The toughest questions most entrepreneurs face will involve international expansion. Whether to, when to, where to and how to expand all involve a wealth of complex considerations. The stakes are high: Success could mean the creation of a global multimillion-dollar business, whereas failure can often be fatal to a startup’s long-term viability.
Luckily, international expansion doesn’t have to be a blind gamble. With the right research and strategy combined with knowledge of the most common pitfalls, founders can mitigate a lot of risk and give their startup the best chance to succeed.
Naturally, many of the factors that we need to explore vary considerably between tech verticals. For ease, we will concentrate on midsized startups that sell directly to consumers. However, don’t be disheartened if you operate a B2B startup, as the approach I will outline may broadly apply to your business, too.
Go big by staying home
A mistake we often encounter is that businesses see expansion as a goal in itself rather than a move necessary to fulfill a clearly defined commercial strategy. There can be a tendency to rush the process without doing all the objective reflection needed. It’s important to ask yourself, with the risk involved, if international expansion is the only way to realize your dreams for your business. If so, are you really ready?
It may be that through luck or ingenuity, your business has thrived in your home country with minimal marketing spend, but there is absolutely no guarantee this will happen abroad.
In relation to being “ready,” the most successful consumer businesses use their home market to refine their product offering, build their team and infrastructure, and critically, learn to adapt their business per shifting consumer expectations and demand. It is generally much cheaper to gain experience and make your mistakes at home rather than abroad. If, after mulling these questions over, you’re ready to roll, great! Where should you go?
Start with the simple questions
There is absolutely no substitute for research, and you can never do enough. You’ll first need to gather data points from your existing customer base. In an ideal world, a percentage of sales would already come from international clients, and this information may, on the face of it, point to potential demand in a particular region.
However, this is by no means definitive. Sales may be concentrated in a particular country simply because of the language your website is in or, if you’re selling via a third-party platform, due to where that customer base is. Pay attention to the customer journey and how interest has fluctuated over time. Flat demand or outlying surges could indicate a ceiling in that market or an extraneous factor that has skewed the data.
The next step is to shortlist locations. Countries with a similar time zone, commercial culture, language, and legal and regulatory framework should be at the top of the list.
Source: New feed