Despite being bootstrapped for many years, Australia-based company SiteMinder expanded to Europe, the US, and Southeast Asia, nearly from the very beginning. We were fortunate to host Dai Williams—Tidemark Fellow, Re-Leased CRO, and former Chief Growth Officer at SiteMinder—for our latest VSKP in Action session to tell us more about how the company did it. Dai spearheaded international expansion from the earliest days at SiteMinder, which is now a publicly traded company and the leader in hospitality channel management, and is doing it all over again at the commercial real estate software company Re-Leased.
We distilled some of the key takeaways from the session for those thinking about how to approach international expansion. To get the actionable details, you’ll want to be at our live sessions! If you would like to sign up to be considered for a future session, please email us at knowledge@tidemarkcap.com.
The Takeaways
Foundational Assumptions
- When you go international, you’re often selling against local competitors, especially in SMB and mid-market, which means you are essentially running multiple country-based businesses.
- Don’t underestimate the translation and localization of both the actual and operational. Translation may seem simple, but continued localization is both hard and critical. Running your software through a translation application and having a native speaker give it a once-over isn’t enough.
- Resilience trumps brilliance. You will get most things wrong when you start. You need to seed a resilient team to reach viable scale and velocity.
If you’re thinking about international expansion, you likely already have some ideas about where you want to go. It is important to make sure you validate each territory with data. A few considerations on this when first going global:
Drill into the region’s digital footprint.
- Outside your four walls: What are the digital signal trends of your category? Is your category known, or do you have to educate people? This will dictate your messaging and how you go about your initial market entry. It will also provide an idea if businesses in this part of the world even know they have a problem you are trying to solve.
- Inside the walls: Where are people searching for your brand from? Track defined metrics like leads, conversion rates, stick rates, etc. This gives you a sense of where people already have an idea of who you are.
- Map the digital data around TAM, so you get relativity of search volume over time. Plan your GTM motion to optimize your investment in a region.
Geographic clusters are not always obvious links.
- Find clumps of regions that can give you leverage with language, culture, etc., but be careful, and test your assumptions before deploying.
SiteMinder first started out with a “regional model” to optimize for growth, then transitioned into a “functional model.” Here are the key things to consider about each model:
Regional Model
- The international office runs as a fairly contained business unit. A multi-hatted MD figure owns multiple departments and is heavily involved on the ground—feeding intel back to head office, closing big deals, etc.
- Benefits: High-velocity feedback loops, little corporate oversight, and the ability to “do their own thing” to maximize growth in a region and get it off the ground.
Functional Model
- This pulls primary decision-making and strategy towards the head office. International employees develop a high degree of specialization in their departments.
- Benefits: Better oversight and governance, shared resources with centralized departments, and the ability to formalize structure and develop specialization.
Last but not least, each region will demand a different set of features in your product. It’s incredibly challenging to address all those needs simultaneously, so you will have to make tradeoffs.
Depending on your market, users may have varying ways of using your product and will ask you for new functionalities. On top of that, if you touch financial transactions or employee/consumer records (or any flow of currency), there's a laundry list of compliance items to check for each country.
- You will never build a “full” product to address everyone’s needs; instead, hone in on a crisp persona to serve.
- Establish staying power and high satisfaction within that persona and add as you go.
You will most likely need to adjust pricing models as you expand. Think about the country’s GDP and ability to pay for software/technology, especially in SMBs. SiteMinder used the Average Daily Rate of hotels (ADR) to gauge software affordability. If a hotel charges $20/night, they will likely struggle to justify paying the same as a hotel that charges $500 a night for software.
International expansion is always tricky, but SiteMinder did it right. We are grateful to Dai for sharing his awesome knowledge with us during this session!
