How to Expand Internationally – Lesson From VP of Growth @ LinkedIn (Video + Transcript)

At SaaStr Annual earlier this year, VP of Growth at LinkedIn, Aatif Awan, had a session on expanding internationally. Has your SaaS startup gone global? If so, what tips and tricks do you feel helped you get to that point? His 6 step framework can be applied to any business looking to generate revenue outside of the U.S.

Also, don’t miss out on discounted prices for SaaStr Annual 2019 tickets.

Transcript

Aatif Awan

Hello everyone. They used to say when America sneezes, the world catches a cold. I’m curious how many people have not heard of this? There are quite a few folks. That’s okay, because it’s becoming less and less true. What the phrase refers to is the singular impact American economy has on the global economy, and what’s happening today is that the world is very different. If you look at the global economy, while US is still the largest, there are other contenders. If you look at China, Japan, and India combined, essentially the same size as the US, and this chart is representing, they’re here to present the size of the economy. So you can see Europe is a pretty big block here as well.

The point here is that there are massive opportunities outside of the US today that all of us need to be thinking about. If you care about growth at all, which I’m sure all of you do, the picture is even starker, not even close. So what this is showing is, the breakdown of six and a half trillion dollars growth in the world GDP from 2017 to 2019, and China has a lion’s share, more than one-third, so two trillion dollars. US, just half of that, a trillion, and India and Europe combined is the same as the US.

So lots of opportunities outside the US, but despite that, companies are not capitalizing fully on these global opportunities. If you look at S&P 500 and break down companies between those who have more global exposure, so 50% of the revenue is coming from outside the US represented by green, and compare their growth in revenue, growth in earnings, to companies that have less than 50% global exposure.

It’s a huge difference. You grow much, much faster when you start focusing on global, but despite that, only 43% of S&P 500 revenue today is coming from outside the US. And I wanted to set this context because a lot of people do not still get this, and if they know about it, then they think it’s too hard to capitalize on these opportunities. And I’ll show you today that it’s not actually, and I do that by talking through LinkedIn’s growth story, which is the next thing I’ll talk about. And then we’ll go into the key lessons we have learned as part of growing LinkedIn.

So before I go into LinkedIn, my context, I am VP of growth at LinkedIn for international growth and data products. I’ve been there seven years, and it’s been amazing to be part of this growth story in that time. And most recently, as part of my software acquisition, I’m also leading the product integration with Microsoft.

So when you think LinkedIn’s growth, let’s go back all the way to 2004. We have this tradition at LinkedIn of taking these milestone photos, and it started in 2004 when you see these 12 people, very early folks, were taking the first of those photos for the 500,000 member milestone. There’s a funny story about that. The team had bought this really nice, expensive bottle of whiskey. They were saving that for actually the one million member milestone, and it was early. So growth was slow. They were waiting and waiting and waiting and waiting, and then one day they figured, hey 500,000 is a big enough milestone. Let’s open the bottle.

13 years later, 2017, last year we celebrated five-hundred million members. That’s a thousand times growth, and it’s been amazing journey to see that. And that growth would not have happened if LinkedIn wasn’t global. You cannot get to that scale with just US. In fact, if you look at LinkedIn membership, it’s distributed all over the globe. In fact, looking at EMEA as a region, US and Canada as a region, they’re roughly comparable. Asia and Pacific is not that far behind, and even LATAM, that’s 75 million members.

So pretty wide representation from across the globe. We have offices in 32 cities across the world, and it’s not just about the number of members. If you look at engagement, today 70% plus of our engagement, which we measure by sessions, actually is happening out of the US. So that global growth story has been very important for LinkedIn, and what I would like to do is walk you through the early years and break this growth curve into three distinct stages and walk through how our journey unfolded over these years.

So the first stage is from the years 2003, when the company was founded, to 2007, and then is when you’re just starting to figure out what the right product is. You’re talking to users and building and finding product market fit. What was important here was that LinkedIn built growths into the product right from the beginning, and that was really crucial. If you are a market player, so if you’re a network, you have to do that because if there are not enough users, nobody will get value out of it.

