What do Citibank, AOL, and Germany’s Priori Data all have in common? They’ve successfully used Australia as a test market for a tech product or service to drive strategic business strategies, optimise R & D spend, and launch new global offerings.
Market testing can be a key indicator of success in other markets or on a global scale, and is arguably critical before the global launch of any new product or service. Particularly in the tech sector, with new players entering and disrupting industries every day, it is critical to always thoroughly assess whether the product is actually usable and has the right go-to-market approach supporting its delivery. This includes pricing structures, supporting infrastructure, documentation, and product support.
For tech leaders who don’t know where to start, my advice is to try Australia.
Ideal for set up and testing
While the US offers the world’s largest economy and most technologically advanced nation, this doesn’t necessarily make it an ideal environment to test a feature, product, or even new business model. Australia is big enough to have the diversity and the nuances of a major economy, while being small enough to not have to scale the product extensively to go to market. This is especially beneficial for established tech companies who may want to test new business models or innovations without risking their brand in their core markets.
Geographically, while the US and Australia are similar in physical size, the bulk of Australia’s business leaders reside within proximity to each other on the East Coast — in Sydney, Melbourne, or Canberra. In contrast to the US, this makes it far easier to build close relationships with clients, partners, and vendors through face-to-face interactions.
Furthermore, the R & D tax credits available in Australia are an incentive to set up engineering and development here. Australia is home to incredible talent, but without the high cost of engineering relative to Silicon Valley.
That said, businesses do have to work a little harder in Australia, because of its smaller size, to crack the market compared to the US. This is largely due to the sheer size of the US market and the fact that its niches are big enough to make even small businesses viable.
A launch pad into the US
After success in one market with one product, it can be tempting to then launch more products simultaneously when making the move to the next market. It’s important to not let success lead to irrational optimism — focus on the success of 1-2 products in multiple markets, rather than on trying to juggle multiple products in multiple markets.
Once the product has finished its testing phase in Australia, it’s the similarities with the US market that make it relatively simple to take that international leap. Australia and the US share a similar GDP per capita, English as a main language, stable democratic governments, strong economic stability, good IP protection, and cosmopolitan cultures. Both countries also eagerly adopt innovative, progressive technology.
Keep in mind that it takes 1-2 years of investment to become successful in the US unless the concept is genuinely groundbreaking. This is especially true in the enterprise market, which has a lot of players entering with short-term goals, visions, and attitudes. Successful business leaders will be in it for the long term, never expecting overnight success.
Finally, don’t be tempted by a ‘big bang’ approach to the US market. Small steps are fine, and combining them with a growing US network of connections, customers, and partners is ideal. Build relationships as early as possible and, where you can, try to build connections between your Australian and US customers as well.
Alok Kulkarni is Co-Founder and CEO of Cyara
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