Six ways to fantastically fail at internationalisation

By Andrew Herweg, International Expansion Officer at imec.istart

By now we should all know that expanding your business beyond your home country is hard. Yet many companies still make costly mistakes because they haven't developed a clear internationalisation strategy.

Below are the most common ones: the mistakes that will damage your investor relationships, annoy current and future customers, and leave your company with high staff turnover.

1. Moving too fast

Entering new markets too quickly is a recipe for overspending and under-delivering.

Before entering a new market, allocate three to nine months to go there and scout for opportunities in person. That time lets you find out whether the market could become a source of 25% or more of your future annual revenue.

It also gives you room to tackle practical obstacles, such as opening a local bank account and registering your business, both of which can take weeks or months.

2. Failing to be demand-driven

Bigger markets mean bigger opportunities, but opportunity comes with costs and doesn't always translate into real demand.

Make sure you consider the whole picture: market demand, market cost and market competition. A big market doesn't automatically mean the demand is there, or that it's easy to access, so let demand guide you rather than opportunity. A good place to start is your inbound sales leads. Look at where they come from and who is sending them, and they'll point you towards where demand is now and where it's heading.

3. Failing to use government support

Governments know more about building businesses than many founders assume, and your government's investment and trade promotion agencies are there to help you free of charge.

They can introduce you to fellow countrymen and women who have already made the move, carry out feasibility studies and put you in touch with local partners. Many also offer subsidies to attend international conferences, open foreign offices and translate your website or marketing materials into new languages.

If you skip these free resources, you miss out on valuable subsidies, knowledge and connections.

4. Failing to look for help

"If you want something done, do it yourself," as the saying goes. But your abilities, knowledge and time all have limits.

Look for soft landing programmes run by organisations with a track record in your new market to help make the transition smoother. Many of these programmes are heavily subsidised, and some include a possible investment.

5. Failing to adapt

Taking what works in your beachhead market and applying it to a new one sounds simple and efficient.

Uber is a good lesson here. The company has expanded very successfully in terms of global presence, but its plug-and-play approach, among other things, forced it to overspend on marketing and operations, ran it into regulatory challenges and put it in head-on fights with established local competitors.

Every market you enter is unique, so localise accordingly: hire local staff and management, translate your marketing and operations materials, and understand the regulatory hurdles ahead of time. And don't rule out partnerships as an alternative to going it alone.

6. Failing to think globally from day one

Always focus on your home market first, however big or small the opportunity. As a founder, though, you also need to keep an eye on the medium and longer term.

If you don't, expanding beyond your national borders becomes more complicated and costly. Hiring is a good example: if you don't bring in people with an international outlook, background or experience from the start, you'll struggle to find anyone in-house who can help open or support new markets. A good strategy is to hire talent from a market you might grow into.

A few other observations

There's more to sales than selling remotely

‍When you sell software, you can do most of your selling from almost anywhere, sitting behind a screen. But for early pilot customers, and as you scale into mid-market and enterprise sales, nothing replaces meeting in person. An arranged 30-minute discovery or check-in call online leaves very little room to go off script, while a site visit leaves plenty, and those moments can give you valuable information and a chance to connect with people in IT or procurement who could otherwise become bottlenecks.

New hires, new offices

‍Recently, two of our portfolio companies opened offices and made strategic hires abroad: Octave Energy in Rotterdam and Deontic in Heilbronn. For both, this was the result of months of conversations, conference visits, new partnerships and signed clients.

France keeps growing

‍France continues to be a bigger play for our Flemish portfolio companies. Azumuta recently made new hires and found a home at Station F, and Luzmo, AI Blox and Prismos all have colleagues spread across the country.

All eyes on Spain

‍Over the years, I've seen more and more portfolio companies test the Spanish market through coordinated pilots, strategic hires and Horizon Europe-funded consortiums. We've even jumped on the bandwagon ourselves at imec.istart, recently launching in Spain and setting up shop in Barcelona. I see a lot of potential there for B2B companies selling to mid-market businesses and MSMEs in the country.