Lessons from $100M Growth in APAC

Welcome to the Switchgear Show. This is your host, Preet Sarkar, and I'm joined by Graeme Soden today. Graeme, welcome to the call.

Hey, thank you. I'm privileged to be here. Thanks, Preet.

Fantastic. For those who don't know Graeme, Graeme is a leader and scaler of SaaS companies in APAC. He's best known for scaling Okta 10x to $100 million, Acquia 4x to $12 million and scaling Informatica 6x to $60 million. And all during this time, he has built teams from single digits to 350 people in the region and achieved high levels of morale and tenure. So I'm so excited to have you on the call today, Graeme, and looking forward to getting into your stories and, and the journey that you've gone through. So thank you.

Thank you. I hope I live up to that introduction.

So tell me, first of all, why do you like scaling companies? Why do you do what you do?

The buzz, the adrenaline. To be honest, it's much easier to manage a team when you're really growing and you're getting results. It's far better than the other side that I've done, which is when you're trying to increase profitability by reducing costs. It's the easy way out. I think that's the main reason I do it. Yeah.

And I think you figure out earlier on which environment you thrive in, right? Are you going to thrive in a growth environment or are you thriving in a cost containment environment? Find your way through that process. Now, that's great. You've spent a lot of time scaling some iconic companies as well as very challenger niche companies as well in the region and have got some really good stories. Tell me some of the more interesting experiences that you've had along the way. While building in Asia.

Okay. And I know because we spoke earlier, you're talking about the amusing ones and the cultural differences that everybody has to learn. Yeah. And I certainly learned, but there was one that comes to mind is the time that the Chinese kept overfeeding the Nigerians in what was turning out to be the longest banquet lunch in the history of the world.

Right.

What had happened was reasons I won't go into, but we had brokered a meeting between Huawei way before they were a household name and the Nigerian telecom. In honor of their guests, this was in Shenzhen, and to honor their guests, Huawei had laid on a buffet lunch, which by any standard is big. Sorry, not a buffet, a banquet lunch. So it's just big by any standard.

Right.

But in this particular case, The food just kept on coming and didn't stop. And we were pushing pieces of food around our plates thinking, hey, I'm not sure I can take any more of this. And it was my pre-sales leader who finally twigged what was happening here. And it's all down to— so food is really important to both cultures. And to the Chinese, it's a symbol of my wealth and my generosity. And I will keep feeding you. If you keep eating it, I keep feeding you. But in Nigeria, it is equally a luxury and hasn't always been in massive supply. The theory is someone puts something on your plate, it is rude not to eat it.

Yes.

And this went on until finally Neil went, okay, I'm going to die here. And literally he was sitting down the other end of the table where the people who'd actually organized the meeting So it's probably the right people to talk to. So we had quiet words to explain, and then the decision was made and it was announced that, hey, for interest of time, how about we take it to the end and we go for coffee? So that's what we did. Thank goodness. So it's that one. Fantastic. And then the other—

and look, and I was just gonna say, I can completely relate to that. Having lived on 4 continents, you go through these cultures, even in the Middle East, where it is rude to refuse food. So, you can just get into this endless loop of being served. So, yeah, go ahead. You're going to tell me another one.

It was just because there's one I know we had a giggle about. But so, this is early days of me in Japan and certainly learning culture. And so, Japan is actually all about team. It's, do not upset the team. Let's find out what the team really wants. And they have this phrase that we translate as sniffing the air, which is trying to find out what the team wants. Before anyone makes demonstrative statements and says, "Let's go do." I didn't know that. I also had some idea, but didn't really understand that you do not question because it's very hierarchical. You don't question leaders, certainly not in open forum. And if there's a suggestion made, you follow it. And again, I didn't know that either. And we had this massive meeting. It was a CIO of a very large Japanese. Probably a household name Japanese organization. So, this is rare for us to get that level of interview. They've turned up with about 8 executives, I think 8 or 9, and the CIO was going to be late. So, he'd asked that we start without him, which we did. He walks in after the meeting had been running a while, and he's looking, so, we don't have anything to drink. Let's have some tea. Graham, would you like a cup of tea? Now, bear in mind, I don't know any of the kind of laws and rules. I said, actually, would you mind if I had a glass of water? And everyone's just thrown down a direct challenge in practically his first sentence to the CIO. Oh my God. So then what happened was my translator, who's sitting next to me, starts speaking, which is odd, right? Because they translate what you say, and I hadn't said anything. She sorted it out and it ended up— I don't know what she said, but I can imagine that she ended up taking cold water with me. They don't drink cold water traditionally, right?

