Since this is Global Entrepreneurship Week, I want to tackle the challenges of overseas expansion.
We've tried it twice. Here are my two tips:
1.) Stars are few and far between. We hired an experienced British professional with a long Rolodex. It seemed both wise and cost-effective. After all, she could hire the right talent who could attract the right clients who could help us grow the business. Wrong. She was a bust and so were we.
2.) Proven track record. The second time, we sought small, established agencies with proven track records. We conducted extensive due diligence, zeroed in on the right one and bought a significant equity stake in what is now Flagship Peppercomm.
But two forays abroad do not a global expansion expert make.
So, I turned to two subject matter experts for tips you can follow.
Marc Meyer is the Robert Shillman Professor of Entrepreneurship at Northeastern University. Meyer also oversees the school's Entrepreneurship Programs, including its IDEA incubator with its numerous ventures. Based on Meyer's experience, you should:
3.) Put boots on the ground. There is no replacement for having one member of your team on the ground and experiencing the specific international market, getting close to the customer, and checking out the competition. This is first-hand research. Once that's done, you can prototype anywhere, but your product or service must be tested directly with your target global customer.
4.) Know thy enemy. Take a deep dive into the market-specific competitive arena, understand the strengths and weaknesses of future challengers and decide if there's a white space for your product or service. And, by all means, make sure your nomenclature translates properly in the new market. Check out these two classic blunders by Mitsubishi and Mercedes-Benz.
5.) Business models need to be market relevant. The dynamics of distribution, pricing and packaging tend to be very different for foreign markets. In India, for example, it's largely about high volume and low price; China is high volume but a broader product portfolio; and the Gulf States, low volume, but premium. In many global markets, the distribution structure is very different than the U.S. The entrepreneur needs to become an expert in how to sell within an international target.
6.) Bring it home. NU grad Ben Kneppers was surfing off the coast of Chile when he noticed massive amounts of plastic floating all around him. The debris sparked an idea. He, and his partners, formed Bureo and began making skateboards using recycled plastic from the Chilean seas. They did the same thing with sunglasses. Want two other examples? Check out Therapeutic Innovations and Viemate.
Minas Apelian, Vice President of R&D Saint-Gobain's North-American subsidiary CertainTeed and Director of its NOVA External Venturing, a Saint-Gobain team in charge of identifying, evaluating and partnering with exceptional start-ups in the clean building space. His tips for going global:
7.) Ask for help. One of the mistakes entrepreneurs can make is being too aggressive in their thinking about new markets. A partnership with a global organization such as Saint-Gobain can provide a small business owner with the where, when and how to enter, say, Brazil, without investing precious time and money. Caution, says Apelian, is the watchword.
8.) Test. Learn. Refine. Do all of your product or service testing, learning and refining here in the US before contemplating a foreign foray. Make your mistakes here. Learn from them. Then begin conducting due diligence on a target market(s).
9.) Risk. Reward. Readiness. As you grow and start making bigger investments in your business and taking on a larger scope, carefully evaluate the risk-reward of expansion. It's all about being ready to take the right step at the right time.
10.) Your Innovation MUST address a customer need. It may seem axiomatic by now, but the build it and they will come concept is deader than TPP. NOVA, for example, helps start-ups understand which markets may, or may not, be open to their innovative offering in the green building space.
The bottom-line for a globally-minded entrepreneur is to follow the experts' tips, take a deep breath and plunge into the deep end of the pool. Or not. Your due diligence will tell you if the water's simply too cold or just right.