5 things to do before launching a startup internationally
Tessa Kurt, CEO of IntelligenceBank, talks about the problems that need to be addressed before the startup goes international.
Any fast-growing startup strive to enter the international level. In fact, global dominance is often part of the company's mission and is the main reason for investor interest. But, in the end, companies realize that reaching an international level is harder than it sounds. An international presence is not only the presence of an online sales channel and investment in marketing, there are more significant things that the CEO should pay attention to first of all.
1. Enter the international level only if the product matches the market.
This means that you have created a useful product, and you have real customers who constantly use or purchase your product and support your activities. This is probably the most important thing that needs to be done long before entering a new market. Opening a new representative office, selecting a good team abroad, and conducting business on a global scale is already a rather difficult task, even if there is a product ready for the market, so leaving without a product will make everything a thousand times more complicated.
2. Consider each new representation as a risk and as an opportunity equally.
It is easy to get carried away with forecasts that give excellent curves that tend to go up due to reaching the international level, but remember that each new representative office carries operational risks. In other words, the organization will take longer than you thought, unexpected associated costs will appear, and everything will be more expensive than you expected. But more importantly, the success of your overseas representation revolves around selecting and retaining a good team. Recruiting staff for an additional office is a laborious task, especially if you have to start with a small number of people. When IntelligenceBank enters a new market, we move a senior manager from the head office to open a new representative office and provide a deep knowledge of the product and culture.
3. Conduct research.
Before considering a new market, you must understand both its capabilities and vulnerabilities, namely, how can you evaluate the new market in terms of finances in relation to your product, and how much is the market ready for your services? It is also important to remember that both a large and a small market require a different amount of startup and infrastructure costs, so consider the size of the market and the possible payback when choosing foreign markets.
4. Explore competitors.
When you enter a new country, you will have new competitors that you may not have heard of before, especially if you enter a larger market. Greater opportunities increase competition, and higher competition means more demanding customers. Thus, your sales and marketing strategy, along with the prospect of developing your products, require undoubted refinement.
5. Recognize that reaching an international level is completely dependent on organizational structure.
If you have a website for transactions, it is relatively easy to attract customers from foreign markets, without having a representative on the ground. But to reach an international scale (as opposed to several clients scattered around the world) you need operational support, such as: integrated servers and IT infrastructure, tax, regulatory and legal advisers, as well as a team that will provide sales, customers and technical support 24 / 7. This means that foreign markets need to be selected carefully, and be prepared when you enter the market to provide the necessary support to your customers.
Although reaching an international level has obvious advantages, a successful exit requires good funding, and your board of directors and management group must strictly follow the strategy, as surprises await you throughout the journey. The new additional office is a fragile structure that needs constant support and attention, and the head office must be fully focused on it, so that everything will turn out in the end.
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