Your brand marketing needs your best analytical talent

 

We now expect analytics in all of our marketing (thank you, Internet)

When people think of analytics in marketing, they think of online marketing. They think of things like PPC and SEO, measuring clicks, tracking pixels, conversion funnels and so on. They think of direct acquisition campaigns and CRM activities.

And it’s sensible to equate marketing analytics with online marketing. Online marketing has changed the culture of marketing in general by providing unprecedented levels of data and automation. It has changed expectations. Marketing should be measured and optimized. Its spend should be justified with numbers.

However, analytics in brand marketing is hard

Where this cultural revolution runs into problems is with brand marketing. Brand marketing is traditionally based around non-online media (such as TV and print). This makes it much harder to granularly track its impact. How many of your target customers were affected by that ad that ran on the bottom half of page 5 of the newspaper? And a lot of brand marketing is not directly linked to an immediate purchase by the customer, so it’s harder to know confidently whether it has yielded a return.

It is a strange juxtaposition at a company when the marketer managing Facebook ads can measure down to the penny the return from 1k of spend, while the brand manager might struggle to prove any impact from 1 million of spend. This contrast isn’t helped by the tendency for the most analytical minds to steer away from brand marketing and towards online. But the exact opposite should happen.

Hard problems need good people

Brand marketing deserves some of the most analytical talent that a marketing organization can throw at it. Why?

First of all, the budgets for brand marketing tend to be big and chunky. And they can be spent fast. Media buys and creative production can chew through a seven figure budget in the blink of an eye. Compared to online acquisition or CRM campaigns, where spend can be drip fed and paced, brand marketing is high risk.

Secondly, the analytics for brand marketing are just much harder. Analyzing online marketing is a straightforward: lots of data, lots of tools, narrowly-defined problems. In brand marketing, your data is much sparser. It comes from many sources. Those sources aren’t automated. In fact, one of the key sources is probably a survey, which needs time and money to be run. And to reach a conclusion, you need sharp minds to triangulate rigorously across your data sets.

Brand marketing might be evolving, but some things stay the same

“But wait! People are consuming Youtube and banner ads. Not terrestrial TV and print. We can measure our heart out and automatically suck up data, just like a Google PPC ad.”

Sure, but it’s only partially true. The old mediums, like print, aren’t going to suddenly die. And until we can perfectly track people seeing a billboard, listening to a radio ad and reading a PR piece – and then link them to their purchase 1 year later – the need for sophisticated analytical talent won’t go away.

So for at least the years to come, it won’t be easy. And this is exactly why brand marketing needs the best analytical talent your organization can give to it.

GS Dun builds new ventures and products, such as CakeAB, the easy-to-use pocket calculator for AB tests. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

How to settle fights for development time

With development, demand always exceeds supply

A founder friend now runs a tech company approaching about 100 employees. It’s just big enough to have different departments: different business units, marketing, operations, customer service, etc. And like any tech company, there is a scarce amount of product development time.

With so many departments, how to allocate dev time?

The question my founder friend put to me was: how do we allocate development time?

It’s a major issue for any tech company that is big enough to have multiple departments. Companies will typically start to feel this pain at about something like 20 employees. And it magnifies with growth.

Don’t hold arm wrestling matches

The typical approach is to have a meeting every week or two where representatives from each department come together. Each person argues their case.

This becomes a series of arm wrestling matches. Essentially Person A has to out-argue Person B to get their work done.

This is a crappy of way of getting development decisions made.

  • The judge (a product manager, a C-level decision maker or a committee) cannot understand the minutiae well enough to weigh up a Small-Change-for-Marketing vs Medium-sized-Feature-for-Operations
  • A boatload of effort goes into lobbying each other, rather than solving actual problems for the business. It’s unproductive
  • Small-but-impactful work doesn’t get done. Experienced product people know the crazy value that can come from making small changes. But small changes don’t sell as well as dramatic features and changes

How to do it better?

Allocate entire sprints to different departments, not many small chunks of time

At the start of every quarter, the management team should simply allocate sprints to the different departments. Essentially they make a macro investment decision and not get stuck into the minutiae of every feature request.

For example, pretend the big aim this quarter is to boost customer acquisition. With single dev team running 2 week sprints, in a quarter, you have about 6 sprints to play with.

