Expanding internationally into market openings with Kameleoon's Jean-René Boidron
Expanding internationally into market openings with Kameleoon's Jean-René Boidron
Jean-René Boidron (00:00):
Every, tends to forget about the essentials and they generally tell you, "Oh, my differentiating factors. The fact that I got this feature and this feature." In March, they're saying something else, in May they're saying something else, everybody forgets that. Your differentiating factor must be through the quality of your solution.
Peep Laja (00:22):
I'm Peep Laja. I don't do fluff, I don't do filler, I don't do emojis. What I do is, study winners in B2B SaaS, because I want to know, how much is strategy? How much is luck? How do they win? This week, Jean-René Boidron, president and CEO of Kameleoon, an A/B testing and personalization platform, for the enterprise. Founded out of France in 2012, Kameleoon is now a global company with a team of over 185 employees in seven different countries, serving over 500 brands. In this episode, we discussed how Kameleoon focused on non-English speaking market openings before expanding globally, and why them chosen to prioritize product quality as a strategy for raising brand awareness. Let's get into it.
Jean-René Boidron (01:08):
Back in 2012, I founded this company together with John who is chief of technical officer and he was the one who had the product vision. Now what he had done before, was creating a tool to allow designers to make changes to websites really easily and without going through some technical hassles and so on. So, he didn't think about any tasting at the time. We presented this thing to some web designers, there was one who said, well, I mean, this very interesting there, do you know anything about A/B testing? Well, I knew the term A/B testing because I have been in digital for 15 years, but at the time there was no tool designed for business teams without too much technical knowledge to get into this, so that's how we got into it. And we realized at the time that there were some other players who had already started some solutions. One of them being very well known in the US and that's how we started over the company.
Peep Laja (02:19):
There must have been something in the water because around the same time a lot of A/B testing companies could start like VWO and Optimizely and so on. You kind of studied on your own, you maybe weren't thinking about the competitive landscape that much, but at some point you must have realized that, Hey, there's a lot of players in this market.
Jean-René Boidron (02:40):
One thing to keep in mind is that we started over one in European country, so France, and that's not an advantage when you don't start in the country which leads and sets the pace in the digital space, which is clearly in North America, in the United States. So we started over in our domestic markets. So, on the one hand, there was literal competition there, on the other hand you're right there was another tool, even two other tools, which were really competing in the biggest market. So I guess that we managed to exist because France was not in the middle of the concerns at the time and the objectives. So we didn't see that much competition in the beginning, plus where we knew and we had seen these players, so of course they were in the US, so of course they expanded into the other English speaking countries, so what we decided was to go to countries which were not initially English speaking and namely in Germany.
Jean-René Boidron (03:39):
So we took the two biggest European countries, France and Germany. For those who are not European, that may sound weird but it's not because you're successful in your own domestic market in Europe, you're going to be successful in the next one. And it's not easy for a French company to be successful in Germany, but it worked real well and we succeeded there as well. To a point where today, Germany is basically the same size of business for community as it is in France. So, and it's suddenly in 2018 and 2019 that we are extended into the UK and then the US. Why did we wait so long? Well, the reason is quite simple, we thought that we had nothing to suggest to the market before these years. On the one hand, our product was getting better and better and we thought that in 2018, we had some stuff that other players didn't have. For example, we had developed and extended module in terms of personalizations.
Jean-René Boidron (04:43):
And the second reason we got there, is because aside from the solution, there're also market strategies and the market strategy of leader in the US was to go really in the high end bracket, high end enterprises. And to a certain extent, left an open space in the years, small to mid enterprise market. So there was a space there in terms of proposing a tool, which was enterprise tool, but at price, which was making sense in the mid enterprise segment and that's how we got introduced in the UK, in the US and today we are in all major markets, so in Europe, but as well in the US, because we managed to enter into this market space that had been left a little bit open for us.
Peep Laja (05:37):
Find an opening in the market and then seized opportunity. Markets have become increasing heterogeneous and customer needs are fragmenting. This is your opening against category giants. Today, a pathway to winning is to understand the needs of specific segments of their markets and the ability to deliver a well targeted well coordinated products and services to each segment. You can't build a 10X sales force, but you a hundred percent can build a 10X product serving a particular segment of the market that has a particular set of needs and one's. Strategy is defined by what you say known to. If you treat all revenues as equally desirable, you don't have a strategy.
