So, you’ve succeeded in your home market, set your eyes on expanding in Europe, or even decided to go for the big prize – the US. Expanding internationally is exciting and rewarding, and success will significantly increase the value of your business. But it can also be quite challenging and often very, very expensive.
In this session, Pål Malmros, partner at Verdane and investor in many internationally successful scaleups, shared learnings from Verdane, joined on stage by Tobi Andersson, founder of the Verdane portfolio company Dapresy. Tobi shared his experiences from expanding internationally as a startup, contrasted with insights on how to lead large global teams, from his current role managing a EUR 100m+ SaaS business following Dapresy’s acquisition and merger with Confirmit and Focusvision.
Internationalization is good for your validation
Pål began by sharing the findings from a poll Verdane made with leading investment bankers in Europe and the US on what happens when, for example, a Swedish SaaS company manages to enter other European markets as well, and found that it increases the multiple with 20-30%. If you manage to take the same business into the US, the multiple will increase by another 20-30%. So, yes, going abroad is worthwhile.
Dapresy is a platform for collecting and reporting market research data. It’s a niche business, in the enterprise segment, with a high-touch sales process. Dapresy started in Sweden by nailing their home market and getting the product-market fit exactly right. Once they felt that their value proposition was solid enough to go outside of Sweden, they began their internationalization journey. First in the UK, then Germany, and finally in the US.
Many Nordic SaaS companies start in the UK
Many nordic companies opt for the first large international market to enter. This was also the case with Dapresy. Tobi mentioned a few reasons why they chose to go there first. One was that the UK is an English-speaking market, and going there helped the company become an English-speaking organization. UK is also easy to travel to, which meant it was easy for the Swedish team to go there often and stay close to the UK operations.
Some of the key learnings from Dapresy’s international expansion:
- It doesn’t work just to hire a sales team in a new country and expect them to start delivering. Dapresy would go in with parts of the Swedish team in new markets to make sure everything is set up right and that the company’s culture is conveyed.
- Fostering a group of “raving fans”, or customer advocates in the UK market, helped Dapresy get traction in other markets, as those happy customers would spread the word.
- Making an effort and taking the time to identify the right team is essential. The setup and leaders you need at different stages of the journey change.
- Dapresy always started in new countries by recruiting leaders who already had a relationship with the product, either as customers or vendors.
- Dapresy also hired leaders with an entrepreneurial background to get people who had a lot of drive and would not give up.
- Incentivizing leaders in new markets the right way, for example, with equity, is vital because it keeps them motivated to win.
- It’s crucial to understand that markets function differently. The US market, for example, moves very fast, which means it’s hard to keep that pace from a different timezone.
- Dapresy brought in VC quite late. But in hindsight, Tobi says that once he saw that the value prop was valid in all markets, that’s when he should have raised funds to prevent cash flow issues from stalling growth.
“As an entrepreneur scaling globally, being humble is key”
Tobis says one key learning when growing to unicorn size is the importance of remaining humble. He has decided to let the management team run the company, which has been a crucial success factor. As an entrepreneur, it’s easy to fall into the trap of wanting to do everything your way, but you can’t scale yourself.
High net retention is essential
Another critical thing for SaaS success is, as always, being on top of Net Retention. Dapresy sits at an impressive NR of 1.4, and he lists five steps that have helped Dapresy reach and maintain that level.
Tobi’s 5 steps to excellent Net Retention:
- Create a sticky value proposition
- Build a customer success team that makes sure customers love the product
- Always be upselling
- Leverage regular price increases
- Have the right Account Management team in place