine a SaaS company from the US planning to expand to Germany. The first thing that comes to mind is language, right? Although a good portion of the german population speaks decent English, their user preference is to consume services in their local language. The second thing is currency. In the US the company bill their customers in USD, in Germany they might be able to accept Euro. Here it's not only about accepting payments in local currency (billing) but also defining a pricing strategy that's competitive in that given market.

> To learn more about pricing strategies, check out this other article I wrote.

Nice, we have localized the website and product, and have billing and pricing in Euro, we might be good to go. Well, not so fast. Localization is not translation. It means making your product feel local to the users in a given market. User experience and purchase decision behavior vary from one country to another. In the case of Germany, users expect a lot more information about specs and product features than in most countries. They also need to trust your business complies with all local regulations - yes, they need to see all those certificate badges on the website - before making a purchase.

This list goes on and on. You might be thinking, how I'm supposed to know everything that's required in each market? The good news is that you aren't. If you find yourself in that situation it means that it's time to consider hiring people on the ground. Find someone with deep knowledge in the industry and market that can help you avoid the pitfalls and grow faster.

It's possible to start from the HQ, but there's a limit to how much your business can grow without experts on the ground. There are blockers that only a local team will be able to identify to unlock the full potential of your business. In my experience I've seen companies struggling for years to get real traction in some markets until they hired a local leader to solve it for them - you won't believe it if I tell how basic these things usually are, for someone who knows the market.

The same goes for your HQ team. Build a team of seasoned professionals in international expansion, folks that have done that before. It will save your company a lot of money and time. Global markets are not for amateurs, there's no room for trial and error.

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This article reflects some of the learnings I had on executing global expansion for large SaaS companies in the past ten years. Feel free to share including the source.