How To Expand Your Business In Another Country
- As you know, one partner strategically can get you 10 times more pipelining revenue than one customer. (upbeat music) John, how's it going? - Yeah, really good, Dan, really good. Thanks for having me on. - Well, I'm excited.
I wanna be helpful, I know you came prepared. Why don't we give some contact to everybody listening, what problem do you solve? What's the name of your company? What problem do you solve? Who do you solve it for? And how does it work? - So I'm John Readman, I'm the founder of a business called BOSCO. We help retailers make more money from their digital marketing, and we do that through using clever AI to connect all their data together, all their performance data together, we then run our clever AI and machine learning over that to predict which campaign and which channel they should be moving their money around to hit their particular, sort of digital marketing objectives.
- That's very cool. How long you been doing it? What's the kind of the size of the company as it is now? - So we've been doing it two years and I suppose launched the product proper in just gone in the a holiday season, just gone in Christmas, and we've got sort of 19 people. So we took some fun at the beginning, we've got 19 people, but we've now got 42 clients and we're just over 20,000 pounds MRO. - Nice job, two years, that's fun.
John, how can I help? - So I suppose, so the main thing for me is deciding do we need direct sales, is a big question I'm trying to work out, and then the other one is tech partners or agency partners or both. And then the other big challenge is we see the biggest opportunity. So I'm talking to you now from the UK, I'm in the Yorkshire in the North of the UK, but our biggest market is the US. And I'm trying to work out, or North America, so Canada, the US. Can we successfully target the North American market from the UK or do we need boots on the ground in North America? So they're my sort of three main challenges at the moment. - Well, let's pick one at a time.
So it sounds like one of the questions you have is, should I build an outbound direct sales channel, right? And what are the factors you're considering? Well there's a bunch of question I have like, your annual contract value? What you've done so far to get the first customers? But when you say direct 'cause different language, different countries, what do you mean by that? Do you mean like a value added reseller? Do you mean somebody that's building their own pipeline? What are you considering? - So, what I mean from I suppose our point of view would be SDRs on the phone. So people outbound calling, following up, setting up sequences in HubSpot, proactively profiling and targeting the retailers direct, and that's obviously got salary costs, commission costs, time, effort implications, and I suppose versus do we just go all in on the partners with the big commerce or the Shopify integrations, and really sort of push and drive that, or we've got some funding, do we go for both? So... - Yeah, this is a great question.
I mean, the way I think about anything in startup world or company building is less is more, and focus and repeatability will always win over size of strategy. So a lot of times people wanna do like multiple things 'cause it feels good and it's exciting, but the truth is, if you actually look at the data and what I call growth stack, you're always gonna be better off doing one thing, getting it to a certain level and then moving to the next level, then trying to do three at the exact same time. Because most companies can't figure out one, let alone two, let alone three, and it's not that you can't do three eventually it's just a sequencing problem, right? It's what do I do today versus next week versus next quarter next year.
So if I just look fundamentally at strategic partners, and to me there's even the word partner is loaded, right? Like is it a value added partner? Is it integration partner? Is it an affiliate partner, et cetera. But if I use the word partner, to me it's somebody else that will get me in front of my ideal customer profile, right? So when you say that, do you mean people that want to present your product to their customer based and then you'll take the rest of the sales conversation? - So, well yeah, that's then does suppose the other part of my challenge around partners is, we currently partner with Shopify, so you could go into the Shopify app store download our product and you can buy it there, and that's a quite a hands off process and then we go through the sort of upsell cross sales. It's almost like a free medium and then we go in an upsell cross sell.
But yeah, so we also partner with agencies. So we can use agencies to actually go and sell our product to their clients, or they can buy our product to use on behalf of their clients. And I suppose you, we have a specific partner proposition.
So if you are digital marketing agency, we can help you help your clients better. And could either white label it and sell it themselves, make some margin, or they could just use it to be better, and I think they're the sort of the two challenges. - Yeah, well so, here's the thing is, having an app in a marketplace is a strategy but you can't push on that, right? Like you're in there, you might be able to get better reviews or ratings, but it's got an upper limit to how much pipeline it'll generate, whereas the second one you talked about, which is kind of a traditional kind of reseller, right? It says, resellers typically use the product as well as they resell it, and that's kind of spot done this really well where they've activated... They just call them partners, right? But they can fuse the language and you call that. If a reseller is going to sell the product, or buy your product from you and then use it with a client, and then charge the client, then they really are a reseller, and that strategy personally is always more effective than building an outbound team.
Because if you do it right, you're really marketing to a customer that can get you multiple customers, and you only pay them when they get you revenue, right? Whereas if you build a BDR and this is the difference, you said SDR earlier, Sales Development Rep. - [John] No, we SDR and we need the BDR as well. So we can need one guy to tee it up and one guy to close it.
