The Software as a Service (SaaS) is growing at a fast pace in the Indian startup ecosystem. There are seven SaaS unicorn companies in India leveraging the potential of the domestic market. The lucrative opportunities in India are highly driven by digitization among traditional corporate houses. According to a Nasscom report – the domestic market for SaaS is likely to grow 6X to reach $13-15 billion by 2025.
On the other hand, when SaaS B2B startups witness growth, it becomes increasingly important for them to look for international expansion opportunities. Many startups are getting an overwhelming response from developed countries like the US. According to the stats – SaaS startups are projected to capture 7-9 percent of the global market by 2022.
Witnessing the lucrative opportunities that SaaS startups are capitalizing on, they can boost revenue growth in international markets. Today, SaaS companies are built on cloud systems that are scalable and accessible to users across domestic and international markets. Many SaaS startups easily build a global audience, however, that does not necessarily mean their business is ready to go global. It is imperative to consider a few essential factors in mind while planning and executing a global expansion plan.
Checklist to expansion readiness
Expanding to international markets presents unprecedented growth opportunities to B2B SaaS companies. The entire world is moving towards digital disruption that opens a myriad of avenues for SaaS startups to attain sustainable growth in international markets. Before working on a global expansion plan or strategy, B2B SaaS founders should prepare an expansion readiness checklist to understand if their business is ready to expand internationally.
The founders need to identify whether their startup is solving a problem on a global level or if there is a global pull for their solution. Apart from this, if the startup is a product-led repeatable business in all markets, they need to work on a more streamlined expansion strategy. These things often depend on the market in which the SaaS startup is planning to enter or the right time is to expand in the startup’s home region first.
Clear GTM (Go-to-market strategy)
A robust go-to-market strategy is a must for the expansion of any B2B SaaS startup. According to a study by Harvard Business School – 95 percent of new products launched every year fail. Considering the failure rate, it is increasingly important for SaaS startups to have a refined GTM strategy before stepping into a new international market.
A strong GTM helps SaaS founders to avoid mistakes in the initial phase itself and gives them direction to increase the chances of a successful international presence. It needs to have important attributes encompassing the geographic reach and customer segments. Additionally, it helps the founder identify the right product-market fit, allowing them to avoid oversaturated markets for their business expansion.
SaaS companies are based on subscription-based business models. This requires extensive knowledge and effort in figuring out the sales technology that SaaS startups need before moving forward with global expansion. It plays a critical role in remote demand generation by measuring and targeting desired customer segment. Since SaaS startups leverage the use of advanced technology, they need to have new-age digital tools to ensure demand generation.
Digital tools like CRM and lead generation are essential for B2B SaaS startups to grow their sales in international markets. Apart from this, Datawarehouse, CDP and Marketing automation embedded with advanced analytics can be a game-changer for any B2B SaaS Startup. These tools can help in expanding the targeted reach and nurturing, leading to an exponential jump in sales performance.
Exploring sales channels
There are different routes to entering into new markets. SaaS startups must identify the right approach to expanding their business internationally. For instance, founders can opt for a direct route by setting up a new regional HQ in the targeted market. The other one of the most common routes is acquisition. A B2B SaaS startup can acquire a business in the region to establish its presence in the planned global market.
On the other hand, reseller partnerships are also gaining traction among startups planning for global expansion. They can join with a trusted partner can bring their SaaS product to the new international market. Apart from this, SaaS startups founders can expand through remote channels by keeping their team in the home region while expanding their marketing and sales to global markets.
Whichever route the SaaS startups adopt, it is practically important for them to align with the market’s time zones, culture, local laws and regulations and price sensitivity of the market.
Every B2B SaaS startup has its own path to grow and expand. However, when it comes to international expansion, the startup needs to explore tried and tested ways to globalize. To capture the market opportunity, it should create winning strategies and execution plans to become the next big SaaS startup globally.
(Neeraj Saxena, Managing partner, XScale)