BUILD

The Balderton Playbook for i18n, Part 5: Your geo-expansion playbook

JAN 16, 2019

BY Rob Moffat

Scaling

In this article, we are delighted to welcome a guest post from Pranav Sood, Director of International Expansion at Balderton portfolio company GoCardless, on his geo-expansion playbook

If your company is getting ready to enter new markets, you should have a geo expansion playbook. A geo playbook serves as a single source of truth that captures your company’s latest and best thinking on how to expand internationally.

The articles in this Internationalisation playbook:

Part 1: When should your fast-growth European startup expand into international markets?

Part 2: Where should your fast-growth European startup expand internationally?

Part 3: We take a look at 94 European and US venture-backed companies worth over a billion dollars to see where, and when, they expanded internationally.

Part 4: Internationalisation — how to budget.

Part 5: A geo-expansion playbook from portfolio company Gocardless. (This article.)

Part 6: When internationalisation goes wrong

The benefits of a geo-expansion playbook

There are a few key benefits to having a geo playbook:

  • It codifies organizational “muscle memory” so you avoid repeating mistakes
  • It clarifies roles and responsibilities relevant to new markets
  • It reduces the need for management decision making
  • It improves your ability to plan and forecast investment requirements
  • It enables you to run multiple geo launches in parallel

What should your geo playbook include?

The specific activities required to enter a new market will depend on the nature of your business. A regulated payments business like the one I work for has a very different checklist to a B2C platform.

Not all businesses follow the typical “land and expand” model; some require little in the way of in-market investment to drive growth.

The format of geo playbooks can also differ. We did ours using Google Sheets, but other project management tools (e.g., Wrike) can also work.

Ingredients of a successful geo playbook

A view of your 'geo' lifecycle

Growing into a new market typically involves going through a number of distinct stages that together make up the lifecycle.

Each of these stages should have an overarching go-to-market objective (e.g., demonstrate initial product-market fit), alongside a more detailed set of activities and investment requirements. Entry and exit gates should be clear: What are the things you need to have seen to be comfortable taking the rollout to the next stage of maturity?

Our lifecycle is separated into five distinct stages, each with its own go-to-market objectives (see below).

Each stage of geo expansion has its own go-to-market objectives

Each stage of geo expansion has its own go-to-market objectives

A predictable model for growing key functions in new markets

To be meaningful, your geo lifecycle needs to have a view of how each of your functions (Sales, Marketing, Operations, Product etc.) evolves over time.

This should certainly include a view of how key functional costs (both headcount and non-headcount) scale over time, and it may well also cover the key activities and focus areas of each function at different stages. This is important because it means you do not have to continually make new decisions about investment requirements while trying to figure out what your expanding team should be doing.

We found that it worked well to create a maturity scale for each function, which gave us a common internal shorthand for the level of investment required. For example, Sales maturity level S1 might imply investing in two Account Executives, alongside one Sales Development Representative.

Well-defined triggers for investment

One of the most important functions of a playbook is to prompt your business to make the right investment choices at the right time. As such, it’s important to have clarity about your triggers. What do you need to see to feel confident that you can accelerate investment in a given geo?

Some triggers that have worked for us:

  • Monthly recurring revenue (or the drivers of it, including number of transactions)
  • Leading indicator trajectory (e.g., number of sign-ups or leads)
  • Pipeline generation
  • Number of employees needed in a given market

What have we learned?

The company I work for is still at a relatively early stage in its international growth story, so our own playbook is continuing to evolve. We’ve opened offices in Paris and Melbourne already in 2018, with another to follow soon in Germany.

A few of the key lessons we’ve learned along the way:

  • Over-invest up-front in clarifying your stage definitions and the key criteria to enter and exit each stage. Even if you don’t get the levels right, defining the metrics is key.
  • Make someone the gatekeeper of the playbook. You could consider a Country Launch Manager role to capture learnings and project manage execution.
  • Consider separating out the playbooks for different types of market. Some geos are more similar than others and may require similar focus and investment.
  • Reserve time for iterating. A key part of the playbook is documenting learnings, so get into the habit of setting aside time to make changes in a systematic way.

About Pranav Sood

Pranav Sood is Director of International Expansion at GoCardless, managing a team across London, Europe, and Australia. He also leads GoCardless’ Business Operations and Strategy team. Pranav started his career at Bain & Company.

This article first appeared in VentureBeat.

READ MORE ARTICLES

Stay in touch with Balderton

Sign up for our newsletter to stay up to date on news from Balderton, and our portfolio.