When I talked to Dhruvil Sanghvi for the first time, I could sense the same level of hustle and vigor characteristic to successful entrepreneurs. Dhruvil is the co-founder of LogiNext, the fastest growing logistics and field service optimization company. After graduating from Carnegie Mellon University with Manisha Raisinghani, the tech brain behind LogiNext, he started his career with Deloitte Consulting, helped Fortune 500 companies convert data into business intelligence and moved on start LogiNext. His credentials include being named as a Forbes Top 30 Under 30 and being a mentor to entrepreneurs and an early stage venture investor in startups.
In short, at 27, Dhruvil is doing something (or many things) right.
The journey towards becoming a global enterprise may look like an overnight success but has a series of carefully executed business strategies.
Here are his 7 tips to make sure your first international expansion isn’t your last.
#1. Assess both the online and offline markets.
The offline assessment method:
Explore a market offline by analyzing your internal strengths, weaknesses, external threats and opportunities. Is there a gap between the problem and the existing solutions? Carry out a survey to find if the problem you’re trying to solve exists in that country.
While selecting the best market and industry to cater to, consider the cost being saved for the end user.
Dhruvil suggests to set up physical offices and account management teams after gaining a strong presence in terms of paying customers.
The online assessment method:
Being SaaS based, they get queries from across the globe. The subscription model allows anyone from any country to log in to their website and subscribe for the plan. First time users can opt for a 15 day trial period where the solution is integrated and an account manager is assigned to try the product before buying.
Their product is accessible from any location globally. This eliminates the need to be physically present in multiple locations, yet have a global presence. The SaaS model helps to understand the response their product generates in different geographic locations.
#2. Capturing international markets.
LogiNext’s first international expansion was in UAE and Saudi Arabia. Due to a lot of inbound interest in the product, they did not have to push it much. Customers were interested in the solution and they closed 20% sales before starting their operations there.
Why did they choose the Middle East?
He says, it is geographically nearby to their back-end technology office which is in India. The cost of living, sales and hiring are low. Moreover the chances of cracking it as the first global market were greater owing to the lack of considerable competition.
The second market they captured was South East Asia starting with Singapore, Malaysia and Indonesia, the countries facing problems similar to the ones faced in Middle East and India. The existing logistics solutions were relatively less automated. The opportunity was ripe to immediately jump into that market.
After capturing these markets, LogiNext started getting noticed in the global market of San Francisco, London and Sydney.
#3. The road to success is not a bed of roses.
Every foreign market is tough to enter, always. So far, the Asian market was the toughest. The challenges included:
- Diversity of logistics issues on ground (different in each country)
- Language barrier
- Sensitivity towards the cost of the software
- Cultural differences
To overcome the challenges, they partner with local service providers and distributors who have a better understanding of that location. These channel partners solve the local language barriers and are able to provide improved services.
#4. Business models should be relevant to the particular market.
The pricing and distribution models vary in each country. In India, it is about large volumes and low prices. In the Gulf countries, the focus is on low volume but premium services.
You need to learn how to sell to each market differently.
#5. The working of the LogiNext software:
He further explains how their solution works. It is a SaaS based logistics and field service optimization software. Anyone can log on to their website, sign-up for a plan and start to optimize their trips, routes and fleet movements. The product has a customizable centralized analytics dashboard. This plans, tracks, monitors and optimizes all field service agents, low wage sales force, delivery boys, vehicles or drivers real-time. This directly reduces the cost of supply chain or field workforce management and leads to dramatic rise in individual productivity.
#6. Find the product-market fit early on.
Product-market fit is the most important and commonly talked about topic in today’s “startup” world. But it is difficult and vague to understand as a concept. Product-market fit is when your market chases your product instead of product chasing the market.
From an entrepreneur’s point of view, it is the moment when you don’t feel like raising external funds and when you feel like investing your own savings because you can see that the product is selling like hot cakes and the company is making healthy profits. This is when you start attracting great talent, great investors and great customers, without putting great efforts.”
LogiNext gets 90% of their customers from inbound interest and only 10% customers have to be chased. This way, they’ve created a huge need for their software and they get users without aggressive marketing, selling or discounting. With a monthly pricing model, even after the closure of sales there is a steady stream of recurring revenues.
#7. Be profitable from day 1.
LogiNext, as a SaaS company primarily sells software – to enjoy large gross margins. Which means, after massive investments in R&D, they have optimized their software to cost 90% of the actual selling price. Additionally, they believe in maintaining a lean team. This helps to control costs and maximize profits. The profits derived from their operations are greater than the overall operational costs incurred, making them operationally profitable. The bottom line being, majority of their last round of funding remains unused. As of today, they cater to more than 200 enterprise customers across the globe.
The bottom line for startups expanding to global markets is to follow Dhruvil’s expert tips. Take a deep breath and plunge deep into the pool. At the end, only your due diligence will tell you if the water is too cold, hot or simply right.
This post is part of our contributor series. It is written and published independently of TNW.
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