05 May 2021
Leadership & Management
As part of a founder’s journey, one crucial step is for founders to grow and expand their businesses in order to stay relevant and adapt to the changing demands set by Industry 4.0 and – more recently – COVID-19. The ability of startups to expand into new markets will depend on their respective growth strategies and peer differentiation. Additionally, their ability to leverage the right digital marketing solutions will be vital to make their brand building and product marketing more effective and to do so across multiple geographies.
The importance of scaling up for startups
The startup ecosystem is synonymous with high attrition rates - a report by Startup Genome estimated that 90 percent of startups fail. For the relative few that manage to survive, they are often characterised by making early moves to gain customers and hiring the right people for their team who understand the larger vision. These contribute to setting a solid foundation for them to scale up.
Startups must maintain their ambitions of scaling up as a way to grow their businesses. To do so, according to Ben Mathias, Managing Partner of Vertex Ventures Southeast Asia & India, they must have a view to expand their presence beyond their home markets. “Being multinational not only gives you a bigger market to go after, but it also de-risks your business from any negative macro events in a particular country. But scaling outside your home country comes with its own challenges, especially for smaller startups,” says Ben.
Echoing Ben’s statement is Jeffrey Tiong, Founder & CEO of PatSnap – an enterprise R&D intelligence and IP intelligence platform which recently secured USD300 million for its Series E round to help power its international expansion pursuits. According to Jeffrey, there are several things that startups must have in place before scaling.
“To expand to different countries, startups must first understand the local market context, the costs involved and the eventual market size. One key success factor is knowing someone from the target market in question – one that PatSnap always considers when choosing which market to expand to,” notes Jeffrey.
Vinod Muthukrishnan, the former CEO & Co-founder of customer experience (CX) platform CloudCherry (now a part of global technology firm Cisco) went on further to describe the ‘homework’ that startups must do before they scale, to understand which market, they should focus on first.
He explains, “As we looked at our operations in India at the time, we quickly did the math and realised that we really had to win and own the customer experience market. This meant winning the most mature and largest CX market in the world – the US. That was the driving force of why we chose the US as a market to expand to.”
Culture and getting the right people on board to scale up
Ben notes that while scaling is important for startups, doing so outside of their home market will inevitably come with its own sets of challenges. He stresses on the fundamental importance of hiring the best talent possible for the right positions. “Founders must hire, develop and retain their talents throughout the growth journey. Otherwise, the risk of failure is higher,” he states.
Similarly, Jeffrey stressed that a startup and its future success would be nothing without its people. He says, “It’s all about the people; if you have the right people, right team, right values, right culture, great leadership…then you can create a great product.” This mirrors the view of Vertex Holdings CEO Chua Kee Lock, who sees culture as a cornerstone for great organisations and absolutely critical for any high performance team.
However, a pertinent question that founders may ask when hiring is who they should prioritise bringing on board. According to Vinod, it is important for founders to make strategic hires that can help spur demand in a market before actually moving there. Shedding light on his own experiences, “Hiring just a VP of sales in a new market as your Step 1 is one of the biggest mistakes you could make. This is because marketing should precede sales; sales cannot generate demand, but marketing can.”
Vinod also added that the next important step to the hiring process, is that startups be consistent with themselves, and maintain their company culture despite being present in multiple markets. “This doesn’t mean forcing everyone to be the same as each other, but rather ensuring everyone shares the same values and speaks a common language. That is how you build company culture. It is also important to note that maintaining the company culture should only come after the right people have been hired.”
Leveraging digital marketing to reach audiences
If startups already have the internal fundamentals in place for their multinational expansion, the next step is to choose the right marketing strategies to get the word out. In today’s environment, digital marketing is a great equaliser, and with the plethora of platforms and techniques – i.e., social media, search engine optimisation (SEO), online advertising, affiliate marketing and content management, reaching out to customers directly, has never been easier.
According to Genping Liu, Partner, Vertex Ventures Southeast Asia & India, “Digital marketing essentially helps you understand your typical customer profile and their decision journey – the latter of which involves marketing messages along that journey that can influence buying decisions.”
Genping further highlights the key parts of this customer journey and which specific methods work best for each step:
No matter which stage of the customer journey a startup is at, and whichever digital marketing tool is being considered, currency and relevancy are important. Which means that it is vital that the company leverages the approaches and technologies that are open to them today. Dhruv Vohra, Director, Digital Natives & Technology at Facebook, illustrates this by stating that, “If startups did digital marketing as it was done 10 years ago, which is via super-targeted strategies, then they will be behind the times.”
What startups must avoid in their digital marketing strategy
While digital marketing is important for a startup’s expansion plans, they must also do it with a structured and consistent approach. Jenny Choi, Head of Client Solutions Management at Facebook, explains that, “When startups begin their marketing journey, they must have a mutually exclusive campaign structure that is very clean, so they should try to not make frequent changes, which is a common mistake made by startups. If you change your assets and variables too frequently, the learning phase of the customer journey starts all over again.”
Other common mistakes that startups make in their digital marketing – according to Duri Granziol, CEO & Co-Founder of Mama’s Choice, a fast-growing online supplier of halal-certified products for mothers and babies – is there is too much focus on existing customers, without targeting new audiences.
“You keep focusing on increasing frequency with the same people over and over again without new people coming in. Now, it’s about machine learning and automation,” he says. “To build a top-focused marketing tunnel, you must create relevant content aimed at the target audience before introducing the product. This allows you to cast a wide net via the content which then introduces the product, and from there, startups can see who a potential customer might be and introduce them to the funnel.”
On a similar note, Megna Apparao, Chief Business Officer of Licious (a Bangalore-based fresh meat and seafood brand) shares that startups must understand their limits based on the information they have. “As a startup, it’s good to define your strategy on how wide you want to go based on the conversion metrics you have. Also, when using SEO, startups need to ensure how every single element is SEO-optimised as this can help them better determine the right return in the medium- to long-term,” she explains.
Don’t count your chickens before they hatch
To both survive and thrive, startups must scale. However, it is crucial that they do it the right way to avoid making their efforts counterproductive, which would then entail a greater risk of failure. A common pitfall for startups is that they scale too fast with detrimental results if they do it before achieving a product-market fit. This can be made even worse if they do not hire the right people and maintain a sharp focus on culture and core values throughout their growth.
It is also crucial that marketing efforts should take priority over sales, as it will be key in the early stages to generate the demand needed to justify cross-border expansion – and the most effective and efficient way to do so is via digital marketing. While there are a lot of digital marketing tools available, startups must ensure that they have the right digital marketing strategies in place. A strategy that keeps in mind how audiences behave throughout the customer journey, alongside making the right use of current-generation approaches (such as machine learning and SEO) to reach as many audiences as possible.
Watch the full video recordings below.
Technopreneur Webinar Series #4: Scaling Up & Cross Border Expansion
Technopreneur Webinar Series #9: Growing Your Company with Digital Marketing
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“Navigating new geographies to grow your business” is part of our Technopreneur webinar series. Be sure to check out our other sessions below:
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