5 Reasons To Scale Up Your Startup Abroad

5 Reasons To Scale Up Your Startup Abroad
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You have an amazing startup. Don’t you have? 🙂

So, it is time to speak about the reasons to scale up to the international market and I will give you 5 reasons to scale up your startup abroad.

5 Reasons to scale up to the international market.

There are many reasons to scale up your startup, I made my personal list with the most important ones:

  1. It proves the real value of the startups and organization.
  2. Your local market is very small.
  3. You will acquire multinational references.
  4. You may become a “Big Player”.
  5. It may become your next exit.

 

1.It proves the real value of the startup and organization.

5 Reasons To Scale Up Your Startup Abroad

There is no better way to demonstrate your business model than testing at the foreign markets. Making this possible will multiply your sales and the size of your startup yearly. So, demonstrate it works in foreign markets and the value of your startup will multiply yearly.

For example, let’s think your startup is doing well in your local market and the reasons for doing well are fitting local and foreign markets. Some companies as Uber, Ikea or Apple they understood this from the beginning.

Having in considerations tech startups, I can also mention a few examples: Bit Defender, Eset, Panda. But not only anti-virus vendors (right now they do everything), I can also mention backup solutions such as Datos101, artificial intelligence security such as Darktrace and I could mention hundred more startup vendors where they demonstrated their business model in the international markets.

2. Your local market is very small.

5 Reasons To Scale Up Your Startup Abroad

Let’s imagine you are Slovenian Tech Startup. How much would be your potential market in Slovenia? The answer is not much in most of the cases.

Now let’s imagine you are located in the USA. How much would be your potential market in the United States? Pretty much bigger compared with Slovenia.

When your local market is a small country, then most of the potential is in abroad. But this is relative, if your local market is the USA, China or India, then the potential is still there but first, you need to make sure your local market is working very well.

3. You will acquire multinational references.

This will give you advantages to have multinational customers and references and global partners (operating in many countries). It means more visibility and more potential investors.

I remember in my last startup, how the international references helped to brand the startup to another level. They acquired partners such a Deloitte or Ernst and young. From the logo references point of view, gives you another “level” like a tech startup.

Another real story with my first startup, Flowmon Networks, with one multinational partner: Axians.

Axians is a tech consulting located in 22 countries. On 2016, at the time of this story, Axians was located only in 12 countries. Flowmon partnered with the UK office, but soon expanded this partnership with Germany, Netherlands, and other European offices.

4. You may become a “Big player”.

5 Reasons To Scale Up Your Startup Abroad

As I mentioned in the previous point, you have to success in big markets in order to grow considerably. Otherwise, your local market is very limited. I will tell you a real story with real numbers and how the foreign markets double yearly one the tech startup where I’ve been cooperating in the past.

Real story of European Tech Startup: Flowmon Networks

This European Tech Startup (Flowmon Networks) was evolving in three years from 2 M € yearly sales to 7.5 M €. It means the evolution was in this way:

  • Year 1: 2 M €
  • Year 2: 4 M €
  • Year 3: 7.5 M €

Having in mind they are not a Silicon Valley Startup with million euros of financing by investors. I am talking about self-financing by its own sales. The international markets made a huge impact on Flowmon. They are located in the Czech Republic with a limited small market.

It sounds good, doesn’t it? If you are aiming to become a “Big player”, then the international market will be your number one booster.

5. It may become your next exit.

5 Reasons To Scale Up Your Startup Abroad

It means, your business model and the product may be limited to the local market. Thus, your potential is very limited and you may want to exit in order to find a better project.

For example, imagine your solutions is only adapted to the local market requirements. These requirements are very particular and it is only found on your local market. Anywhere else out of your local market, they require your solutions.

Another reason can be the Go To Market model. I have known one startup where the local Go To Market was by personal relationships. It means the market was developed because of personal relationships from distributors.

They have tried other “Go To Market” strategies and none of them didn’t work. This means, they had to have a local person with a big portfolio of personal relationships with partners and customers. Otherwise, the model implemented it wasn’t working.

Therefore, they depended on having a local person with these requirements in order to be successful.

Startups Tips mission and value.

In Startups Tips we know and experience how much pain and cost means investing in the wrong strategies and people. We save your time by Startup Coaching & Consulting. Would you like to Scale Up your Tech Startup to the international market? We will listen you and we will guide you – Javier Nieto León. Founder at Startupstips.com

I hope I helped you to understand the reasons about why scale up your tech startup.

You may be also interested in the Top 7 mistakes to avoid to scale up your tech startup to the international market.

I believe in tech startups, so I help them to scale up to the international markets.

If you are interested in more Startups Tips, you can write a comment below or write to info@startupstips.com

Javier Nieto León

 

 

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Javier Nieto León

When I started as a Business Development Manager at a Tech Startup Vendor in 2014, I faced the issues and the pains about how hard it is becoming a global Tech Startups. The Startups Tips mission is to help your Tech Startups to go from Local to Global.

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