Customer and Revenue
Acquisition in Asia-Pacific
Jeremy Geiger
www.LinkedIn.com/in/JeremyG
[email protected]
www.RTMAsia.com
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
Who Am I?
• Living in Asia-Pacific for 15 years
– Tokyo, Seoul, HongKong, Singapore, Bangkok
– Business expansion in Japan, Korea, China, HongKong,
Singapore, Thailand, Philippines, Malaysia, Australia, India, NZ
• Started-up 15 new country branch operations
– Enterprise software for supply chain, ERP, BI, CRM, BPM, 3D
visualization
– $65M revenue, 30+ partnerships, 50-150% annual growth
• EMBA from Kellogg School Mgmt program in Asia
• Currently work with software, SaaS, internet &
consumer electronics companies as part of RTM Asia
Who is RTM Asia?
• 80 Successful Asia-Pacific Business Executives
• Working with technology start-ups:
• Consumer/Enterprise software, internet and hardware
• Who have the challenge of expanding internationally
• RTM Asia creates new market opportunities in AP
• Market analysis and go-to-market plan for key Asian markets
• Accelerate growth & profitability
• Create new business models in Asia to drive incremental upside
• Minimizing effort, investment & learning curve from HQ
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
WHEN to consider Asia-Pacific expansion?
1. Customer is pulling you
–
–
Enterprise customer is asking you to support product in AP
Consumer: Significant swell of new users in AP country
2. Strong growth, publicity and customer references in US
3. Potential partner/reseller from AP approaches you
4. Market potential is unusually high in Asia-Pacific
–
Automotive, Aerospace, Manufacturing, etc.
5. Capital available
WHEN to consider Asia-Pacific expansion?
•
Typically stage
–
–
•
$5M-$10M annual revenue for software vendors
Initial contact from potential AP prospect and/or reseller
Typical reasons
1. Revenue (to increase profit or funds for R&D spend)
2. Become a Global player (with international references)
3. Company valuation (global revenue potential increases
valuation)
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
DIFFERENCES and considerations among AP countries
Size of Early
Market Adopters?
Unit Risks
Price
Most
Typical
Sequence
Aust/NZ
1
Japan
2
China
3
Singapore/HK
4
Korea
5
India
6
Thai/Malay/
Indo/Phil
7
*Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.
Sample Asia-Pacific Expansion Timeline
Months
Aggressive
0
Conservative 0
Aust/NZ
Japan
China
Singapore
and/or HK
Korea
India
Thai/Malay/
Indo/Phil
6
12
18
24
12
24
36
48
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
Difference among AP countries: Product
Need for
Localization
Expected
Product
Maturity
Need for
Customization
Aust/NZ
Japan
China
Singapore/HK
Korea
India
Thai/Malay/
Indo/Phil
*Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.
Difference among AP countries: Support & Presence
Support
Volume
Local
Presence
(Partner
or Direct)
Channel
Partner
Network
Aust/NZ
Single
Japan
Double
China
Double
Singapore/HK
Single
Korea
Single
India
Single
Thai/Malay/
Indo/Phil
Single
Vendor
Direct
Presence
Required
*Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.
Levels of Localization
•
Level 0
–
•
Level 1
–
•
Access files with local language names
Level 3
–
•
Product Documentation
Level 2
–
•
Marketing Materials
User input in local language/formats
Level 4
–
User interface
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
Partner Approach
•
Most countries in Asia-Pacific require a partner-centric
approach
•
Types of partnerships
1.
2.
3.
4.
5.
Strategic Partner with investment
Strategic Partner without investment
Master Distributor
Alliance Partner
Resellers
Go-To-Market Requirements
•
•
•
•
•
•
$500k - $1M investment per country, in the 1st year
Target break-even in 12-18 months (with no royalties
to HQ)
Need top Pre-Sales person support
Invest in Strategic top-down analysis rather than
signing first reseller that knocks on your door
Need localized product unless targeting highly
specialized technical/management positions
Country/Regional Manager should have relevant
experience doing strategic deals
Go-To-Market Short-Cuts
•
Using knowledgeable 3rd parties that can get
appointments with the most strategic
partners/customers can have significant impact
–
–
–
–
3 month Strategic Go-To-Market Analysis
Operate your branch operation without capital expenditure
Raise capital from local strategic investors
Get paid, based on results
Investment & ROI Expectations
•
Big Bang
Year 1
Entity
Employees Offices 1st Year Year 2-3 Long-Term
Investment
Profit levels
Profitof
Go-to-market
can be achieved withTarget
different
per country
ROI
Potential Potential
involvement
& investment:
$500k - $1M 100%
Direct hires
–
Rented
0%
Med
owned
High: Direct
hire, open offices, local regulations
subsidiary
($750k/country)
Strategic
$250 Majority- Direct hires Rented 250%
High
Medium: Country
heads, virtual offices, partners
Investor – $500k
owned
High
Med
subsidiary
3rd party
Accelerator
Remote
Partner
Mgmt
$100 $400k
None
$100 $300k
None
Provided 150%
Provided
by 3rd party by 3rd
Med
Low-Med
None
Low
Low
party
None
0%
Note: Option to start with 3rd party accelerator and then move to Big Bang or Strategic Investor once market traction
Agenda
• Background
• Asia-Pacific expansion. When?
• Country-Specific Considerations
– Business Development
– Product, Localization & Support
• Go-To-Market Investment & Requirements
• AP Revenue in relation to global revenue
AP REVENUE in relation to global revenue?
•
•
•
•
AP is typically 10-50% of global revenue
Median 20-25%
Traditionally, almost 50% of AP revenue from Japan
In future, China’s share will increase
AP REVENUE in relation to global revenue?
•
Much of US tech company’s growth is fueled by
international expansion. Ex.: In 2008:
–
–
–
–
–
–
Oracle Overseas sales +22% vs. US +2%
Cisco Overseas sales +20% vs. US -8%
Google Overseas sales +40% vs. US +22%
eBay Overseas sales +16% vs. US +5%
Apple Overseas sales +29% vs. US +20%
Sun Overseas sales -2% vs. US 10%
Summary
SUMMARY: For Business Development / Marketing
•
•
•
•
•
There is global demand for useful solutions
Global expansion improves company revenue,
profitability, valuation and company credibility
Each country in Asia-Pacific is different and requires a
different approach
There are different strategies for Go-to-market
depending on investment & bandwidth available
Do your homework and involve knowledgeable people
SUMMARY: For Localization People
•
•
•
•
Asia-Pacific can not be treated as 1 group of users.
Each country will have unique users & needs
Invest upfront in proper technology and processes
because once Asian market expansion starts, it is likely
to expand rapidly to other countries
The structure and number of parties involved in sales,
support and training will be very different than the US
Customer demand will drive localization needs
Thank You
Questions?
Jeremy Geiger
[email protected]
www.RTMAsia.com