4 strategies for early global expansion

Technology has disrupted every industry from retail to media to taxi services — and it has also disrupted how we build businesses. Recent advancements in remote conferencing and analytics enable companies to launch global operations much earlier than in the past.

Historically, businesses started small and local. This was the only way to build successful companies because they depended on local manufacturing and supply chains. Establishing international reach right off the bat was costly and unwieldy.

Thanks to the disruptive technologies that have emerged in the past several years, the classic growth model proves increasingly limiting. New startups can leverage multiple geographic advantages to expand globally from their earliest stages.

Perhaps your target markets are in Europe and Asia, but you want to recruit engineers from Silicon Valley. Are you going to abandon your core audiences and build for the Bay Area instead? Of course not. Technology allows you to connect remotely with your engineering team in California while you’re on the ground in Germany or Thailand. You’ll validate your product overseas and then expand into the US when you’re ready, maintaining a global operation all the while.

Businesses are no longer constrained by physical location. You can build an international team to serve whichever markets need your goods and services. Technology has made it easier and more cost-effective than ever to replicate your processes in new markets.

Market Validation

One of the greatest benefits of early global expansion is market validation. The more people using your product internationally, the more likely other people are to buy it. If I’m pitching a potential client in Canada, I’m more likely to secure a deal if I can demonstrate that global customers are using my technology. Local partners want to know that someone else tested the product first. The bigger the names on your client roster, the better.

When we founded our company, we told our board members that we wanted to expand into Europe. They were surprised but supportive, and soon after, Vodafone and Bosch decided to partner with us. Those companies brought us access to prospective customers in multiple geographies, giving us strong validation in a short time.

As you can imagine, those relationships earned us considerable respect locally. If we were good enough for the largest mobile carrier on the planet and for one of Germany’s largest companies, Canadian investors knew they should take us seriously, too.

Of course, you have to validate in the right places. If I wanted to launch a mobile service, I’d validate it in one of the Nordic nations, which are strong markets for consumer-based services. I know that if I prove my product there, I’ll earn the trust of investors and customers in the US and Canada.

Market saturation is also a factor. Launching consumer products in the US is challenging. Digital literacy is extremely high, and it’s difficult to cut through the noise. The impact from a US launch will be far smaller than launching in a smaller country like Denmark, where people are willing to try new apps and software.

Validate your use cases in markets that are receptive to new products, then bring them to your local market. You’ll grow much faster if you can make a compelling case based on your global customers.

Thinking Globally

Global expansion is more accessible than ever, but it requires careful strategy to get it right. Use the following steps to ensure that your company succeeds in all your target locations:

1. Find your perfect market

At a small startup, you don’t have money to waste. Identify markets where you can afford to open operations and develop a strong base. Keep in mind that you’ll need to travel there frequently, so select a location you can visit often without exceeding your budget.

Look for markets that have a need for your product and where your company will find a cultural fit. These might be in the US, Europe, or even Asia, so take a holistic view of all possibilities.

2. Form partnerships

Seek out reciprocal, synergistic global partners who can help you expand into their markets. Show them the mutual benefit, and enlist their salespeople to sell your product locally. The Vodafone team helps us decide which of those are mature enough for our product, and they facilitate our entry into those they think are a fit.

Our product was recently deployed in New Zealand, which never would have been possible at this stage without Vodafone. Evaluate potential partners on the basis of their performance within their markets, the potential for reciprocity between your services and theirs, and their ability to help you expand.

3. Build small, autonomous teams

Instead of relying on a traditional hierarchy, organize smaller teams that have the freedom to act on their local knowledge and experience. You’ll have to navigate time zone and cultural differences if your teams are spread across continents. But they’ll deliver better results if they feel comfortable in their environment and empowered to act on their expert instincts. Along the way, be sure to keep the lines of communication strong to avoid falling into the trap of siloed operations.

When setting up in unfamiliar markets, tap into resources offered by governments, such as the Canadian Technology Accelerator initiative. Draw on those networks as much as possible; they can connect you with trade commissioners and embassy contacts who have references for local talent. Additionally, don’t underestimate cities with strong universities, such as Toronto, Berlin, Singapore, or Tel Aviv. They are filled with passionate and driven young talent.

4. Leverage technology

The ability to work remotely has revolutionized the opportunities for doing business internationally. You can schedule meetings with partners and employees in San Francisco, Tokyo, and London within a few hours of one another — and run a global business from anywhere on the planet.

Technology offers access to the best talent pools in the world. Take advantage of that reach and flexibility by building agile teams in all your target markets. If you leverage the technology effectively, you can develop a global enterprise faster than ever before.

Ten years ago, early and cost-effective international expansion was unthinkable. Now, it’s a competitive necessity. Approach your business with a global mindset from day one, and you’ll soon have a thriving worldwide company on your hands.