Your big decision: of the 6 sprints, how much goes to each department? For example:

  • 3 sprints (1/3rd of the total amount) goes to marketing, since they’re going to be driving customer acquisition
  • 2 sprints goes to operations and customer service who likely need some upgraded tools to serve a large inflow of new customers
  • 1 goes to paying down tech debt and re-factoring systems that have been on the verge of collapsing

The management team should also set a schedule for the quarter, so each department can see when their sprints are coming up.

By doing this resource allocation decision at a macro-level once a quarter, the management team eliminates the arm wrestling that would otherwise happen over every single bit of dev work.

Let each department decide what to do with their sprints

Another key element of this approach is that each department can decide what to do with their sprints. Some teams will fill them with a host of small fixes and changes (anyone who has a run a back-office ops function will probably understand this). Others will go for major features.

When sprints are being allocated, a department may give an idea of how they would spend their budget. But they shouldn’t be beholden to it. Plans change. Shit happens. Each department lead will know at the time their biggest priorities.

Support each department lead with a solid product manager

Different department leads will have different levels of tech and product savviness. The product managers at the company need to work with department leads to refine their priorities. This has to be done ahead of their sprints.

By the time the department’s sprint is due to start, a product manager should have worked with the department to figure out what they need to have designed and built. This means understanding the department’s area of the business, stress testing priorities, getting rough sizing of effort involved, figuring out if the work can be simplified, understanding the relationships with other parts of the business, etc.

Departments are free to do deals with each other

With this approach, departments will figure out how to do deals with each other. They might swap sprints, because the scheduling better suits each other. They might agree to share sprints, especially if one department needs more design work done, while the other really needs build.

Or sometimes, something goes wrong and a feature doesn’t get finished within the planned sprint. In this case, a department lead might make a deal with the following department to get more time to finish the feature.

This sort of cooperation makes this approach work much more smoothly – and is very straightforward compared to the arm wrestling matches.

Remember the bugs!

Bugs suck and they emerge at inconvenient times. My favoured approach for bugs is to leave space in every sprint to fix them. While big bug weeks can help clear a backlog, realistically, it is difficult to ignore bugs altogether in the meantime.

Every department has to understand that if something major blows up in another part of the business, it has to get fixed even if it’s their sprint. Having some ground rules on what is an urgent, important bug and a clear idea of who is the final judge will save a lot of internal arguments.

How you know you’re doing it right: minimal internal lobbying

If you frequently find yourself in a meeting with lots of people playing a zero-sum game against each other, you can be pretty certain something is broken in your approach to making development decisions. When you have it right, the energy put into zero-sum games will go into solving real customer issues.

GS Dun builds new ventures and products, such as CakeAB, the easy-to-use pocket calculator for AB tests. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

To beat the odds in ramen, think like an engineer

Singapore is a not an easy place to start a food business. With thousands of hawker stalls selling delicious dishes for just a handful of dollars, convincing someone to spend SGD$16 for a bowl of noodles at lunchtime is not the easiest sell.

But Chris Tan and his partners at Buta Ramen have done exactly that. And they’ve been recognized as the number one ramen place in Singapore and kept it going for 3 years now.

But how have they succeeded in such an intensely competitive environment?

By thinking like engineers. With backgrounds in engineering, the team thought about their venture differently from most food entrepreneurs. I spoke to Chris when I was in Singapore and learned their story.

Fit the concept to the location.

A typical food business story is to start with a concept and then find a location.

Chris and his partners aren’t typical. They did it the other way around. They first found a high foot-traffic location in the heart of the Central Business District. Then they decided on ramen, served with tasty pork.

Why ramen with pork? They had a passion for great meat. And it was unique compared to other eateries in the area (sandwiches, Italian and other Mediterranean fare).

But most importantly, ramen could be done in the very limited square footage they secured.

Demand is spiky, so keep dishes moving fast.

The hot food business has very spiky demand. A huge chunk of your business comes in at mealtime hours. So it’s important that when that demand hits, you put out dishes quickly.

Part of the solution is inherent to ramen. It’s a dish that allows for ingredients to be prepped ahead of time. A good bowl of ramen needs minimal food prep once the customer has ordered.

