ANZ: Ideally Suited for Prototypes

Last month I spent two weeks on the other side of the world - one in New Zealand (Auckland) and the other in Australia (Sydney).  The purpose of the trip was a class: KIP (Kelley International Perspectives), which has the mission of teaching students about perspectives on business in other parts of the world.  Of course we had time to explore and be tourists, but we spent a fair amount of time visiting firms (10 in all) in addition to once-a-week sessions on campus back in January and February.

The main take-away for me from the experience stems from these countries' unique situations: They are both very geographically isolated - from every other nation, but especially from developed ones - and they both have very small populations (there are roughly 22 million Aussies and 4 million Kiwis).  They are also somewhat wealthy, developed, and American-like, stemming from their British origins.  In fact, Australia is often considered to be more like the US than the UK, and my own experience of Sydney was very much like visiting an American city, only the people had different accents.

All of these traits make Australia and New Zealand (ANZ) a perfect proving ground for new products destined for the US.  This is especially true for companies with established brands that they do not want to risk damaging for the sake of a new product.  And as it happens, many American companies are already leveraging ANZ in this way: We visited Kimberly-Clark in Sydney, who uses Australia quite often as a test market for its Huggies and Kotex brands.  They find that Australians react very similarly to Americans when it comes to marketing and products, so the level of success of a new campaign or new product there is a strong predictor for the same in the US.

This strategy may also work for a startup, but of course this strategy comes with the trade-off of needing to wait at least several months to get feedback from the ANZ market.  Also, I haven't dug much into the subject for the tech industry, but it would be great to see the results of companies opting to launch tech products in ANZ before the US and finding whether or not there was a correlation with success in the US.