Customer and Revenue Acquisition in Asia-Pacific Jeremy Geiger

Customer and Revenue Acquisition in Asia-Pacific Jeremy Geiger www. Linked. In. com/in/Jeremy. Geiger@RTMAsia. com www. RTMAsia. com

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

Who Am I? • Living in Asia-Pacific for 15 years – Tokyo, Seoul, Hong. Kong, Singapore, Bangkok – Business expansion in Japan, Korea, China, Hong. Kong, Singapore, Thailand, Philippines, Malaysia, Australia, India, NZ • Started-up 15 new country branch operations – Enterprise software for supply chain, ERP, BI, CRM, BPM, 3 D visualization – $65 M revenue, 30+ partnerships, 50 -150% annual growth • EMBA from Kellogg School Mgmt program in Asia • Currently work with software, Saa. S, internet & consumer electronics companies as part of RTM Asia

Who is RTM Asia? • 80 Successful Asia-Pacific Business Executives • Working with technology start-ups: • Consumer/Enterprise software, internet and hardware • Who have the challenge of expanding internationally • RTM Asia creates new market opportunities in AP • Market analysis and go-to-market plan for key Asian markets • Accelerate growth & profitability • Create new business models in Asia to drive incremental upside • Minimizing effort, investment & learning curve from HQ

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

WHEN to consider Asia-Pacific expansion? 1. Customer is pulling you – – Enterprise customer is asking you to support product in AP Consumer: Significant swell of new users in AP country 2. Strong growth, publicity and customer references in US 3. Potential partner/reseller from AP approaches you 4. Market potential is unusually high in Asia-Pacific – Automotive, Aerospace, Manufacturing, etc. 5. Capital available

WHEN to consider Asia-Pacific expansion? • Typically stage – – • $5 M-$10 M annual revenue for software vendors Initial contact from potential AP prospect and/or reseller Typical reasons 1. Revenue (to increase profit or funds for R&D spend) 2. Become a Global player (with international references) 3. Company valuation (global revenue potential increases valuation)

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

DIFFERENCES and considerations among AP countries Size of Early Market Adopters? Unit Risks Price Most Typical Sequence Aust/NZ 1 Japan 2 China 3 Singapore/HK 4 Korea 5 India 6 Thai/Malay/ Indo/Phil 7 *Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.

Sample Asia-Pacific Expansion Timeline Months Aggressive 0 Conservative 0 Aust/NZ Japan China Singapore and/or HK Korea India Thai/Malay/ Indo/Phil 6 12 18 24 12 24 36 48

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

Difference among AP countries: Product Need for Localization Expected Product Maturity Need for Customization Aust/NZ Japan China Singapore/HK Korea India Thai/Malay/ Indo/Phil *Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.

Difference among AP countries: Support & Presence Support Volume Local Presence (Partner or Direct) Channel Partner Network Aust/NZ Single Japan Double China Double Singapore/HK Single Korea Single India Single Thai/Malay/ Indo/Phil Vendor Direct Presence Required Single *Note: ROUGH Generalization. Highly dependent on product, market, industry, etc.

Levels of Localization • Level 0 – • Level 1 – • Access files with local language names Level 3 – • Product Documentation Level 2 – • Marketing Materials User input in local language/formats Level 4 – User interface

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

Partner Approach • Most countries in Asia-Pacific require a partner-centric approach • Types of partnerships 1. 2. 3. 4. 5. Strategic Partner with investment Strategic Partner without investment Master Distributor Alliance Partner Resellers

Go-To-Market Requirements • • • $500 k - $1 M investment per country, in the 1 st year Target break-even in 12 -18 months (with no royalties to HQ) Need top Pre-Sales person support Invest in Strategic top-down analysis rather than signing first reseller that knocks on your door Need localized product unless targeting highly specialized technical/management positions Country/Regional Manager should have relevant experience doing strategic deals

Go-To-Market Short-Cuts • Using knowledgeable 3 rd parties that can get appointments with the most strategic partners/customers can have significant impact – – 3 month Strategic Go-To-Market Analysis Operate your branch operation without capital expenditure Raise capital from local strategic investors Get paid, based on results

Investment & ROI Expectations • Big Bang Year 1 Entity Employees Offices 1 st Year 2 -3 Long-Term Investment Target Profit Go-to-market can be achieved with different levels of per country ROI Potential involvement & investment: Rented $500 k - $1 M 100% Direct hires 0% Med owned High: Direct hire, open offices, local regulations subsidiary ($750 k/country) Strategic $250 - $500 k Majority- Direct hires Rented 250% High Investor – Medium: Country heads, virtual offices, partners owned – High Med subsidiary 3 rd party $100 - $400 k None Accelerator Remote Partner Mgmt Provided 150% Provided rd by 3 rd party by 3 Med Low-Med None Low party $100 - $300 k None 0% Note: Option to start with 3 rd party accelerator and then move to Big Bang or Strategic Investor once market traction

Agenda • Background • Asia-Pacific expansion. When? • Country-Specific Considerations – Business Development – Product, Localization & Support • Go-To-Market Investment & Requirements • AP Revenue in relation to global revenue

AP REVENUE in relation to global revenue? • • AP is typically 10 -50% of global revenue Median 20 -25% Traditionally, almost 50% of AP revenue from Japan In future, China’s share will increase

AP REVENUE in relation to global revenue? • Much of US tech company’s growth is fueled by international expansion. Ex. : In 2008: – – – Oracle Overseas sales +22% vs. US +2% Cisco Overseas sales +20% vs. US -8% Google Overseas sales +40% vs. US +22% e. Bay Overseas sales +16% vs. US +5% Apple Overseas sales +29% vs. US +20% Sun Overseas sales -2% vs. US 10%

Summary

SUMMARY: For Business Development / Marketing • • • There is global demand for useful solutions Global expansion improves company revenue, profitability, valuation and company credibility Each country in Asia-Pacific is different and requires a different approach There are different strategies for Go-to-market depending on investment & bandwidth available Do your homework and involve knowledgeable people

SUMMARY: For Localization People • • Asia-Pacific can not be treated as 1 group of users. Each country will have unique users & needs Invest upfront in proper technology and processes because once Asian market expansion starts, it is likely to expand rapidly to other countries The structure and number of parties involved in sales, support and training will be very different than the US Customer demand will drive localization needs

Thank You Questions? Jeremy Geiger Jeremy. Geiger@RTMAsia. com www. rtmasia. com