Oh, wow.

And that satisfied everybody. And I'm sure what she said was, look, he's a Western cultured person. He doesn't understand anything. How about I'll drink water with him and then he feels good and then nobody else needs to drink water, certainly not cold water. And they all agreed. That's what we got. So there you go. The meeting stopped for about 5 minutes, I think. Well, it certainly felt like 5 minutes while this was sorted out. There you go.

Wow. So I wonder if a good translator or a great translator would say, yes, we'll have the tea, thank you.

And Graham, please drink the tea, or this is going to go south. Yeah, I think if I hadn't been quite so demonstrative, and again, that's maybe something you learn, Could, she could have done that, but I think I left everybody just exposed. Right. Yeah.

I ran an enablement session for a sales team in China. Different situation. When you mentioned working with a translator, that just brought back memories because if I spoke for, I'd say, 2 lines, they would go on for the next 5 minutes. And I'm like, wow, I did not say that much. And they're laughing, people are laughing. And I'm like, wow, I must be really funny, but I did not say that much.

that.

So I don't know what's being translated here. So that's always an interesting experience. Tell me, in terms of, you've done this a number of times, and I know that you would have a playbook of strategies of how to grow into Asia. At a high level, what would be some of the key insights that you think for anyone thinking of Scaling, whether it's from the US or Europe scaling in Asia, or it's even an Aussie software company thinking about scaling up into Asia, what are some of the things that we need to be thinking about that you would expect to encounter and insights on how to overcome that?

Yeah, like, I think it might sound obvious, but one is to really question why you want to be there. What is it you want out of and what part of the market? Because it's not a market yet. It's many countries and they're all very different. And it's what do you want? What does the company need? I think then if you are opening up, it's, I always think you want to try and build, if it's Souden Enterprises, you want to build Souden Enterprises in Japan. You want to build the Japanese Southern Enterprises. I think it's best to try and avoid building a mini-me Southern Enterprises grafted into Japan. And that's tricky because Southern Enterprises probably wants consistency and standards and just have the one set of rules. But it is a matter of if you can appear as the Japanese variant, then you will look Japanese inside Japan, which is where you're trying to do business. I think that's really important. But it does come down to why are you there? Because you may not be setting— if you're trying to do a mini-me, it may not be a realistic expectation. And then the other one is communication. It's so difficult. It's like twofold going against you. Firstly, Asia is invariably remote, certainly from Europe and from the US. And I think unless you've worked remotely, It's very hard to really appreciate how weak the messages get the further you are removed geographically from the source. There isn't the socialization, it just comes down, it's very difficult. But if you then multiply that and make it twice as difficult again, that you're actually communicating, and to the people to whom you're communicating, it is not their first language, so they're now learning in a second language. And just as importantly, they're trying to communicate back to you, and it's requiring you to have twice the patience because, again, the language is not common, and they haven't heard the iterations, they haven't socialized it. It's a lot more raw. So, I think communication's invariably at the back of issues.

When you talk, at one end you have India, Japan, at the other end, China, and then Australia, you've got, and then you've got all the smaller ASEAN ASEAN countries, what would be the best place to set up base and then identify how to penetrate different markets?

Yeah, it's probably Singapore, but it's also unlikely to be Singapore straight away. Usually you want to enter Asia Pacific, it's for growth, and the company is probably a young company and it's trying to maximize its growth as efficiently as it can. And so it's the fastest return for a dollar investment. So that would earmark different countries for different reasons. It could be Australia because the business culture is very similar, so you can just roll it out theoretically. But it could be India if you are, if your target is developers, massive community of developers, or the largest community in the world are actually domiciled in India.

Yes.

So you would want to go there, but again, you might not want to make your HQ there. It comes down to why do you want an HQ? I think you need an HQ, but if you're building an HQ because you want control over the business, that's a completely different set to having an HQ so that you can appeal more attractively to the market. One is outward looking, the other one's very much inward looking and control. So again, why do you want an HQ and what is it you've got to share? What have you got to sell rather?

