What do you do if you are a B2B tech company that wants to take advantage of the massive opportunities in APAC, but aren’t yet sure about if- and how to invest?
Usually companies end up taking a variety or combination of the below approaches when they enter the region:
Commission a market research to learn about the market before deciding
Outsourcing to partners on commission-based plans
Sending someone over from HQ
Hiring people remotely
These can all be viable solutions, but based on the feedback we often get from founders, executives, board members, advisors and investors in B2B scale-ups, each of these solutions come with their own inherent challenges.
"Which way to take?"
1) Commission a market research to learn about the market before deciding
Gathering the proper research and insights is always an advantage prior to launching. However, that alone will only give you information at an arm's-length distance and you won’t receive the value from being involved in discussions with potential partners and customers yourself, or “getting in the trenches”. Something we have seen is invaluable when making strategic and investment decisions in fast-moving categories and markets.
2) Outsourcing to partners on commission-based plans
This sounds great in theory, with no risk and all upside. The reality is, however, that if these partners are not successful early on, they are likely to switch their time and energy to focus on other opportunities that pay better. We often hear stories about considerable time and energy spent on building these partnerships, with little to show for it in the end.
3) Sending someone over from HQ
This approach seems great because they likely know your company's products, culture and know how to get things done in the organisation. The drawback? Well it can cost a lot of money and take considerable time before they are up and running and actually producing results.
Getting set up in a new country, building a network, often from scratch, and learning about the different markets means time spent, and occasionally expensive lessons learned. And in many cases these people leave to return home after a couple of years, before anything really gets off the ground and you have to either do it again or spend significant time, energy and resources to continue the efforts.
4) Hiring your own people remotely
This can often take time, having to work with recruiters, conducting many rounds of interviews and then hopefully landing on the right candidate(s) that have relevant experience in the region. However, even if you are lucky and find the right people, the time required for onboarding to gain an understanding of the company, the culture and the products/services often takes much more time than people expect. Secondly, hiring remotely usually comes at a hefty price tag; the first hire is usually someone senior that then needs to build their own team to get things moving. And if you are unlucky and make a wrong first hire, this becomes a costly exercise you end up doing over and over again.
The challenge with the two last approaches, even when they work out, is that they can take significant time and resources before actually producing results. It will take considerable effort and time from you and your HQ management team to get the market expansion up and running. Time that you may not have or that is better spent in more mature markets.
What if there was another way, an approach that allows you as a company to “dip your toes” and get a feeling for the market before deciding how much to invest, which resources to assign for it and most importantly how to actually go about it?
Enter Market Traction Testing
The partners at TSF collectively have collectively spent 30+ years scaling companies in APAC and over the last three years worked with 20+ companies to support their APAC expansion.
To help with the challenges above, we have distilled our experience and learnings, and designed a program called “Market Traction Testing”. A program specifically created to enable companies that know (or suspect) they want to expand to APAC, but are not yet sure about how to go about it and how much to invest in the early days.
So rather than guessing, through our program Clients quickly get direct feedback from the market itself, and in some cases new customers and partnerships. Think of it as rapid prototyping of commercial opportunities.
The program combines market research with direct feedback from 10-20 potential partners and customers that the clients get to hear for themselves “straight from the horse’s mouth”. In some cases it also brings new customers and partners onboard. Additionally, you get advice from subject matter experts who have deep knowledge in your specific field as it is applied throughout the vast and diverse APAC region.
The main benefit is that you as a client get to validate assumptions and answer questions with real feedback from the market. It enables you to take a more informed decision when deciding how to enter the market and match the ambition level with the right type of investment required.
In many cases, program participation is followed by a longer term partnership between our Clients and The Scale Factory. The final output of the program includes a business case and market learnings, that allow us to jointly build a commercial plan for the region. This plan has a greater chance of success, as it's built on real market insights and a built momentum of commercial interest from your target segments, as well as growing awareness from initial outreach. This is a great foundation for the new expansion.
For any B2B tech company that wants to explore how they could be part of our Market Traction Testing program and capitalise on the opportunities in APAC, feel free to reach out to us. Pierre, Lars and Thomas