Do You Really Know How to Globalize your Startup?
Many startups prematurely attempt globalization before they’ve gained a secure foothold in their local market. Companies with some measure of success are eager to expand internationally yet fail to conduct the necessary research to see it through to completion. But do you know how to globalize your startup? Lean principles are the go-to guide for successful globalization.
What are the Lean Principles?
Silicon Valley has some experience with regards to startup globalization techniques. Their practices have evolved over periods of growth and decline, through successful and failed attempts at international expansion. The learned lessons have become the basis for a practice of international expansion known as “Lean Globalization.”
These principles include concepts that may seem fairly obvious. Unfortunately, once some companies begin to gain momentum and eye international expansion, these trusted principles seem more like suggestions. The key to successful international expansion is to do your homework before globalization plans are considered seriously.
The process that companies such as Twitter and Etsy follow include doing the following:
- Validate your intended market early in the planning phase. Understand what local users want and how your product fits within that demand.
- Listen to your customers and keep the lines of communication open.
- Test everything as you progress in the market. Test your products, test your approach, adjust as necessary then test again.
Is Your Startup Ready for Globalization?
Knowing if your company is ready to go global is the first step in the globalization process. Before you can expand, it’s important to know how your business is doing in its current market. Ask yourself the difficult questions and be prepared to answer them honestly and objectively.
Have you saturated the local market as much as possible? Do you have a strong enough foundation in place that expansion will not negatively affect the rest of the business? Do you have a strong enough team in place that can handle inter-departmental cross-training and functionality? Knowing the answers to these questions will make it easier for you to know how to globalize your startup.
According to Taku Harada, CEO of Orinoco, you can’t expect to figure out Tokyo if you haven’t figured out San Francisco first. He used American companies SurveyMonkey and Bit.ly to sum up timing of global expansion, noting that they saturated their markets and were therefore obviously ready to globalize their companies.
Understanding how to Select and Validate your Intended Market
Not all markets are equally as attractive or ideal for international expansion. Those non-U.S. markets that are most sought after, according to TechCrunch, include those with, among other attributes, high broadband and mobile capacity as well as fairly easy regulatory and tax requirements.
Other important factors to think about are the competitive landscape of each market you are considering, where your current traffic is originating, and if your business or product will fit in with the local market, tastes, etc.
You may be anxious to gain access to the billions of consumers in the growing Asian markets, but if the majority of your traffic and business is coming from Europe, then you may need to reconsider your game plan.
As you are completing your due diligence to know how to globalize your firm, also take into consideration the country’s political climate, infrastructure, and GDP per capita before you finalize any global expansion plans.
Repeated Testing and Open Communication
When thinking about how to globalize your startup, don’t fall prey to the idea that what worked to make you successful in your current market is the same as what will work in any other market, especially an international one. The only surefire way to know what this new market wants is to ask them and then get their feedback once they’ve had time to try your product or service.
Having a team with strong communication skills is vital to any new venture. On Forbes.com, Ajay Yadac, CEO of Roomi, points out that it is more important to understand than to be understood. Focus on obtaining insights into the local market—what do they really want and how can your business provide that.
Once you have that answer, get it for them. This is where those communication skills are necessary. Ask them again. Is your product or service what they are looking for? How can you do better? How is the business itself doing with service and processes? Be ready for their answers and act on them.
Know When it’s Time to Let Go
If true globalization is your goal, it’s time to face the fact that you cannot be in every office at all times. What you can do is have a highly-trained team in place to take care of the day to day of business while you continue to build your global empire.
Be ready to support them, to guide them, to let them learn from their mistakes, and to celebrate their wins. Make sure they’re ready and then, let them run the show.