But a less obvious part of this is before the order even comes in. It’s menu simplicity. Like a good user interface, the Buta menu doesn’t flood you with choices. It gives you four dishes. That’s it.

First, this makes customer decision making faster. It is far less likely that someone gets to the front of the line and is still stuck in indecision.

And second, a simple menu means fast prep time. Only a certain set of ingredients are needed and there is only so much complexity that the chefs need to handle. When under time pressure, it makes a difference.

Don’t sacrifice quality for speed.

Let’s be clear. Buta Ramen is not a McDonald’s factory, sacrificing quality for the sake of high speed production.

Like good engineers optimizing an outcome given constraints, the Buta Ramen team worked within the constraint of maintaining high quality food. The meat marinates for 24 hours overnight. They conduct egg cooking experiments to perfect their technique . They go to conferences to see what else is cooking (figuratively and literally).

Quality product is the ticket to play. The efficiency is what gets you profit.

Brilliant buzz marketing beats buying ads.

Buying ads is a terrible way to market a hot food business. Instead, the Buta team capitalized on the fact that the business lunchtime crowd is a repetitive one. Office workers tend to go to the same area each day at lunchtime. So they went ahead and created lines out the door on day 1.

How? They gave away meals for free. Full size portions of ramen (not skimpy sample sizes). This created a ridiculous queue. And because they were running out, they handed out tickets to everyone in line who missed a free meal, so they’d come back the next day.

For every office worker who dashed out those days to grab their usual lunch, just seeing the ridiculous queues ensured they made a mental note to stop by.

Think different.

Having spent time in the food sector, I can safely say that the Buta team is not typical – hence a large part of why they’ve been able to beat the odds in an intensely competitive sector. If you’re in Singapore, drop by. And if you’re not local, then here’s something to salivate over.

GS Dun builds new ventures and products, such as CakeAB, the easy-to-use pocket calculator for AB tests. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

 

 

Leaving the European Union would be a divorce without reason

I’ve been struggling for weeks, wanting to add my small piece to the debate raging on now about the European Union. As the United Kingdom, should we stay in?

The struggle hasn’t been getting to an answer. The answer is easy. We should definitely remain a member of the EU.

The struggle has been how to convey the impact that this would have – both on building new ventures (the topic of this blog) and the country as a whole. The impact of leaving is so large, so far-reaching, it is hard to get your hands around it. And the benefits of staying are so pervasive that you take it for granted.

I often use the analogy of divorce. A divorce is about more than just leaving your bedfellow and housemate. In the same way, the EU debate is about more than just leaving a club. It is about long-term security and stability. It is about partners in the world who understand us and share our values. It is about economic prosperity.

And like a divorce, the act of leaving the EU would be a painful one. First it would tear a hole into finances. The Bank of England, the IMF, the Confederation of British Industry, Bill Gates, Richard Branson, Michael O’Leary, Paul Krugman, etc etc etc all believe that the UK is better off in the EU. I looked and couldn’t find a credible independent business or economic source advocating to leave. Admittedly I didn’t look very hard, but then again, if they were there, they would be on the Leave website.

One only has to look at the current low that sterling has reached based on just the fear of Brexit. Currency traders aren’t exactly known for putting politics before profit.

And on top of all this, leaving would mean having to pay the divorce lawyers. Virtually every government body and major corporation would be putting considerable money and teams into figuring out an extraction over several years. The Leave case talks a lot about agility. This is the opposite of that.

Moving on beyond money, like a divorce, leaving would tear into friendships. We’d find out who likes us for us, or whether it’s because we’re part of the EU. I suspect that most countries and businesses that come to the UK like us a lot more now, while we’re part of a 500 million person market.

But perhaps most importantly, it would tear into our sense of self. Like a macho man, the Brexiteers insist that we can cast away our partners. The problem with that is we’d be casting away the one set of people in the world that share our values and cultural understanding. As much as we joke about the French being French, we also joke about Londoners vs Mancunians. When it comes to differences, we make mountains out of molehills.

Like our European neighbours, we are a liberal democracy. We believe in the right to vote. We believe in free speech. We believe in the rule of law. We believe in social safety nets. We believe that if our neighbour is sick and poor, she should have access to healthcare. We believe in protecting the rights of workers.