- Yeah, so again, my world my language is, SDRs are the people that qualify usually inbound, BDRs are people that go outbound, and then account exec is the person that sells. So in that model, my language, maybe not yours that's why I'm just being clear, building a BDR function to go out build pipeline, to qualify, and then handing it over to an account exec that then closes, is an incredibly tough thing to do at scale, especially when you're early. Usually these are things you bolt on after you've got some brand recognition in the market, because then that creates some like natural momentum and partners are great because then you can rely a 100% on their momentum, their name brand, their Goodwill, and they'll bring you those opportunities, right? Versus you having to build all that with a false start.
To me, I've always said the analogy to think about from a partner point of view, is if there was a train going by which is pipeline, the BDR process is kind of like building the track, laying it down, building the engine, building the train, and at some point you've gotta build all this infrastructure to actually like get that pipeline. Whereas the value added reseller model, you literally just gotta build a really strong hook and hold on for your life when you on to that partner, because it will bring you that pipeline. And as you know, one partner strategically can get you 10 times more pipeline and revenue than one customer, right? - Oh, look what I said, that's yeah. That's exactly what I was talking. Yeah, we're finding that and that's exactly.
And it's now, and I found myself in the board meeting today saying I'm gonna focus on three things. And I'm like, "Well, you can't focus on three things." And I found myself correcting myself and going, "Right, we need to focus on one day."
And I think partners, and we having a conversation with a partner in New York at the moment and they potentially got 80 times for us. If it works for the first five clients, they're like, well we've got 75 more. And if we think how long would that take a BDR and an account to close 80 clients, yeah, we might have to discount and give some margin away, but it's still sales effort, 'cause call the acquisition cost. - It's an efficient cashflow flow model, right? You're not putting out all this cost of hiring, training, even if it's baseless variable, infrastructure, playbooks. You know, there's all these things you gotta learn how to do you've never done them before at scale, that the other one you literally just have to reach out, build relationship with partners and just have enough of a pipeline for them to fill up your internal pipeline with their activity.
So I love as a default, all things being equal. I always go the partner route initially 'cause it's the most efficient and effective. And I can usually like build a really good pipeline and I learn from that.
So it's like when should you have multiple ones? My rule of thumb generally, is when you get to about a 100K a month of net new MRR through a channel predictably, then go. And maybe you get to 70 and you're like, "Okay, I feel like this is gonna get to a 100 and you start building the second one. But it's like drilling a vein of gold, right? Like drill it till you feel you're kind of like 70% of what's there, and then start drilling other test holes to figure out what's the next one, but once you find one that works, you go down that one 70%.
And that's why I call it growth stacking is 'cause I really think it's about choosing the right channel, get it all working, get it all green, and then stack them up to build that velocity and that momentum. So on that question, that's my philosophy. I think we have time for another one.
You were talking about the tech side. Why don't you-- - Well, the tech side was more of putting the apps in the app store, and then I suppose the question again, the sort of direct versus partners. If we took the money we would invest in direct salespeople and used it to promote our integration in BigCommerce, our integration in sales, in Shopify or Salesforce, would that be a better use of time, effort, money? And I think I sort of, I think you've sort of answered the question there already with the partnership. Taught one relationship, many customers and I think that makes huge sense. The big thing I'm not struggling with, discussing and debating is...
And I don't know how many, if you've got examples of other previous coaching clients or people you've dealt with before, is how easy or what are the challenges around entering the US market and selling into the us from the UK? - Yeah, it's interesting for me 'cause as a Canadian, most of my business is in the US. And other than time zones, like I've never noticed that any company treated me differently because I was Canadian. Obviously I don't have the same accent that gives it away. Like, "Oh you're not." Sometimes I'll throw in an air to it and people are like, "Canadian?" I'd be like, "Yeah." Here's what I'd recommend.
Even when I was in Canada building Clarity, every seven weeks I would get on a plane for a week. And I would literally go New York, San Francisco, Toronto or Vancouver and then back to New Brunswick where I was from, and that cadence allowed me, if I was on phone calls. And it was me, I'm not saying it's you. You might have a business development rep and they're gonna be doing this, but if it's you, I would say figure out what's the cadence where you're in those cities that you think you're ideal partners are at, at what frequency that's gonna allow you to be. Like you can't get away from physical presence, right? - [John] You can't build those relationships, yeah. - Yeah, people will learn trust you and build a relationship deeper, faster in person than somebody who doesn't, right? Like zoom doesn't even do that.
You really need to get in person. So my rule is build that cadence, build that pipeline, reach out to people. They're like, "Oh, when are you in town next?" You say, "Oh, I'm actually there mid April."
They're like, "Oh wow, well we'll hit me up." It's like, "Well, I'm actually organising a lunch with five other people just like you, why don't you join the lunch?" And they're like, "Oh, that would be amazing." And then you all get together, you have lunch. You follow up, you have conversation, you can do dinners. I used to do breakfast meeting, early afternoon meeting, a lunch, two meetings, dinner, and then either flight to San Francisco Red Eye, or I would do, not a Red Eye. I would do the Red Eye the other way.
