Scaling Globally

Am I crazy? Here I was crammed in economy class on a 16-hour flight to Hong Kong to do business stuff, when I had a good thing going in NYC. I was content just building up Stack Overflow’s enterprise business in the US. It should have been enough.

The problem is I live in a constant state of dissatisfaction. I can’t just coast. I am always pushing and prodding and then pushing some more. Sometimes it’s this insane desire to be the best at something, sometimes it’s to fix something I see that’s broken, and sometimes it is unstoppable curiosity.

This time it was curiosity that got me. I wanted to take this new Stack Overflow Enterprise business and build it up from scratch in Asia. The positive is that after 18 long months and too many flights, I was getting traction. The downside is I probably shaved ten years off my life expectancy and became mentally unstable in the process.

The two hardest things you can do as a startup founder are to find product market fit and to scale your startup outside of your country. The former is the death of most startups. But the later can just as easily kill your startup.

In many ways, going global is like doing another startup, as if doing one startup wasn’t hard enough! While there are degrees of being a global startup, when you set up operations in another country, the level of complexity quickly escalates. You are entering into a country that you are not as familiar with, with few to zero business relationships, and navigating entirely new legal frameworks, tax rules, and cultural dynamics.

While I was not the founder of Stack Overflow, I saw myself as founding the Enterprise business and faced some of the challenges of global scale. I heard many horror stories as well from founders I mentored during my time at AWS. I also experienced quite a few nightmares doing business globally in my prior startup.

As I sat down to prepare my most recent talk at the Meet Taipei conference, I started to gather some thoughts around what it takes to prepare your startup for global scale. It is important to emphasize that “global” always starts with the journey to succeed entering one new country. Once you overcome that challenge, entering other countries becomes a little bit easier (but never fool yourself into thinking it is easy).

Therefore, I want to leave you with twelve questions to help you decide whether entering another country with the goal of global scale is for you. Asking these questions can also help you avoid some of the pitfalls that many startups fall into. If you think this is the right path for your startup, let’s dive in to help prepare you for the ride!

1. Why is going global important? When the question pops up in your mind about going global, is that because that was your vision from the beginning, or do you have a hunch about growth opportunities overseas? Those are both valid reasons for exploring global scale. However, there are also bad reasons for pursuing global scale such as pressure from investors or the need to fuel your own ego. Neither of these should ever be the basis for taking such a significant bet on your company given the resources a global strategy requires.

2. Is global scale needed for growth? Global scale is not a requirement for a startup, but growth is! Growth can happen without expanding outside your region or even your own country by launching into new industries, new customer segments, or new products. The key is to understand the compelling reason to go global that is aligned to your vision for company growth and delivering customer value. If you are building a horizontal SaaS business app like I was doing at Stack Overflow, then that could be global, whereas a product that solves an inherently local problem might not.

3. What is your minimally viable market entry? The level of effort entailed with a global strategy is dependent on the nature of your business. For low-cost, general purpose SaaS tools, simply having a website and product in English is sufficient for reaching a vast majority of the planet. That is not the care for businesses that depend on enterprise sales motions, are in regulated industries, require onsite implementation and support, or compete in highly competitive markets. Getting established in a new market requires knowledge of the local regulations, corporate policies, and tax requirements. Make sure to research the requirements and contact firms that specialize in helping foreign companies get established in local markets. Once you have the knowledge, you can decide what is the minimum effort needed to enter into different countries.

4. Are you ready enough? You will never be truly ready to make the leap to regional or global scale. The key word here is “enough”. The basics of your business should be established first before pursuing any expansion strategy. For example, you should have product market fit in your home market and understand the unit economics of the business. You want to be profitable or at least have sizeable funding or financial buffer to support the effort. There is also the time and attention aspect, so you need to be honest as a founder and ask whether you and your team have the bandwidth to support building the business in another country.

5. Are you seeing pull? Are you seeing customer growth from international markets today without any effort on your part? You have a few customers signing up online or calling your sales desk. This is a strong positive sign! Reach out to them to learn how they found your startup, their reasoning for considering a solution provider outside their country, and what the local provider market is like. This knowledge becomes the hypothesis for your global growth strategy. One of the things that convinced me that Asia was worth entering was visitor data on our public Stack Overflow site that showed the fastest growing developer ecosystems in the world were Indonesia and Vietnam. This was enough to explore the viability of spending more time in Asia.

6. Do you have credibility? You need more than a website with product information to draw potential overseas customers to your startup. Customers are not seeking products, but solutions that can solve a problem. This means going beyond a sales pitch to elevate your “thought leadership” credentials and show you are a solutions oriented provider. This could be through a blog, newsletter, or podcast with industry insights and market research. You can host events or videos with customers or industry professionals sharing their insights. When we were launching Stack Overflow Enterprise, I created DEVBIZOPS, a weekly newsletter with content about developer culture and engineering leadership practices based on conversations we were having with CTO’s and VP’s of Engineering. And while it might be obvious, you need to have content and materials in the native language of your target markets, so Japanese if you are entering Japan or English for US markets.