And while we may have different views over the details, again these are just molehills. Divorcing, when we have so much in common, would be on some level a rejection of this part of ourselves. Leaving would change who we are. And it would cost us a unique set of friends in the world.

We don’t have a good reason to separate

I wouldn’t argue that divorce never makes sense. But if you’re going to do it, have a good reason. Be certain that the benefit will significantly outweigh the losses.

One of my main issues with the Brexit case is that it is essentially conjecture. With conjecture, anything is possible. For example, one story was “we could be like Switzerland and Norway, while striking trade deals with our former colonies!”

When Barack Obama, John Key and Malcolm Turnbull all tell us to stay in the EU, it’s a sign from said former colonies. And to be like Switzerland, we’d have to be a tax haven. And to be like Norway, we need more oil. So if we follow the conjecture further, if we leave, we would be a lonely country fracking our countryside and doing funny things with bank accounts.

The Brexiteer case is a fantasy about being single again. But once we realize that our ex has kept the house and the cute barista at the coffee shop does not want to give us their number, the feeling that we’ve made the biggest mistake of our generation will set in.

EU membership gives us influence over an entire continent

The European Union is made up of 28 countries and 500 million people. In comparison, the United States is only 320 million people. The economy of the EU is US$18.5 trillion, outweighing that of the US or China.

On a global scale, the EU is a big deal. And we’re a big member. By population and GDP, the UK is the second biggest member of the European Union. We hold 10% of the seats in a European Parliament, although we’re just 1 out of 28 countries.

And that influence within the EU buys us influence in the wider world. Our non-European friends are friendly in large part because we are a member.

We have a powerful seat at one of the biggest tables in the world. You don’t give that up to have the only seat at a folding card table outside of the room. Politically, it’s a short-sighted move.

The Big Picture is peace

There are a lot of costs to leaving, whether it’s our wallets, our businesses or even our holidays. But that’s petty stuff. Let’s take a big picture view.

The European Union and its predecessors were started to unite us in peace. Our countries had spent the first part of the last century killing each other. Trade and political unity was put in place to stop it from happening again.

Given the last several decades of peace, the EU has done its job. And it can continue to do so – but only if we stay in. Our departure would be a serious blow to the EU, hitting it at a fragile time. One only has to remember history from 100 years ago to realize how in fragile times, things can turn ugly quickly.

I would like to believe it’s not a high probability event. But 10 years ago, I would never have predicted a major global recession, the greatest humanitarian crisis since World War II and the Apprentice guy being within arms reach of the White House.

We’re in uncertain times. But one thing we can be certain of is that each vote to leave chisels away at our most important long-term defense against conflict. The last century brought us trench warfare, aerial bombings of civilians – and much worse. Swinging a pick axe at the thing we built to stop history from repeating itself is arrogant. Only the arrogant gamble with long-term security.

Have the benefits spread enough?

It is easy sometimes, sitting in London and working in tech, to forget that the benefits of the EU may not be obvious to everyone. The EU fuels our businesses, giving us access to a huge market, bringing talent and investment to our companies and making London the capital of European tech.

But the fact that the EU debate has come this far means something is wrong. Perhaps the benefits of the EU have not spread far enough. Or rather, perhaps the benefits of economic growth have not spread far enough.

Real median income in the UK is still below where it was back in 2009/10. House prices have risen to push down home ownership rates to some of the lowest levels since 1988 and the number of first-time buyers still hasn’t surpassed the level in 2007.

Against this backdrop, I imagine it is easy for frustration to be directed at immigrants. Certainly blaming foreigners is an easy platform to run on, a tactic not lost on politicians like Putin or the guy from the Apprentice. And in this vein, going against the European Union becomes a vehicle for gaining higher office.

Although I believe that we will ultimately vote to stay in the EU, there is a long-term challenge to ensure that the benefits of the EU are not only apparent, but felt, by a broad segment of the UK.

The great failing of the European Union

The great failing of the EU is the lack of a European identity. I think it was quite telling that in the recent terror attacks in Brussels and Paris, many conveyed a sense of empathy that was along the lines of “It is terrible what happened to them.”

