Sendbird pioneered global and business categories
Entering the global market is probably one of the goals many startups have.
However, it is not easy to achieve successful results after entering the global market in reality due to difficulties in securing competitiveness to satisfy the global market and customer satisfaction due to different customers and market characteristics in each country.
Considering the difficulty of lack of market information and network, the process until a startup decides to enter the global market does not seem easy (see Figure 1).
In such a difficult reality, there is a pioneer who conquered the global market through 'Bon Global' with the goal of becoming the global market and 'global number one' from the beginning of business.
It is Sendbird, which is positioned as a global powerhouse in the category of chat API.
What is Chat API? Is Chat API Beneficial for Global Expansion?
Chat APIs are part of the Software as a Service (SaaS) business.
Specifically, it is an 'in-app chat' platform as a service that refers to the chatting solution provided by SendBird.
Because Chat API is a B2B business, companies are customers, and the company's enterprise chat and messaging solutions are provided as SDKs (software development kits).
In terms of business model, the fact that the main customer is a company can make global advancement relatively easier than B2C if it has a competitive advantage in key resources based on technology.
This is because the service-related needs required by businesses are not only clearer than those of B2C, but are also relatively less affected by cultural differences by country.
In terms of revenue model, it is attractive that a company is a customer.
In addition, as digital transformation has taken place in all industries and economies around the world, and the introduction of chat API by companies has become an essential element for business activities, the meaning of the chat API business model as a business for global expansion can be said to have increased.
How to Pioneer the Global Market: Discovery of YC and Categories
(1) The first means to succeed as a Global - Y combinator (Y Combinator) pass
'Y combinator (Y Combinator, hereinafter YC)', 'flip' - For start-ups who want to enter the US or global market, It is a familiar term, but at a time when these terms were unfamiliar, and when it took a lot of courage to enter the US as a startup, Sendbird overcame difficulties in entering the global market with 'Flip' and the YC program as a stepping stone.
From the perspective of global management, four factors, 'entrepreneur's competency', 'network', 'market' and 'globalization', have an important influence on the process of a company entering overseas markets through Born Global.
As shown in <Table 1>, it is essential to secure a network to succeed as a global company.
In particular, since SendBird CEO Kim Dong-shin's experience of success in the domestic market as an entrepreneur and results related to his previous business experiences, such as his success as a game company, were not significant factors to consider in the US market, it was more urgent to secure a local network. .
In particular, in order to establish a business model called chat API and develop related markets, it was essential to mobilize capital and provide advice on the market through a network between major stakeholders and investors in the market. It was difficult to secure.
SendBird decided that the fastest way for early-stage startups in Silicon Valley to establish a network is to complete the YC program, the global number one accelerator.
But passing YC wasn't easy either.
As a result, I was able to pass through two challenges, and in the second challenge, I emphasized to the judges that I had accumulated rich experience and skills in messaging solution functions while running the messaging solution business.
In addition, they were convinced that SendBird actually has the technology to solve the problems customers face in this field.
Coincidentally, the interviewers, Twitch co-founders Justin Kan and Michael Seibel, also had the experience of running into difficulties building a chat function on the platform while making game broadcasts, which helped them pass the YC.
Q. What was Y Combinator's course most helpful for you?
A. "When a start-up made up of only Koreans goes to the United States to sell something, it's not easy for B2B to break through the competition and stand out. When you sell by e-mail, in a situation where you can immediately click the delete button, you can receive about 1 second more when the word is entered, and that 1 second makes a huge difference. In addition, it seems that the connection with Y Combinator played a very large role in making not only global sales or sales, but also the company's culture and the DNA of a certain member in an American way."
<Lee Sang-hee, CEO of Sendbird Korea> by Jeong Myeong
-won ▶ How did Sendbird achieve success in the US market?...View full text of <Soup Interview>
As SendBird aimed, YC established a network of investment ecosystem that was most needed in the local market. helped in obtaining
After graduating from YC, the first place where Sendbird received investment in Series A was where it was introduced through a YC partner.
At the time, it was not easy to get investment because the concept, understanding, and marketability of the field of messaging solution or chat API were not clear.
At this time, CEO Kim Dong-shin was introduced to Doug Pepper (Shasta Ventures partner) through YC partner.
Doug Pepper, a veteran VC who is well-versed in the B2B software field, not only gave advice on business and strategy during meetings with Sendbird, but also wrote recommendation emails to potential clients and VCs. Practical advice was also provided.
