Innovation is no longer a Silicon Valley monopoly. This part of the world is emerging as a strong technology hub, with companies like Atlassian and Xero becoming popular around the world (including in San Francisco, where I live and work) and commanding billion dollar valuations that are actually justified. A PWC study says the Australian tech start-up sector has the potential to contribute $109 billion or 4 percent of GDP to the Australian economy by 2033.
Given the wealth of innovation here, it’s no surprise that that 38 percent of cash-generating Australian start-ups already have export revenue. But for that other 62 percent to really thrive (not just survive), they’re going to need sell across the Indian Ocean. The real question for local entrepreneurs is – how do you position yourself for global success at the outset?
As an early hire at Salesforce, the first global SaaS company, I was responsible for much of that company’s early international marketing strategy. Today I run a subscription finance management company called Zuora that has offices in nine countries, including a thriving space overlooking Sydney Harbour.
Many Australian companies are obviously well-served by focusing on their local markets, but if you really want to do business with the world at large, here are my top four imperatives for launching a truly global start-up:
1. Launch a service, not a product
If you’re starting a new business today, it’s highly unlikely that you’ll generate interest for selling a physical product on a per unit basis. Instead, you want to launch an ongoing service that you can sell online. As the world shifts from selling products to selling services – companies, investors and stock markets are increasingly focusing on recurring revenue business models built on strong customer relationships.
But just as importantly – services travel well, and products don’t. Unless you’re keen on supply chains, shipping routes and customs regulations, find a way to provide a web-enabled outcome to someone. Ask yourself “What do my customers really want, and how can I deliver that as an intuitive service?” Success no longer revolves around the price of the product and the margins you make. It’s more about delivering value to customers, and continuing to grow a mutually beneficial relationship.
Sydney-based Canva is a great example. For decades, when a business needed help with design, they hired a team of designers who in turn needed expensive software, stock photography, etc. But what about the small stuff such as well-designed presentations, social posts and posters that different teams across the organisation need on a daily basis? Canva spotted this inefficiency early. For a monthly subscription fee, it offers an intuitive online design tool that comes pre-built with ready made templates and images. Launched in mid-2013, the company already has millions of users spread across the world and is used by 40 percent of the Fortune 500 companies.
2. Think scale
McKinsey recently released a study that found that if a software company only grows at 20 percent annually, it has a 92 percent chance of ceasing to exist within a few years. Be ready to scale. Make sure your systems and processes across the board are ready for it – from product to delivery to billing and finance. Gone are the days of identifying green pastures and then setting up systems and processes to tap into those markets. Today, if your company finds interested customers, you have to be ready to sign them up immediately or you risk losing them to a competitor.
Look at how the Financial Times fared over the Brexit weekend. While most newspapers saw a surge in traffic, the FT saw a 600 percent surge in digital subscription sales. As people turned to the internet to help them understand the results and its ramifications, the newspaper dropped its paywall for all Brexit-related news for 24 hours on the eve of the vote and promoted the content on social media. And when people flocked to the site, they were cleverly marketed to with different tiers of subscription offers. Now, the FT was able to do this because its website and subscription systems could scale to accommodate the surge.
3. Welcome every kind of currency
If you look at any of the leading global companies born during the last few years, they all offer an easy, seamless payment experience including accepting different currencies and payment methods. Let’s look at Uber for instance. I pay in USD using my Paypal account while my Country Head in Sydney pays in AUD and prefers to use his credit card, no matter where we use their service. Both of us are customers of Uber, a global company and prefer to pay them in our local currency and preferred method.
Make sure it’s easy for your customers to pay you. Doing this won’t necessarily be easy for you though. Businesses often underestimate the complexities of international payment methods. There are more than 200 ways of electronic payment methods alone! While I’m not advocating that you accept payments in all of them plus all the currencies in the world, it’s important that you are able to accept leading global payment methods such as credit cards and Paypal as well as the dominant payment method in the larger markets where you have customers such as Alipay for China and Boleto for Brazil.
4. Start as a SaaS native
A huge advantage that startups have over more established companies is that they can start with SaaS systems. Cloud-based services trump on-premise IT solutions any day when it comes to agility, flexibility and scale. As a global startup, it’s paramount that you can be agile and responsive to fast changing customer demands.
Now, no company can do it alone. It’s really about finding partners that understand your vision and can help you grow. I can’t stress the importance of this enough – every piece must come together to form the complete jigsaw. It’s the same with business – one broken link such as a lengthy, complicated sign-up process or an inaccurate invoice can have a negative impact on customer acquisition and retention and ultimately the success of your business.
If you look at the successful global companies in Silicon Valley, you’ll find that all of them rely on a network of SaaS services to stay ahead. For instance, at Zuora, we use AWS, Salesforce, Box, Docusign, Zendesk and several other services to keep us ahead of the curve. And in turn, as a SaaS company ourselves, we help hundreds of subscription companies across the world stay nimble and responsive.
Get these four fundamentals right, and the world is yours.
Tien Tzuo is founder and CEO at Zuora