But in a sense, it happened to all of us. The attacks were not against the French. Nor the Belgians. They were against open societies, the European kind of societies. Paris and Brussels were two cities added to the list that London was already on.

Perhaps the lack of European identity is simply a question of language. Or it’s more subtle than that and it’s a lack of shared symbols and narratives.

Whatever the reason, it is important to our long-term security, economic prosperity and influence over the continent to ensure that the European Union stays strong, rather than dismantle it. We must vote to remain.

GS Dun builds new ventures and products, such as CakeAB, the easy-to-use pocket calculator for AB tests. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

Hiring your first “techie”

I had a chat a little while ago with an entrepreneur. Smart guy and with some good early traction. He comes from a commercial background, far from tech and product.

He wanted to chat about hiring the first technical person to join his team. It’s a conversation topic I’ve had a few times in the past, so I thought I’d share my braindump here.

1. Find a product-oriented developer

Some developers love the deeply technical challenges, for example, making something happen 10x faster than before. Others like solving immediately practical problems, like helping buyers meet sellers.

If you’re reading this, chances are that you need a developer who likes solving those practical problems. Find the one who likes making things that people use.

How? It’s not always evident from their job, so ask about their hobby projects. Ask about what they were trying to do or solve. Why this approach over that approach? How did the product evolve? How did they come up with the UI? How did they get user feedback?

Look for signs that they care whether their product is being used or not (it may not be successful, but they should at least care).

2. Full stack!

Developers generally specialize in front or back-end. But if she’s your first developer hire, then try to find someone who has a reasonable level of comfort with both. She won’t be expert at both, but should be good enough in one and very good at the other.

Similarly, don’t hire a one-trick pony, which is someone who really only develops in one language. I’ve seen a startup re-write their entire codebase into a different language, because their key hire was a one-trick pony.

3. Don’t outsource

It might be tempting to hire an agency, but don’t do it. Consider it a test to sell someone on you, the vision and the company by having them join you with a proper level of commitment.

The reason not to use an agency is because things never go according to plan. You need the close working relationship to zig-zag your way through problems. An agency isn’t committed enough (even with equity) to put in that extra effort when the setbacks happen. And chances are that your working relationship won’t be close enough to make sharp left turns on a moment’s notice.

An agency also won’t live/ eat/ breathe your customers. So many product decisions are made on gut feel at an early stage and you need some pretty sharp guts to make good calls.

Outsourcing makes a bit more sense when you have a bigger team that is an organizational foundation and you have discrete chunks of work that you can pass off externally.

4. Get them to explain stuff to you clearly

I say this a lot, but if they can’t explain a past project without using lots of jargon and making it understandable to a non-expert, they probably aren’t good. The great ones will be able to cut through all the complexity and explain the heart of the matter.

5. Be wary of the document-ers and process-ers

I’ve come across devs who are really into documentation. Or process. Before writing a line of code, you need to spend a few days writing a 10 page spec doc of some sort, getting it reviewed, signed off, blah blah (someone please shoot me at this point).

A bit of paper and a bit of structure is not a bad thing. Sketched mockups. A checklist. Some post-its. Whatever. But you really don’t need much at the start, especially if the team is just 2 or 3 people. Less is more (but you definitely need more than zero).

If you see any hint of Microsoft Project, just pull the handle and eject. “Oh look, my cat texted me to tell me the house is on fire. Gotta go!”

6. Try before you buy

A CTO friend once warned me that with interviews, you can work out if someone is roughly ok. But until you work with them, you don’t know if they’re excellent or actually kind of mediocre.

If you can agree a small chunk of (paid) work that the person can do, it will tell you 5x more than any interview. It should be real work, something that you need (but something you can afford to go a bit wrong). This often isn’t practical for a number of reasons, but if it is ever an option, take it.

7. Enlist a trusted tech friend to do a technical assessment

Talking is nice, but ultimately you do need to see if the dev can actually write code that works well. This is the minimum skill set required. Get someone to assess that for you.

 

Hopefully this list saves someone a bit of pain and uncertainty. This is not easy. Recruiting developers is tough. But if you’re in the middle of it, I wish you luck and look forward to hearing your stories about it.