Understood. And then what would be some of the specific nuances or differences between China and Japan? And you look at some of these major regions, what are your, what's your take on each one if we were going to go through them?

Yeah, okay. I'll start again with Australia because that was the easy one. Business culture tends to— the language is there. You can more or less just graft the Southern Enterprises straight on Australia and it would be quite acceptable. Japan would be very different. And like many Asian countries, it's very much on relationships. So you have to build that relationship over time. You can't just walk in and assume you have it. Doesn't matter how good your technology is. And their business culture dictates they behave certain ways. And if you don't actually comply, then they'll be probably very polite, but actually not very helpful because, A, they won't be buying, and B, you won't be expanding because you're actually not clicking. So there are reasons. So for example, actually Japan's a good one right now. I believe any vendor in that cloud services space Should be having a really good time in Japan and South Korea, for that matter, even though particularly South Korea is very highly technical, adopted technology massively and very widespread. Neither of them approached the cloud early. There's many reasons, a different conversation with why that would be, but they looked and waited and they're in a line and they were looking at each other and nobody really moved until it became quite obvious that globally, Cloud was a very large thing. So some of them start to move, but then of course they're all looking, so they all move. And I think that's what's happening in Japan at the moment. I think cloud should be booming, economic issues aside. Cloud should be booming in both those economies because they know they have to transform. So it's knowing things like that. That's what really should inform your decision to— Yeah. Go, no go, I think.

Understood. And what about China? How do you crack that market in terms of this potentially a very large opportunity there as well?

China's massive. And if you want to be a true global company, you're going to need to have a major presence in China and it has to be part of your whole business. And if you don't, then they'll almost certainly have a rival solution that'll knock you out anyway. But how do you— China, again, like many parts of Asia, if not all, It's very much channel. It's very long-term partnerships. It's very much understanding. And there are things that you still, I would suggest, can't challenge as rigorously as you might in other territories. So channel, you have to use channel, but with every best intention you can build into and all the rigor you can build in your business, Pretty much guarantee there will be extra layers in your distribution that you were not aware of. And it's a matter of making sure that you've done everything you need to do whilst being able to accommodate that eventuality, because it's going to be there. I think we managed to count 8 players we did not know of in one distribution chain one time. Maybe an exaggeration, maybe we overinflated some of it. It was amazing. And everyone taking a little piece and we didn't even know them.

Wow.

Yeah.

So in terms of when you are talking about channel, in which context do you think it's better to have a channel-first strategy versus a direct sales strategy when looking at the ASEAN region?

I think actually the, if you're going to go after a developer market in, or the developers in India, you can identify who they are. And they don't want to meet salespeople. If you want to sell to them, you get them on board and you use their networks. So that might be a direct. Almost everywhere else would be through channel. Even if you're selling to major-sized organizations, they'll have channel partners they want to deal with. They'll feel more comfortable about you if you're working with them. So you really need to work out a strategy. Um, and it's quite— that's— it's such a big territory, you won't cover it easily without huge investment, without channel. Um, it's— I don't— I think again, this is all about not being a mini-me. Starting small and doubling your sales and doubling them again and doubling them again and halving the territories is— I don't think it's a recipe for success in Asia. No, it has been for me anyway.

Understood. In terms of, based on what you said, what would you say is the best way to scale in Asia?

So I think you've already, in an ideal scenario, you've tested the market, you've made some sales, they've looked pretty good, they look repeatable. It looks to be aligned with how you do business or would expect to do business. You Hopefully have found your way to certain channel. This is way before you actually go and move in. And then I think you literally take your team. There may be a couple of people you'll take with you, but the rest you should recruit locally and just open up, start the marketing, start where you began really. There's no easy way other than leverage. It's very big reference. As it is, selling is anyway, but particularly I think in Asia, certain countries more so, it's, I will actually entertain you if one of my peers elsewhere whom I respect has told me this is good. And you can almost leverage the relationship that way. It's, yeah, it's, I promise you, it's, you can always achieve, I put it the other way around. I don't believe anybody can achieve, we seem to overestimate what we can achieve in the first year. And then we seem to massively underestimate what we can achieve 5 years. Asia is a 5-year play, I believe. And yeah.

