Live from SaaStr Europa 2022: Cantina Stage

Please welcome managing partner at Omers Ventures, Harry Briggs. Morning, everyone. Hope everyone's feeling reasonably recovered from all the parties last night and lovely to be here in Barcelona. My name is Harry Briggs. I'm going to be talking about scaling across markets and I think originally, by the way, I should confess, this talk was going to be given by my colleague Jamboo, who scaled Uber across multiple markets. I'll talk a bit more about him in a second, but I am his obviously partner and had my own much more modest story. So a little bit about me. So I started my career. Sorry, some of these haven't quite come through McKinsey. Then I started a drinks company called Firefly, which you may have seen, it's still around. We started it way back. I'll talk a bit more about it. And scaled it across 30 markets and eventually sold it to private equity around 2012. Then I became a VC at Bulletin and now I'm a VC at OMERS Ventures Global Canadian venture investor, early stage investor. And I should probably mention, as it's kind of Pride Month, I've done quite a bit for the sort of pushing diversity in the venture world. Obviously limited success, but a little perhaps. And this is our team today, as you can see, we like hanging out in Woodlands in Buckinghamshire and we seem to have a propensity for wearing yellow. And the guy in the middle there is Jamboo, who, as I say, might have been on stage, but his wife gave birth to a baby girl on Friday, which is why you've got me instead. So over the course of now, nearly 12 years in venture, I've been lucky enough to work with some pretty amazing founders. Sorry, some of these logos seem to have got a little bit corrupted in the transfer just now. But yes, companies like Revolut, the Hut Group, Gusto Paddle, and as you can see, a lot of these companies have scaled to multiple markets and built global businesses. And I've been lucky enough to see something of their journeys along the way. But I thought I'd start a little bit. I realized that my company was not a SaaS company, but the company that I founded mainly because I think it taught me a few lessons about some of the things not to do when scaling internationally. So Firefly was, as you can see, we started it in 2003. We launched and the idea was it was a healthy, natural energy drink, a sort of healthier alternative to the Red Bulls that were huge at the time. Still are pretty huge. And then a weird thing happened, which is that within about three months of us launching we launched in Harvey Nichols and Selfridges and some very upmarket London stores. We got a call from this very cool shop in Paris called Colette, and they said, hey, we've seen your drink in Selfridges. Can we order some for Paris? And we had this weird dilemma of, like, you know, we were thinking our plan was stay in the UK for two or three years, figure out what we're doing, and then scale internationally, maybe next market after that. But before we knew it, we couldn't really say no to Colette. They were a very trendy store. They said, look, we'll handle all the customs, don't worry. Then we got a call from Denmark and then a call from Japan, and before we knew it, we were in 20 countries. And that seemed great at the time. We were like, well, look, our sales are growing. We're selling pallets and pallets of drinks and containers of drinks across the world. It's very exciting. We feel cool. But then you start to realize some of the downsides of that, like the distraction, like the fact that, you know, some of our labels had to be in multiple languages, which meant that when we changed a product, we had to sort of change a whole lot of different labels, meant that our inventory became more complicated. All the sort of stuff that you would expect as a former management consultant, to have thought about, but, you know, can easily overlook. Anyway, I'm going to skip forward because clearly this was not a SaaS company and you want to focus on some of the bigger learnings here. But we hit the global financial crisis in 2009, 2008. We needed to scale back. That gave me an opportunity to move into VC, a bulletin which was great. And in 2012, we sold the business to private equity, made some money for our investors. Sadly, not a lot for ourselves, but as I say, quite a few things along the way. So I'm going to talk a bit about some lessons learned from that experience, some lessons learned from Jamboo's Uber experience, and some lessons learned from some of the companies I've been lucky enough to work with over the last decade. So the first rule of international expansion. Anybody want to guess? That's a very good one. But mine was don't do it. But, yeah, that's kind of the same. Keep it simple. So why do I say that? Well, first look at Uber. I'm sorry if you can't read all the names here, but look at how big they were able to get just scaling across more cities in the US and how much simpler it is to scale to another US city versus scaling to Bangalore or Lyon or Melbourne, for example. So I think the question that you should be asking when you're thinking about going international is are you expanding to escape your problems, or do you actually have something worth scaling? And look, I confession Firefly, you know, we had a really good launch. Sales were growing really fast, and then they were beginning to kind of plateau a little. And so when these international sales came through, it was like, great. We can hit our targets by selling pallets to the Middle east and obscure Caribbean islands, but it didn't necessarily solve our problems, and it probably was distracting us from figuring out how to scale properly. So let's look back at this Uber expansion again. You know, the, the Jambu part of the story. So they were only in San Francisco for more than a year when they started. They didn't go international. You can't quite see the bottom here, but that's, that's 2010, 2012, Paris, and. But look at what happens here in 2013, incidentally. A few months after Jambu joins the business to run international expansion in Emea, they're suddenly able to scale to multiple cities in a very short space of time. At one point, they were opening a new city every three days. And that's because they finally figured out a playbook. They'd figured out how to scale properly. And I'll come back to some of the ways that they did that. So assuming that we're going to ignore the don't do it, what questions should we be asking before expanding? First question. Have we got it right? And I'm going to go into these in a few more, in a bit more detail, but, you know, have we got the business right? Is this working? Have we got it repeatable? So it might be working in this market, but have we just been lucky? Have we had great pr? Have we had something that isn't necessarily easy to replicate in new markets? Do we understand what is different about the next market? Again, I'll come back to more of this. Do we have the team for expansion and for Uber, that was probably the most important thing. And, and is it worth it? Is it going to give us a good roi? So here are some questions to perhaps assess, you know, have we got it right? That first question. So do customers love our product? In Firefly's case, we actually had very good MPS score. You know, we were, we were, we were pretty, pretty competent on that front. Are the customers staying now? In Uber's case, as you probably know, they built their business a lot around referrals and giving people free rides and then they found that once people had had a couple of free rides they tended to stay and you know in Firefly's case we had very little data. We knew how much the stores were selling but we didn't know whether it was the same people buying multiple times or lots of people trying it once and never coming back. So the joy of this clearly do we have a scalable acquisition model? I'll give you some measures on this as well and do we feel good about the unit economics? So there's a lot on this slide now sorry but obviously measures for this net promoter score are they staying? We can look at the retention we can look at the cohort ideally particularly in marketplace businesses cohorts should be improving as you scale. So Uber as you probably know they would start in a very small part of the city they'd get really good supply in that small area so that the customer got a great first experience and then once they had.