March, 2023
After having spent 6 months in London, it’s clear that for us software investors outside the US, understanding the basic tenet of globalisation, which is the highest quality product delivered at the lowest possible price being the winning condition, is very important.
This was reinforced after my India visit. For the medium term, the US will remain the single biggest market for enterprise software. Hence, when building outside the US, imperative to have a view on how you’re going to beat competitors in the US, which is their unfair advantage.
Much like during China’s rise to manufacturing dominance a few decades ago, Chinese tech companies have harnessed a labor pool of affordable talent to constantly fine-tune product features.
China is highly competitive — software and hardware companies have to constantly cut costs, reduce profit margins and increase efficiency to remain viable, but the trial by fire naturally provides an advantage when entering overseas markets.
Zhang said Cloudpick could price their offering below its main competitors from the US and Israel. Qian Huang, founder of Passive Edge, said his start-up had a similar edge, with pricing at about half that of British and German competitors.
My read on the above:
- In order to be global, you first have to beat local competitors.
- Once you go global, you have to beat your international competitors for which the easiest route is delivering a certain product experience with the lowest possible cost structure.