Okay. That's good to know. That's very good. Now, how, when you look at some of these massive territories with their unique nuances, what is the way to scale and ensure maximum ROI? Even if you want to give me that Phase 1, 2, 3, how do you enter that market?

So I take a big look at the metrics you're using and the metrics, not the measure. So do those metrics apply? And I say that because it's quite easy to see what's happening if you're taking, maybe you're doing an assessment of your entire business and you can see this, maybe it's a product set, maybe it's an approach, works really well. So, if you lead with that and then you don't have success with that, it's probably, well, it might be poor execution, but it might well be that, well, actually that measure, you were never going to succeed with that measure in the early days. Maybe it's because relationships take longer to build or other reasons. But really take a look at the measures. I would investigate measures.

I would—

Tell me, what else do I do? You want, you do want rigor. You don't want the Wild West East, whichever out there. You need to have control. So, I wouldn't suggest you don't hold, if it's Salesforce, if it's sales and it's Salesforce as your record of control, then absolutely. And try and get the the compliance with Salesforce in those territories is the same as you would in your own territory. But again, have an understanding of the culture at the time. I think one of the best pieces of advice I ever gave, I was incidental, but I said it would be really helpful if when looking at Asia, if you could develop a mindset, imagine not that you're expanding to Asia, but actually you're opening up your company for the first time, just happens to be in Asia because all those things you learned and went through, you can accelerate because you've been through it. But if you ignore the fact that's what you learned and then you go into Asia, I think you can have, I think you really fall on hard times. Yeah. It's hard to really, what I'm trying to say here, I forgot it. I'm sorry. I'll have to leave that one.

No, that makes sense. I think what you've given me so far is that there are these major polar big territory regions. You've got India, you've got Japan, you've got China. You mentioned that communication is critical because without the communication piece, it's very easy to have a lot of activity but not outcomes. You then mentioned that the channel strategy is critical because without channel, you are not going to be able to actually get real engagement and real traction because they won't trust you. And then finally, I think what you said is that Singapore is a great place to potentially look at servicing the rest of the region, but depending upon who your end customer is, it's going to be heavier on the direct or heavier on the channel. That's what really the key messages that I'm getting from what you've said so far. What let's— so let's move. You've now got 18 months in, you've made investments, you've got people on the ground, but you've got some territories that are performing poorly? How do you fix poorly performing regions?

Okay. Because that has quite frequently been my entrance. Okay. And again, I would go back to, can we just take a look at those metrics in terms of the metric, as opposed to the value that's being achieved? Just check that that is for real. And then really take a look how well aligned is your strategy for Asia Pacific or that particular territory, how well aligned is that strategy with the rest of the organization? Because I know from experience what happens when there's more pressure, when figures aren't coming in and there's a cutback anywhere, it's like tightening of belts. Then all these other functions that are working across do not get the same return out of this new fledgling region. So it's the first to be cut. And so, you're asking them to contribute proportionally more at a time when they're being asked to cut back. So, you really need to understand how aligned you are with the total strategy of a company. I don't know how many times I discovered that a function had scaled back its operation without my knowledge, only for us to find out when it started to cause a problem. I understand why it was done, but it doesn't help you open Asia Pacific. And then the other reason, and I've seen enough CROs do this, they're under the pump, they've got to get revenues up. They know that if they open up in, I don't know, federal US, they'll equal the business I can get out of Asia Pacific within a couple of years. So if there was a 2-horse race, I'm going to stand no chance against that. If that's— but that's again, why are you in Asia Pacific? How aligned are you? And it could well be that it's poor execution. But again, take a look at communication. I'll bet you communication is there. Again, I would suggest if the region isn't performing, it's at least, I would suggest, 50% the fault of HQ, not the region. Unless it's really bad, but then you can usually spot that.

Yeah, understood. And look, given the significant results that you've achieved with different size companies that I mentioned in the introduction, I think that clearly when you commit to the 5-year plan, like you said, you are going to see revenues that will exceed your expectations. Like you said, I think initially it's not as great, but as you basically really fine-tune your strategy and you're actually seeing results and are able to multiply that, you're going to get the wins. How do you de-risk a growth plan?

