Are Indian Startups Ready to Go Global?
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Financial Year 2016 was a watershed year for businessto-business (B2B) start-ups in India, with more than a 1000 new companies getting registered and over $1 billion was invested in the segment. Given the fact that traditional IT market is not adventurous enough to give young start-ups an opportunity coupled with the price sensitivity of the market, sooner or later B2B product companies will tend to look at going international.
There are three approaches that most companies traditionally follow:
1. Looking at the markets like the Middle East or South East Asia, you will find most of these economies are much smaller than India, however, sometimes it is easier to setup a shop there from a revenue standpoint and also it is a cheaper option. But, just because you have managed to set up your business in these economies does not guarantee your presence in the US or European market, it is still as hard or simple if you had customers only in India. Additionally, most of these markets are extremely relationship driven and therefore you need to have a clear partnership strategy, else it would be a waste of time.
2. Spend money on online advertising and make sure that the product is awesome and downloadable for a free trial and target smaller companies so that they can download the product and try it hands on. In my experience, a new product becomes instantly popular more out of an accident than a plan unless someone is selling some utility/tool that addresses a dire need or required by lots of customers.
3. And lastly, setup a telesale/ business development organization in India or the US (if you have more cash to burn) and move one of the founders to latter. This approach works sometimes. I feel that we have failed to see successful B2B product ventures coming out of India because most entrepreneurs are extremely conservative on their sales and marketing (S&M) spend.
Average S&M spend for most B2B start-ups in the valley is >45 per cent while in India it hovers at an abysmal 25 per cent and sometimes even lower. This speaks more about the state of mind.
In my view once the product-market fit has been established, focus should be on spending on branding, marketing, establishing partnerships with organizations which can help them scale and build the market. And, this needs money.
If you want to play in the global markets, first thing you have to do is change your attitude. Get aggressive, budget a bigger S&M spend and be conscious about being dressed for the occasion. Do you look like a global company? What does your brand stand for? Customers in the West are more discerning when it comes to who they want to do business with.
Branding and marketing are a great start, next make sure the product is easy to download and use, provide enough explainer videos to show somebody how to remotely install your product and get self help. Targeting and segmenting the market is next.
Initiate a few approaches (for e.g. initially targeting companies in a particular geographical area or a particular industry or revenue size) and then modify to find stickiness. Once there is hint of traction, go all out to capture that specific space, give discounts for references (priceless) and some free usage to acquire the first set of customers.
Using a combination of digital outreach and field sales to win businesses is the cheapest way to scaling customer acquisition. There is this notion that one should partner with resellers — I do not ascribe to that view simply because the resellers do not create the market, they merely sell into a market and would like to sell a product that sells on its own vs. having to do the heavy lifting.
While none of this is rocket science, most start-ups find it hard to apply these things. Lyncbiz offers all of these services to product companies to make sure that we can scale their global business. Literally from building the market entry strategy, website and marketing/ branding strategy to running sales campaigns and acquiring customers, we provide it all. Most product companies who work with us find incredible value in the strategy phase itself, where we help them think about the target customer/market(s) using a dipstick approach, IP monetization strategy, product architecture for scaling and use cases.
(This article was first published in the November, 2017 issue of Entrepreneur Magazine. To subscribe, click here)