Global expansion... The start-up way

Wanting to grow from local to global is a healthy business aspiration. It’s an exciting time for any company. However, global expansion could be the biggest challenge to date for your business: 

• Global expansion could dilute your focus on innovation. As your team is busy customising your offering to the requirements of a new market, it is not focusing on innovation and creating new features
• Global expansion could weaken your company’s culture. It is relatively easy to create and nurture your culture amongst a team located in the same office, but welcoming remote employees who have different cultures and backgrounds and are in a different time zone is a different ballgame
• Addressing a brand new audience in a new market obviously requires considerable budget, time and effort. 

Thankfully there are tried and tested steps any company can take to reduce the risk and to ease the growth of your customer base from national to global. I learned them when supporting Google’s global expansion in 2003-2010, and Eventbrite’s a few years later.

Before jumping into the “how” of global expansion, I always ask businesses to take time to assess their readiness for this transformational step. I ask questions such as: 

• How strong is your position in your home market? Are you amongst the leaders? Are you growing fast? How competitive is your home market? 
• Is global expansion going to take away so much of your focus on your home market that you could be taken over by a competitor or miss a major local opportunity? 

If all your answers point towards readiness, let’s move on to the 5 steps for a fast, efficient and safer international expansion. I call it the 5-P’s. 

I - Prioritise

In this preliminary step we will assume that your company could not tackle 10 new markets simultaneously. You need to find your sweet spot. It is therefore time to crunch some data! 

A. INTERNAL DATA

Your product or offering is probably already gathering interest from customers outside of your home market. Where is this organic traction taking place? This will point you in the direction of a handful of countries, where there is a clear appetite for what you’re offering. This is a good baseline as any!

B. EXTERNAL DATA

At Eventbrite, we created our own “ ripeness model”. It took into consideration all sorts of data points about potential new markets such as: GDP, mobile penetration, adoption of e-commerce, competitive and regulatory landscape… This set of data empowers you to “rate” potential markets. Then we would work with an analyst to apply to potential new markets the growth rate that we experienced in our home market over the past 5 years, and see the future potential of these new markets (if they were to grow at the same pace as the USA). 

This is how you can safely prioritise your top 5 international markets: Countries where there is already a solid appetite for your offering, and a real opportunity for growth. All of the information you need is available internally or online! This is a cost-free, efficient and quick prioritisation exercise!

II - PLAN

Once you’ve identified a new market that you feel is ripe for your business, a lot of ducks have to be put in a row before it’s time to invade and invest: 

You need to assess the salient aspects of taxation, legalities etc. to know if you need to open a local entity in order to trade locally (Do you need a local bank account? If so, does that require opening a local office?...)

You must understand the social norms of the market in order to adapt to their ways of conducting business: Are face to face meetings a must? How important are personal introductions? This will help you understand if you absolutely need a team on the ground. 

You also have to size up the actual effort that localisation will require for this new market. Note that I am not talking about “translation”, but “localisation”. Localisation is for instance realising that dates in the USA (month-day) are written differently from Europe (day-month), and if this is not localised, a North American event ticketing platform cannot be used in Europe! Period! 

One of the best ways to get answers to all these questions is to speak to other startups who are more advanced than you in that market. When I worked at Eventbrite, I used to exchange with peers at AirBnB, Pinterest and Etsy. 

You also need to understand local customs, habits and expectations: For instance, how do companies pay you and how do they get paid in this country? What does it take to gain their trust (do consumers expect you to have a local bank account where the $$$ stays until the transaction is fulfilled)? What will make them tip from a local competitor to your product? At Eventbrite, we obtained invaluable information by meeting potential customers on the ground. We gathered Sales, Marketing and Product experts from our HQ, organised a tour of the country and had dinner in a different city every night with event organisers and event goers, and we listened!

III - Partner

A great way to optimise your investment (as in, keeping it low!) when entering a new market is to develop relationships with influential local organisations or trade associations or governmental bodies. Seek companies with similar audiences to yours, yet non-competitive offering, and look for avenues to enter into mutually beneficial agreements. For instance, for Eventbrite, a local insurer who sells liability insurance to event organisers could be a great partner! We share the same target audience of event organisers and this partner will have a database full of them! This local player already has the trust and the attention of its customer and could introduce Eventbrite to them. It’s far easier to leverage the network of an organisation, which already has a customer base and trust, than it is to create your own, from scratch. 

Think about what you could offer in return, to ensure that the partnership is solid and stands the test of time: 

• You could help the local partner launch in your home market
• You could bring a technology edge that this local partner does not have
• You could bring added value with content creation, in depth know-how about what you specialise in, or a special discount…

IV - Penetrate

Let’s recap’: 

1.You know which country to focus on

2.You know how to conduct business in this country and you've put the basics in place

3.You have strategic, wide-reaching local partners. 

Now is the time to act fast and boldly! 

FAST: Unless local competitors live in a cave, by now they know you’re coming, and they too are getting ready! You don’t want to give them enough time to organise a counter-strategy. 

BOLD: Launch simultaneously all campaigns, be it marketing, PR and SoMe... Get your Sales team on the ground talking to people. Get invited to speak at trade conferences. Organise a roadshow with your founder(s)… In a nutshell, now’s the time to send out the message that you “take this market seriously” and that you’re “100% committed to it”. 

Now is the right time to send a SWAT team on the ground. This SWAT team is composed of a handful of employees who have consistently been over-performing in your home market. You will of course, in time, create a local team in this new market, but recruiting can be time consuming (it can take a year to find a local MD!) and you don’t have time. The interim MD on the ground will come from your home market, which means that you know this person very well, making it easy to work with this Interim MD remotely, while supporting the creation of a local team. 

V - Perfect & Scale

The most important lesson I extracted from my experience growing Google and Eventbrite globally is to keep being agile and to keep learning. Don’t focus on doing everything perfectly, be scrappy and learn by testing different pricing models, marketing strategies, investment levels, vertical segmentations, types of partnerships.... You are not learning how to expand in a new market, you are learning how to expand across the globe!

From the first day, when you start thinking about global expansion, keep a journal and document everything that you do. As you test different approaches, keep learning about what works in the new market you’re tackling, and what doesn't! Focus on activities and strategies that are scalable (from 1 to 10 markets) and track all the results. 

In time, you will create a global expansion toolkit, which is a document that summarises the best-of what works, offering great guidance to anyone opening yet another international market for you and making your global expansion truly scalable. At Google, I set up the 70-30 rule: People who were opening a local market would spend 70% of their time and resources doing exactly what had worked in other markets before them (according to our global expansion toolkit) and 30% of their time would be spent customising everything so our offering and brand are perfectly relevant, locally. 

Tackling global expansion is an exciting step for any company. The road is littered with risks, but the need to grow is stronger than its challenges! Through a tried and tested approach comprising 5 steps: Prioritise, Plan, Partner, Penetrate, Perfect and scale, startups can get a slice of the world, without jeopardising innovation, efficiency or company culture. 

See my full presentation on global expansion the startup way here: https://vimeo.com/108367458