A look at publicly listed cloud companies' international efforts. Learn how the best B2B software startups internationalized early on.

1. January 2017
THE INTERNATIONALIZATION OF HIGH GROWTH STARTUPS
A LOOK AT PUBLICLY LISTED CLOUD COMPANIES’
INTERNATIONAL EFFORTS
Crane Venture Partners

3. “Made up my mind to make a new start, going
to California with an aching in my heart.
Someone told me there's a girl out there, with
love in her eyes and flowers in her hair.
Took my chances on a big jet plane, never let
them tell you that they're all the same.”
- Going to California - Led Zeppelin, 1971
3

4. Technology
evolu.ons
come
in
waves
-­‐
from
the
mainframe
to
the
PC
and
from
the
cloud
to
ubiquitous
compu.ng.
The
next
wave
is
all
about
data
-­‐
and
it
has
been
building
for
several
years.
At
Crane,
we
believe
the
next
billion
dollar
enterprise-­‐focused
companies
will
have
access
to
and
use
(open
and/or
proprietary)
data
in
unique
ways
to
create
value
for
their
end
user.
We
also
believe
that
the
European
startup
ecosystem
is
on
the
cusp
of
emerging
from
the
shadow
of
our
compatriots
in
the
Valley.
European
founders
are
no
longer
focusing
on
building
regional
winners.
Rather,
the
founders
that
we
admire
and
aspire
to
work
with
are
building
global
companies.
Learning
how
to
navigate
interna.onal
waters,
especially
the
US
-­‐
the
largest
market
in
the
world
for
enterprise
soMware
-­‐
is
an
essen.al
element
for
any
founder
seeking
to
build
a
European
soMware
champion.
Companies
like
Atlassian,
Mimecast,
Shopify
and
Xero
have
proven
that
it
is
possible
to
build
global
soMware
champions
founded
and
headquartered
outside
of
the
US.
Hot
on
their
heels
is
a
new
genera.on
of
privately
held
European
companies
such
as
Elas.c,
NewVoiceMedia,
Onfido,
ShowPad,
TalkDesk
and
TrustPilot
which
have
taken
the
US
by
storm
and
in
many
cases,
are
already
opera.ng
or
expanding
into
mul.ple
interna.onal
jurisdic.ons.
Crane
tracks
>100
European
B2B
soMware
companies
valued
at
>$100m,
and
many
of
these
have
made
the
successful
transi.on
from
their
Bri.sh,
French
and
Nordic
or
European
roots
into
globally
scaled
en..es.
We
know
first
hand
how
much
planning
and
prepara.on
goes
into
launching
into
a
new
country.
And
it
doesn’t
stop
there:
suppor.ng
customers,
growing
the
team,
adap.ng
to
local
customs
-­‐
all
while
maintaining
the
company’s
culture,
are
milestones
that
are
unique
to
each
company.
CraneVenture Partners - Building European Software Champions (1/2)
4

5. The
defining
difference
between
the
fastest
growing
soMware
companies
and
the
rest,
is
the
near
religious
focus
on
scaling
hard
and
fast
into
new
markets.
The
prepara.on,
the
fana.cal
aaen.on
to
serving
customers
and
the
art
of
global
leadership
are
what
enabled
so
many
of
these
companies
to
create
their
own
category
and
remain
relevant
today.
We
hope
that
you
will
find
this
report
useful.
It
is
the
first
of
two
studies
looking
into
the
interna.onaliza.on
efforts
of
soMware
companies
that
we
will
be
publishing.
We
had
three
goals
when
we
started
off:
1. Provide
transparency
on
what
the
best
in
class
companies
have
achieved
with
their
interna.onaliza.on
efforts
2. Beaer
prepare
founders
for
the
long
journey
ahead
to
mi.gate
key
risks
launching
in
new
markets
3. Help
Founders/CXOs
and
their
Boards
to
work
more
closely
on
the
planning
and
execu.on
of
launching
their
first
new
market
CraneVenture Partners - Building European Software Champions (2/2)
Scott Sage
Co-Founder and Partner
KrishnaVisvanathan
Co-Founder and Partner
Thank
you
and
safe
travels,
Sco5
and
Krishna
-­‐
January
2017
5

6. International experts - some of the key contributors to this study
Andy Leaver
CRO, SailThru and Crane Advisor
George Coelho
Chairman, Octo Telematics
and Crane Advisor
David Mann
Senior Executive, Dropbox
Cristina Fonseca
Co-Founder, Talkdesk
Scott Witucki
Director of Sales, Mixpanel
Glenn Elliott
Founder and CEO, Reward Gateway
Eamon Jubbawy
Co-founder and COO, Onfido
Peter Mühlmann
Founder and CEO, Trustpilot
Brynne Kennedy
Co-founder and CEO, MOVE Guides
Alex Kayyal
Salesforce Ventures, Europe
Russell Loaridge
Director, Janrain

