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Stretch: Tallyfern: which international market first?

You run the case. Read the prompt, answer questions from the notes below, and share data only when the candidate asks for it or gets stuck. Score at the end.

Case timer

00:00

Target length:

1. Read the prompt aloud

Read it slowly, then pause. Let the candidate ask questions before they structure.

Written case: Tallyfern, a software company selling accounting subscriptions to small businesses, must choose its first international market among Germany, the UAE, and India. Using the data pack below, write a one-page recommendation.

The prompt refers to Exhibit 1. After reading it, say: "Open Exhibit 1 now."

Format note: Difficulty: Stretch. Format: written case, with a data pack. Industry: Technology (software). Region: Global (Germany, UAE, India). Interview length: about 45 minutes. The company is fictional and all figures are illustrative. Lead with the recommendation, then show a short table of the numbers that support it.

2. Answers to clarifying questions

Give these answers only if the candidate asks. If they ask something not listed, give a sensible answer or say it does not matter here.

If asked: What does the company sell?
Answer: Accounting software for small businesses, sold by monthly subscription, with an 80 percent gross margin everywhere.
If asked: What is the goal?
Answer: Pick one market to enter first, based on revenue in year three and customer economics.
If asked: Are there local requirements?
Answer: Each market needs tax and invoicing localization: Germany (e-invoicing and GoBD bookkeeping rules), the UAE (VAT and planned e-invoicing), and India (GST e-invoicing), about USD 0.5 million one time each (illustrative). Many German customers also prefer their data stored in Germany.

3. The hypothesis a strong candidate states

Listen for an early, testable guess like this one. It does not need to match word for word.

Large markets are not always the best first choice. My hypothesis is that the market with the best customer economics (lifetime value against acquisition cost) should go first, even if it is not the biggest.

4. A model structure

Compare the candidate's structure with this one. A different split can be just as good if it is clean and fits the problem.

Year-3 revenue and customer economics by market
- Customers and ARR in year 3
- Key: LTV/CAC
- Local costs and requirements

Exhibit 1

The prompt uses this exhibit, so the candidate opens it right after you read the prompt ("Show exhibit 1" on their screen).

Tallyfern market data pack (illustrative)

Tallyfern market data pack (illustrative)
Market	Target small businesses	Expected share by year 3 (%)	Price (USD a month)	CAC (USD)	Monthly churn (%)
Germany	400,000	2	60	900	1.5
UAE	80,000	4	50	600	2.5
India	1,500,000	1	15	150	4

So-what

India has the most businesses but the lowest price and highest churn; Germany has fewer businesses but the best customer economics.

5. The working, step by step

Each step shows how a strong candidate works it out. Share a new fact from it only when the candidate asks or is stuck, and let them do the math: the result in the dark box is what they should reach.

Step 1: Germany: year-3 ARR
What a strong candidate does: 2 percent of 400,000 businesses at USD 60 a month.
ARR (USD): 400,000 × 0.02 × 60 × 12 = 5,760,000
Step 2: UAE: year-3 ARR
What a strong candidate does: 4 percent of 80,000 at USD 50 a month.
ARR (USD): 80,000 × 0.04 × 50 × 12 = 1,920,000
Step 3: India: year-3 ARR
What a strong candidate does: 1 percent of 1,500,000 at USD 15 a month.
ARR (USD): 1,500,000 × 0.01 × 15 × 12 = 2,700,000
Step 4: Germany: LTV/CAC
What a strong candidate does: Monthly contribution divided by monthly churn, then divided by CAC.
LTV/CAC: (60 × 0.8 ÷ 0.015) ÷ 900 = 3.56
Step 5: UAE: LTV/CAC
What a strong candidate does: Same method.
LTV/CAC: (50 × 0.8 ÷ 0.025) ÷ 600 = 2.67
Step 6: India: LTV/CAC
What a strong candidate does: Same method.
LTV/CAC: (15 × 0.8 ÷ 0.04) ÷ 150 = 2
Step 7: Curveball: local data hosting in Germany
What a strong candidate does: Interviewer: "Many German customers prefer data stored in Germany, and hosting it there would cost about USD 1 million a year." Germany's year-3 contribution after that cost:
Germany contribution (USD a year): 400,000 × 0.02 × 60 × 12 × 0.8 - 1,000,000 = 3,608,000
Step 8: Germany LTV/CAC after hosting
What a strong candidate does: Spread over 8,000 German customers, hosting costs about USD 10.4 per customer a month (USD 1,000,000 / 8,000 / 12), lowering monthly contribution:
LTV/CAC after hosting: ((60 × 0.8 - 1,000,000 ÷ 8,000 ÷ 12) ÷ 0.015) ÷ 900 = 2.78

The recommendation to listen for

At the end, say: "The CEO walks in. What is your recommendation?"

I recommend that Tallyfern enter Germany first, plan the UAE as its second market, and approach India later with a different product. First, Germany gives the highest year-3 recurring revenue: 2 percent of 400,000 businesses at USD 60 a month is about USD 5.8 million, against USD 2.7 million in India and USD 1.9 million in the UAE. Second, it has the best customer economics. With 1.5 percent monthly churn and a CAC of USD 900, its LTV/CAC is about 3.6, against about 2.7 in the UAE and 2 in India, where a USD 15 price and 4 percent churn leave little room to pay for acquisition. Third, the choice survives the main local cost. Hosting data in Germany would cost about USD 1 million a year, which lowers LTV/CAC to about 2.8, still above both other markets, and leaves a year-3 contribution of about USD 3.6 million, the largest of the three. The UAE is a sound second step: a small market, but a 4 percent share and an LTV/CAC of about 2.7 make it a good base for the Gulf. India has the most businesses, but at its price it needs a lower-cost product and sales model first. The main risk is that the 2 percent share proves optimistic, since German customers may expect local-language support and accounting features. As a next step, confirm hosting and data rules with German customers and test pricing with 50 German accounting firms that advise small businesses.

Risks a strong answer names: German customers may expect local-language support and accounting features; Share assumptions may be optimistic in a crowded market.

Next steps: Confirm hosting and data rules with German customers; Test pricing with 50 German accounting firms that advise small businesses.

Strong versus weak

A strong answer

Led with a clear choice, compared markets on both revenue and customer economics, and tested the German hosting cost.

A weak answer

Chose India because it has the most businesses, without checking price, churn, or acquisition cost.

Score the candidate

Score each criterion from 1 to 5. A 2 or a 4 sits between the descriptions.

Structuring

1: No clear structure, or a memorized framework that does not fit the problem.
3: A sensible structure, but with some overlap, a gap, or no clear priority.
5: A structure built for this problem, with no overlap and no gaps, a stated hypothesis, and a clear first step.

Math

1: Frequent errors, no units, or needed heavy help to finish.
3: Right answers but slow or messy working, or one error caught late.
5: Accurate and clearly narrated, with units, a sense check, and what the number means.

Exhibit reading

1: Read the chart aloud without finding the number that matters.
3: Found the key number but gave only part of the so-what.
5: Pulled the right number quickly and said what it means for the case.

Synthesis

1: Summarized what was done, with no clear answer.
3: Gave an answer, but with weak reasons or no next step.
5: Answer first, then two or three reasons with numbers, the main risk, and next steps.

Communication

1: Hard to follow: long silences, no signposting.
3: Clear most of the time, with some rambling.
5: Calm and concise, signposted each step, and checked in with the interviewer.

Total

0 out of 25

Score all five criteria to see the band and the feedback template.