Peep Laja (06:16):
Kameleoon found openings in the market, first in Europe, where there were fewer competitors and later in the US, where they observed an underserved segment of the market. You need to be deliberate about selecting the customers you want to serve and not simply provide homogenous set of products to as many customers as possible. It's very hard to defend against the giants of the industry by offering arms length products to the exact same customers. Besides the language part, what does even a market mean today? If we talk about software tools like on the internet, there are no borders, like Bangladeshi market is as far as New York from Austin, Texas on the internet. So, why make this distinctions to the UK market? How are you thinking about this?
Jean-René Boidron (06:59):
It's a very good point you're raising here and I'm really very surprised to see that as you say, on the one end, we do consider that, for example, we have only one marketing, right? Marketing is being led from the US. Everything that we do, we duplicate for the other markets and we work as a team. So we are 185 people today at Kameleoon in seven different countries. You know, we do work as one team with one marketing and there's of course, one product for companies. That's one thing, but on the other end, what is really surprising is that there're still these local identities and I must say, in the A/B testing space, you don't see the same number one player in each of those markets. So if we stick to the four ones, we just mentioned, North America, UK, Germany and France, you won't quote the same names if you had to say who is the leader in this country.
Jean-René Boidron (07:59):
And that comes for two reasons, I would say number one, well, because of your local origin, as far as we are concerned, we're French, so we studied over in France and that makes sense that we be considered as a leader in this country. In the same time, this has been left apart by other players. And also there are also some distinctions, for example, in Germany, Germans, they like to open the hood. When they buy your car, they don't buy the car only because of the design, the design isn't important thing. They always want to proof of what they buy. So everything they look into, every single detail about the statistical model or the data model, everything. And since we got a tech DNA, I believe that our tool is a great feat for Germans. So that's why, I guess it's really one of the reasons why we succeeded there. So this is to say, I agree with you, it's one market definitely. You know, trying to say, this is a totally different, no way, but in the same time, well, there's still some local differences,
Peep Laja (09:09):
Competitive strategy to consider be more local. We may have access all markets via internet, but as Jean-René mentioned, there are ways to age out the competition by appealing to more local sensibilities. That's how Baidu was beating Google in China, even before the ban. When you double down on a niche or a type of buyer, your messaging can highlight or show how you get them, how you understand them and how the category leaders miss the mark and think you don't matter. Here's international marketing strategy expert, professor Richard Lynch explaining why even a global giant, like McDonald's found major benefits in employing localized strategies.
Richard Lynch (09:47):
McDonald's restaurants, it has global brands, global customer satisfaction. It can even research new menu items globally and recover the costs across many countries. So why does it need a local strategy? There are five main reasons. McDonald's needs to cater for local tastes, whatever the consequences for global strategy. Different countries have developed different fast food chains over time. McDonald's needs to be able to position itself against its local competitors. Governments in different countries around the world, have different views on what can be sold in fast food outlets. McDonald's does not own all its restaurants centrally. If the headquarters makes all the key decisions, then what incentive is there for the franchisee? Finally, we have local service quality. What does this mean overall for McDonald's global strategy? It may that the company needs to operate a strong local strategy alongside its global operations.
Peep Laja (11:06):
So in 2018, you decided to expand out to the English speaking UK, North American markets. Was it a success right away? Did your growth accelerate? How did it go?
Jean-René Boidron (11:18):
Well, it did for a very simple reason is because the biggest markets are clearly US on the one hand and in Europe say conception of digital is much higher in UK than it is in continental Europe. So since these markets were blank markets for us, we couldn't but grow in these countries. For us, it's a great opportunity. It's really good for us to expand clearly worldwide, because we can really say now that we are a global company. As long as you know, in the US, you can't say that you are a global company and now we can say it. And yes, answering your question, yes we see success, I mean for a simple reason, by the way, things change, there're not so many players in this space. Yes, on the one hand you can list a whole range of solutions, but I would say many of them have been bought out by suites or stacks.
Jean-René Boidron (12:12):
So in these suite and stacks, these experimentation solutions become very small tiny part of their old stack. So some of the solutions are just fitting away because people end up paying attention to new innovations and new way of doing things. So, we don't really compete with solutions belonging to suite and stacks, but we do replace some of them sometimes because the experimentation managers, they see that the suites don't keep pace with the innovation in this space. And if you look at best of players, we are the number, I would say will count in the number of your one end or two ends. So it's both specialist market with not too many players and as I said, you have to find your sweet spots in terms of verticals and also size of the enterprise that you fit in and we believe that we are great fit for mid enterprises looking for a professional tool.
