International expansion: What business leaders should consider

Yet, for many growth-stage businesses, the opportunity does not end at home. International expansion can open doors to new customers, new partners, and new sources of funding — opportunities too big to ignore.

While every market has its nuances, certain principles apply to almost all successful expansion strategies. Here are four areas business leaders should carefully consider.

Define what success looks like

Before making any major commitment or investment to expanding internationally, leaders should ask themselves what success looks like in the territory they’re moving into. Is the goal to generate an additional stream of revenue, with light-touch operations in-country? Or is the ambition to build a significant presence, requiring relocation of talent and long-term investment?

Often to achieve success in overseas regions, particularly in the US market, there is a requirement to relocate senior level talent to help ensure consistency of culture and values.

Validate product market fit in this new territory

Founders expanding overseas should be on the lookout for clear signs that their product or solution already has traction or product-market fit. Ensuring this is in place will mitigate the risks of moving. Does the product or service need to be adjusted for this new market? Are there any early adopters in the region showing demand? Has the company been able to build any inbound interest or pipeline?

A bigger addressable market, whilst attractive, doesn’t automatically mean success, so before committing, leaders should ensure there are multiple data points to confirm a business opportunity exists in the region.

Understand cultural differences

Different norms guide business practices around the world. Local labour laws, tax regimes, IP protections, and investor expectations will all differ and require careful navigation.

In the US, for example, litigation is a real threat and much more commonly utilised in a way that UK business leaders will not be familiar with. In many Asian markets, deep personal relationships and trust precede business agreements, meaning expansion strategies must incorporate significant time spent on building connections.

As a consequence, business leaders must ensure they’re clued up on the biggest cultural differences – and their implications.

Build Local Presence and Leadership

Successful internationalisation is rarely achieved by managing operations remotely.

Full international expansion will most likely require the relocation of at least one senior member of the leadership team. There may be local, regulatory obligations requiring the presence of senior leadership; while when it comes to fundraising, or winning clients, engaging with a senior decision-maker is typically a pre-requisite for success. Hence, international expansion is as much about discipline as it is about ambition. Defining success, validating traction, navigating cultural complexities, and embedding leadership locally are the building blocks of an effective strategy.

What we’ve shared is only a snapshot, but we hope it offers some food for thought. You can always read more about what Octopus Ventures offers the world-changing businesses we back on our website.