Then Reid Hoffman and our founding team, they kick started the waddle growth by actually pulling in their contact layers and writing people, and that was a very good set of people that modeled the behavior for community because they were entrepreneurs. They were lessees, founders, et cetera. At the same time, soon after we launched public profile, now I imagine, before LinkedIn when you had a meeting, what did you used to do? You know? You had no idea if somebody reached out to you in a meeting about them, you could google them, but mostly it was just their public website, and now LinkedIn changed that through public profiles. And that became a really big driver for us for growth because we capitalized on that behavior in human curiosity and showed people when they search in Google whoever they were looking for. And then through that people realized, oh, I should have a profile too.

So that was a big growth channel and for us. Now what’s interesting is, without doing anything, even in this first stage, the international growth started to happen. That was because the product was in English, but a lot of the world speaks English, and because we were growing widely, and a lot of people in US are connected to people in UK and Canada and Europe and India, those people started to join the network, although very slowly. But we started to get some numbers and during this period we reached about 17 million members.

So the next ways is the 2008 to 2011. So those four years, the growth really accelerated, and that was because we started a cross-functional growth team which is really important as you think about growth and growing internationally. Having a dedicated, cross-functional team who’s true north is driving that core growth, that’s fundamental. This team was really focused on acquisition though, and what they were doing is, they were identifying a key channel to talk vital growth in SCO, and then breaking it down into the drivers and optimizing each of those drivers.

But we also started focusing a lot more on international expansion. So this is when we started translating the site into French and German and a bunch of other languages, and what we observed was, every single time we translated into a new language, very easily we’ll double our growth rate in that market. So that’s a starting point, and we’ll talk more about it. And it doesn’t have to be that expensive. You can do it in house, and you can find companies that will do it for you. But really…And at the same time as we started getting global members, we created a global sales team to capitalize and monetize that growth.

Then the third stage, which started in 2012 and lasted to last year, is where we really scaled our growth team. So we moved from just acquisition and sign-ups, to actually looking at the entire member life cycle. So we’re looking at activation, how people connect with others, how do we retain and reengage them through notifications? And we started focusing on quality growth because the engagement became more and more important. So LinkedIn at this stage, went from just being a place where you respond to recruiters and find jobs, to actually staying up-to-date with your industry and engaging with other professionals. And that’s why we moved from sign-ups to quality sign-ups to what we call engaged, quality members. So these are people who have a large enough network. They’ve a good profile, and they’re engaging repeatedly with LinkedIn.

The international expansion at this stage, massively. One, we expanded the number of languages we supported to 24. So that, you know, gives us pretty broad coverage. We invested very heavily in mobile and partnerships. So this is the time, and mobile is taking over the world. And internationally was more important because in markets like China and India, they kind of by-passed desktop and email. So we had to do mobile, and partnerships became a very important channel as well, which I will talk more about later.

We also started realizing that, yes. The localization effort is good, but there’s some markets that are going to be harder. And we’ll need dedicated teams to go after them. So for China, India, Germany and Japan, we had dedicated teams who would just focus on those markets. So that can become important too, depending on the difficulty of market, and we continued to expand the global sales team through this.

So that, you know, gives you pretty good context and overall framework for how LinkedIn’s growth worked, and now I want to dive into the key lessons that we learned during this growth stretch. So the first one, you know, which is really important for any business, is you have to start with developing a prioritization framework because you don’t want to be in endless meeting with different people saying, “Oh, no. I think that market is important. No, I think we should invest more in Europe.” And not have a common basis and common language to talk about it.

And how you build that framework, you have to think about how it matters to your mission and vision. LinkedIn is already mission and vision driven company. So vision is to create economic opportunity for every member of the global workforce. So you have the word global right there. So that was easy. Our mission is connecting world’s professionals to make them more productive and successful. The same thing. We’re talking about the entire world’s professionals.

