Indian founders are on global journeys, and that means finding and perfecting product-market fit in different geographies. It is akin to navigating through different roads and cultural structures, physically and metaphorically. But before they begin to think of PMF, a more fundamental question is when to start planning for a new journey. Should it be after perfecting PMF in their home market? Should it be after achieving certain milestones?
There is no one-size-fits-all answer to these questions. The industry and context of what you’re building are what matter the most, and your journey can take a different route from everyone else’s. Companies, such as Darwinbox, have perfected their business models in India, before eyeing overseas markets. Others, such as Rocketlane, built their product for the US.
For this piece, we spoke to Rohit Choudhary, the co-founder and CEO of Acceldata, which helps customers monitor their large-scale data systems end to end. With a presence in the US, India, Asia and West Asia, Rohit knows a thing or two about building and scaling an international business.
Here he answers some common questions founders have about the process of going international, based on how he navigated his journey, and some learnings from the larger market.
What is product-market fit?
Product-market fit is often a paradox — it is something so abstract you may never know what it is, but when you have PMF, there are quantitative and qualitative ways of measuring it. The right question, Rohit says, is how do you navigate PMF, instead of discovering it. Particularly while navigating international waters for the first time.
First, size up the opportunity. “Begin by understanding if the market for what you’re selling is big enough. If you find that this market exists, the next step is to understand that all software is not bought in the same quantity,” he says.
For example, if you were in India and building for enterprise customers, a few segments such as security, virtualisation, cloud infrastructure, data infrastructure, and data analytics are high TAM (total addressable market). In these segments, it is quite likely that you will have applicability in advanced markets such as North America as well.
“Even if you thought you have PMF, you will likely not have it right away because the moment you take the product to the customer, they will tell you a number of things that are missing from the product. You address those, and your PMF evolves over a period of time.” – Rohit
Then, you begin to validate your hypothesis about the market and demand. “This can happen only when you’re close to your customers or early adopters,” in Rohit’s opinion.
It is during this process that you begin to think about the holy grail of PMF. “Even if you thought you have PMF, you will likely not have it right away because the moment you take the product to the customer, they will tell you a number of things that are missing from the product. You address those, and your PMF evolves over a period of time,” Rohit says.
Will I have to significantly rewire my thinking?
“It is important to note that the US is an iPhone-first market,” he says. This is an interesting way to think about it.
The average US customer, and even end-consumer, is used to a seamless, glitch-free software experience. It becomes imperative to provide the same level of experience to your customer when you build for the market. In contrast, a product in India will get used on higher- and lower-end machines and customers will want a lot of hand holding or custom services, which means you have to put greater focus on optimising your product to work under all conditions.
With this context, if your product “will solve somebody’s problem at a price point that is acceptable, you will have tremendous applicability,” Rohit adds.
What parameters should I track to know if I am on the right path of product-market fit?
The answer to this question depends on industry context and the problem you’re solving. “For Acceldata, the important thing was not the country in which you work. It was how much volume of data do you have. So, anchoring your business on the vector of your long term growth is the only way by which you can actually decipher signals from noise,” Rohit explains.
He further talks about a few false flags you should steer clear of:
- Suppose you’re getting good signals from smaller customers in India, but if those customers don’t exist in the US or Europe, you won’t be able to replicate that success. Your PMF should be based on long term pricing vectors that work as your order volume expands. If your initial hypothesis about your target market holds, then you will see growth across all geographies.
Pro tip: Early design partnerships are very helpful to test the waters and understand what works.
- Don’t deviate from your core business vectors, even if it means a 15-20% lesser revenue on some deals. In 2019, Acceldata was signing smaller deals in Asia Pacific, uncommon in the growth stage of international expansion. But Rohit had a reason. “We were not looking at it from a lens of geography. We were looking at it from the lens of how much data volume the customer had,” he explains. Their core business vector was data volume which helped build out the platform and inform better business decisions.
Should my sales strategy change when selling outside India?
The thing that will help founders figure out sales in any geography is getting to the heart of what customers are paying for.
The way to figure this out is through working with your initial design partners and looking for patterns that work. Tracking your annual contract value (ACV) is an indicator Acceldata tracked in the early days, and took the time to understand that a typical sales cycle in their industry could be as long as 200 days.
Other than this, the basic sales principles remain the same. “You still have to do founder-led sales for the first few years. Look at your TCV (total contract value), what is the repeatable pattern? You might get a couple of initial sales people who will follow your playbook or your pitch. And then you learn together. Your sales guy will teach you sales mechanisms and processes. And as a founder, if you come from an engineering product background, you teach them your pitch,” he adds.
How about the overall hiring strategy? Should I change it significantly?
Hiring decisions and strategies change as the company grows.
“Initially you need people who are jack of all trades, and can get things moving. But as you go along, you have to hire for expertise. And that’s when you look for the best,” Rohit says.
“Conduct experiments as quickly as possible, and give yourself time to succeed in the long term. Because as your company starts taking shape and form, every incremental mistake is very expensive.” – Rohit.
But these are general good practices. Every founder makes mistakes, and startups are all built on experiments. Some work, and some don’t, and either is fine, because every mistake is an opportunity to learn. The only advice Rohit has for founders is to conduct experiments early on.
“Conduct experiments as quickly as possible, and give yourself time to succeed in the long term. Because as your company starts taking shape and form, every incremental mistake is very expensive. For example, when you get into the growth years, skipping a whole year or missing out on a whole year can be a lot more expensive than the early PMF finding days,” he adds.
At the end of the day, what matters most is building a good product that will stand the test of time, and bring in revenue even as you scale. At the heart of PMF in any geography is your customer and a true pain point you are solving for them.
This article was originally published on Limitless.