7. Introduction
“I was fortunate enough to invest, build and support technology companies from California to
China starting in 1990. Today’s software companies are going international much faster
because production, collaboration and demand is global.”
- George Coelho, Crane Advisor

8. Its all about growth
• Customer and revenue growth separates the global software
champions from the also-rans.
• And international expansion is central to being a global category
leader, enabling an increase in market share whilst reinforcing the
growth-value equation.
• But, it is a huge undertaking that requires a significant investment (in
cash and time), not to mention meticulous planning on how, where,
when and who should lead the charge.
“Speed is a competitive advantage. And speed comes from highly energised, motivated and
passionate people with a common vision. Repeat the vision to them repeatedly. No innovation ever
came out of large teams - when the big guys turn their guns on you with hundreds of developers,
use speed against them. And let them sink in corporate morass.”
- Andy Leaver, Crane Advisor
8

9. Why do startups launch internationally?
Sustaining or
accelerating growth.
Nearly every S-1, F-1
and 10-K reviewed for
this study includes
geographic expansion as
a key component for
revenue growth.
Revenue
Diversification
Allows the company
to diversify
revenues and risk,
adding resilience to
the business.
Sustaining Competitive
Advantage
Protects the company’s
strategic position. Allows
them to cement their
technical lead in an
increasingly competitive
global market to create
long term value.
"I founded MOVE Guides in the UK and have since expanded into the US. The challenges in
the US are that it is a bigger market with a much more competitive talent landscape so you
really do need a local presence immediately to engage in the ecosystem. The positive is that
we have found that customers, especially in the enterprise, are much more keen to be early
adopters and make faster purchase decisions.”
- Brynne Kennedy, MOVE Guides 9

10. The risks of internationalizing - how the best deal with them
• Managing a geographically dispersed
organisation
• Different customer requirements and/or
sales cycles
• Cost and complexity of localising, selling,
marketing and supporting a product for
different countries
• Dependence on 3rd parties like resellers
• Political and economic instability
Culture, core values, systems, processes wrapped
within a blanket of adaptability
Recognising upfront what worked at home may
not translate and adapting accordingly
Upfront investment & patience - commitment to
being successful as important as execution
Creating a win-win without compromising quality
Disaster recovery planning only gets you so far,
the rest is about being calm but decisive in a crisis
The Rewards of International Growth come with its own Risks and what separates success from failure
we believe can be distilled into the following:
10

11. Key Statistics on the 69 Cloud Companies
“From day one we established ourselves as a global company. That included being present
where our customers were (mostly in the US) and taking advantage of the talent and network we
had in Europe. Portugal is a small market but this was never a barrier - we knew that if we
created a product that solves a problem and were able to show traction, there were no
geographical barriers to raise capital and make it happen.”
- Cristina Fonseca, TalkDesk

12. Key stats on the publicly-listed cloud companies (1/3)
Total number of
companies analysed
69
Number of co’s with an
international presence
62
Number of co’s Founded or
HQ’d outside of the US
(Atlassian, Fleetmatics, Mimecast,
Shopify, Talend, Wix, Xero, Zendesk)
8
Average year founded
(oldest 1987, youngest 2011)
2002
Average time to $100m revenues
(fastest 4 years)
10years
Average time to IPO
(fastest 2 years, slowest 23 years)
10years
12

13. Average YoY Growth
from 2014 to 2015*
40%
Number of Companies that
have reached $500m in
annual revenues
10
Number of Companies
that have reached $1bn in
annual revenues
3
-­‐
*Only includes companies still publicly listed. n=61
Key stats on the publicly-listed cloud companies (2/3)
13

14. Key stats on the publicly-listed cloud companies (3/3)
81%
The top 15 companies
YoY Growth from 2014
to 2015
Company
Annual
Revenue
Growth
(’14-­‐’15)
Hortonworks 164.8%
Xero 103.3%
Demandware 100.6%
Shopify
95.4%
Twilio 87.9%
Appdynamics 84.0%
New
Relic 74.7%
Workday 68.0%
Castlight
Health 65.1%
Instructure 64.8%
Coupa 64.8%
Zendesk 64.4%
Tableau
Software 58.4%
Appfolio 57.3%
HubSpot 57.0%
14