GS Dun builds new ventures and products, including international expansion ventures. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

The 80% Rule Summary: have authority and responsibility sit together

This is a post in a series about the 80% Rule for Designing Teams. As a recap, the rule is that “each team should be equipped with the resources and authority to deliver 80% of their mission without outside dependency”.

At its core, the 80% rule is about ensuring that authority and responsibility sit together. Teams fail when they are made responsible for something – and aren’t given the authority over the tools and people needed to meet that responsibility. It is incredibly frustrating.

The implication of the 80% rule is sometimes counter-intuitive. It may feel like organizing in ways that feel inefficient. For example, many companies assume that centralization is efficient. “Why does every prod dev team have their own designer? Isn’t it redundant? Let’s consolidate all of the designers into a single department and share them across different teams!”

But the trade-off of that centralization is loss of authority over design. And if design is an essential part of those product teams succeeding, then well they’re now just screwed.

So save you and your teams pain. Make customers happy. Give your teams direct control over their fate – and watch them flourish.

GS Dun builds new ventures and products, including international expansion ventures. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

Functional organization can sometimes be good for you

This is a post in a series about the 80% Rule for Designing Teams. As a recap, the rule is that “each team should be equipped with the resources and authority to deliver 80% of their mission without outside dependency”.

Reading the first posts in this series, it may sound like there is no place for functional teams. But let’s be clear. Sometimes it makes sense. Here are situations where it does:

  1. Demand for the function is spikey
  2. The function is very expensive to provide
  3. The function is non-core
  4. The organization is complex

Let’s look at some examples, again using EdCo, our fictional online education company, and the Primary School Team. Keep in mind that the Primary School Team is just one of several business units (others might be Secondary School, University, etc).

Demand for the function is spikey

Suppose the Primary School Team makes a big brand push every summer. They need intensive brand help for only 3 months. Rather than pay for their own brand team, it makes sense to work with a centralized EdCo brand team.

The function is very expensive to provide

Payments is a good example. It is expensive to develop a payments system that offers a wide range of payment methods, is integrated into customer service operations, and manages fraud risk. Consequently, the Primary School Team is better off if EdCo has a centralized Payments Team providing these services internally.

The function is non-core

Office facilities is a good example. If the Primary School Team has the best office facilities in the world, do their customers care? Probably not, so EdCo should probably have an Office Management Team to handle it.

The organization is complex

Imagine that EdCo is a big, sprawling company with 8 different business units. Each one has its own marketing head. Maybe there’s one or two central marketing services team for brand and analytics. And with all of this organizational complexity, marketing things slip between the marketing cracks. There might be conflict. One business unit yells about how low their prices are. Another is promoting their premium packages. Or there might be lack of knowledge sharing. One business unit may have discovered the secret to low cost customer acquisition, while others are completely unaware. When things slip between the cracks, there is probably a role for a person who looks at the Big Picture. For example, it might be a Chief Marketing Officer who sets a vision and strategy for the function (“we stand for premium quality!”), lays down the law (“no discounting!”), resolves conflict (“which team owns these customers?”), spreads best practice, troubleshoots top issues (“CompetitorX’s brand awareness is beating ours!”), and ensures continued excellence in people.

Just be careful

Functional org is needed at times. But it is a not a risk-free road. It’s easy to centralize decision making too much and impose too much process (“I am the CMO! Everything remotely marketing related is mine! All mine!”). This is terrible behaviour because it takes away from the business unit head, the one person meant to counterbalance all the competing pressures of different functions to serve a particular customer set. If the functional leader has enough control to effectively break the 80% Rule, then they’ve gone too far. So when figuring out roles, just be careful.

GS Dun builds new ventures and products, including international expansion ventures. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.

New direction for GS Dun

Many of you know GS Dun as a consultancy that focuses on building new ventures, especially when it comes to international expansion. We’re at a crossroads now and taking a new direction.

However, as they say, don’t be a stranger. GS Dun is always happy to have a chat about what we’re doing, what you’re doing, or whatever someone is doing. It makes us all a bit smarter.

See you around!

Why my backpack is like Air Force One: international is a necessity

Going international isn’t an option. It’s a necessity

Back when I started out at McKinsey in San Francisco, I worked on a European expansion project for an American client (the first of many international expansion projects). What quickly became evident was that “Europe” is not a single market. It’s a collection of markets. And building scale comparable to the American market meant entering many countries rapidly.

