By Ulrik Jørring - Danish born, venture capital (VC) provider and avid supporter of entrepreneurs in his heart and soul. Member of This Way Up (TWU) @ThisWayUp_ & CEO-Collaborative Forum, @Ulrik Jørring:
Many startups want to sell abroad but they typically find this much harder than selling "at home" and they often fail. After witnessing many failures and some great successes here are some tips that I have collected over the years.
1. Be Committed to a Few Markets
If your product is new and exciting, you will often get requests from potential partners all over the world who indicate that they would like to work with you. Trying to sit at home and service all these initial requests are most often a waste of time. And traveling all around the world with a few meetings in every country is also time consuming, costly, and of very limited value.
It is better to decide on fewer markets where you think your product has merit and that you can serve well. And even when you have made that choice, you should be prepared that it can take a long time from your first attempt until sales pick up and the new market is profitable. Once you get there, the payoff is great, but you should be prepared that it can take a long time.
2. Use All the Help You Can Get
Given the problems of understanding the local culture - and getting the right employees - you can look for other people who can help you enter a new market. This could be by setting up a local board or advisory board, for example. European or Israeli companies entering North America can often benefit from working with business communities of the same origin - for example, Danish companies expanding into the Bay Area can often benefit from the community of Danes already working in the region.
The local embassy or consulate may also be able to assist. Although they are sometimes hampered by a lack of expertise in your particular sector. So perhaps the best way for them to assist is in helping with practical matters and providing introductions to people in your industry who are willing to help.
3. Laser Sharp Segmentation
One of the first things you learn in business school is that you can expand your business either by broadening your product range or by broadening your market scope - for example by entering new markets.
Unfortunately, many startups tend to do a little bit of both, and that rarely works. Especially when going to a new market, it is important to focus on those potential customers where your product makes the most sense.
This is perhaps especially important to remember for people coming from a smaller market and entering a larger market (The US, China, Japan, Germany). You cannot aim for huge sales to a broad audience from the beginning. It is better to focus on those customers that will be most receptive to your story and expand from there, once they are on board.
Selling into foreign markets is a challenging - and potentially a very rewarding - endeavor, and one that startups all around the world must focus and potentially benefit from. I hope these thoughts - based on my involvement in many startups over my years in venture capital and before - will be helpful to you.