15. To date 11 companies exceed $500m in revenues (but with a large young cohort hot on
their heels)
69
58
10 3
$100 million
in revenues
$500 million
in revenues
>$1 billion
in revenues
Companies with $500m in
revenues by 2015
Athena Health
Concur*
Dealertrack*
Netsuite
Tableau
Ultimate
Workday
Companies with > $1
billion in revenues by 2015
LinkedIn
Salesforce
ServiceNow
*Last year of annual revenues available was 2014. 15

16. Key Findings on Going International
“Onfido’s product is ‘global by default’ - therefore, a global team and global customers were a
natural by-product. We attracted US customers extremely early on and launched an office in
San Francisco 18 months after founding the company.”
- Eamon Jubbawy, Onfido

17. Where do companies go first and how do they decide?
What questions were we hoping to answer?
Who leads and participates in the creation and execution of the internationalization plan?1
2
3
4 What does best-in-class look like (learnings for the rest of us)?
When do you go (a core element of the plan)?
“Localisation is a journey - launch when it is just good enough. Many large SaaS companies
launched in EMEA with no data centre and no local language. Make early customers design
partners and let them help you in the journey.”
- Andy Leaver, Crane Advisor
17

18. Planning for and executing the push into a new market is a team sport
Founders
VP or GM of
International
The Board
• First and foremost, it must be
founder-led (typically the CEO).
They own the project with all
stakeholders reporting directly
into them.
• They will need to spend ample
time with prospective
customers, partners, and early
employees and be visible to the
new market before the official
launch. Get ready for lots of
flights!
• They need to dedicate time
after the planning to regularly
be in-market to demonstrate
commitment.
Team
Involvement
The Scout
• Some startups send an early senior
employee to meet existing and prospective
customers and own the due-diligence phase
of planning.
• Sometimes the scout is the first employee
for a period of time before a “local” VP or
GM is hired.
• Attributes this person needs to have:
Problem solver, resilient, entrepreneurial
and close to the CEO.
• The fastest growing companies with a good
customer base and growing pipeline in the
new market(s) skip straight to a VP of
International or GM.
• This person spends a period of time at the
HQ getting familiar with the product, sales
cycle and culture before building their team
in the new market.
• Holds the founders accountable
and should be hands-on during
the DD/research phase.
• Should help define clear
objectives and milestones.
• Ideally, at least one board
member travels with the
founder(s) on a scouting
mission to help plug them into
their local network of potential
customers, partners and
employees.
18

19. For more than 80% of US companies, London is their first launch city
Most Common First City Launched for US Headquartered companies
London
44
Dublin
5
Misc. Canada
5
“London is a great place to launch given the depth of talent and the number of enterprise customers to go after.
You can also service the rest of Europe from London - but you get to a point where you have to have sales reps
focusing exclusively on one country.”
- Scott Witucki
19

20. Non-US Companies have a slight preference for the East Coast to begin with…
Most Common First City Launched for Non-US Headquartered companies
But….Zendesk first opened an office in Boston before relocating to SF and Atlassian’s
launch in NYC was unsuccessful before subsequently successfully relocating to SF.
San Francisco
3
Boston
2
New York City
2
20

21. 75% of companies had total revenues of up to $20m the year before launching their
first international o∞ce
Total
Revenue’s
$m
Number
of
Companies
Companies
<$5m 10 Concur,
Demandware,
eGain,
HortonWorks
LivePerson,
Marin,
MobileIron,
Salesforce,
Textura,
Wix
$5-­‐10m 10
Appdynamics,
Channel
Advisor,
Cornerstone
OnDemand,
Jive,
Medidata,
Netsuite,
New
Relic,
Rally,
Talend,
Marketo
$10-­‐20m
19
Apigee,
Apptio,
BazaarVoice,
Brightcove,
Callidus,
Cvent,
E2open,
Eloqua,
Everbridge,
Five9,
LinkedIn,
MindBody,
ProofPoint,
Qualys,
RingCentral,
Tableau,
Twilio,
Veeva,
Workday
1 in 3 of companies had $10m or less in revenue the year before they launched
“Be fanatical around customer success - especially your first International customers. This success
feeds into renewals, referrals and references - the holy trinity!”
- Andy Leaver, Crane Advisor 21