Peep Laja (13:13):
So you're focused on the mid market, are you focused on any specific verticals and then how did you come to that decision? So what was happening behind the scenes?
Jean-René Boidron (13:24):
In terms of verticals, we've been very good in some niche, like I would say financial and insurance market and healthcare market, but these are niche. They are not the first users of experimentation, but these really helped us to build a name. You know, for example, in the US, we EPAC compliant, which is something related to the healthcare sector and that helped us to make a start. It's not the biggest market, but at least I can say that we are leader in the healthcare sector, but we are clearly one of the key players.
Jean-René Boidron (13:57):
But today we have many customers and most of our customers are still in the retail eCommerce fashion business, for example, because those ones are still converting visitors into buyers. We're very strong in the media business as well, originally many leading media, like RTBF in Belgium, Die Welt and LTL in Germany, Le Monde and Le Figaro in France. I've been using Kameleoon so we got an extensive knowledge of what is needed in the media business. So we cover all those things but once again, this may be different from one country to another, because once you get a great name in one country, then it's easier to get other names, but these names ring the bell in these country, but doesn't ring a bell in none of the country. So we may be stronger or weaker depending on each territory.
Peep Laja (14:49):
What is working for you guys in terms of customer acquisition?
Jean-René Boidron (14:53):
I guess we are acquiring customers like everybody is doing that is we are using all the marketing recipes. So we make sure that we get better and better in SEO. We are do participate to the right events when they were events et cetera, et cetera. But if I had to mention one thing, I would say that we did consider from day one and I think that makes the difference between Kameleoon and some other players, that we were on a specialist market and that experimentation was key and we were found of the experimentation, but it's a specialist market. So we did not try to go full scale in large marketing events. We stay with those who know what experimentation is all about.
Jean-René Boidron (15:37):
And I would say in terms of marketing, what's most important and to my opinion, this is one of the three pillars of the success of any company is the word of mouth of your own customers. That is your best salespersons are always your customers. And this relates to other thing, quality of the solution, but really the word of mouth is absolutely key. So even if it goes slower than spending a lot of money in terms of marketing, we spend time making sure that we bring success to the experimentation program of our customers. So there's the tool on the one hand, we're trying to add with the right support, when I'm saying the right support, we make sure that there's the right use of the tool. And then we expand with these word of mouth in the different markets. You know, in the UK, for example, we were called by one local agency and we make sure that the first project was successful and then the second one, the third customer, and then the snowball is starting rowing. And then it comes naturally, afterwards.
Peep Laja (16:45):
Sameness is everywhere. It's hard to tell how one tool is different from another. So it shouldn't come as a surprise that customers often end up choosing a SaaS tool solely based on a recommendation by a peer. If all things seem more or less the same, I might as well go with the one my friend has used. In fact, word of mouth traffic has the highest conversion rate. With that in mind, gaining market share is the best thing a brand can do for itself. The more known you are, the more word of mouth you will get and the more consideration sets you will enter. The more popular you are, the more popular you will get. Focus your marketing machine to build mental availability. How do you guys think about your theory of advantage? Meaning how are you planning to win?
Jean-René Boidron (17:31):
You know, what keeps you awake at night at is what keeps me awake at night? What is my competitive advantage? I mean, this gets back to the one essential of the company, which is always your partner. In a world where we know that marketing is making a difference, you see more and more companies who want to go fast and the way to go fast is to spend a lot of money into marketing. But sometimes it's really at the expense of the quality of the solution. There is no one way to succeed, there are several ways to succeed. But I always believe that we need a great solution and a great product, and it's better to go slow in the right direction than fast in the wrong one. And if you got a great product and that comes to quality, well, you are saving a lot of time, a lot of sweat afterwards. I know that graveyards are full of great products, great technologies, but I also think that people forget that graveyards are also so full of marketing companies.
Jean-René Boidron (18:31):
Sometimes they're successful at one point, but the product doesn't follow and then that creates a problem in the long haul. So as I said, we in specialist market, it's a small world, word of mouth is important. People talk about what about the solution that you're having and so on, so the question is not to be good in one year, it's to be good five years from today, 10 years from today. But I always want to get back to the essential, because if you forget the essential, if you repeat that to your team, everybody tends to forget about the essentials and they sometimes say, oh, in January they tell you, oh, my differentiating factors, the fact that I got this feature and this feature. In March, they're saying something else, in May they're saying something else. Everybody forgets that your differentiating factor must be first the quality of your solution.
