Today’s question comes from Peter. I’ve done some research into competitors and I have a few competitors in the US but none have expanded nationwide yet. If I place a stronghold here in London would I be able to expand to the US and immediately have a leg up on my competitors?
We’ve talked about a local rollout plan, but in this case we’re talking about expanding to new countries. This has been tried before and failed before.
Be careful. Whatever you’ve determined you need for time and resources to expand internationally you should double it. For any startup, we’ll talk about if and when you should expand internationally.
Should you Expand Internationally?
It would take a long time to justify to me why you should expand internationally. You’d have to show that you’ve gained such a big piece of the market share in your current area – you’ve tapped out the local market. Or, if you have a competitor in your market but it hasn’t caught on in the States yet then you may be able to beat them to the market. But it’s important to think about why that competitor hasn’t expanded yet – it could provide some good insight for your own expansion.
The other way to look at that is to think about if your competitor could bury you. The more you have for resources the better you can fight against a competitor coming up on you.
If you have some kind of competitive edge such as a partnership with a company or a co-founder in another country that not every startup has then that could be a good reason to expand across borders.
What Makes it Successful?
If you are acquiring customers and gaining customers then you should be collecting good data. You can gauge from that data how much it costs to acquire them and their lifetime value so if you do expand internationally you have an easy way to measure if it’s been successful or not.
It’s not necessarily difficult to expand internationally these days but that makes it even more important that you measure everything to gauge success against your existing benchmarks. Even if you are just trying to expand from one local area to another, if you can’t tell me your main data points then you shouldn’t be expanding. You should know all of your numbers before you decide to expand in any way.
Knowing the data will help you make logical decisions when it comes to understanding how successful your expansion has been.Knowing your data will help you make logical decisions when it comes to understanding how successful your expansion has been. Click To Tweet
Will Customers Care?
As long as you are solving the problem the customer needs solved, then customers won’t really care where your company is based. If you’re a SaaS company this is easier, but if you are a service business you need to be careful about expanding into other markets where there are different time zones and different languages.
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