There’s no gain without risk. Every entrepreneur knows that. Once your business model has been validated and you’ve conquered your local market, there’s only one logical step left to take: international expansion done right. That is why product-market fit is critical.
The first question many entrepreneurs find themselves asking is whether it’s the right time to expand their company on an international level.
Charles Ferguson, General Manager of Globalization Partners operations in Asia-Pacific, believes three key elements are critical to the success of an international go-to-market plan: the right cash position and budget, the right people, and the right product-market fit. However, even with these three elements in place, there are always risks involved in the global expansion process and understanding how to manage them is essential.
Ferguson joined the Derisk podcast, where he shared his insights on how entrepreneurs can minimize global expansion risks.
Don’t assume what works at home will work internationally
According to startup coach and investor Marc Andreessen, a product-market fit can be defined as “being in a good market with a product that can satisfy that market.”
One common mistake companies make after achieving success in their local market is assuming international expansion is as easy as distributing the same product and using their local sales, branding, and marketing strategies in the new location.
“Entrepreneurs think ‘oh my God— this works so beautifully in my founding market, my mothership. I am passionately convinced this is going to fit in a new territory. I call it passionate myopia,” says Ferguson.
When planning your international expansion, it’s essential to research local competitors and their go-to-market strategies in those new marketplaces. It also means reaching out to potential talent, finding local incubators, accelerators, and any local partners who can help you run small experiments to find your ideal market fit in your new territory.
“Probably, the company that you’re enjoying providing services to in your domestic market does have an operation in another country,” says Ferguson. “It’s always great to talk to your customers and determine if they see value in what you’re providing as being applicable in the other country that they operate in.”
Don’t go it alone: work with people on the ground
Picture this: More than 650 million people live in Southeast Asia. Expanding to Indonesia, Malaysia, Philippines, Singapore, Thailand, or Vietnam could present a massive opportunity for your business. But getting inside knowledge of the market and the culture could be the key to success.
“It’s always a bright idea to hire local talent within the chosen market to help you to plug into the network,” says Charles. “You need relationships. And certainly, having somebody on the ground is helpful.”
[bctt tweet=”It’s always a bright idea to hire local talent within the chosen market to help you to plug into the network.” username=”globalpeo”]
Find the right partners
An excellent way to build towards international expansion success is to find partners that can provide easier pathways into the new market.
For example, governments can be a crucial source of support for your company. They have programs that provide grants and loans for new companies and offer access to incubators. Ferguson notes that your government may also have “a foreign, direct investment arm that offers tons of free information about the market, about the competitive landscape, and about product-market fit that you should, without question, be leveraging.”
Above all else, always do your homework.
“You should never jump into a new market until you’ve done a significant amount of due diligence,” says Ferguson. “This research can uncover areas of risk that you can put plans in place to mitigate, but it can also put in place avenues towards the new opportunity that you didn’t know existed.”
Reach out for support
If your company is looking for a fast, compliant way to onboard global talent in a new region, look no further than Globalization Partners. Read more about how an Employer of Record (EOR) works to solve international hiring hurdles and request a proposal to get in touch with expansion experts.