Five Questions on International Strategy: Pedro Gomez from Microsoft

Pedro Gomez, Microsoft

1. Can you share some background about your work, and how it is connected to international strategy?

My name is Pedro Gomez. Bringing digital products to billions of users worldwide is my calling. I studied natural languages and pursued an MBA and courses on strategy, project management, and user experience design.

At Microsoft, I am part of the Microsoft News team. Microsoft News is a publishing platform that delivers high-quality news from popular and trusted publishers around the world. Our digital experiences include the MSN site, the Microsoft News application on Windows. our apps for iOS and Android, as well as a growing number of syndication partners.

I lead a team of Global Product Managers. We are responsible for making sure that our products are locally relevant, efficient to run, and scalable globally. At nearly a half a billion monthly users, our services reach one of the largest audiences in the world. We publish content from more than 4,500 media brands across 140 countries in 28 languages.

As a volunteer, I serve as the Vice Chair of the Globalization and Localization Association. GALA is a global, non-profit trade association for the globalization industry. As a membership organization, we help build professional communities, share knowledge, and advance best practices in the sector.

 2. How have you seen international strategies evolve over the years that you’ve been working on taking products to international markets?

Traditionally, there was a big gap between English and the United States, and the rest of the world. International expansion was typically an after-thought. I have seen products where the localized version hit the local markets after two years of the original release date! These days, simultaneous shipping. At Internet speed, companies do not have the luxury of waiting around to serve their global audience.

The connection with customers is now frequent and unmediated. In the past, products were thrown over the wall at invisible customers. Then feedback was gathered… and implemented in a subsequent release…possibly years away. Microsoft News as, for instance, is instrumented to know how our audience engages and reacts with the product by the minute. Moreover, we run multiple concurrent experiments to gauge the potential reception of new features and updates. User reactions to changes vary by market: we test updates out in multiple markets and only ship when we are satisfied that a given feature works in a particular market Finally, we pay very close attention to explicit user feedback: if your fans are reporting a problem with your experience, it behooves you as a product manager to listen to them!

In terms of technology, you see a lot more automation. Gone are the armies of people that were needed to shuffle files around to provide language versions of the digital experience. In come sophisticated workflows that sniff out changes in content, trigger handoffs, process handbacks and republish content automagically. Many of these systems now employ machine translation, which has a wide array of applications from content gisting to translation productivity enhancement.

In parallel with this change in the “how”, the “who” has also evolved. Industry openings for core program managers, developers, data analysists, or social media managers were unheard of a decade ago, whereas they are now routine. Globalization has shifted from being a tax to becoming a value multiplier.

3. What are some of the most common strategy pitfalls for companies when dealing with emerging markets, compared to developed markets?

Research into future GDP growth projects that emerging markets will grow twice as fast as advanced economies. Six of the seven largest economies in the world residing in emerging markets by 2050. Even adding a healthy handful of salt to any future forecasts, there is evidence that these new markets are making a shift from “emerging” to “reality”, with China and India leading the charge. These billions of new consumers are not going anywhere, Ignore them at your own peril.

The challenge lies in finding the right balance between staking out a position in these markets and missing the mark. You do not want to be way ahead of the curve: “pioneers are the ones with the arrows in their back”. Neither do you want to be a follower into a crowded market place. You have to time your expansion and your investments in a way that is fiscally responsible and opportune.

At an abstract level, emerging markets are no different from others. Your audience has the same needs regardless of their geography. Your users have to learn/find/try/buy/use/support your product. What will be different is how each of these needs gets instantiated in each market. If you look at e-payments, funds need travel back and forth between a payor and a payee. In the west, people use credit cards or clearing houses such as PayPal. In Europe, many consumers are very comfortable with bank drafts. In China, AliPay and WeChat Pay are the currency of the realm. In sub-Saharan Africa, feature phones are the tool of choice.

The user requirement is the same, there are only differences in translation. The key is to build backend systems which are flexible and can be configured to respond to different circumstances. Do not hard code an expectation that your users will have credit cards into your product.

You have to do research about your product and the ecosystems that it will be a part of. From that research, adaptations to your product and UX will follow. Embrace this diversity and your product will become richer. Do not be shy about learning what works elsewhere and bringing it back to your home market. No single group of people or culture has the patent on smart thinking.

4. What keeps you up at night when it comes to international expansion efforts and strategy? 

Sheer excitement keeps the optimist in me awake … The opportunities are endless. Helping people communicate across cultures and languages is a good thing unto itself. And it will also make you money. Why limit your audience when you could impact the world at large? Let’s get going.

The planner in me is worried about all of this happening in an organized, cost-efficient, scalable manner. Your products must feel native to all markets…without breaking the bank. You need to leverage your global infrastructure and optimizing the use of resources to realize economies of scale. Your global experience must be modular and configurable, so that elements can be added, removed, or changed as needed without development intervention. This is all easier said than done!

5. What are some of the ways you would suggest measuring ROI for international efforts?

Comparing the marginal cost of adding markets with the marginal revenue that you expect to bring in is a good place to start. The challenge is that you will only be able to decide if you went into the right markets at the right time… after the fact. This is a consequence of assumptions and time horizons.

Financial models work with assumptions and it’s difficult to prove their accuracy theoretically, before you make an investment. Research, research, research to make guesses as educated as possible. By the same token, you should be wary of hockey stick projections, where flat lines magically transform into exponential growth without an obvious explanation.

Next, build a market expansion which is incremental and progressive. Test before you invest, even if it means that you will be offering your product for free to build demand. Do something, learn from it, and apply the learnings to the first phase of expansion. Course correction is your friend. In global expansion, you may consider countries as part of clusters with similar socio-economic characteristics: if it works here, then probably our plan should work there and there.

For this type of analysis, I am a big fan of two-by-two charts. These matrices allow you to compare competing alternatives along two dimensions (ease of entry vs. expected return, for instance). At the risk of self-promotion,  I recently wrote a Linked-In article on this very topic.

Finally, have patience and humility. Be ready for a slog and surprises. The competition is fierce all over the world and users are famous for lobbing curve balls at products. The road is narrow and steep, but riches await at the end.

Nataly Kelly

Nataly is vice president of international operations and strategy at HubSpot and has previously held diverse roles leading marketing, research, product development, and localization. She writes for Harvard Business Review on topics of international marketing and business. Nataly grew up in rural Illinois, lives in Boston, and has visited 57 countries (so far).

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