Going international isn’t an option. It’s a necessity

Back when I started out at McKinsey in San Francisco, I worked on a European expansion project for an American client (the first of many international expansion projects). What quickly became evident was that “Europe” is not a single market. It’s a collection of markets. And building scale comparable to the American market meant entering many countries rapidly.

That’s still true today. Any new venture born in a European country needs to go international to achieve scale that is globally competitive. The UK, Germany, France, Spain, and Italy are all decent-sized markets, but each is just a fraction of the United States. Competing globally is scary when you realize your American competitor is being fueled by a market 5x bigger than yours. Think about it: 5x customers, 5x revenue, 5x investment. So they have 5x more budget to spend on product, insight, infrastructure, supplier relationships, etc.

I’m being simplistic here, but you get the point. As soon as you are competing head-on, scale matters. And to get to that scale, European companies have to think about going international early.

The “Mobile Office”: enabling international development

While we’re talking about the United States, I remember reading somewhere that Air Force One supposedly contains everything the President needs to run the country, while he’s traveling. He can jet off on a state visit and not miss a beat.

GS Dun has the more basic version of Air Force One. It’s my backpack, which I’ve nicknamed “the Mobile Office”. And like AF1, it holds everything needed to run critical operations: laptop, plug converters, stationery, and even a full sized keyboard. I have spent so much time with the Mobile Office that in some countries, I am legally married to it.

Why have I spent the past years on the road? Because GS Dun has to be an international firm to be relevant. We already see that our deepest amount of work is in international expansion new ventures. And it is a common topic / question we get asked about.

Although the constant zig-zagging between London, Rome, Berlin, Dublin and other places last year drove me a bit bonkers, it was necessary to take every opportunity to deepen market understanding and relationships, alongside developing new ventures. Europe doesn’t have the luxury of Silicon Valley, a single place where all tech is consolidated. So I did some of that consolidation myself, by spending life on the road.

Once your model works, push yourself into it

Going international is a big step. If you haven’t done it before, it’s daunting. Language, competitors, payment systems, suppliers, labour laws, marketing channels, and cultural norms. But don’t back away from it. If you have a business model that works at home, push yourself to take an international step.

Or another way of looking at: imagine you’re in Silicon Valley. Your model works. What’s your next step? Stay in California? No, it’s probably to start breaking into New York and to do it quickly.

As a European tech company, if you don’t embrace international expansion at the same pace that a Bay Area startup embraces New York, consider yourself in danger of losing the scale game. International is a necessity. Pack your bag and push yourself into it.

After a bit of success at home, many startups or mature companies eventually think about replicating that success internationally. It’s a new venture. But rather than being a new venture based on disruption, it’s one based on execution. It takes an existing product and adapts it, the marketing, and operations to the local market.

Getting the details right – and doing it quickly – is incredibly important. If the product has had any success in its domestic market, you can pretty much assume that someone else (like Rocket) has noticed and is already rolling it out in your international markets.

How do you get the details right and move quickly? In past posts, I’ve talked about the importance of org for new ventures. Looking beyond that (and the marketing, prod dev and ops), there are three other things I would recommend doing.

• Get on the ground
• Learn (some of) the language
• Find great local talent

Getting on the ground is necessary if you want to really understand a market and build local relationships. Trust and intuitive insight takes months, not a few Skype calls. If you’re not relocating, then spend a lot of time flying.

And while you’re there, learn some of the language. As a manager, your job fundamentally is to take in information and make a decision. So much of that information comes in tidbits that don’t get translated properly: customer feedback, competitor ads, email forwards, etc. If you have no idea, it will cost you.

I’m not saying that you need to be writing novels in a foreign language. Just download Duolingo or Rosetta Stone to your phone and get yourself to an A2/B1 level. It is a worthwhile investment (and not a big one).

And when you’re on the ground, make a fool of yourself. Speak to people. Taxi drivers, waiters, patient friends, etc. It will be a step-change in your level of understanding of that market.

Last but not least, work with some great local talent. They will be your guide, but don’t turn them into your crutch.

It is tough breaking into a new country. But these points should help you execute more sharply with your international new venture.

If you’re looking for the next post in the 80% Rule series, it’ll resume soon. We felt like mixing it up a bit.

GS Dun works with existing companies to launch and build new ventures. Our name is short for “get sh** done”, so while we can talk the talk, we prefer to keep our meetings short and just get on with it.