Executives from global FX brokerage technology provider Leverate talk about their experience of entering and adapting into the Chinese market, and what has been of critical importance during the three years that the company has been operating in China and the Asia Pacific region
When Leverate set out to go global, we would be lying if we said we knew what we were doing. The truth is, that we made every mistake imaginable. But then there is nothing like the wisdom gained by learning from your own mistakes, and it was our ability to learn from our mistakes that in time, made our approach to localization systematic and ultimately successful.
Start: Make sure the market is right for your business
“Victorious warriors win first and then go to war, while defeated warriors go to war first and then seek to win” — Sun Tzu, The Art of War
At that early conceptual stage, even before you lay done any foundations towards developing your global expansion, you need to identify which regional market presents itself as the ideal location to grow your business. China is a consistently hard region to enter and it should go without saying that selecting a new frontier involves an enormous cost in resources.
If, like us, you don’t have the funds similar to Apple and you also operate in a complex industry, then you need to be highly strategic in the way in which you allocate your resources. The decision to expand into any new frontier, should really come down, at most, to an ultimatum between two markets. So make the decision seriously and wisely.
Step 1: Make your wish list
“Never venture, never win” – Sun Tzu, The art of war
Planning is key and by failing to plan your China expansion, you’re basically preparing to fail. Many companies will often embark on entering a new market, but without ever really seeking to understand what’s needed in order to be successful there in the long term. This at its best, runs the risk of making bad business decisions, at its worst, it makes your entire geo-expansion doomed to failure.
To plan well, prepare the perfect localization list, where you list everything that is needed in order to make your products strong in the new market. This includes the ‘juicier’ visible work of adapting features to your product that suit the interests of your new market and the more ‘behind-the-scenes’ invisible work, such as solutions that relate to your operations, hosting, payments and other vital structural components.
Take a day or two to go scouting. Speak to potential customers or domain experts already in China. Speak to C level company leaders who have the experience of localizing a company in your selected region and while you’re at it speak to your customers who may already have a business in China (Remember, that Australian client who has a branch in Shanghai? They’re never shy of sharing their opinion).
But in the midst of this planning phase, be careful and make sure that you do not over plan. It’s impossible to know everything at this early phase, the point is to build your awareness of what’s involved when entering this new frontier. Aim to have 10 items, that could easily grow into 20 or 30 items and then for each item approximate how long it would take you to address it. Use ‘small’ for 1 week, ‘medium’ for 4 weeks and ‘large’ for eight weeks or longer.
For example, to add a new app in Chinese you would allocate as a small project, to distribute your app to the top 5 local Android app stores in China or improve your app start-up time would be a medium size project, while adding Chinese mapping and navigation data from local sources would involve a large time allocation.
Step 2: Develop your MVL (Minimum Viable Localization)
“The greatest victory is that which requires no battle.” – Sun Tzu, The Art of War
Now that you have created your Perfect Localization List, revisit that list and strike off anything that is not absolutely necessary in order to establish your business in China. Basically, what are the elements that you need to retain in order to make your product viable and yet not suck?
Similar to the concept of an MVP (Minimum Viable Product), this is an exercise in business priorities and minimalism. Make the needs of your localization as thin as possible, nothing flash or nice-to-have, but only the must-have’s. Don’t be overly ambitious (you only need to support 1 android app store, not 5!), break it all down (let’s translate the user interface, but wait on the voice snippets in Chinese) and compromise (allow people to sign up with just WeChat, you’ll get to email soon).
Look at it this way, the thinner you can make this list, without jeopardizing the quality of your product, the more quickly, and easily, you’ll be at the finishing line of a having viable product standing on its own two feet. If you make your MVL too long, you’ll delay the time to market, which will then impact your revenue potential. On the other hand if your make your MVL too concise you run the risk of frustrating your initial customers. Another dangerous outcome which can result in internal chaos, dissatisfied clients and a bad reputation, the last of which is particularly devastating in China.
When Leverate first launched in China in 2012, sales and marketing were on track, but we underestimated the latency that was going to be incurred by Asian clients who endured a painfully slow financial data feed. The result was that all the initial clients were lost, along with our reputation. It took another two years and another round of investment (2 million USD) to eventually get us back on track.
Step 3: Launch and Measure
“He will win, who knows when to fight and when not to fight” – Sun Tzu, The Art of War
Once all the ground work has been laid, now is the time to go to market. Let your sales and marketing team work their magic as they bring clients through the door. Yet, as exciting as this period is, don’t lose sight that you are still very much in experiment phase and your progress needs to be monitored very closely. Create a clear set of KPI’s and let that guide your further planning and focus. Periodically regroup and hold a “cracking China” meeting to debrief amongst your team and share your insights.
Step 4: Iterate and Refine
“Move not unless you see an advantage; use not your troops unless there is something to be gained; fight not unless the position is critical” – Sun Tzu, The Art of War
Once the MVL blitz is over you can redirect your team into a “roadmap mindset” as you start to implement ideas from your perfect localization list. As we entered this phase we created a spreadsheet that worked as a “localization roadmap” for the next 12 months.
Over the course of time, we’ve added new ideas to the bottom and discussed priorities every month. This localization roadmap becomes a critical document as it aligns all stakeholders and invites everyone to check in, be it the staff in China, your product managers at the headquarter offices and for the executive team, it allowed us to understand the future impact on sales and retention.
After a while we approached this roadmap, in terms of revenue, whether it has the means to create new revenue (“this new product will help us earn $1.5m per annum”) or preventative (“if we don’t develop this mobile app, we will lose $500,000 USD annually”). We found that most items can be quantified in this way and in the process it helped us to realize items that were needed, and items that really weren’t.
While we have given 100% attention to product and granted there is a lot more to discuss in relation to marketing, sales and CS, but the objective here is to take the mystery out of the process as you execute your localization in China for minimum waste and maximum return.
Image: 500 Hang Seng Road, Shanghai. Copyright FinanceFeeds