Building a Global SaaS Business

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Businesses all over the world are now online, mobilized, and using cloud business applications. And new cloud business application companies are built on modern cloud platforms that can scale to users all over the world.

So you’re instantly global ready, right? Not quite.

In order to serve customers all over the world and become a global market leader, you need to plan and design your business for the global market, from day one. This is equally true for established SaaS companies launching new products as it is for new cloud business application startups designing their first product.

From your business plan through product design, pricing, go-to-market, and operationalizing your business, here are a few best practices to keep in mind as you prepare to dominate your global market.

PLAN GLOBAL FROM DAY ONE

Today the market for cloud business applications is global, which means your total addressable market (TAM) is global too. Your business model should incorporate the different price points and customer acquisition models in different geographies.

Thinking about your global market isn’t optional; your competitors will pursue the global market opportunity and if your product or business model doesn’t support global customers, it’s unlikely you’ll be the future market leader. Large global markets are motivating for your team and investors.

Understanding your global market opportunity will help you plan your product, business, and investment appropriately. At Cloud Apps Capital, we understand the nuances of global business markets and invest in early stage cloud business application companies that have a path to becoming the global leader in a large market.

LOCALIZE YOUR PRODUCT

In terms of product design, it’s always easier to plan and build your cloud business application for global customers from the beginning, rather than retrofitting your code later. This means making sure your product supports time zones, currencies, date and number formats, and languages holistically. Even if you’re not ready to support users in other languages, it’s a small upfront cost to externalize your labels and text strings at the beginning of building your product, versus a very high cost to retrofit this into your product later.

As one of the original product managers at Salesforce.com, I learned this lesson the hard way. We already supported users in eleven languages, and it really wowed prospects to see the entire app change seamlessly from English to Japanese with one click. But in early 2004 when Marc Benioff wanted to allow a big customer to change the name of our standard tabs (accounts, contacts, leads, etc.) to any term they wanted, this seemingly simple feature spiraled into a localization monster because we had to support this new capability across every language.

Allowing customers to rename standard tabs became a huge project that touched every user-facing page of the application. In order to retrofit customized and localized terminology into our product, we had to externalize all labels and text out of the page, add a “Translation Workbench” feature, and rewrite every line of copy on our screens into a structure that could be accurately translated across every language.

The moral of this story: Your code base will only keep growing, so even if you’re an established SaaS product, if you want to serve global customers, it’s best to tackle today what will just be more expensive to tackle tomorrow.

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LOCALIZE YOUR PRICING AND PACKAGING

Pricing and packaging flexibility is the key to success in international markets and a powerful tool in your global strategy toolbox. A one-size-fits-all pricing and packaging strategy rarely works all over the world. Price too high, and you are too expensive for some markets. Offer the exact same product for a lower price in a different country, and you’ll be inviting prospects to twist themselves into payment-headache knots to get the lower-priced version.

When thinking of your global go-to-market strategy, consider the ability of businesses within a certain country or region to pay, and the core functionality they realistically need to get started and be successful with your product.

Some emerging markets are just starting to embrace cloud business applications and their use cases may start off as less complex than what is expected from customers that have been using SaaS applications for a long time.

For example, let’s take Brazil. To go to market effectively in Brazil, you could create a Brazil-specific edition that provides an edition of your product in Portuguese, accessibly priced in Reals, and that includes the core functionality that businesses will need to get started using your product successfully. The combination of being available only in Portuguese, coupled with payments in Reals, means companies in other countries wouldn’t be able to use this lower-priced edition. As your Brazilian customers expand their usage they can upgrade to higher editions when they are ready to collaborate with users in other countries and languages. This approach allows you to serve most SMB businesses and enterprise teams in Brazil with a price possible edition tailored specifically for them — while protecting your price points in other countries.

LOCALIZE YOUR BUSINESS OPERATIONS

Just as you have to localize your product, packaging, and pricing, it’s also important to localize your business operations. There are 196 countries in the world, most with their own currencies, languages, and business conventions. Take taxes as an example — in the E.U. taxes are included in the price you list and charge your customers, while in the U.S., taxes are added on top of the price. Other global differences include invoice sequencing, currency rounding, and the range of ways customers expect to be able to pay you. If you can’t manage global invoicing and payments, you’re literally turning away customers.

It’s on you to make sure your business can monetize your product and get paid by users all over the world. This is hard, but necessary if you want to serve the global market.

COMMIT TO BUILDING YOUR GLOBAL STRATEGY

Succeeding in the global market ultimately comes down to planning ahead and building the product capabilities, systems, and processes that allow you to serve and monetize customers all over the world.

You also need the support of partners — including venture investors that understand the global business software markets and cloud business models, and who can help you plan and build the right foundation for long-term global market leadership.

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