#30: How Offshore SaaS is Targeting the US B2B Market

Chip Royce, Flywheel Advisors

A fascinating parallel is emerging between historical trends in manufacturing and today’s Software-as-a-Service (SaaS) industry.

The United States outsourced manufacturing to Asian nations in the 2nd half of the 1900s, resulting in the creation of powerful competitors.

We’re witnessing a similar transformation today in the B2B SaaS sector.

Echoes of Globalization: Manufacturing & SaaS

American companies outsourced manufacturing to Japan after World War 2 and to China, and other Southeast Asian countries in the late 1990s. We not only transferred production but also technological expertise and manufacturing excellence. These nations transformed from mere production centers into formidable market competitors.

Today, we’re seeing this pattern repeat in B2B SaaS.

Companies in India, the Philippines, and South America are catching up, rapidly, in modern software development.

They’ve learned robust engineering practices, sophisticated product architecture, English-language customer support, and comprehensive SaaS application development.

Three Types of Offshore SaaS

We’ve engaged with companies looking to sell to U.S. B2B. These clients already have traction in their home country and want a share of the lucrative B2B SaaS market.

1) Services Posing as Software

Many international companies want to evolve from outsourced services into software. These organizations spent years delivering services to U.S. clients. They’re now packaging their expertise in a SaaS layer.

Success in this category isn’t guaranteed.

Companies must create real value through software, not a thin veneer over their services.

The winners will show clear benefits: less risk, more efficiency, and faster growth.

2) Market Challengers

A second category consists of companies creating alternatives (‘dupes’) to established U.S. software products. These companies are launching alternatives to B2B apps, such as CRM, accounting, and customer support tools.

Competitive pricing isn’t the only value driver for breaking into the U.S. market. Companies must also overcome the trust advantage enjoyed by established U.S. brands.

To succeed, Market Challengers must excel in four areas: modern features, pricing, and a long-term commitment to the market. The fourth focuses on specific, underserved industry verticals (or user segments).

3) Innovators from Abroad

Companies with new, novel SaaS concepts are the most exciting category. These organizations use their global perspective to solve problems ignored by U.S. firms.

Their mix of global talent and low costs allows for aggressive market-entry strategies.

Success in this category depends on the same dynamics that any new entrant faces. Solve an existential customer problem, provide an understandable message of the value created, and implement an effective go-to-market strategy.

How can U.S. SaaS defend its turf?

It’s never been easier to enter the U.S. B2B market. Customers want to save money and find innovative solutions that drive revenue and efficiency.

How can domestic US companies defend their turf from offshore SaaS?

Companies must create defendable “moats” (competitive advantages that block competitors)

1) Innovate through Unique features and IP

I saw firsthand the negative impact of not continuing to innovate and develop features and a lesson that stuck with me throughout my entire career.

I worked for an internet content platform that was the first of its kind to deliver a customized experience tailored for each user. In 1998 that was a big deal and required massive computing power to deliver.

At one point, we had to pause feature development in order to re-architect the platform for performance. What was envisioned as a 4-month process became a 9-month project. Our product was good, but the 9 months with no new innovation enabled competitors to catch up and in some cases leapfrog our company.

It is even easier for competitors to catch up to you. To defend against offshore competition, keep speaking with customers, create new features, and improve existing ones.

2) Effective pricing

I’ve seen startups charge too little, and others charge too much. Offshore SaaS apps will seek to undercut your pricing as a way to encourage competition.

You have to charge enough to create a sustainable business, but you must manage your cost structure to fend off competition.

3) Better marketing and sales

Your overseas competitors are less marketing savvy and often lack a clear understanding of customers. Their sales activities often scream “I’m calling from an overseas call center” and struggle to bridge cultural divides.

Exploit this issue to your advantage, most customers prefer to do business with other US companies.

Find out through research the existential problems your customers experience and how your product solves those issues. Get your product in those customers’ hands, get testimonials and logos, and incorporate them into your marketing programs.

4) Don’t ignore professional services

There are reasons that overseas services companies are getting into software.

A software tool they can operate is good. However, many companies want work “done for them” and having a services arm can be a strategic advantage.

Think of ways to affordably provide services to customers, everything from onboarding, to setup and integrations, to day-to-day management. If you can get your cost structure right, these services can be immensely profitable.

5) Data protection standards and regulations

One way to defend against overseas SaaS providers is to take advantage of U.S. data standards and regulations.

Selling to education, HIPAA, FERPA, and COPPA data privacy regulations are required and most overseas companies struggle to ensure compliance.

Government and many corporations may often only use services where data is stored on specially hardened hosting facilities.

Identify which of these services are required, architect this into your tech stack, and be sure to market these features in your sales activities.

How can offshore SaaS break into the US B2B Market?

For international SaaS companies aiming to enter the US market, Flywheel Advisors offers a proven, comprehensive approach that reduces risk and maximizes chances for success.

We built our method on years of experience helping overseas technology companies establish and grow their presence in North America.

1) Assessment

We begin with a thorough, fast, and efficient market assessment that includes:

• In-depth customer research to understand pain points and needs.
• Comprehensive market analysis to identify opportunities and challenges.
• Development of a defined customer opportunity using our proprietary “6 Keys” framework
  • Identify existential problems that need solving.
  • Craft a compelling solution and offers.
  • Target the most promising industries.
  • Develop clear, differentiated messaging.
  • Identify optimal sales channels.
  • Design effective sales motions.

2) Expansion and Planning

Building on the assessment phase, we help companies:

• Define key performance indicators and success metrics.
• Transform insights into actionable strategies.
• Develop a minimum viable go-to-market (GTM) plan.
• Create detailed execution roadmaps and playbooks

3) Execution & Scaling

We support companies to establish a U.S. market presence through:

• Implementation of the GTM plan
• Development of strategic partnerships
• Creation of scalable growth strategies

Risk Mitigation Through Experience

One of the keys is to de-risk the market entry process.

Our phased approach ensures that companies make informed decisions based on solid market intelligence and proven methodologies. We help clients avoid common pitfalls and succeed in the North American market.

Partner for Success

Contact us to learn how we can help your SaaS companies expand into the US. We offer the expertise, methods, and support needed to succeed in a competitive market.