22. *This metric was difficult to quantify. In most cases companies split their revenues by geo as soon as they launched internationally. In other cases where the first year international revenues were reported and they were substantial,
we based it on the year they incorporated their 1st international office. In some cases like a Zendesk where the product was global from day 1, it was difficult to quantify precisely when they technically ‘went international’.
Companies are accelerating the pace of launching internationally
Average time to launch international*
5.5 years
Median time to launch international*
4 years
Cohort
(Year
Founded)
Time
to
International
(#
of
Years)
Population
Size
(#
of
Co’s)
Sample
Companies
Pre-­‐1998 10.9 10
1998-­‐2001 5.8 18
2002-­‐2005 4.1 17
2006-­‐2011 3.4 17

23. And the youngest companies selling to developers, end users or SMBs are
internationalising the quickest
• Tend to have shorter sales cycles
• Rapid adoption from the bottom-up within large enterprise
• Generally have lower ACVs than some of their peers in B2B enterprise
• For Shopify, Wix and Xero who sell to the CEO or CFO within a small enterprise, they don’t need
to get broader buy-in internally
• There is a large group of fast growing private companies that have similar characteristics to the
companies listed below that may be going public in 2017. It will be interesting to see if the average
time for this new cohort is <3.4 years
23

24. International revenues as a percentage of total revenues
Average time for international revenues to
constitute ≥10% of total revenues
Year6
Average time for international revenues to
constitute ≥30% of total revenues
(Demandware was the quickest, achieving this
in year 4)
Year7
“You should only put people on the ground once you have a critical number of
customers to support in that region. Then you can also start up-selling them with in-
market sales people if it makes business sense.”
- Scott Witucki
24

25. Companies that are founded outside of the US internationalize much faster
Key reasons for internationalizing faster:
• In many cases, the “home” market is too small and behind in the technology adoption curve
• The US is still the largest market for enterprise software
• But, also in many cases it was because they were pulled into new markets by demand
Year2onaverage
“If we would have focused our customer development solely on local companies then we would not have
ended up with the innovative solution that TalkDesk is today. We had to pro-actively go after companies
that were much more forward looking (these were US companies to begin with) and then bring the
technology to our local ecosystem and other markets. One of the other key lessons we learned was that to
land properly in a new market, you needed a strong existing local network.”
- Cristina Fonseca, TalkDesk
25

26. Companies that are founded outside of the US internationalize much faster
Company Founded Yr
International
Started
$100m
Revenue
Yr Revenues
the
Yr
Before
International
International
Revenue
CAGR*
2002 2006 2011 n/a 32%
2004 2005 2012 n/a 48%
2003 2008 2015 n/a 11%
2006 2007 2014 n/a 111%
*CAGR was measured as the first year of international revenues available to 2015.
“As founders operating 8 hours apart, you quickly get used to 11pm calls to discuss important matters. But for the rest of
the team, we’ve built a strong culture of optimising the two hour time crossover efficiently, with live video streaming in the
office and a weekly meeting at 9am PST // 5pm GMT every Friday to sync up the whole team.”
- Eamon Jubbawy, Onfido
26

27. Companies that are founded outside of the US internationalize much faster
Company Founded Yr
International
Started
$100m
Revenue
Yr Revenues
the
Yr
Before
International
International
Revenue
CAGR*
2005 2007 -­‐ $5-­‐10m 7%
2006 2007 2015 n/a 97%
2006 2008 2014 <$5m 81%
2007 2008 2014 n/a 56%
*CAGR was measured as the first year of international revenues available to 2015.
“We had been internationalising too much and going after too many countries. It gave us a position that was ultimately
indefensible, as we had to fight local and much more focused competitors in each region. We knew three things
before deciding to open the office: that we could successfully sell to UK companies, we had depleted the local market
in Copenhagen for English speaking sales people, and we knew we had to scale more. That made the decision to
open the UK office obvious.”
- Peter Mühlmann, Trustpilot
27

28. Salesforce
*10 years is calculated from the companies’ launch date, not the date they commenced international activities.
Appdynamics
LinkedIn
MobileIron
Veeva Systems
Zendesk
Atlassian
ServiceNow
Shopify
Wix
Workday
Brightcove
Guidewire
Xero
Bazaarvoice
Box
Demandware
LogMeIn
Mimecast
6years 7years 8years 9years 10years
19 companies have surpassed $50m of international revenue in 10 years* or less
28

29. The 4 principals for launching internationally
Based on conversations with >30 founders/executives including:
- Founders / Execs from the 69 Cloud Companies
- Founders / Execs from hyper-growth privately held US and European Cloud Companies
“Price according to your local market, not your home market.” - Glenn Elliott, Reward Gateway

30. Achievements before
launching 1st
international market
Repeatable Sales
Execution at Home
Early International
Customers
Graduated from selling
to early adopters
Understanding of local
culture
Operational readiness before launching 1st international market
30