(2) Discovery of chat API categories based on messaging solutions Sendbird
made great efforts to present clear and concise explanations and definitions of its services to customers through the YC. "- "The service provided by SendBird is a chat API."
By defining SendBird's service categories, SendBird can more clearly analyze the service accessible market (SAM) and identify customers more clearly.
Clear definition of categories is important because it can help customers understand the business process and develop market needs.
However, discovering a category means that there is a difficult task to increase the understanding of customers in a situation where there is no understanding of this service.
Therefore, SendBird felt the need for a storytelling strategy for the chat API.
They needed to be persuaded about why companies should purchase a SaaS (Software as a Service) business rather than directly through an in-house development team, and why they should choose SendBird.
For effective persuasion, Sendbird recruited local storytellers and employed a strategy to compose Sendbird's service into a narrative.
In addition, a lot of effort was put into content marketing to attract potential customers to SendBird.
In the case of Shinsegae, a major customer, it was also a case that came to SendBird after seeing SendBird's data-based presentation (mobile concierge center Outlook summary chart).
In other words, we have thoroughly contemplated 'how customers will recognize us' and thoroughly thought over all the processes that customers can come to, and created a path through which customers can find us.
Q. What are the strategies that companies planning to target Silicon Valley should keep in mind?
A. “The strategically important part is whether there are the most potential customers who can use our product, or what we can call early adopters before going beyond the initial chasm of our customers and now going to mass adoption. I think it's very important to first understand whether there are a lot of enthusiasts in the local area. The reason why many services really fail is that money may have run out or momentum may have fallen, but they solve the wrong problem, so in the end, the product market doesn't fit properly. It seems that there are a lot of cases where it is stagnant because the growth is not accelerated.”
<Lee Sang-hee, CEO of SendBird Korea> by Jung Myung -won
(3) Characteristics of the Saas business model, one client and multiple personas
On the other hand, another reason why SendBird went beyond being a unicorn to become the global number one lies in the strategy of identifying the customer's persona and quickly resolving the pain points experienced by them according to their role within the organization.
Because SendBird's messaging solution is a B2B model, people from various departments of the company participate as decision makers in the purchase decision process.
Therefore, it is necessary to know what the inconveniences of decision makers in each sector are and to be able to propose solutions to them in order to reach the final sale.
At the time SendBird was targeting the market with a messaging solution, there were already competitors in the US market that offered similar services.
As shown in <Figure 4>, SendBird was able to preoccupy the global market by digging into the concerns of its customers by person in charge in the company, accurately identifying the links that could lead to purchasing decisions beyond releasing technologically superior products.
Q. There are not only global customers such as Reddit and PayPal, but also many domestic customers such as KB Kookmin Bank and Nexon. Why is operating profit continuing to be in the red?
A. “Sendbird is used by 300 million people around the world. As a company, our goal is to infiltrate potential customers globally more quickly and pioneer the market as a market pioneer. Even if you go to a late start-up, it is not that certain sales are concentrated in a specific country or region, but globally, we have diversified well so that we can create such a diversified portfolio now. We have a global expansion strategy, so these are some sort of calculated losses for us."
<Lee Sang-hee, CEO of SendBird Korea> by Jung Myeong
-won ▶ Why is SendBird a company with 300 million global users in the red?...<Soup Interview> Read full text
Challenges Sendbird must overcome
In the early days of SendBird's messaging solution service, more than 90% of revenue and customers were confined to Korea.
As word of mouth gradually began to spread in the global market, in 2019, about 40% of the global companies went to the United States, 30% to Europe, the Middle East and Africa (EMEA, Europe, the Middle East and Africa), and 30% to the Asia Pacific (APAC) region. could be transformed into
In this regard, the strategy of considering domestic and overseas as the same market and approaching with a global one-market strategy from the beginning was effective.
Sendbird, which wanted to form a global corporate identity from the start, not only conducted contracts based on English standard contracts when contracting with domestic companies, but also conducted business operations in the domestic and global markets equally.
According to CEO Kim Dong-shin, there was resistance to subscription-type messaging solutions from customers because the concept of software as a service (SaaS) did not exist in Korea in 2015.
Many people think of SendBird as an SI company because they did not understand the SaaS service.
So, there were many cases where they requested 'just install it on our server', and there were many times when they faced resistance to paying monthly fees according to the subscription fee method.
Like this, embarrassing situations that often occurred whenever contracts were sent to clients who thought of themselves as SI companies began to disappear when they settled in Silicon Valley and sent English contracts with the identity of a global company.
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