So from that perspective you realize that we want every single professional LinkedIn, and that was helpful because sometimes you’ll have these debates with the sales teams. Oh, are members in a certain market, like India or Brazil really that valuable? And we’d say fine, they’re not valuable today, but still important to our mission. In order to believe this over time, you’ll be able to monetize them as well.

After you’ve figured out that, then obviously you have to look at a number of dimensions, and you’re looking at how good does your product market fit in these markets. So just because you have product market fit in the US doesn’t mean the product also works equally well in a different country. So you can access all of these markets, and that dimension, you can look at what your headroom for user and customer growth. And finally you can look at how valuable those users and customers are, and what’s the monetization upside?

So this chart here on the side, this is just illustrative, doesn’t represent LinkedIn’s priorities, but you can plot something like this. And what the benefit of that is, it will automatically cluster things. So you’ll see here that US shows up pretty low on the user upside because you’re probably doing well there. That’s where you started. Product market for it’s good, but then other markets there may be more growth opportunities. And some markets you may not have product market fit, and you can put that together to say hey, we can think of some markets as core, which is we have good product market fit. We’re gonna invest in them, and they’re gonna be relatively easy and predictable to monetize. Some markets are strategic, where maybe the product market fit is not as good, but they are really important. They’re big markets. You have to get it right. It’s worth making the effort and making that strategic investment in them.

So usually, a market like China or India and some of the Europe would fall into that, and then finally, there may be markets that are just too hard. So Japan is such a market for us, and we think of it a venture market because we’re not really sure if LinkedIn’s value propositions work in Japan because people really don’t change jobs that often. So there’s this concept of an implied loyalty, lifetime work, and median number of job changes is one in people’s career. So you have to do something different, and we believe we can. But you have to think through very carefully.

And the final point there is, make this a long term opportunity analysis. So it’s not about where the world is today. Look at where it’s going. So where are the opportunities of the future going to come from, and make sure that is baked into this analysis. So if you do this, you will have a pretty good portfolio of core, strategic, and venture markets, and everybody can be aligned around that. At any given time, you can allocate your investments accordingly between those three categories.

So the next thing is you wanna start and get some quick wins, right? So start with the really high ROI, very basic localization initiatives, and, as I mentioned earlier, when I would retranslate our site into a different language, we would get immediate, double the growth rate. So this is the easy one, and especially for a lot of enterprise products, there’s not that much to localize, you know. You can do it in house. You can hire services. You can even crowd source it to users. There are a number of ways of doing that, but that’s the starting point. You have to really do it, and you’ll see immediate ROI.

But what does it mean to localize a market. It starts with translation, but translation is not just word-to-word copy. It includes the meaning of it. It includes tone and voice. It includes things like, in the US we defer to school very broadly. In India, school just means high school. So you cannot use school as the translation. You have to talk about college and university very separately and very distinctly and so on. So you want to take into account things like that as well.

The next thing that you wanna think about is, for your key flows, you want to really optimize that copy by country. So you’ve done the translations, but quite often, you’ll see how you message a certain action to users makes a big difference. And that’s the value of maybe testing different messages. And one of the things you can do is, you can come up with gradients, translate that in your key languages and test it differently for different markets. And you’ll find some really good vents out of that because how people are motivated is also different from market to market. So different centers would appeal to different people. So that’s a very easy test if you have the scale and also very high ROI.

And then you wanna start getting into a little bit more complex, but still relatively simple things, like local payment methods. So different payment priorities in different market. These days it’s very easy if you go with Stripe or some other provider. So you’re gonna just make sure you’re doing that. Localizing content. So if you are using content marketing to drive traffic, again making sure you have localized content. If you’re talking about the companies that are using your product, don’t just use the US companies. If you are selling in Europe as well, then use those companies in that copy and just have that. And again, hiding some local editors, local customer service, BD marketing. You wanna start doing that because those things are going to be very easy and allow you to scale in these markets.

