The NABC method was developed in the USA by the Stanford Research Institute as a tool used for the development, assessment, and presentation of ideas. Using the NABC method requires a thorough knowledge of the value proposition. It is part of the plan itself to generate relevant and specific questions.
The generic NABC method by the Stanford Research Institute stands for:
- N for Need. An idea without a practical need for it remains just what it is: a good idea and nothing more.
- A for Approach and is usually a point of departure for most activities, but with the NABC method.
- B for Benefit or the innovative elements of an idea. In other words, that which constitutes its uniqueness.
- C for Competition existing in the area concerned.
We make a case for an international software firm, willing to build a business in Germany. They work in a fast-changing environment where companies need to move fast but smart, and a failure is an option. Bottom line: they want to invest as little as necessary to understand but as much as needed to remain independent.
Need in NABC
An international company seeks the most effective legal, technical and commercial setup to start their business within Europe. The common challenges are due to different time zones plus the standard go to market hurdles: Cognitive Hurdle, Resource Hurdle, Motivational Hurdle and the Political Hurdle.
Approach in NABC
Sembassy´s approach is to be mandated by the international company to deliver the setup (support the planning and the understanding of the market structure) and execute the market entry (local bridgehead acquisition on customer, supplier and service partner level). Our cooperation with the international client is milestone-based and may last six months or three years. In the first case, the client decides to take over operations directly and maintain established relationships with customers and partners themselves. In the second case, the client and Sembassy agree on a role model to deliver top-notch services to the European / German target market in a well planned and established the shared role and workflow model. Here is a default implementation roadmap for working with Sembassy.
Benefits in NABC
The Benefits are faster sales, due to local sales, friendly channels, less cost, due to less travel, given infrastructure and lower risk, due to minimal financial and legal exposure. These benefits have a different meaning, depending on the nature of our client´s business. E.g.: If you are selling Mobile Gaming Apps on the Apple AppStore, you have a clear framework, how to do business in a new country. The AppStore guidelines tell you, how to win users, and how to monetize them. You may charge for certain goods in the App´s gameplay. You may convert them from free gaming to gambling. In both ways, the AppStore will tell you, what´s in line with applicable law. However, with connected services you typically run into the main cost drivers user-acquisition and user-retention. Here, things will become expensive very quickly, when your team screws the whole project by ignoring local law. Back to gaming – gambling: this is quite complicated in the European Union, as laws like the U.K. Gambling Bill give you rights in some regions only. If you are seriously building Apps and have been banned from the Apple AppStore before, you know that this kind of event can break your neck. We can expect a significant learning curve with Mobile Health Apps and Industrial Internet of Things (IIOT) Apps. It´s obvious that European user organizations will more and more force their local legislation to hold the developer accountable for any breach of privacy. Facebook is the most prominent company in this discussion and playing it´s political power and technical dominance very well.
Cost in NABC
Next step in our value-based approach is to compare the associated costs that come with each alternative. In our gaming – gambling example we can name one alternative “doing nothing” (very popular alternative by the way). In this case, the associated costs would be the “missed business”. But apart from the “doing nothing” alternative, we can compare the more serious alternatives for an US-based tech startup, that received additional funding for “international growth”. Their shareholders expect to look for aggressive growth opportunities and certainly have heard that the European Union in 2016 generated a nominal gross domestic product (GDP) of 16.477 trillion US dollars, constituting approximately 22.2% of global nominal GDP and as a whole is the largest economy in the world. However, with all the uncertainty around UK Brexit, it´s hardly predictable, what´s the best go-to-market approach. Old school recommendation would tell you to do, what they others did and install a European bridgehead in London (where most comes together). But that could become a massive strategic mistake. Not only is the cost of living and cost of doing business in the U.K. much higher than in any other European country. There is a well the still open question, if and how the UK based firms will have access to the European Union.
Sembassy is often compared with these three alternatives:
Option 1: Send your own team – if there is a capable available team
Option 2: Build a local team from the scratch – find, hire & train
Option 3: Buy a local company – certainly most expensive jump start
Here is our unfair advantage
You may have read about the term “unfair advantage” before. It´s used in the Business Model Canvas when the entrepreneur is asked, why the user should choose his service. Good answers would be: “we hold a patent”, or”, “we know this industry better than anyone else”. Sembassy´s answer would be that we are designed to serve exactly this use case (international tech firm, going after the European market potential with a mobile service”. The reasons for this are: we don´t have to feed international overheads like a global player has to. We can start lean but scale fast, as we team with the leading European service platforms and use automation. And finally, we are not exposed to hidden interest by a shareholder and will align our business model with our clients.
No Corporate Bias – No Cultural Bias – Straight Forward Performance Driven
Contact me, if you are on a serious mission and allow us to put some serious numbers on this kind of benchmark.