7. Do you know your targets? While the types of accounts and personas might be the same as your native market, there could be differences. Job titles can have different meanings in overseas markets. The business culture might dictate that you speak with other personas either higher or lower in the organizational chart. This could also impact the types and size of customers you reach out to. For example, as I was doing business in Asia, I found having “sales” in my title was limiting the ability to reach decision makers in local enterprises, so I changed my public title to “Regional Director” and saw more success. Therefore, tailor your ideal customer profile, key personas, and sales tactics for new markets and build detailed account lists based on these adjustments to better focus your sales efforts.

8. Do you have connections? You may not have many relevant contacts in your target market. However, there are chambers of commerce that help with networking as well as government organizations that aid with cross-cultural business exchange. You can also leverage alumni networks from your university or former employers to build connections. Lastly, do not ignore cold outreach using LinkedIn and email! This can be an effective strategy, but only if you send personalized and concise messages. I used cold outreach to build my network in Asia when expanding the business for Stack Overflow. I sent short notes saying that I was visiting and curious about developer culture and engineering practices in their country. The messaging worked as it plays on intrigue which helped me book 25 in-person meetings with senior IT executives in five days during my first overseas trip.

9. Can you activate hustle mode? Successfully building business overseas requires more than connections over LinkedIn to earn trust. You need to be seen as part of the ecosystem and someone that is committed to establishing a business for the long-term in the country. This means as a founder, you need to spend meaningful time on the ground engaging with local customers, partners, industry influencers, and communities. You also need to jump on any chance to meet in person like the time I met the APAC CTO for a global bank at the airport before he departed to Paris for holiday, leading to a deal a few months later.

10. Are you building influence? Along with having credibility through thought leading content and being seen in the local ecosystem, you also need to broadly generate awareness. This could range from sponsoring and presenting at events, speaking on podcasts, and engaging influencers on their media channels. While these efforts take time to translate into opportunities, it can turn into a flywheel for creating low-cost referrals to your business in the long-term. One way I did this to establish my presence in Hong Kong was to sponsor a local event by an established technology association. Then I created content with findings from the event and emailed my local contacts, generating positive responses from contacts that had previously not engaged and opening up new opportunities. All it cost was to sponsor one iPad for a raffle, putting me in front of a room of over one hundred and fifty IT executives.

11. Are you fully leveraging cloud? Technology is critical to achieving scale and serving customers effectively, especially as you go global. Using the cloud enables you to scale up and down as needed. Cloud also gives you flexibility to experiment, iterate, and ship quickly. One thing that founders often neglect is that cloud providers can help in additional ways beyond technology, even beyond the ubiquitous credits they provide for startups. When I was at AWS, almost every startup I talked to was part of the Activate program which provides credits, discounted offers from partners, and resources to build on AWS faster. There are also programs for startups further along in their journey such as the AWS Marketplace, Global Startup Program, and ISV Accelerate that assist with go-to-market support. Tapping into these programs can speed up the process of developing a pipeline of international business without investing too much into building your own on the ground infrastructure.

12. Are you willing to be patient? You need a strong bias for action when entering into new markets and be results oriented. It is easy to get in a cycle of having lots of activity without any outcomes. However, you also need to understand that results will take time. Start with one deal in one country, build success with that customer, then you can set higher and more substantial goals. Remember, customer success is easily your best advertisement to establish yourself as a trusted local partner to customers in international markets. For me, that was securing my first banking customer in Hong Kong for Stack Overflow which helped me get the next deal in Asia, creating a domino effect to accelerate the business.

If you decide to go global, the next question to ask is whether you are seeing momentum. Entering new markets can feel like taking two steps forward and one giant step back. You cannot predict the wins or the setbacks. However, over time, you should begin to see progress on activity, awareness, deals, and revenue if you considered the twelve questions I shared above and continuously reassess your answers as you gain more knowledge of the markets you enter.

Have you made the leap to go overseas? What are one or two critical things you learned along the way that helped you take a global approach to your startup?

Mark Birch

As I mentioned in the essay, I presented at Meet Taipei this week. In fact, the conference is still going on into the weekend!

Because today’s newsletter is running long, I will share my thoughts on the experience next week. In the meantime, here is my schedule over the next few weeks and would love to meet up if you are in any of these places during my travels:

• Taipei: Nov 20 – 26

• Hong Kong: Nov 26 – 28

• Brisbane: Dec 1 – Dec 3

• Hong Kong: Dec 3 – Dec 6

• Taipei: Dec 6 – Dec 8

• Kaohsiung (Hacker House): Dec 8 – Dec 14

• Taipei: Dec 14 – Dec 15 (may extend)

Thanks and see you somewhere around the globe soon!