So that’s the first stage. After that, you want to think in terms of values to adoption. A lot of what growth and expansion is, it’s moving these barriers and friction points, right? And you want to understand them, both through qualitative research, where you talk to users, understand like what are their pinpoints, what is stopping them from doing certain things. And also quantitative analysis. So hopefully you are tracking every single user action. You’ve built funnels out of that. Start looking at that by the country breakdown, and you’ll see very interesting things pop out of that where, oh this flow works so smoothly. But here, you’re dropping a lot of customers after, and they’re just ready to buy. And that’s how you’ll figure out, oh maybe the pricing is not right and do something about it.

And some of the common barriers are just the user input fields. You know, you get a product manager who’s based in the US, grew up here. They’ll design the flow a certain way, and it won’t make any sense in a different market in terms of the data they’re asking. So if you’re asking for zip codes for example, or state, not every country has states. Site speed is a very common one. So that was something we realized, that our site and our expediences were working, flying in the US and Europe, but when you go to India it was really slow. It’s taking five seconds to load a page, and nobody has the patience to wait five seconds to load a page.

So that led to a project we called LinkedIn Lite, and we had a dedicated team go over the entire LinkedIn expedience, strip it down to the bare bones, started with the mobile web expedience, then built the LinkedIn Lite up. And that has been a huge driver for growth for us in India, and then we expanded it to developing markets. Now it’s live in 60 plus markets. So you wanna figure out those things, and then go after them.

Finally, pricing is a big issue that US price point and willingness to pay is very different compared to some other markets. So you definitely wanna try that, and a general rule of thumb for a lot of the development market is you immediately wanna slash it by a third. You know, that’s the price point around which you wanna test, but a lot of people don’t bother. And then, they say, “Oh, we’re not monetizing in this market,” and it becomes sort of a self-fulfilling prophecy of okay, this maybe we can’t monetize here. But you have to really test the price point to figure that out.

Then you have to also think about the growth channels that you’re building, in general. So for us I talked about SE and waddle growth. Are they going to scale across the walls or not? And data will tell you whether they will or not. For us, what happened was both SE and waddle growths, so we’re depending on two channels, they both didn’t quite work that well in the rest of the world as they did in the US. SE was relatively easy because Google is still dominant in most of the world. We had to do some work around how you have content in multiple languages and still tell Google that this is the same content and not duplicate. But that was relatively easy. China you have to work it by doing 360. So that’s a different story, but we invested in that to make sure to get it right.

Waddle growth was very, very difficult. So if you think about LinkedIn’s waddle growth flow, what is it? It’s basically people importing their contacts, connecting with people already on LinkedIn, and then inviting others who are not on LinkedIn to LinkedIn. And that’s accounted for almost half of our sign-ups. So that 546 million people, 223 of them actually were invited by somebody to join LinkedIn. Now the problem was, the entire flow, everything was built based on this assumption that people have emails. And that was a fine assumption in 2003 when we were just building a product for the US, didn’t work out when you go to China and India, and people by-pass email for the most part. Also didn’t work for a lot of younger people because email just became different. It’s for work, or it’s for companies communicating with you. And mobile became really the important.

And then we had to go and do this massive project that we called project Digits to take our waddle growth engine from email and transition it to mobile’s phone graph and SMS based invitations. And that was a massive effort, but it paid out because now we got to a point where for China and India waddle growth engine start working. And that was really important for us to be successful in those markets. One thing to keep in mind as you are early in the history of the company, thinking of these things upfront will save you a lot of work. So if we had thought about, oh it’s possible that people could invite people over a phone number, we wouldn’t have to go and manually scrub 4,000 or 6,000 place in the core where email was being directly different and so on. It was just too painful, but it doesn’t have to be. Same thing goes for payment methods. Like whatever you can come up with abstractions, that will allow you to scale in multiple markets. Definitely design for that.

