Internationalising a tech firm is something many CEOs & Founders dream of. They see the endless travel, complexity & meetings as a price worth paying for the reach that they can achieve.
It is between Series A & B, many tech firms begin to glance East & West as they consider their next big opportunity.
But, for many, this drives the wrong behaviours:
- Dancing from market to market to chase inbound opportunities
- Following in the shadow of a singular established client
- Following the crowd – from bright lights of Silicon Valley to ‘copycatting’ a competitor
The ‘Magpie effect’ of internationalisation is a challenge many founders face. But the ‘shiny’ is often misleading. Prior to expansion, ensure you are doing it for the right reasons. Only having sense-checked the ‘why’ can you begin to look abroad.
To put internationalisation strategy into execution, we believe there are 3 tenants to frame any global plans:
1. The home team strengths – determine how your edge has led to success in your home country & align your team to international expansion
- What are the strengths of the team, tech, service, organisation to leverage?
- How does the culture of the firm drive the choices we should make?
- What is the ambition when it comes to international scale & the role it needs to play?
2. The scale of opportunity – compare the success achieved from your home market to the size of the various international market opportunities
- Where is the market headroom, growth & Total Addressable Market?
- How does the market adopt technology – what does that mean for the opportunity?
- Why will the technology fit with this market?
3. The market expectations – data alone will not drive results, it is vital to look at the nuanced differences between the markets driven by human behaviour
- How do the specific markets operate?
- How do suppliers & vendors sell & supply to the market?
- What are the cultural nuances that are less obvious on the surface that will dictate how you will sign a deal?
From this, a starting point should be feasible. We should be clear how and where we believe the biggest opportunity to be.
Looking beyond the data…
Companies often fail to understand the importance of the human elements of internationalisation. Just look at Groupon’s failure in China. Knowing the size & growth of the market will only tell you half the story. Is your team truly aligned with international expansion? How could your firm culture influence which markets to evaluate? How do the target markets actually operate – how do their procurement & tendering processes work?
These are just a few of the questions you need to consider. But the reality is that thinking through the approach will drive the right plan, not simply the easy one.