31. Achievements before
launching 1st
international market
Repeatable sales execution at home
• Forecastable growth at home
• Been through renewal cycles and
have established customer success
programmes
• Clarity on pricing structure/model
• Live marketing programs by channel
that are forecastable from one quarter
to the next
• More inbound leads than outbound
leads, which translates into a working
sales machine
• Stellar domestic growth - typically
>100% p.a.
31

32. Achievements before
launching 1st
international market
• Organic inbound leads from a new
market (but make sure your sales reps
are testing the quality of these leads)
• Must have successfully closed new
customers in the new market. It also
counts if you cross-sell to an existing
customer in a new country.
• A good understanding of how the sales
cycle differs from home market
• A deep understanding of the customer
problem or “product/country fit”. In rare
cases, new customers will use the
existing product in new ways.
• Outbound lead generation can be done
from any location - and today it’s social.
Equip all parts of the Sales Org with
social selling skills and test these
metrics in your new markets as well.
• Make your first international customers
hero’s! Brand and name your customer
event early and get them speaking and
have the press there.
Early international customers
32

33. Achievements before
launching 1st
international market
• Have ROI use cases from customers
both at home and in the new country. If
you are still selling to early adopters
then it is too early to forge into a new
market.
• Good ROI use cases also enable more
targeted marketing campaigns
• Must be able to successfully win proof of
concepts (if you are selling larger
enterprise software contracts)
• Category leaders are winners - and the
best way to lead a category is to create
it. Work hard at influencing Gartner/
Forrester into recognising your USP’s in
your category. Don’t be the footnote in
somebody else’s category!
Graduated from selling to early adopters
“Choose your fights responsibly. But
choosing a weakness of your largest
competitor and using it in PR can be
very effective - remember, when the little
dog barks, the big dog shouldn’t bark
back. If they do, you’ve arrived!
Stealth is also good - when your
competitors sales people call you
because they lost a deal unexpectedly
then hire them. They’ve seen the future!”
- Andy Leaver
33

34. Achievements before
launching 1st
international market
• When you are in a new country you
need to be able to learn really fast
• A sales manager sitting on top of 3-4
sales people to learn about culture (and
sales process). Its impossible to learn if
they are all out selling and not talking to
each other. Even if you end up selling
smaller deals because sales reps are in
the office, it is easier to coach this way.
• Sometimes the buying process is not
different, but the reasons for buying
are.
Understanding of local culture (1/3)
“As a startup achieves critical mass in the US (70-100 employees), they become less entrepreneurial. You
can’t drive around Europe with a US engine. You have to build a culture that resonates with the US team,
but is its own culture in and of itself. You have to get in a 8am work till 4pm till the tsunami of emails come
over from the us and then work until midnight.” - Russell Loarridge, Janrain
Finding talent in a new country who are a
cultural fit with your organisation is a major
challenge. Many companies send their best
employees to help establish a new market.
They are responsible for hiring the first
employees, forming partnerships and
ultimately helping to find their replacement. A
typical expat new market leader will run the
office for a period of 18-36 months.
34

35. Achievements before
launching 1st
international market
Understanding of local culture (2/3)
Buying Differences: Glenn Elliott -
Reward Gateway
UK - Need to convince someone to meet
you. If you want someone to buy from you,
you would expect to meet them as
everywhere is only 4 hours from London.
US - The effect on business process
caused by geo is that no one expects you
to meet them because everything is so
spread out. In the early days, all our sales
were completed online or over the phone.
But we have learned that you can close
bigger deals in the field. We worked
incredibly hard at getting the magic right
over video call to save time and money.
Australia - Everyone wants to meet you
because of the social culture. Need to be
strict on qualifying hard first.
On How Customers Perceive You: David
Mann - Dropbox
You need to feel like you’re part of the local
conversation and not an outsider. You don’t
want to come across like an American
company, a German company or a Chinese
company, etc. You want to come across like
an international company and one that shows
that it genuinely cares about the customer.
35

36. Achievements before
launching 1st
international market
Understanding of local culture (3/3)
On Hiring in a New Country: Mikkel Zane -
Zendesk (Startupland, 2014)
We suffered from the “Law of Jante,” a
Scandinavian mentality that urges people to be
modest. From a young age, Danes are taught,
“don’t think you are better than anyone.”
Hire for differences, not similarities: Try to have
as many cultures and backgrounds as
possible. Tech companies can become a
posse of young white men living in jeans and
hoodies. But having diverse backgrounds
creates a much better culture. There is a
tendency to think that everyone needs some
common ground, but that’s a myth. It’s much
better to be like the United Nations, made of
different cultures and backgrounds, and to be
forced to make it work and to find a common
language. A diverse workforce enables the
company to make sure no predominant group
sets the tone. Instead the company finds its
own common tone.
On Global Culture: Alex Kayyal,
Salesforce Ventures
Make going global a cultural point. The more
you prepare for expanding internationally, the
better your chances of succeeding. Beyond
just go-to-market, the opportunity is to build a
global culture from day one.
36

