Challenge: Small companies want to expand to global market but face limited resources to invest
OK, so you have small company that’s growing well in the US. The product value fits well with international markets, which are inviting local exploration. International expansion frequently starts with hiring a local, in-country team in English-speaking markets (UK, Ireland, Australia and/or New Zealand). The thought is that hiring local resources will help translate what’s worked well in the US and assist in guiding localization efforts. These resources also bring to the table channel relationships and past customer experiences which help propel the process forward. Sound familiar?
The plan is not unreasonable. The learning curve will be steep and frequently initial sales will prove to be positive. The typical issues don’t arise until the next phase, where business growth doesn’t take off as expected, due to expectations of increasing revenue without continued investment.
This is where further investment is required. Certainly the local team may need additional personnel to ramp up channel partners, produce local events, develop local case studies and/or provide collateral localization. However, there may be further investments required stateside in the form of additional development, product management or product marketing to support this fledgling international team. The further investment doesn’t stop there. Driving internationalization as a priority with the executive staff is required as well. Every quarter an executive should make a location visit to see progress and challenges firsthand and bring this experience back to HQ in order to make a plan and implement necessary changes. The executive team needs to make the commitment to drive international agenda, communicate feedback and plans, and drive initiatives to support the remote team.
The fundamental mistake most companies make in their internationalization programs is lack of secondary investment, which won’t likely be justified with short-term revenues. The meagre initial revenues’ true payoff is in the learning necessary for next steps on the investments required for success. Likely investments will have to be made in advance of revenues – often significantly in advance of increased revenues.
Lesson: Only make initial investment in international markets if you are willing to double down with further investments ahead of increasing revenue.