Customer and Revenue Acquisition in Asia-Pacific Jeremy Geiger [email protected]

Customer and Revenue Acquisition in Asia-Pacific

Jeremy Geiger www.LinkedIn.com/in/JeremyG

[email protected]

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




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 US3. Potential partner/reseller from AP approaches you4. 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 reasons1. 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




DIFFERENCES and considerations among AP countries

Size of Market

Early Adopters?

Unit Price

Risks 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

Aggressive 0 6 12 18 24

Conservative 0 12 24 36 48

Aust/NZ

Japan

China

Singapore and/or HK

Korea

India


Months

Agenda




Difference among AP countries: Product

Need for Localization

Expected Product Maturity

Need for Customization

Aust/NZ

Japan

China

Singapore/HK

Korea

India



Difference among AP countries: Support & Presence

Support Volume

Local Presence (Partner or Direct)

Channel Partner Network

Vendor Direct Presence Required

Aust/NZ Single

Japan Double

China Double

Singapore/HK Single

Korea Single

India Single


Single


Levels of Localization

• Level 0– Marketing Materials

• Level 1– Product Documentation

• Level 2– Access files with local language names

• Level 3– User input in local language/formats

• Level 4– User interface

Agenda




Partner Approach

• Most countries in Asia-Pacific require a partner-centric approach

• Types of partnerships1. Strategic Partner with investment2. Strategic Partner without investment3. Master Distributor4. Alliance Partner5. 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

• Go-to-market can be achieved with different levels of involvement & investment:

– High: Direct hire, open offices, local regulations ($750k/country)

– Medium: Country heads, virtual offices, partners

Year 1 Investment per country

Entity Employees Offices 1st Year Target ROI

Year 2-3 Profit Potential

Long-Term Profit Potential

Big Bang $500k - $1M 100% owned subsidiary

Direct hires Rented 0% Med High

Strategic Investor

$250 - $500k

Majority-owned subsidiary

Direct hires Rented 250% High Med

3rd party Accelerator

$100 - $400k

None Provided by 3rd party

Provided by 3rd party

150% Med Low-Med

Remote Partner Mgmt

$100 - $300k

None None None 0% Low Low

Note: Option to start with 3rd party accelerator and then move to Big Bang or Strategic Investor once market traction

Agenda




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 YouQuestions?

Jeremy [email protected]

www.RTMAsia.com

Documents

Customer and Revenue Acquisition in Asia-Pacific Jeremy Geiger [email protected]