37. First 5 steps to take in the internationalization process
1. Conduct due diligence and a thorough analysis on a new market.
2. Invest into building market awareness and end customer demand from customers before
opening an office.
3. Focus at the smaller end of your typical annual contract value so you are not getting stuck in
long sales cycles. It is imperative to build reference-able “local” customers asap.
4. Ensure you use the same effective marketing campaigns and language used in the early days
of finding your first customers. In a new market, users are not as well educated yet.
5. Focus on getting the right procedures in place including legal entities and structures as well as
tax planning.
37

38. Acommon operating strategy
1. Establish a
beachhead
3. Build field sales2. Grow early
customer base
1. Establish a beachhead: The first customers in a new market
will almost always be sold to from a local HQ. It is imperative
to have local customers plus existing demand from new
potential customers before putting employees on the ground
and opening a new office. One company established 30% of
their total revenues from a new market through an inside
sales team before opening an office!
2. Grow early customer base: Once you have opened the
office, it is important to gain local references and case studies
before starting to make additional sales and marketing hires.
3. Build field sales: Once a dominant position has been
established in the new country, it is important to start forming
partnerships and a field sales force to graduate to larger
enterprise customers.
This is the playbook from a large number of companies interviewed
for this study:
International
Launch
38

39. International launch timeline - an illustrative approach
Company
founded
$100k
MRR
+
1st
few
interna.onal
customers
$1-­‐3m
ARR:
commence
due
diligence.
Send
scout
&
founders
start
spending
.me
in
new
market.
Board
buy-­‐in.
Set
goals
and
forecasts
with
Board.
Finalise
overall
plan.
Create
a
100
day
plan.
First
renewal
and
up-­‐sell
cycles.
Strong
convic.on
on
pricing.
Clear
evidence
marke.ng
campaigns
are
effec.ve.
$2-­‐5m
ARR:
Officially
launch
first
international
office
First
100
days
lesson’s
learned
for
internal
Interna.onal
Playbook.
39

40. Salesforce Case Study

41. Salesforce
was
founded
in
1999*
in
California
and
are
the
largest
pure-­‐play
SaaS
company
in
the
world.
When
they
IPO’d
5
years
later
they
already
had
offices
all
across
Europe
and
in
Japan.
They
had
total
revenues
of
$5.4m
in
2000
and
$22m
in
2001
and
interna.onal
revenues
were
$135k
and
$2.1m
in
the
corresponding
years.
In
2015,
they
had
over
$6.6bn
in
revenue,
30%/c$2bn
of
which
came
from
customers
located
outside
of
the
US.
CEO
and
Founder,
Marc
Benioff
had
considered
the
interna.onal
poten.al
of
their
service
from
the
very
earliest
days
of
the
company.
They
had
built
the
Salesforce
applicaon
so
that
the
user
could
configure
it
to
any
currency
and
almost
any
language
(even
character-­‐based
languages).
Salesforce’s
internaonal
expansion
began
in
February
2000**
when
the
Irish
soMware
execu.ve
Fergus
Gloster
emailed
Marc
asking
what
he
was
doing
about
Europe.
Fergus
and
a
small
team
launched
the
first
European
office
in
Dublin
later
that
year.
They
hired
na.ve
speakers
so
when
a
German
customer
called,
they
thought
they
were
speaking
to
someone
in
Frankfurt
and
so
on.
They
ensured
that
callers
got
to
the
right
employee
by
having
them
call
into
local
phone
numbers.
They
also
used
email
and
online
forms
to
capture
leads
and
then
responded
to
these
online
inquiries
in
the
language
of
the
inquirer.
This
level
of
customer
service
was
unheard
of
in
2000
and
was
one
of
the
many
reasons
Salesforce
built
a
passionate
early
customer
base
who
referred
other
customers
to
the
plarorm.
Salesforce - a global product from day one (1/3)
* Revenue and international percentage data taken from Capital IQ and Salesforce 2015 10-K.
**Qualitative data taken from Benioff, Marc. (2009). Behind the Cloud.
41

