The digital era is full of great ideas and people “thinking big” what gives birth to many new businesses. Almost every day new Startups with game-changing technologies pop up, ready to enter and conquer new markets.
After first local success startups often aim to take their business to the next level and develop international markets as soon as possible. No doubt, that there are markets out there full of potential clients, but in order to conquer them more than a good product or service is needed. Developing a market is not the same as developing a product. Markets are often mature and complex; finding the optimal market entry strategy is key for sustainable success.
The reality is that international expansion is a very critical phase in the life-cycle of a young company and therefore the time when most of the start-ups disappear into thin air. Getting a foothold into new markets is resource-intense; the challenge is not only to find your clients, but to find the best channel to get to them.
This little roadmap gives on overview of how an international expansion process and finding the optimal channel for a Tech Startup could look like. First advice: Don’t go to through an indirect sales channel before you are ready!
Prioritise your markets. To find your optimal market you have to look at, compare and understand various markets in a first step. Think if your value proposition is the same across different countries and markets. To find this out it is recommendable to analyze the different markets on the basis of relevant drivers. Macro drivers to identify the potential and the size of a new market. To measure the attractiveness of the market regarding your product, use industry specific drivers and other relevant factors. Never underestimate legal issues and it differences across countries. Lawyer up and check if your product complies with legal standards or guidelines.
Map your stakeholder. After you have identified your target markets think of different stakeholders which can influence or be affected by your business. Think broad and not only about potential partners, distributor or customer, but also about competitors, governments or other pressure groups. Different countries, different customs. Identify and map all the stakeholder of your business and rank them on interest and influence. A precise and appropriate stakeholder mapping could reveal hidden barriers or opportunities for your market entry in an early stage.
Profile your Business Partners (not only your end-customer): Taking a look to your stakeholder mapping various business partners, such end-user, buyer or potential reseller are likely to be ranked high on interest and/or influence. Deep profiling of this group of stakeholders will help you to find the right channel. Depending on your solution you have to weigh which partner for which Go-to market model is appropriate. Is your solution a service or software you rather won’t need a local reseller in the first place. If you offer a physical product a distribution partner is rather recommendable.
Create a Database with the right CRM: After you have selected the profile of your potential business partners create a database with CRM system, which seems convenient for you. Having the appropriate CRM system and using it accordingly will facilitate the process of developing your market and reaching out with the accounts in your database.
Start developing. With a good and structured database the fundament of a successful market development is set. Now it is time to get in touch with the market. Probably new challenges arise and new resources are needed, which do not exist in the company yet - a lack of know-how, language barriers, cultural differences, etc. The good news: You don’t have to do it alone, so be open for support! In times of shared economy, crowdfunding, -sourcing and –working, we have arrived in an era where we use the power of collaboration as the key to challenge high competition. To develop a new market you don’t need necessarily a full-time team but rather people with the right mix of local know-how and needed skills. So think twice if you have the resources for doing it yourself, hiring new people or rather source it out to some external experts. Outsourcers come with skills already in place, so you do not spend time training. Let them consult you!
Follow-up with your database and learn. To find business partners can be frustrating, difficult and time consuming. It can take up to 5-9 touchpoints to come to a deal and therefore every step should be documented accordingly. Companies change, people leave, new people enter - and if things are not reported, information is likely to get lost and opportunities are likely to be missed. During this whole process you will get insights and feedback of the market. Be focused and see what works and what does not. Use these learning effects to adapt your strategy and thus increase your market efficiency.
International expansion and finding the right channel for your business is tricky. Besides the right timing, having a structured and goal-driven market development plan is the key element for your success. Good luck! and do not hesitate to contact us should you have any questions in this regard: firstname.lastname@example.org
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