That’s still true today. Any new venture born in a European country needs to go international to achieve scale that is globally competitive. The UK, Germany, France, Spain, and Italy are all decent-sized markets, but each is just a fraction of the United States. Competing globally is scary when you realize your American competitor is being fueled by a market 5x bigger than yours. Think about it: 5x customers, 5x revenue, 5x investment. So they have 5x more budget to spend on product, insight, infrastructure, supplier relationships, etc.

I’m being simplistic here, but you get the point. As soon as you are competing head-on, scale matters. And to get to that scale, European companies have to think about going international early.

The “Mobile Office”: enabling international development

While we’re talking about the United States, I remember reading somewhere that Air Force One supposedly contains everything the President needs to run the country, while he’s traveling. He can jet off on a state visit and not miss a beat.

GS Dun has the more basic version of Air Force One. It’s my backpack, which I’ve nicknamed “the Mobile Office”. And like AF1, it holds everything needed to run critical operations: laptop, plug converters, stationery, and even a full sized keyboard. I have spent so much time with the Mobile Office that in some countries, I am legally married to it.

Why have I spent the past years on the road? Because GS Dun has to be an international firm to be relevant. We already see that our deepest amount of work is in international expansion new ventures. And it is a common topic / question we get asked about.

Although the constant zig-zagging between London, Rome, Berlin, Dublin and other places last year drove me a bit bonkers, it was necessary to take every opportunity to deepen market understanding and relationships, alongside developing new ventures. Europe doesn’t have the luxury of Silicon Valley, a single place where all tech is consolidated. So I did some of that consolidation myself, by spending life on the road.

Once your model works, push yourself into it

Going international is a big step. If you haven’t done it before, it’s daunting. Language, competitors, payment systems, suppliers, labour laws, marketing channels, and cultural norms. But don’t back away from it. If you have a business model that works at home, push yourself to take an international step.

Or another way of looking at: imagine you’re in Silicon Valley. Your model works. What’s your next step? Stay in California? No, it’s probably to start breaking into New York and to do it quickly.

As a European tech company, if you don’t embrace international expansion at the same pace that a Bay Area startup embraces New York, consider yourself in danger of losing the scale game. International is a necessity. Pack your bag and push yourself into it.

International expansion: get on the ground (and make a fool of yourself)

After a bit of success at home, many startups or mature companies eventually think about replicating that success internationally. It’s a new venture. But rather than being a new venture based on disruption, it’s one based on execution. It takes an existing product and adapts it, the marketing, and operations to the local market.

Getting the details right – and doing it quickly – is incredibly important. If the product has had any success in its domestic market, you can pretty much assume that someone else (like Rocket) has noticed and is already rolling it out in your international markets.

How do you get the details right and move quickly? In past posts, I’ve talked about the importance of org for new ventures. Looking beyond that (and the marketing, prod dev and ops), there are three other things I would recommend doing.

  • Get on the ground
  • Learn (some of) the language
  • Find great local talent

Getting on the ground is necessary if you want to really understand a market and build local relationships. Trust and intuitive insight takes months, not a few Skype calls. If you’re not relocating, then spend a lot of time flying.

And while you’re there, learn some of the language. As a manager, your job fundamentally is to take in information and make a decision. So much of that information comes in tidbits that don’t get translated properly: customer feedback, competitor ads, email forwards, etc. If you have no idea, it will cost you.

I’m not saying that you need to be writing novels in a foreign language. Just download Duolingo or Rosetta Stone to your phone and get yourself to an A2/B1 level. It is a worthwhile investment (and not a big one).

And when you’re on the ground, make a fool of yourself. Speak to people. Taxi drivers, waiters, patient friends, etc. It will be a step-change in your level of understanding of that market.

Last but not least, work with some great local talent. They will be your guide, but don’t turn them into your crutch.

It is tough breaking into a new country. But these points should help you execute more sharply with your international new venture.

If you’re looking for the next post in the 80% Rule series, it’ll resume soon. We felt like mixing it up a bit.

GS Dun works with existing companies to launch and build new ventures. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.