42. Total
Annual
Revenues
in
billions
‘(000)
Salesforce (2/3)
Percentage
of
Revenue
by
Geography
Vitals:
• Founded
in
1999
and
launched
in
Dublin,
Ireland
in
2000
and
in
London
(via
Surrey)
shortly
thereaMer
• Reached
$100m
revenues
in
2004
• Reached
$50m
of
interna.onal
revenues
in
2005
• Interna.onal
CAGR
from
2000
to
2015:
94%
• Reached
10%
of
interna.onal
revenues
in
3
years,
20%
in
5
years
and
30%
in
11
years
42

43. Key
Learnings:
Benioff
believes
that
a
good
guideline
for
global
strategy
is
to
think
about
the
early
start-­‐up
days
and
how
you
got
your
first
customers
and
how
you
tackled
early
challenges.
He
also
suggests
using
the
original
messaging,
not
the
current
messaging
of
the
company
because
it
is
difficult
to
launch
in
a
new
country
and
replicate
what
the
company
is
currently
doing
at
home.
It’s
possible
that
the
new
market
isn’t
mature
enough
yet
for
your
product.
He
has
three
rules
to
help
save
infrastructure
costs**:
1.
Translate
the
product
on
day
one
to
the
major
languages,
but
only
add
addi.onal
languages
as
customer
demand
builds.
In
Europe
they
found
merit
to
the
“80-­‐20
rule,”
whereby
80
percent
of
the
revenue
comes
from
20
percent
of
the
languages
spoken
in
the
region.
2.
Build
a
bedrock
of
small
customers
in
each
country
before
hiring
local
employees.
This
proves
that
the
market
is
ready
and
the
commitment
is
worth
it.
3.
Don’t
over
hire.
Employment
laws
overseas
are
complicated
and
largely
favour
the
employee.
When
hiring
sales
and
customer
service
people,
adhere
to
the
same
standards
that
you
would
in
the
home
office.
Salesforce (3/3)
**Benioff, Marc. (2009). Behind the Cloud. San Francisco: Jossey-Bass, pp. 174-175. 43

44. Conclusion

45. In conclusion - No one size fits all
The
only
certainty,
from
our
analysis
of
the
69
companies
and
our
own
experience
suppor.ng
startups
over
many
years,
is
that
every
startup
is
different.
Whether
your
startup
was
founded
in
con.nental
Europe,
Israel,
the
UK
or
US,
understanding
the
unique
challenges
for
a
successful
interna.onal
launch
are
vitally
important.
For
European
companies
in
par.cular,
there
is
an
ac.ve
debate
on
whether
founders
should
(i)
move
early
on
to
the
US
to
launch
and
pursue
customer
development
and
then
stay
(ii)
move
the
en.re
company
there
and
re-­‐headquarter
in
the
first
few
years
(similar
to
Zendesk)
or
(iii)
wait
un.l
the
.ming
is
right
and
launch
a
US
office
and
send
a
founder
or
an
early
senior
employee
there
to
run
it.
We
have
seen
all
three
of
these
strategies
work
well.
It
is
easier
than
ever
to
launch
and
grow
a
startup
from
anywhere
in
the
world
with
open
source
soMware,
cloud
services
and
free
communica.on
tools
and
the
growing
numbers
of
highly
qualified
technical
people
coalescing
in
every
major
hub.
Nothing
can
replace
the
levels
of
determina.on
found
at
any
startup
-­‐
when
coupled
with
the
the
right
culture
and
playing
to
your
strengths/unique
advantages
your
company
could
have
if
you
retain
the
HQ
or
engineering
team
in
your
home
City,
crea.ng
a
global
soMware
champion,
in
our
opinion,
is
determinis.c
and
in
your
hands.
With
that,
we
thank
you
for
your
.me,
aaen.on
and
contribu.ons
and
would
like
to
leave
you
with
Crane’s
10
Commandments
for
launching
into
your
first
new
market/country.
45

46. 1. Think like a global company from the start
2. Develop a product so it can be localised easily
3. Consider a range of go-to-market strategies before committing to one
4. See where the market pulls you, don’t force yourself into a new market unless absolutely necessary
5. Test selling to a new market from your HQ before sending your first employee over permanently
6. Send a founder or early senior executive to launch your first international office
7. Integrate your local hires into the company by training them in your company’s HQ
8. Allow each office to build their own culture while retaining the core pillars of the company’s culture
9. Set organizational goals for the international business
10. Focus on one market at a time and record your learnings
Crane’s 10 commandments for launching internationally
46

