Expanding your startup internationally is often very hard. Like stepping into a whole new playground where the rules are different, and you don’t know anyone. You finally found the formula for success in your domestic market through many iterations of trial and error, and now, you might very well need to go back to exactly that — trial and error. 

It’s no secret that international expansion has become a bit of a default course of action when raising money from a (later stage) VC, but that doesn’t necessarily make it the best moment to actually go abroad. Having said that, how can you determine whether to expand, when, where, and — most importantly — how?

Steal like an artist

The good news is that you are most certainly not the first company that has been through this, and there’s a lot we can learn from those who came before us (and managed to survive). 

It’s not so much about copying their homework (which we, of course, would neeeever do…) but about understanding the principles behind their strategies.

So, here are some of the key ‘steals’ that we like to share with our startups.

Choosing Where to Go

The first big question is, where do you even start? Picking the right country is absolutely crucial, as it steers your startup into a strategic direction and sinks money, time, and opportunity in the process. Targeting Germany, for instance, can be the pathway to unlocking Austria and Switzerland but failing to do so leaves you with a German-friendly product and setup that is of no use anywhere else. So, what can we learn from the greats here?

1. Find your audience: Look for places where there’s a gap only your product can fill. Spotify, for instance, went after markets with high piracy rates. That turned their proposition into a no-brainer for their suppliers as they finally offered a legal way to stream and distribute music — exactly what people wanted. Make sure your problem actually applies to the country you’re looking at, step out, analyze, and never assume that your domestic problems automatically apply elsewhere.

2. Understand the rules: Different countries = different regulations. Think about Uber’s global expansion; they had to navigate a complex web of local laws. In some countries, their entire business model was initially not legal, making it all the more essential to do your homework on regulations before diving in.

3. Check out the competition: Go out there and contact competitors, pretending to be a potential customer. We’ve seen a plethora of cases where the ‘main competitor’ turned out to be all bark while the real threat came from a business without any significant marketing. You don’t want to find yourself in a position where you’ve optimized for an edge over a competitor that doesn’t actually matter. Netflix always meticulously looked at what local viewers liked and what competitors were offering and what they were not.

Entering the new market

So, by now, you’ve gathered a good bit of information and have a feeling for what the people want, but that doesn’t magically sell your product. “We will build it and they will come” that’s what it says on many startup tombstones. 

So, what lessons can be learned about how to sell abroad:

1. Try forming local partnerships: Teaming up with local businesses can give you a headstart. You’d be surprised by how willing other startups or even bigger companies are to give this a shot. We’ve even seen competitors team up under the sentiment “we either create this market together or we die alone”. In that sense, you are new here, so you might as well ask as many stupid questions as you can before anyone expects you to know the answers. 

2. Build a team on the ground: Having people who know the local market can make a huge difference. Companies like Stripe showed us that a good balance between new, local hires and a few established pioneers from your company can turn your new office into a new arm instead of a separate child that lacks direction and identity. 

3. Go local: Airbnb’s success in going global was partly due to how well they adapted to local markets. They made sure their service felt local, whether through language, payment methods, or cultural touches. Ask locals about how you can make your product resonate with them, without losing its original identity. Marketing could be your best bet here. While the Dutch typically look for a low price tag (guilty as charged), Germans may value quality over price more, requiring different messaging and customer journeys. 

To expand again or not to expand again in the same manner

The painful truth is that even a successful expansion to another country gives you zero guarantee that you can pull it off again. Everything you learned about the market, the culture, and the competition, 500 km to the south, most of it might not hold true anymore. 

But that is no reason for despair. The core skill to master here is being flexible while using the previous playbook. Don’t hold on to the previous GTM strategy, like it’s gospel. But do look at your previous learnings. We see portfolio companies that are able to replicate international success in country after country, while other companies notice that every country poses a different puzzle. 

So, do not hesitate to iterate over and over again, refining the process but keeping the fundamental system in place. The decision whether and when to expand is ideally a continuous process, keeping you ready to jump at a moment’s notice but never diving in like a fool.

Wait, why were we going abroad?

Going abroad can complicate matters: increases the size of your operations, increases your burn requiring capital infusion (hello VCs!), and complicates your governance and exit options as VCs require you to go big. Understand your own motivations first, whether you’re fine with working hard for a longer period of time, as you will first invest time and money into a venture within your venture, with an unknown payout. You can also choose not to. There’s nothing wrong with being a ‘national hero’.

Should you want to expand internationally: it’s definitely a challenge but also an incredible opportunity – to not have personal regrets down the road. And in executing, by learning from those who’ve been there before, you can avoid common pitfalls and make smarter decisions. 

At No Such Ventures, we don’t hold the eternal knowledge of how to expand to what country with what product through what channels. But we do try to learn from our own experiences, as entrepreneurs and as investors and from our own investors, who have often scaled before, to then try to assist management in expanding their lovely product(s) abroad. All the best!