The lure of the market size, chasing the inbound leads or following in the footsteps of those before you, are the typical reasons we see for internationalisation.
However, one-third of companies who internationalise have sub-$10m revenue, but it takes 6 years for international revenue to constitute ≥ 10% of total revenue. Placing your bets should be met with rigour and evidence.
How can you think about capturing the international opportunity?
What are you trying to prove?
If it is seeking the gravitas and validation of an external market for the next round, the short-term win can meet your demands.
If it’s the IPO, proving yourself against a saturated market will help deliver to your end-goal.
What you are trying to prove will dictate a very different choice on the ‘where’:
- For the immediate validation – procurement lengths and market readiness would dictate where to go.
- To reach the IPO, a sizeable market becomes a trade-off for the high opportunity cost required to navigate a complex procurement cycle and working to displace the competition.
Map out the 3 core drivers of you hitting the end goal and replicate them across markets and regions
Have you only thought of the obvious?
Replicating your home market is an obvious answer to the question of ‘where’s next?’ Matching the market size, the technology appetite, and the market maturity to your home-success can deliver confidence in your ability to win.
But do not underestimate your ability to be a market maker.
The insurtech Lemonade reached global scale by the simple hunting of digitally enabled consumers vs following the insurance giants.
Also – Tallinn in Estonia is not surrounded by the Silicon Valley bubble. However, its post-soviet economic shifts have driven it to boast a 30.6 start-up per 1000000 inhabitant ratio: the third highest concentration in Europe.
Have you forgotten those who are not yet obvious? Those with a declining economy who are now forced to innovate, or those with a rapidly shifting consumer demographic creating new demands.
So how can you plan where to go?
- Map out the 3 core drivers to your success that might not be obvious. Think about the feedback from clients or the thing that flips the deal.
- Then identify the regions where this can be replicated and look beyond market size. Is there a dramatic shift in the market about to happen? Who can you leverage to win?