View From the Board Room – On Being Global
In today’s world, you can become a global company on a dime; we’re the proof of it. It defies good old startup logic.
Based in SF, Traackr went global much earlier in its life than many equivalent venture funded start-ups. With more than 20% of company revenue coming from non-US sources and 20% of its staff based overseas, Traackr is a truly global business. But it wasn’t always so.
24 months ago, it was with much trepidation that the company’s Board made the conscious decision to go global – going against any startup playbook that tells you to wait until much later before “going international” and focus on building a domestic presence before exporting it elsewhere.
We decided to challenge this good old startup wisdom for several reasons:
- We knew that for Traackr to succeed and scale, it needed to become a global business. A common mistake many US-based businesses make is to perceive “international” as an extension of the US so we decided for Traackr to be born global – to go through the hurdles of dealing with regional differences and idiosyncrasies so early in its life that it would be imprinted in the company’s DNA.
- We saw our international expansion, not as a distraction from our core business, but as a way to enrich our thinking and product, and leapfrog competitors even here in the US.
- And maybe most importantly, we realized – through our early work with first tier brands – that in order to become a true partner we needed to address their needs to be supported globally.
And here is what we learned in the process…
Make it happen, don’t let it happen
We made a conscious decision to expand Traackr internationally. I say conscious because in my experience many start-ups go global today by accident – the ambiguous blessing and curse of the web is that a SaaS product can be accessed by anyone anywhere. The incidental/ unforeseen/ unintentional result is that many SaaS companies have found themselves with a significant non-local presence that they then have to figure out how to support. And while Dropbox is the same no matter where it is being used, if your product requires (like ours does) the integration of significant in-market data sources to be effective, you need to make a specific decision to invest engineering, sales, and marketing resources building and selling a viable product for non US markets.
Customer demand is the best market data
At the time that the decision to go global was made, it was still the early days in terms of market traction for our product – we were in effect “doubling down” before we knew exactly how the market would play out. We made our bet based on the best type of market data available to us – namely, demand from our most sophisticated customers who pressed us to provide our service in other countries so they could apply it to the increasingly global programs they were designing. We also saw this first mover opportunity as a way of locking these markets up before competitors or copycats did.
Small’s big potential
Earlier on in my career, in the 90’s, a general rule of thumb for companies thinking about international expansion from the US to Europe was to be prepared to commit upwards of $1M and one year to such an effort. Why? Because with travel, hiring and communication costs (think how much international conference calls cost back then!), $1M didn’t really get you very far. This is no longer the case. Traackr made the decision to go global during a time when the resources of the company were, shall we say, somewhat limited. Without institutional venture funding, we had a budget for this initiative of approximately… US$50K. By continuing our “capital efficient” ways (sometimes called frugal or downright stingy), we knew we could perform the engineering and in-market sales activities that would quickly allow this group to become self-funding. With tools such as Skype, G+, Gotomeeting, Yammer, our CRM and many others, the primary challenge of being a global company, namely that of costs and difficulty of regular communication, became dramatically cheaper than 10-15 years ago.
International mindset; fake it until you make it
I do have to declare that the odds may have been stacked in our favor on this initiative. With 4 out of 4 Board members originally from Europe and deep business networks in many European countries, we had a lot of open doors and lots of couches to sleep on as we entered these markets. That said, this was not a pure coincidence as we actively sought out this diversity both in our team as in our investor network to enrich our thinking and make it a part of our company culture. For startups that don’t have such a diverse team at the onset, my advice is to purposefully build it. In other words, fake it until you make it.
Since Traackr EMEA launched in June 2012 in London, we have grown steadily – with customers in the UK, France, Germany, and Spain and expansion planned to Sweden, Portugal, and Italy amongst others over the course of the next year. Aside from the significant contribution from our European operation to our bottom line, our international footprint also helped us develop more use cases and made our platform sturdier as a result. To this day, our international presence is a key competitive advantage over the various market competitors, none of whom ( to our knowledge or according to our customers ) have yet built international capabilities into their operation or their product.
And while we’re not advocating for all startups to go global on day one, if it makes sense to your business, know that it is possible. You can make a conscious decision and successfully become an international company using far less capital than most would expend. With effective management and communication platforms, international expansion can be far less costly and much more effective than in past years.
This growth can accelerate the development of your product and your company.