When a startup is successful at home, the logical next step is to look beyond its borders for its next big growth opportunity. Getting set up in a new country, however, requires an understanding of the potential pitfalls and a clear evaluation of where to set up and what is most important to your startup.
DoubleDutch was looking to expand mainly due to the need to support our growing client base in the U.K., Europe and further east. We were still a 35-person company, so with limited resources it was critical that we had a simple and concise approach. We needed to ensure that we maintained focus on the core of the business, and that moving overseas did not become a distraction from immediate business growth.
We set out to understand those elements that we saw as being critical to our success. For other companies exploring international expansion as a key opportunity for growth, the framework we created may help set the foundation for going global.
Finding your city. The first step is figuring out where you want to plant your international roots. Different companies have different priorities and objectives when it comes to international expansion, but ultimately basic logistics and government policies will broadly dictate how suited a country or city is for your company.
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When vetting potential international locations, the key criteria that we used were:
- Access to talent (adding the right people to your business is critical for success)
- Access to markets (being able to access the target market is key)
- Ease of set-up and the local government’s approach to business
- Language barriers
Most countries have a foreign investment body whose purpose is to help companies expand and set up commercial activities within their borders. In our case, having a good relationship with the Netherlands Foreign Investment Agency (NFIA) was instrumental in allowing us to have a soft landing in Amsterdam.
NFIA helped coordinate a reconnaissance trip to Amsterdam to scout for office space, talent, recruitment agencies and legal and accounting firms, as well as meet other companies that had gone through the same process so that we could learn from their experience.
Prepare for landing. Once you’ve found a city that’s a fit, the real fun begins. It’s important to have a pretty extensive game plan prepared in advance -- one that is tailored to your business and your destination. With that in mind, stay aware that plans will change. Allow room to maneuver, and be flexible when making tough choices down the line.
Being pragmatic about the cost of investment for us to grow and expand into foreign markets was important from day one. Investors are rightly wary of global expansion and its risks, so we needed to make sure we were realistic with our projected costs and provided ourselves with some runway to operate around unexpected challenges.
Coming in under budget sends a far better message to investors than spending too much. Be realistic, but understand that something always comes up.
Setting up shop. Once you’ve landed and got the basics up and running, your next steps will depend heavily on your company’s unique priorities and objectives. No matter what, your ultimate goal is to get your international office operational and acting as an extension of your organization by expanding upon its culture and values, and continuing to build on the world-class team that got your company this far.
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For DoubleDutch, building a team that added to our existing company culture as much as possible and encouraging “hustle” and “creativity” were key goals in the international hiring process. We instituted an interview process that included Skype calls with the U.S. team and hired a full-time recruiter to provide support on the ground and ensure a steady candidate flow.
In interview debriefs we’d measure each candidate according to our core values in addition to their role-specific aptitude. This rigorous approach to hiring may have slowed our initial team growth, but the result was that all of our employees are on the same page whether they’re based in Amsterdam, San Francisco or Hong Kong.
Hiring a great team and establishing culture are significant accomplishments when setting up abroad. Keeping these victories in mind is important while plugging away on the business end, because reaching the same level of hyper growth will not happen immediately.
A global team. In the world of a startup, employees don’t work the standard 9 to 5 -- this is even more relevant for teams that work in a totally different time zone. Ensure that your international teams are recognized for what they’re building and their contribution to your business’s growth.
Establishing clear channels of communication and setting up regularly scheduled check-ins can help make sure that teams based abroad don’t feel as though they’re on an island fighting a lonely battle. This is especially relevant when working in a fast-moving technology company where product and processes go through continuous enhancements.
We set up weekly office hours across regions within teams as well as across functions, and shifted the times of company meetings to accommodate the time zones. It’s important that everybody recognizes the time-zone difference -- something as simple as having clocks with international times visible in the office can help.
A slow process. In Amsterdam, we had a slow first quarter and felt like we were spinning our wheels for a while. But with continued investment and persistence we began to gain traction and witnessed dramatic increases in revenue the following quarters. After all of the planning and preparation, patience was perhaps the most important skill during those first pivotal months.
As long as your startup is aware of the labor-intensive process of moving overseas, is able to expand without too much distraction from core markets, and able to invest time, energy, and patience into the expansion, the benefits are invaluable.
Related: Going Global: How to Prepare to Take Over the World