47. Methodology andAppendix

48. Methodology
• Only cloud based B2B tech companies listed on stock exchanges globally were included.
• The companies needed to derive >50% of their revenues from subscription licenses.
• As companies only report a few of years historic financials in their S-1 or F-1 prior to listing, full historic financials and/or
complete data on the geographic revenue splits were not always available. For this report, revenues have been split between
domestic (their home country in most cases) vs. international. In some cases it was possible to split revenues by country or
region, but not for every year.
• In almost every case calendar year revenues are used with the exception of a few companies with January or April year ends. In
these cases we have taken the financial year’s data.
• All figures are reported in USD (Xero is the only co where we used historical fx rates to convert into USD).
• Sources included S-1’s, F-1’s and 10-K’s filed with the SEC. Other databases included CapitalIQ, Google Finance, Crunchbase,
Duedil and interviews with executives from some of these companies.
• Nine** companies in this study are no longer public (having been acquired) but were included nonetheless as good financial
data was available
• This report only covers data up until the full 2015 financial year. It will be updated periodically once further 10-K’s are issued and
more companies list.
**Concur acquired by SAP in 2014, Constant Contact acquired by Endurance in 2015, Dealertrack acquired by Cox in 2015, Demandware acquired by Salesforce in 2016, E2open taken private by
Insight Venture Partners in 2015, Eloqua acquired by Oracle in 2013, ExactTarget acquired by Salesforce in 2013, inContact acquired by Nice in 2016, Rally Software acquired by CA in 2015 48

49. Going international =Year first international o∞ce incorporated
For this report:
• In most cases, this corresponded to when a company first started booking or
recognizing international revenues.
• Where incorporation documents could not be found or did not match with a
company’s international revenues, data from SEC filings were used.-­‐
49

50. The Suspects - 69 in total
2U Box Cvent
Guidewire
Software
Marin Software Qualys
Textura
Corporation
Apigee
Corporation
Brightcove
Dealertrack
Technologies*
Hortonworks Marketo Rally Software* Ultimate Software
Appdynamics Broadsoft Demandware* HubSpot
Medidata
Solutions
RealPage Twilio
Appfolio Callidus Software E2open* inContact* Mimecast RingCentral Veeva Systems
Apptio Castlight Health
eGain
Corporation
Instructure Mindbody Salesforce.com Wix.com
AthenaHealth ChannelAdvisor Eloqua* IntraLinks MobileIron ServiceNow Workday
Atlassian
Concur
Technologies*
Everbridge Jive Software NetSuite Shopify xactly
Bazaarvoice Constant Contact* ExactTarget* LinkedIn New Relic SPS Commerce Xero
BenefitFocus
Cornerstone
OnDemand
Five9 Liveperson Paycom Software Tableau Software Zendesk
Blackline Coupa
Fleetmatics
Group
LogMeIn Proofpoint Talend
*Denotes that a particular company is no longer a publicly held company after being taken private or being acquired by another publicly listed company.
50

51. 2U Box Cvent
Guidewire
Software
Marin Software Qualys
Textura
Corporation
Apigee
Corporation
Brightcove
Dealertrack
Technologies*
Hortonworks Marketo Rally Software* Ultimate Software
Appdynamics Broadsoft Demandware* HubSpot
Medidata
Solutions
RealPage Twilio
Appfolio Callidus Software E2open* inContact* Mimecast RingCentral Veeva Systems
Apptio Castlight Health
eGain
Corporation
Instructure Mindbody Salesforce.com Wix.com
AthenaHealth ChannelAdvisor Eloqua* IntraLinks MobileIron ServiceNow Workday
Atlassian
Concur
Technologies*
Everbridge Jive Software NetSuite Shopify xactly
Bazaarvoice Constant Contact ExactTarget* LinkedIn New Relic SPS Commerce Xero
BenefitFocus
Cornerstone
OnDemand
Five9 Liveperson Paycom Software Tableau Software Zendesk
Blackline Coupa
Fleetmatics
Group
LogMeIn Proofpoint Talend
*Denotes that a particular company is no longer a publicly held company after being taken private or being acquired by another publicly listed company.
62 of the 69 (90%) have an international presence
51

52. • 2U (education)
• Appfolio (real estate)
• Athena Health
• Castlight Health
IndustryCloud
Companies
• Benefit Focus
• Constant Contact
• Paycom Software
Non-Market
Leaders
Focusing on vertical markets in the U.S. to start
with. Very different regulatory environments and
end users outside of US.
If you don’t dominate in your home market, its
hard to do well internationally. Many companies
can’t afford international operations because
they’re fighting big battles at home.
Only a few cloud companies have not made the push internationally
52

53. @Crane_VC
medium.com/crane-­‐taking-­‐flight