We were back this past week with another edition of the Bowery Capital Startup Sales Podcast and welcomed our friend Oliver “OJ” Jay to the program to talk about Dropbox’s approach to global SaaS sales. OJ has been with the company for a number of years and was an early employee tasked with setting up their international offices and building out the freemium and SMB SaaS sales teams. The topic of global SaaS sales comes up a lot in many early stage companies with most folks taking a bit of a piecemeal strategy during the early days. OJ spoke at length about how Dropbox approached global SaaS sales in a very methodical and streamlined way. The podcast was ripe with a ton of insights and below were 3 tips that were very relevant to any early stage SaaS founder.
(1) Don’t Discount The Value Of Internal Buy In – OJ helps a lot of early stage SaaS businesses think about global SaaS sales and one of the biggest issues that comes up every time is organizational buy in. CEOs and salespeople tend to believe that with a couple of great logos in a region they can just go out and launch a bigger presence in that region. They feel that a test or trial period will help them them figure out international before going to the board or full executive team to get buy in. What happens? Rarely does it succeed and most times the office can’t scale, is stranded, and shut down. OJ stresses the importance of over-communicating early on and not moving forward without buy-in from everyone. This includes your board, your other executive team members, your middle management, and your front line employees in all divisions. At the end of the day a sale of your product involves the payments product manager, the customer success director, your lawyer, and other components and so it is incredibly important to have everyone on the same page before you embark on global SaaS sales.
(2) Take A Phased Approach & Focus On Unit Economics – The Dropbox team took a phased approach to launching in different regions and started extremely small with specific milestones. Phase I was a 6 month trial in a specific region utilizing an existing Dropbox employee or employees (usually 2-3) to first and foremost start selling but also to get the unit economics right. They predominantly focused on getting the inbound high velocity sales and SMB sales down to a science in that region before reporting back to the executives and board on the success. If they couldn’t get Phase I right, they would not move on to Phase II. If they got the unit economics right in Phase I, they would move on to Phase II. Phase II involved another 6 months where the existing Dropbox employees would hire in 2-3 local employees to prove out the hiring and training model. If they could get boots on the ground successfully and keep up the unit economics they would go back to the executive team and board and unlock Phase III. Phase III was really building on the first 2 phases and the final phase of the process. The existing Dropbox employees would hire in local management, build out a recruiting function, and overall set the organization up for success. Once these Dropbox employees finished Phase III they’d move on to another region. Long story short, mitigate risk by setting your goals up front and taking a phased approach that primarily cares about getting the unit economics right.
(3) Choosing Regions Isn’t Rocket Science – Global SaaS sales isn’t rocket science according to OJ and while Dropbox did a ton of modeling and risk analysis on what markets might work for them the simple advice he gives is really to focus on the other English speaking countries. For most businesses, this means focusing your efforts on Canada, United Kingdom, Australia, and Ireland. They are huge markets in aggregate, have organic demographics that make sense for your business (strong broadband penetration, lots of IT spending), and limited operational problems around regulation, language barriers, or other country specific issues. You can always get cute with the data you show your board or executive team but OJ stressed to not think super hard about global SaaS sales and that your gut was probably correct around moving into other English speaking countries.