Ooh, I suppose you're constantly reviewing it. At least I hope you're constantly reviewing it. It's the fail-fast mentality with growth because you could spend a lot of money and not achieve the growth. And then everybody is seeing it as a major failure. So, fail fast is one. Really, actually, again, communication. Check what you're calling a failure might not be a failure, or at least might not be a failure inside the region. That might not have been a realistic expectation. Could well be there isn't a clear enough understanding, because you've got to appreciate that whoever's on the ground in whatever territory, wherever you are representing the company, And if they haven't got as clear a view of what the company is and trying to be and aiming to go, where it's aiming to go, then it's not going to convey that message. I think when we were back at university days, it was believed that you retain 20% of what you actually learn in a lecture and are able to pass it on. And if you pass it on, And therefore, they only retain 20%. It's very soon. It's not very much information being passed. If you want to de-risk, really make sure you've got a clear message and you're really taking the feedback the other way. It's, I think, a little too easy just to assume it's poor execution sometimes when it's actually a misunderstanding.

Yeah.

I think, yeah, totally different, longer subject. Just how strong HQ regions view territories, distant territories. It's true across everywhere. Yeah.

Yes. Uh, Graeme, I relate at a very personal level because prior to running Switch, I used to work with, it was a Fortune 100 company. I was one of the country sales directors for Australia, but reported into Hong Kong. Not Singapore. And we had 5 regions, the key regions reporting in. And the number one challenge that the Asia-Pac leader would face would be that he'd have people agreeing with him, but then there would be no follow-through actions. If I could say— And what you just said was also, it's a 2-way feedback because a lot of people are used to giving information and telling people what they want done, but not listening To what's actually happening or not happening, and I from personal experience, I think refining your communication skills is probably the number one thing determining success or failure in Asia, which is so disparate in terms of language and culture. And so, yep, I completely agree with you.

Understand the quality of the executives and technical resources across the whole of Asia Pacific. really high. So it's unrealistic to assume that they can never execute well at something else.

That's right.

There are very high skill levels.

Look, this has been very good, Graham. The big takeaway that I'm, you know, taking away for other leaders and other conversations is that at the end of the day, you've got to learn how to communicate. Because if you can communicate, then you can mobilize and find the right people and partner with them. And most importantly, commit to the longer run. This is not a region, unlike Australia, where you're going to see a lot more similarities to potentially the US market. Whereas in Asia, it's just really about understanding the cultures, communicating, committing to the long run, and building the kind of success that you've seen time after time.

If the only addition that be really super clear as to why you're there, because it's a different strategy. If you're only there because you have to be there to prove you're global, You'll build a different strategy if you're really there to develop a particular aspect of the market.

And that's a great point as well. I think that I'll say this for executives who are in conversations with companies looking to scale up in Asia. I have seen, unfortunately, a couple of companies who've committed to just one year and pulled out, and it has led to a lot of challenges for others who committed to the ride. So I agree. Why are you there? And if you can't justify and commit to a longer run, then I would, for any executive who's talking to companies looking to scale, I would put that as a red flag if they're not clear. So that's a golden nugget. Thank you very much.

If I have one more minute, maybe I can just add a tale to that because there was, so we had a strategy meeting over in the US-based organization, big strategy meeting about Asia Pacific. And I meant to say, okay, let's take a look at the pros and cons. Let's start with all the reasons we should go in and then look at the reasons we shouldn't and see if we can overcome them. And I didn't quite say it right. And we ended up— we started with all the reasons we shouldn't move in. And you know what? It was a really good exercise because that part went forever. There was such a long list. Whereas the why should we go in? Had one massive overriding factor, 2 especially. The main one was because the industry analysts had already said that this organization was going to suffer if it didn't become more global. And so, for all of those objections, there was one bigger. So, then we had to look at going through the whole lot. Everyone was now pretty much, I think, fed up that we had created such a long list. because we had to mitigate everyone. I don't know. It amused me because I found myself in a reverse situation that I'm normally defending. And yes, that's fantastic. Interesting lesson.

And if things didn't turn out, you did have a long list.

Yes. I won't name the company. They did very well.

Of course, your results speak for themselves. So thank you, Graham. This has been a fantastic conversation. Thank you for Just having this conversation, spending time sharing your insights and all the lessons. I'm sure this is going to benefit a lot of people who are thinking about scaling in Asia, taking a role scaling in Asia, or venturing into that journey. So thank you so much again, Graeme.

Thank you, Priya. Enjoyed it. Thank you very much for the opportunity.

All right.