Conventional wisdom says that companies need to establish themselves in the domestic market before even thinking about an international move. Historically so many factors have limited expansion so it’s not hard to understand the hesitation but now the expansion environment is completely different than it was even ten years ago.
The traditional limitations to international expansion range from language, logistics and trade barriers, to B2C exposure. Combined with a lack of local market knowledge which requires a large amount of invested time and money can delay international expansion for years. In the past ten years everything has changed; following the common belief to delay international expansion to focus locally and on the product now presents a bigger opportunity cost than an opportunity for growth.
Today in the Eurozone there is a dominating single currency paired with more agile B2C and B2B relationship building and the ability to outsource many business processes. The biggest hurdle and limiting factor to gaining market share is no longer logistical but due to direct competition. If your product or service is two or three years ahead of the innovation curve, why wait for the competition to catch up before expanding? If your focus continues on product after it is already innovative, you are inviting the competition to eat into your potential markets.
The Opportunity Window of Innovation
is what I call this time period where your product is ahead of the innovation curve, and the rest of the market cannot possibly compete with you. Put into practice, this window is the amount of time that your company has to saturate the market before the competitors catch up and establish themselves. There are a few companies that have taken advantage of this window further in the article but first ask yourself; what must be done if your product is the most innovative? The answer; sell, expand, and saturate every market possible! Don’t give the competition a chance because they will copy your product and business model and can become a threat to all that you’ve worked for.
Let’s say you are an innovator in France (population 55 million); why wait two or three years to expand next door to Germany (population 80 million) or to Spain (population 47 million)? After those two or three years you’ll be fighting an uphill battle as the local competitors catch up and cash in on your ideas while copying your business model. Hesitation and not acting has created an enormous opportunity cost and now that foreign competitor might have gained enough funding and momentum to expand into your market.
This waiting and reluctance to expand can be due to a focus on product when the focus should be on selling, expanding, and cashing in on your own innovation. The longer you wait to move your innovative product, the more the competition is able to establish themselves and The Opportunity Window of Innovation closes. Once closed, you are no longer at the front of the market and can expect competition to threaten your own business.
Let’s look at some examples of companies who have taken advantage of the window
A Spanish startup was designing an innovative management tool for utility companies. Before the product was even finished, the startup decided that they wanted to sell next door in France as well because their solution filled the same need as in Spain. This way they would be able to position themselves in two markets instead of one. So the startup hired a trusted partner with experience in sales acceleration to launch the product as fast as possible instead of the long process it would have taken to recruit talent and set up offices in two countries.
The partner knew both markets well, had the sales infrastructure already set up, and within six months of first talks the startup was now moving the product in both countries. Working together, the partner would target certain accounts based on size and profile, reach out to the companies and then put the startup in contact directly to close the sale.
This acceleration of business is helping this startup take full advantage of The Opportunity Window of Innovation and as competitors are now emerging they are now facing a large uphill battle because this startup has positioned itself and is already working with the major market players in both countries. The plan of this company now is to expand and saturate the US and other European markets to position their innovative tool before any competitors can get established or gain momentum. As they secure more clients they are also able to get the funding to stay ahead of the innovation curve.
Another example of a company that expanded quickly is an Australian startup in the water services sector that was able to capitalize on The Window of Innovation Opportunity in multiple markets as well. They were not even established in their domestic market and they found a partner to help position themselves internationally. Together, analyzing foreign markets, the startup and the consultancy determined that their product in its current state would be well received in foreign markets.
Now this startup has operations in China, USA, Mexico, Spain, France, and other parts of the Americas and is one of the leaders in its niche sector. There was some initial competition from the beginning but this company was the only one that focused early on international expansion and is now reaping the benefits. The startup now has the resources to become a global powerhouse as they have essentially shut out future competition by acquiring large market shares.
What do these two companies have in common? They knew their product was innovative and decided to act and saturate the market as fast as possible instead of waiting. Globalization has made it easier than ever to expand internationally and we are in a moment where many companies still haven’t realized that all the traditional hurdles no longer exist.
Go international! The window is open! Establish yourself now and don’t give the competition a chance.
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