Hiroyuki Anno, DELIGHT Global, How did he achieve global expansion?
What did Hiroyuki Anno of DELIGHT Global do to achieve global expansion?
This article will unravel the 'dos' and 'donts' of global business, making use of the strengths of his own business.
Notable content:
・How did you apply your experiences to your business?
・What are the strengths of being Japanese?
・How do you get new customers without being pushy?
・How do you set goals for global scale?
・What are the advantages and disadvantages of establishing a company abroad?
— Anno-san, thank you again for joining us today. In the first half, we discussed your background, the motivation behind launching your service, your encounter with The Founder Institute, and your global expansion efforts. Given our desire to inspire more Japanese entrepreneurs and startup business people to challenge the global market, as reflected in the purpose of this podcast, we would like to ask you some questions from a global perspective in the second half as well. Thank you for your continued participation.
— You mentioned that you wanted to operate globally from the start. What motivated you to aim for a global market from the beginning?
Anno: "First, our product is a multilingual phone bot with a cloud SaaS system. Since there are no physical constraints, we can provide phone numbers in 50 countries and support 33 languages. Therefore, we thought it would be better to operate globally from the start rather than focusing solely on the Japanese market. However, we initially didn't know how to go about it, but we always had a global vision in mind."
— I see, thank you. Then you encountered the Founder Institute program, which helped you refine your product concept and brand, leading to your current challenges.
Anno: "Yes, although the project itself hasn't changed much. What has dramatically changed is our investor pitch and sales pitch, which we use to explain our product to customers and investors."
— That's interesting. I believe many Japanese startups and entrepreneurs want to challenge the global market but face various obstacles, such as language barriers. What advice would you give to those who want to challenge the global market?
Anno: "Well, as I mentioned earlier, I was born and raised in Japan, graduated from a Japanese university, and have no experience living or studying abroad. Looking back, the most valuable experience for me was working as a sports agent and organizing marathon events at the company I founded. Especially as a sports agent, my experience in negotiating with foreign countries helped when we transitioned from promoting professional athletes to promoting our phone bot product. I became quite accustomed to cold calling and emailing people I didn't know, which has been beneficial."
— So, it's essential not to fear failure or rejection and to take action, right?
Anno: "Exactly. When I contacted angel investors living in Europe, only three out of a hundred responded. They said that few Japanese people had contacted them before, so they were intrigued. This was similar to my experience of promoting Japanese professional athletes to European leagues, where such outreach was rare. Starting as a sports agent in 2000, there were few Japanese athletes moving to European leagues. This pioneering spirit gave me an advantage. Similarly, I believed I could promote our phone bot in the same way. Although we initially struggled with investor pitches, we later connected with the Founder Institute. Instead of seeking investment, we focused on selling our product, a SaaS that is easy to contract for as low as $10 per month. Our past experiences shaped this approach."
— I see. So, past experiences played a significant role in your success.
Anno: "Yes, my experience in cold calling and sales has been valuable both in Japan and abroad. Despite being an engineer specializing in AI, I have strong sales skills as well."
— When considering overseas markets, how do you select them? Currently, you are expanding in several countries, including Japan, the USA, the Philippines, and Ukraine. How do you approach clients in these diverse regions?
Anno: "We have an MVP (Minimum Viable Product) but haven't achieved PMF (Product-Market Fit) yet. We're still exploring. Industries and clients struggling with phone handling tend to be interested, regardless of nationality. We avoid aggressive sales tactics like cold calls and emails, preferring referrals and pitching at events."
— Understood. Regarding KPIs for your MVP stage, what metrics do you focus on?
Anno: "We focus on MRR (Monthly Recurring Revenue) and its growth rate (MoM). Balancing investment of time and money, we aim to scale globally while achieving sustainable unit economics."
— Are you currently targeting SMEs or larger enterprises?
Anno: "Initially, we targeted SMEs due to the ease of approach, especially during the pandemic when remote work was prevalent. However, unit economics didn't work out. With the Founder Institute's guidance and the pandemic's impact, we shifted to targeting larger enterprises, focusing on referrals and direct engagement."
— At the MVP stage, are you focusing on one market or multiple countries simultaneously?
Anno: "Given my familiarity with the Japanese market, we started there. We later established a headquarters in Delaware and onboarded a co-founder, expanding our focus to North America. We're targeting industries like finance, aviation, and telecommunications in both markets."
— You mentioned relocating your headquarters to Delaware. Why did you make this decision, and when did you bring in your co-founder?
Anno: "We moved to Delaware because hiring a foreign co-founder in Japan was challenging due to high costs and administrative burdens. Delaware offers a startup-friendly environment with standardized templates and easier processes. We made the move in August 2023 and onboarded our co-founder two months later. This structure allowed us to consolidate our Japanese subsidiary under the Delaware parent company, attracting investors globally."
— Did you handle the company setup yourself or use an agent?
Anno: "Setting up in Delaware was straightforward, done online using Stripe Atlas for about $500. Transitioning Japanese investors to the new structure required shareholder resolutions and consulting with legal experts as needed."
— So, starting with a Japanese entity and later moving to Delaware is a viable option for those aiming for global expansion.
Anno: "Yes, I recommend starting in Japan and moving to Delaware once you have an MVP. This approach leverages Japan's favorable environment while preparing for global scalability."
— What challenges have you faced in your global expansion, and do you have any advice for aspiring global entrepreneurs?
Anno: "Finding the right co-founder is crucial. Building a diverse management team helps ensure broader perspectives and expertise. English proficiency and clear business pitches are essential. I recommend using resources like Y Combinator's co-founder matching service to find suitable partners."
— Did you encounter any issues with fundraising or managing the transition?
Anno: "Initially, my pitch materials were inadequate, focusing too much on personal background rather than the business value. Joining the Founder Institute in October 2020 significantly improved our approach, aligning our mindset with startup norms."
— Any specific pitfalls to avoid when aiming for the global market?
Anno: "Avoid spreading yourself too thin across multiple countries. Focus on two or three key markets initially, such as Japan and North America or Japan and Indonesia. This focused approach helps manage resources and achieve better results."