Or just try to fill up the calendar that way. But to me like that's... There's cultural differences selling into the UK versus the US. The US is easier, US people wanna buy.
They don't like being told-- - This is exactly what we're finding. We phone up people in the US, and they're interested in new ideas. They wanna explore, they wanna try. Whereas the Brits are really cynical about, "Oh, well that's all a bit scary and that so."
So I'm thinking, well, we've got this really smart innovative tech that we can prove works, it's gonna help make you more money quicker, faster. And Americans love that, right? - Yeah, I'm always looking for markets that are quick to buy and spend the most. And the reason why the American market is attractive to a lot of European clients of mine that I work with, is because the US dollar for the most part. So there's currency component to it. There's a speed of purchasing decision seems to be higher.
They like to be sold. I know that a lot of my scale specialists that try to enrol clients that are in Europe, they want multiple conversations to make a decision even though they could have made it on the first call, it's just kind of part of the culture. And it's just not... Like you said, they're not as apt to be early adopters or early innovators around some new technology, whereas in the US, there's just kind of this culture of like trying to find the competitive edge.
And if they feel that's your product, then they're gonna really push it through the organisation to make that decision. But in regards to like the differences. Again, time zone and physical presence, if you can solve that using the strategy I mentioned. Where like every two and a half months if you want, you go there for 10 day, you do all your meetings. You queue them up, you bring your clients together.
You do your deployments, you kind of schedule things to be super efficient, and then are able to work later in your day typically, so that you can, especially with the west coast customers being in Europe. Like their early morning is kind of your afternoon and then it kind keeps past. Other than that it's-- - It does make it tricky, we're tryna do that at the moment, but my data science teams in Melbourne, Australia. And I deal with them at 5:00 am, which is great UK time and then we're on the West Coast like 9:00 pm, but that's fine-- - The time that's the only thing. I actually culturally speaking, it's way easier to go Europe to US than US to Europe.
That's my experience and I've had, geez, probably a 100 clients go both ways that I've coached over the years and the history. Especially when you're opening up offices, that's a completely different challenge. But in regards to just building pipeline and selling partnerships for the most part, I think it's gonna be easier to go from Europe to the US than the other way. - Yeah, no, no. And I think that's gotta be the strategy, and that whole one to many with the value added reseller is definitely the the way forward so.
- And there's so much pipeline there for you that if you just got all your resources and all your efforts and focus on like, we're gonna build a repeatable, scalable model, we're gonna document, build our CRM. We're gonna build the whole, best practises, playbooks for each stage of this CRM until we can predictably ramp up and add 10 to 15 new partners every month. Every new partner generates X amount of pipeline and we can start to build predictability in it, and you get it to consistently with a somewhat pot, like a decent CAC payback period of like something, less than nine months. I mean, that's when you've got predictability in the model.
It's way more advantageous for you to get that to work and make it work, then try to do three 'cause it sounds great to your board or your invest. Because at the end of the day, the probability of you making that work is gonna be way higher, than trying to go build a BDR and account exec model, that's extremely expensive. Like that's just the reality of it, it's like you gotta pay people a 100 to 150 grand a year to do the the business development side, the BDR side, then you gotta pay couple 100 grand, 300 grand a year for a sales person that can sell at the level you're talking about, kind of that mid-market enterprise. And like that's just one person in each is 500,000 a year kind of stack, right? When you look at commissions. So it's like if you wanna really build up that volume, I mean, you're in a million and a half in an investment and that's if it works, right? Or the other one, you have one person just reaching out, building those relationships queuing that may be them for you. A lot of my clients just do with their assistant initially.
And just start to build that playbook and then hand it off to somebody else who just do the sourcing, and then somebody else that comes full time to do the kind of the partnership management side. - Yeah, and I think you're right, I can't focus on all three 'cause that's not focused, but yeah. And yeah, it's reassuring-- - It's a good way to put it. - Yeah, it's reassuring to. Here 'cause my so far is actually the selling into the North America from the UK is a lot easier. And they sort of half seem to like the Brits phoning them up, especially-- - A 100%, you guys have the accent, you sound smart, usually are, you're kind.
I mean, it's a competitive advantage. So John, as we wrap up, I'm just curious. What would be the kind of two or three biggest takeaways that you've got from our chat today? - Well, I think it's reassured me that, it's completely doable for a software company from the North of England to take on North America.
And we'd rather be a small company in America than a huge company in the UK, in terms of future valuation that's really where we've got to be. And I think, not necessarily investing a huge amount of money in direct sales, and focusing on that value added reseller model where I can get the one to many very quickly, and get my hook into the train. I think is a very good analogy. And we've already been planning the calendar to go on on like when can we go, what events are on? And like, so shop talk in Vegas in a few weeks and all these different things that we can go to, and then build meetings around that. So yeah, that's been super helpful.
Thanks very much, Dan. - I love it John, appreciate the time we'll talk soon, have an amazing day. - [John] Thank you for having me. - Cheers.
(upbeat music)
2022-06-24 13:22
