African tech companies are increasingly exporting their innovations outside their home markets to the U.S. and Europe, among others.
This has especially been the case with South African firms. Fintech company Entersekt, blockchain startup Custos Media and e-health company hearScreen are flying the flag for the country in the developed world, and flying it well.
Such companies, however, face very different challenges when launching operations away from home. These challenges often depend on the market in question.
“It can be very tough, or quite straightforward, depending on the specific territory and their perception of the trustworthiness of things African,” says Jeanne Maartens, senior vice president for marketing at Entersekt.
Her company has found, for example, that U.S. firms are suspicious of non-homegrown products, whereas Germany has a much more positive view of Africa.
“Moving into a totally new market where there is no brand awareness at all can be very challenging. We have met with this challenge a number of times now,” Maartens said.
Ensuring you partner with people that can help you adapt to a new market is key. She said such firms should appoint good local media agencies well ahead of the first sales campaigns, and work hard to build brand awareness.
“Very often the messaging that resonates in a particular market is very different from the messaging that resonates in your home market,” said Maartens.
“It is also important to keep in mind that with a technology product, terminology used may mean different things, and the same thing can be called by different names in different territories.”
She said marketing needs to be an integral part of any company’s strategy when expanding.
“No technology product, no matter how cool, sells itself. The market needs to be aware of its existence, its benefits and its advantages over other products,” said Maartens.
Lessons from back home can still be key when expanding abroad, however, said G-J van Rooyen, CEO of blockchain startup Custos Media.
“Trust runs much thicker through expat networks, and we have tried to make use of this wherever possible,” he said.
Often, when speaking to large overseas prospects, he said he is asked about clients in South Africa. Potential clients want evidence that certain solutions are trusted locally. Meanwhile, all of van Rooyen’s early opportunities abroad came from personal introductions from his local network.
“When we entered the e-book market in the U.K., it was through a London-based entrepreneur with a South African background, who could take complete ownership of the product offering in that market,” he said.
This is also likely to be the case once the blockchain startup starts selling into Hollywood or Bollywood. Making major potential clients aware of your existence is the first major challenge, he said.
Custos decided to position itself as a thought leader in its particular space, which allowed it to get the attention of the bitcoin community and through that, investors.
“Since investors in L.A. are typically well-connected in the film industry, they helped us with introductions into the studios,” van Rooyen said. The company also uses summits and expos to grow its reputation.
He said there is little difference in cost when it comes to obtaining press coverage in more developed markets, but when it comes to events, there is a serious gulf.
“I would encourage any young company to develop the narrative around their product, unique value proposition, back story, and successes,” he said.
“For face-to-face marketing at summits and expos, the cost difference is substantial. Cape Town sometimes feels like the most remote place in the world if you have to travel to market your business, and the travel costs and exchange rates make each marketing opportunity a careful consideration.”