So another vector that becomes very important internationally is partnerships and government relations. In the US, partnerships can be effective. Like for us, it wasn’t the case. We grew off the other channels I mentioned, but once we were thinking about international growth, it was really fascinating. I think as US companies, we have this advantage of name recognition and mind share. A lot of people internationally actually want to work with the US companies. So when we went to China, we started, we had four million members in a country that has a billion and a half people, and 160, 150 million professionals and students. So very small. We did not have much to offer our partners to be honest, at that scale.

Despite that, we’d go and talk to companies, and they’d be very interested because globally we were a large network. And the Chinese companies were trying to make their mark outside of China. So there was an interesting play which is why we’re able to partner with, basically, the who’s who of tech in China. So at 10 cent we had WeChat, Alipay, JD.com, which is the Amazon of China, Huawei which is the largest smartphone makers, and those partnerships were very important to our growth, actually. And I think that’s where, even if that hasn’t worked for you in the US, you have to just go and start those conversations, and you’d be surprised how often it’s not a dollar for dollar value exchange. And it could be a lot of soft stuff that you can bring to the table that companies would be interested in.

Government relations also becomes very important because the regulations are very different in different markets, and that was one of the things that LinkedIn got right as we entered in China. We had one of the few companies that had been successful in China because we learned from the mistakes that others had made in terms of just ignoring the government and just doing their thing. So we talked with the government. We built those relationships, and we asked ourselves, what does it take to comply with the local laws?

And that doesn’t mean you give up on your philosophy, your principles, but you have to have that conversation. It’s just like any other negotiation, but that’s very important. On the positive side, I think if you build relations with the government, so I have a picture Jeff Weiner, who’s our CEO, with Narendra Modi, the prime minister of India. It was like … We planned a visit. We were able to strike a partnership with the government of India very quickly, which was helping people get jobs in India, and it just did so much for our growth there because of the publicity we got, because of the new growth channels it started. So that’s also very important angle that the governments are looking to show results, and if you can help them in that, they are very eager to work with you.

Alright, so the final point is evangelize global growth early and often, and this is the last point, but I think this is as important as the first one of building that prioritization model because it’s human nature to just focus on what’s near us. So you’ll tell people global is important, and then they’ll do their quarterly planning. And they’ll say, “Oh, yeah. We did some user research in San Francisco. This is what we heard. This is what we’re going to go and do.” So you have to really repeat this. Until you get sick of hearing it yourself, you haven’t repeated it enough.

And you want to make that part of the company’s mission. Why limit yourself to just one country? Why not target the entire globe? And get your exact team really excited about that, and then have them become the evangelists because that will matter. That’s how culture changes in a company. The interesting and kind of funny part is, we had a really good head of product in China, Henry, and he started this tradition of saying, “Hey, let’s take a bunch of you guys to China.” So he organized this trip, and it was a whirlwind tour.

We were there for a week. We went through five cities all across the length of China, met a lot of tech companies, but it had such a profound impact on everyone who’s part of this trip in terms of understanding of China, how big it is, how fast people are moving there. Those people came back. They became really advocates of, no, no, no. We gotta go and do China right. And then we repeated, took that playbook, and we did that for Japan and Germany and India. So that’s a good tactic to get people really immersed in the market so they can understand it.

Awesome. So quick recap. We talked about international expansion. It’s a big growth opportunity. A lot of people don’t realize it. LinkedIn, super global company, 70% of our growth and engagement is out of the US, and we talked about six rules. So develop a long term market, prioritization framework, start with the high level, higher writings first, in terms of localization, starting with translation. Then think about removing barriers to global adoption in each market that you care about, and then, once you’ve done that, that’s the basic stuff. You really start thinking about how to scale your growth channels to be truly global in nature. And partnerships and government relations, don’t discount them. They can be big in these markets, and finally, always be evangelizing growth.

And final thought I will leave you with is, this quote by Chris Gardner, who is the author of ‘Pursuit of Happiness’. How many people have seen the movie? Yeah, so read the book as well. It’s a really good book, and he’s such an inspirational person. His life story, it’s amazing. He says, “The world is your oyster. It’s up to you to find the pearls.” So go find them. Thank you.

Published on September 27, 2018

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