Peep Laja (19:18):
A great product is your ticket to the game, no doubt, but you need to win on other things beyond the product. Sure, to win, your company does have to be the best at something but the best doesn't just mean the highest quality. It's whatever that group of customers you sell to cares a lot about. It's about being the best for a particular use case for a specific set of customers. A good product is table stakes, it's merely meeting expectations. It's like easy to use or good support. Everyone expects those things and should you not to have those things? There will be disappointment.
Peep Laja (19:55):
In the 1970s and 1980s, you could buy a piece of brand new electronics and it might have been nonfunctional out of the box. So quality was a true competitive advantage back then. And then the quality revolution happened and today, it'd be unthinkable that a new TV you buy doesn't work. Every new car drives well, but that's not why you buy one. B2B software is no different. Yes, you need a good product, but it's not enough to win the market. Here's Chris Orlob, head of Go to Market, explaining why product differentiation is important, but no longer enough to win you more than your fair share of the market.
Chris Orlob (20:32):
Product differentiation is dead today. Let me soften the statement a little bit. Product differentiation is a ticket to play the game today, but it is not going to win your market by itself. You spend all day with your product. You spend all day analyzing your product and you probably spend a lot of time on your competitor's websites, or even with their products directly analyzing the differences and nitpicking and you know the differences like the back of your hand and it just blows your mind that everybody else cannot see those differences. It's not so easy for your buyers though. They don't spend all day with your product. They don't spend all day with your competitor's product. And so even though you do have a unique product, buyers come away with a surface level understanding of both of those products and lump them to being quote unquote identical. How you sell has become as, or more important than what you sell.
Peep Laja (21:27):
In sense where often it's pretty easy to copy a competing product. Do you see a product in engineering, being a long term competitive advantage, or do you in the long run, everything gets commoditized and you need to win on brand?
Jean-René Boidron (21:45):
It depends in which market you are. I would fully agree with this on large markets, I mean, in terms of size being over 10 billions. If it's over $10 billion, then you'd get big players. And as good as your product can be, you'll be beaten by marketing. Even if the marketing is for product, which is not as good as yours. As I said, graveyards are full of great products and great technologies. But the experimentation market is not a $10 billion market. You know, we're talking about a $2 billion or $3 billion across the globe. And in these markets, you get with specialist and this is why I'm saying that you are not going to win only in marketing. You can win in the short term, but three years is very short. You know, if you got a long term view of your business, as I do consider that you must, if you want to stay in the market, then marketing is not going to do the whole stuff.
Jean-René Boidron (22:45):
So you have to work long term and everything doesn't get computerize. Let's take that today, you got, as I said, few players in the market, I don't think there's going to be a newcomer in these markets, coming from nowhere and saying, okay, you know what? I mean, I got a great tool here, and this is as good as the others and the reason why I'm saying this is because I think the market is too small and this is not worth the effort for somebody to come in and catch up with the ones who are already here. So computation remains, this is tough every day for everybody, but you know other markets which are tougher. So, it really depends on the size of the markets.
Peep Laja (23:29):
So, you have succeeded in a space where lots of other players have not. So obviously you've made some right decisions and probably have had some failures as well. So if you think back to your success in your company growth, what advice would you have for other B2B SaaS founders?
Jean-René Boidron (23:51):
The first advice which comes to my mind, really put on a piece of paper, what the essentials are, because you're going to get everyday sense of topics in marketing, in sales and R&D product marketing, et cetera, et cetera, keep three or four things that you repeat every day to your staff, that they shouldn't forget, whatever happens. And these things have to be repeated and well, you have to put it on the wall. Make sure, as I said at Kameleoon, we have three essentials which are product, meaning quality must be there because this going to save us a lot of time afterwards. Second of all is the brand, we don't want anybody to hurt the brand, speak the same language, tone of voice, et cetera, et cetera, so the brand is essential. And third was the word of mouth, meaning our customers are best sales specialists. Once you have sorted your essentials, then many strategies can win them either, so that's first advice.
