Why startups need an emerging markets distribution strategy
All too often, startups try to execute on go to market strategies strictly focused on finding traction in the United States or EU and then hoping that success in these markets translates into direct success globally. While some companies do achieve success in both developed and developing markets this is the exception: not the rule.
For every Facebook and Twitter to hit the market, thousands of startups hang their ‘open for business’ shingle in N. America and hear nothing but crickets. Effectively, startups following that strategy are making success in the hardest markets a prerequisite for rolling out into more accessible markets. Following the “if you make it here, you can make it anywhere” mantra isolates the company from the majority of its user base, which ever more everyday resides globally.
Analyst Mary Meeker’s most recent “State of the Internet: 2014” report points out that 9 out of 10 internet properties are made in the United States but 79% of their users are outside the U.S. That data point says it all.
Global markets matter
Start-ups need to bake this into their go to market strategy from day one. And conditions have never been more favorable for small startups to do so for 3 reasons:
- Cost of localization
- Global rise of social media usage
- Easier access to major distribution channels
Most immediately, the cost to localize an app or web product has dropped at least tenfold in the past four years. Companies like CrowdIn and freelance markets like Elance now mean you can access quality translators and add a new language for an app for less than $1000.
International social media
Social media penetration –particularly Twitter – is saturated enough to make viral discovery and distribution a reality when it wasn’t four years ago. Meaning, you can build your brand without having to navigate less accessible in-country advertising scenes. And finally, forging partnerships with consumer cellular telcos and OEMs for device preloading are more accessible than in North America and Europe.
Simply put, it’s easier to get a meeting with Brazil’s ‘Oi’ (formerly Telemar) than Verizon. If you can’t staff to do direct deals with carriers and OEMs, companies like App Attach can give you direct access to carriers and OEMs through their closed app market.
This approach works. Examples are out there. Quixey, which has built a ground-breaking way of marrying deep search around apps and app data, saw the opportunity of prioritizing expansion at a pretty early point developmentally, partnering with one of Singapore’s main info-communication companies, StarHub. Zomato – a restaurant discovery platform, owns its space in 12 and counting countries. This list is growing by the minute. To put it another way, if you’re launched a startup and aren’t happy with your growth in the US market, stop waiting for the hockey stick and go global.
Karl Mattson, VP of International at Maxthon