We should all know by now expanding your business beyond your home country is hard. And many still plenty of costly mistakes because a clear internationalization strategy hasn’t been developed.
Here, we explore the most common mistakes that will ruin investor relationships, annoy current and future customers, and ensure your company encounters high staff turnover!
Quickly entering new markets is a recipe for overspending and under-delivering for your business.
Before entering a new market, allocate three to nine months to go out there and scout for opportunities in person. This time enables you to realize if a new market could be a source of 25% or more of future annual revenue
In addition, setting aside reasonable time allows you to tackle obstacles such as opening a local bank account and getting your business registered. Both could take weeks or months.
Bigger markets, bigger opportunities. However, opportunity has costs and opportunity doesn’t always translate into real demand.
Make sure you have fully considered the whole picture – think about market demand, market cost and market competition. A big market doesn’t directly mean the demand is there, or that it is easy to access. Focus on being demand-driven rather than opportunity driven. A good piece of advice is to look at your inbound sales leads, where and who they are coming from and that will point you in the right direction regarding where the demand is now and in the future.
You might ask yourself what governments know about business building. The answer is – more than you think. Investment and trade promotion arms of your government are there to help you free of charge.
They can introduce you to fellow country (wo)men who’ve already ‘walked the talk,’ can conduct feasibility studies and make introductions to local partners. In addition, these organizations can provide subsidies for you to attend international conferences, open foreign offices and get your website or marketing materials translated into new languages.
By skipping out on leveraging these free resources, you’re missing out on valuable support in terms of subsidies, knowledge, and possible connections.
If you want to get it done, do it yourself is how the phrase goes. However, there are limitations in terms of your abilities, knowledge, and time.
Look for soft landing programs run by organizations with track records in your new market to help you make a smoother transition. In many cases these programs are heavily subsided and/or include a possible investment.
Take what works in your beachhead market and apply it to a new market. Simple & efficient, right?
Let’s learn from Uber, while they have been very successful at expansion in terms of their global presence, their plug-and-play approach among other things has forced them to overspend in terms of marketing and operations as well as run into regulatory challenges and get into head-on fights with competition from established local providers.
Each market you enter is unique, localize accordingly by hiring local staff and management, translating marketing and operations materials as well as understanding regulatory hurdles ahead of time. Also, don’t discount possible partnerships rather than going at it alone in a new market.
You should always focus on your home market first no matter how big or small the opportunity may be.
However, you must keep looking at the medium to longer terms as a founder too.
If you don’t, business expansion beyond your national borders will become more complicated and costly. For instance, hiring a non-diverse workforce from the beginning. By not hiring those with an international outlook, background or experience, it will be tough to look within for help to open or support new markets. A good strategy to implement is to hire talent from a potential new market for growth.
At imec.istart, we help our startups to think international from day 1. We have a dedicated Internationalization Officer, Andrew David Herweg, who also organizes foreign business missions and prepare young entrepreneurs for international breakthrough.
Are you an ambitious tech startup that has a working proof of concept? Are you ready to take your startup to the next level? ➡ Reach out to us and apply in one of our open calls.