Jean-René Boidron (24:47):
The second one is don't take for granted that you need to raise necessarily tons of money to be successful. You know, Kameleoon is not my first company, I started over in 1990 with my first company. At the time, I needed some money, here, there was no capital funds in France, there was nobody was existing. Today, you want to raise money, I mean, you got hundreds of funds existing. They call every single day. And sometimes people confuse what the success of the company is, it's not raising money. Raising money is a way to be successful, it's not the end of the story. And I'm getting back to what is the size of the market, raising too much money on the market which is too small, is the recipe for big problems, because you're making promises to your shareholders, you're also making promises to the people that you hire in the company and if you don't keep up with your promises, then you end up creating issues with your employees, with your partners, with your shareholders.
Jean-René Boidron (25:53):
And that's what also is making a difference between Kameleoon and some other players, we basically bootstrapped. Kameleoon is profitable today. My goal is not to say that you shouldn't raise money, but it's one way to succeed. Make sure that you are raising money, which makes sense for what you can achieve on the market, otherwise you end up making mistakes and trying to push the machine too fast.
Peep Laja (26:27):
Kameleoon was wise to be wary of overfunding. It's been the destruction of many startups who then built too quickly on shaky foundations, only to have everything crumble beneath them. Like Jean-René said, it's not that you shouldn't raise money, but you should be aware of the challenges you are taking on in doing so. Here's entrepreneur and angel investor Jason Calacanis, explaining the risks involved in funding a startup before a sustainable business model is in place and why venture capitalists are willing to do it anyway.
Jason Calacanis (26:56):
The venture capital community is only going to fund sub 1% of enterprise to start in the United States every year, like maybe 10 basis points of them like one in a thousand. And the reason is, it's jet fuel. You only want to take that money if you really want to build something big and you want to build it fast. And when you put jet fuel behind a startup, as we've seen with other rockets, things can blow up. 7 out of 10 startups we invest in, go to zero. Now, if you were to start the business and only build it off customer revenue and use your own money and go nice and slow and grow 10% a year, the chances of you blowing up the rocket are very low because you're riding a bicycle. The bicycle can only go so fast.
Jason Calacanis (27:38):
And once you start taking that money, the way venture capital is constructed in these venture funds, we're going to invest in 30 names and one or two of them are going to return three times the capital we've deployed. The venture capitalist behavior and the game they're playing is different than you as the founder. You, as the founder, you may really care about this and it dying really matters to you. And then you got a venture capitalist like, we're betting on 30 names, we need two of them to hit it out of the park, maybe three, and nothing else is meaningful.
Jean-René Boidron (28:07):
And the last advice I would give, it's great to go fast in the right direction. It's great to make a mistake fast as well, but it's better to go slow in the right direction than fast in the wrong direction. What makes the difference? It's everybody will say there's a finding the right person. The number one, right person is absolutely key. You know pretty well if it can work. So, for example, I said that we've been very successful in Germany, aside from distribution. It's also because we found the right first person was dedicated with us and has been with us now for seven years, same story in the US. Well, in some other countries, I haven't been that successful and you know, this is absolutely key if you want to succeed. So, people are always.
Peep Laja (29:00):
So what three key strategies have worked for Kameleoon. One, they found that opening in the European market, they focused on solidifying their strategy there before expanding globally.
Jean-René Boidron (29:10):
We managed to exist because France was not in the middle of the concerns at the time and the objectives. So we didn't see that much competition. Our product was getting better and better and we thought that in 2018, the market strategy of a year in the US, left an open space in the years, small to mid enterprise market.
Peep Laja (29:34):
Two, they focused on building a high quality product that would generate lots of word of mouth marketing.
Jean-René Boidron (29:39):
What's this most important and to my opinion, this is one of the three pillars of the success of any company, is the word of mouth of your own customers. That is, your best sales persons are always your customers.
Peep Laja (29:51):
Three, they were cautious of seeking too much investment money early on.
Jean-René Boidron (29:56):
Raising money is a way to be successful, it's not the end of the story. Raising too much money on the market, which is too small, is the recipe for big problems.
Peep Laja (30:06):
One last takeaway from Jean-René.
Jean-René Boidron (30:08):
We need a great solution and a great product, and it's better to go slow in the right direction, then fast in the wrong one. And if you got a great product and that comes to quality, where you're saving a lot of time, a lot of sweat afterwards.
Peep Laja (30:24):
And that's how you win. I'm Peep Laja. For more tips on how to win, follow me on LinkedIn or Twitter. Thanks for listening.
