Market Entry Lessons

Aug 18

Entering new markets is hard. You have to ask yourself a series of questions about how to launch your product, how to grow your business and how to establish your brand.

We had the opportunity to sit down with Henrik Johansson, Crypto.com's Global Head of Growth, to talk about his experiences launching products in new markets and building remote teams.

Read on to learn his top 4 lessons for entering new markets.

This blog article is based on a video interview we shot with Henrik. Watch the video below for the full interview.

1. Product-Market Fit

You think you know your own product but every new market, every new culture will view it in an entirely different way. Your product will not just be seen differently but it will also solve different problems for the users there. Your product’s adoption and usage pattern will be different even in markets that are “similar“ to each other like the US and Canada. They are geographically close and speak the same language, but the way people look at things and use products varies greatly.

The same is true for Japan. When we brought Spotify to the Japanese market, the use cases and the value people saw was completely different from our home market in Sweden. It’s not just a matter of maturity. Early adoption in Japan came from a different place and Spotify was viewed in a different manner.

On top of that, when we launched in Sweden, it was at the height of piracy whereas when we launched in Japan piracy had almost gone away from most markets. So the problem Spotify solved was different not because there is a different market, a different culture and a different audience, but because it was a different time.

So even though you think you know your product and you think it’s great, you can’t count on the same product-market-fit in a new market. When you introduce your product to a new audience, you have to take a step back and observe what’s happening. How do they perceive your product? How do they use it?

It might fit a completely different use case or issue from what you have imagined. But that is completely fine as long as it solves your users’ problems.

2. Brand Perception

The second factor when entering a new market is your brand perception. How is your brand perceived by the new audience? The product is one thing and to some extent it will be your brand depending on how you create your narrative and story.

But your brand is a somehow different story. Even if you think you have excellent brand awareness or have a huge global brand, a new market audience might have never heard of your brand. They have no clue of what your brand actually means. They will look at your logos and everything in a very different way.

So what is the brand you are building? What is the story you are telling? This is different from your product but will have a huge impact on the audience you are talking to. How do users perceive your brand? How do they describe it to their friends? This is crucial because it will determine if you can generate viral growth in a new market.

You shouldn’t assume that your logos and marks mean the same to a new audience. You need a certain openness. You have to accept that people associate your brand differently or maybe even place you in a totally different category. But that’s OK as long as you reach that product-market fit and solve the right problems for your audience.

3. Internal Culture

A third point I’d like to point out is your internal culture. When you enter a new market, establish an entity and start to build your local team, you will come across a variety of challenges and opportunities.

In your home market you most likely have an established company culture and a soft contract on how people work and communicate. But now you are hiring people who are not only from a different culture but also remote from HQ. They might have a different way of working, a different communication style and different expectations. There is no inherently good or bad way of doing things but there are differences and it’s important to notice these and manage accordingly.

When you bring a product into a new market and build a new team you have to ask yourself: What are the pieces of your company culture that you want to emphasize and retain, and how do you make it possible for people who join your team to bring in their local culture and enrich what you are bringing from your home country.

This is a question that is often overlooked. People think they will just figure it out or it will solve itself but it’s not that easy. You have to make a very conscious effort to educate people on your existing work culture while at the same time have an openness to adapt to the local culture of the new market. If you fail to do this you might end up with a local entity that is poorly connected to the local market or you have a local entity that is poorly connected to HQ. Obviously either case is disastrous.

There are rare cases where a product will outlive its global footprint in a specific market, for example Yahoo or more recently Yogibo, that are still going strong in Japan although they kind of “failed” in their home markets. But that’s a whole different story and nobody wants that. You want to build a team that can enrich your company culture with their local perspectives and at the same time be very well integrated into your global organization.

4. Empowerment of Remote People

Last but not least, you need to consider how to empower people who are remote from HQ. This is a little different from your company culture. It’s more about how to set the new team up for success so they can operate autonomously and take ownership. They should have control over their own prioritization while staying aligned with the overall prioritization of the global organization.

This comes down to a few things. First, you have to be careful with leadership because leadership has an outsized impact on culture in the beginning of a new team building exercise. So finding the right leader to set up a team in a new market is extremely important. Second, you have to let go a little bit and take a step back. You have to accept a higher level of variance because you won’t be able to influence this group as much as you can influence a team that is closer to you physically or geographically.

So you have to empower the local team by putting the right leadership in place and then manage your own expectations by accepting a higher degree of variance. They will figure out ways of doing things you haven’t thought about. It’s about setting context and giving them the tools to make decisions on their own. It won’t be exactly how you expect it but it will be good because you trust them.

Conclusion

Entering new markets is still hard, even after reading this. But I hope Henrik’s 4 lessons will help you on your journey. Don’t get stressed out if your product-market fit is different from your home market. As long as you solve your customers’ problems you are well positioned. This is similar to your brand awareness. Every new market will perceive your brand differently and that’s fine as well.

To build a successful local team actively drive your company culture in any new market. Focus on enriching your existing culture with influences and perspectives from your new local market. And finally, you have to empower the people in the local market. They have to be able to make their own decisions and drive the business. Only then will you be successful.

If you are currently thinking about entering the Japanese market or are having problems finding the right leaders to set up shop in Japan, reach out to us and we will be happy to help.