Considering Going International? 10 Tips for Success
Your plans for global domination will be much more likely to work if you take into account these 10 tips to help you look before you leap.
Over the last few months, I’ve spoken with business development experts at some of the fastest growing and most established B2B software companies in the world to learn about best practices for entering new international markets. From these conversations, I have put together a list of 10 best practices for startup or expansion-stage companies to consider as they start thinking about building an international expansion strategy.
10 International Expansion Strategy Best Practices
- You’re either in or you’re out. Successful international expansion strategies are well funded, adequately resourced, and have a committed management team behind them. One of the biggest mistakes that management teams do in is go half-in. So it is important to have a very compelling reason driving the strategy to enter a new international market.
- International market entry will be a roller coaster. The senior management team needs to be ready and bought in for the ride. You also need to realize it will likely be more difficult than the US ride, with more obstacles and resistance.
- Go somewhere where you will get some wins in a reasonable timeframe. There is a magic mean between size and needs. The key to building momentum is getting quick wins in an international market and finding a place to build a scalable expansion model.
- Don’t repeatedly recreate the wheel. The most successful business development teams have figured out how to turn the market identification and evaluation process into a scalable and repeatable experiment.
- Fail fast. Successful teams have also learned how to get results (including negative ones) early, and have established a process for doing so. They start by measuring experiments immediately and develop a regular review process for evaluating their progress on each experiment. The purpose of this process is to minimize the resource costs of learning about new markets and give the team more chances to get it right.
- Don’t over-think it. It’s easy to get lost in analysis paralysis determining where to go. There are a lot of factors to consider (regulatory environment, where all the signals are pointing, etc). However, there is always going to be a lot of uncertainty in the selection process, so don’t over-think which target to go after. You will learn more from the first couple of data points collected through an experimentation process than in the whole identification process.
- Only enter one new international market on the ground at a time. Unless there is a major strategic reason that compels you to do otherwise, you should really only dive into a market if you’re confident you can be a top 3 player. Remember, you will likely only get one chance to enter on the ground, so you need to enter with a splash and do it at the right time. If you’re not confident you can be a top 3 player then the cost of entering may outweigh the return.
- Consider partnerships. Establishing a reseller relationship or a referral partner in a market of interest is typically the best way to aggressively test an entry without fully committing to it. The reason for this is that you typically only have one chance to enter a market and channel partners are great ways of testing whether it’s ready. You can also test via “export selling,” but this can also provide misleading insights on the potential of the market. Many markets may have interesting cultural dynamics that make being local or having someone in person necessary to participate. Knowing these factors before testing is important.
- Conduct interviews. Most of what you do not know about a market can be uncovered in a couple meetings with partners, former competitor employees, or prospects.Consequently, market observations are an important step in the evaluation process that must not be skipped over.
- Re-wrapping products rarely works in international markets. Typically, you will need to localize the product to be a top player in the space.
Taking your business into new international markets is a risky and capital intensive strategy. Following these market best practices will minimize your risks and set your team up for success.
Looking for more tips on international expansion? Watch these videos from sales and business development expert Dave Brock of Partners in EXCELLENCE: