Choosing the right region for your international expansion can be a make-or-break situation.
Just because your software product is working well in your current region doesn’t guarantee that it’ll immediately flourish everywhere else. And just because you’re geographically close to another region, doesn’t mean it’s the best choice for your international expansion.
To be successful with international expansion, you’re going to move strategically and gather as much insider knowledge as possible. Because there are some local-shaped challenges that only local-shaped insight can overcome.
So how can you pick the right region for your international expansion?
- Have an opportunistic mindset
- Get local references
- Analyse market potential
- Don’t bite off more than you can chew
Now that’s all easier said than done, so we’ve put together a collection of practical advice that will (hopefully) help you avoid some of the pitfalls others in your shoes have made.
Let’s dive in.
Have an opportunistic mindset
International expansion can feel like going back to square one with your business. But if you think opportunistically, you can unearth a bunch of leads hidden in your business.
Ask yourself these questions: Are there any obvious opportunities presenting themselves? Do we have any warm leads in other regions already? What about a pre-existing relationship with a certain region?
Unearthing these opportunities that already exist within your business will give you some solid avenues to pursue.
But you should also deeply consider your software’s capabilities and the problem you solve. Combining this knowledge with some desk research will allow you to find alignment between what you offer and and a region that needs it.
Get local references
With internationalisation you need to follow the customer trail.
As much as this will hurt to hear: it doesn’t matter how good your Nordic references are.
Local references are worth their weight in gold. Any way to get a local reference will save weeks, if not months of door-knocking and cold calls.
But if you need local customers to get local customers how do you get started? There’s one tried-and tested method for cracking this Catch-22. Identify if any of your current customers have subsidiaries in other countries and try to convert them first.
“Our first expansion was moving into Japan. It’s a special market but is 8 hours ahead of Sweden. We caught a wind of opportunity. One of our co-workers had good knowledge of the market, then by luck and hard work we met a key opinion leader in this niche market that liked us and championed our entrance.” Mats Klaar – CEO, Viedoc
Analyse market potential
It’s important to identify market size/dynamics, competitors, customer behaviour, and customer needs. Just make sure you’re doing so on the back of opportunistic thinking.
You need to do the desktop analysis, but don’t over-prioritize it. For example, if you go to a management consultancy firm, they’ll spend a month analysing all the different markets.
But if you work from the opportunities first, you can speed up this process. Identify where it makes sense to look at, then use research to make sure you’re not missing anything obvious.
Don’t bite off more than you can chew
The name of the game is to start small.
If this is your first expansion, start with one region. To put it simply, right now you don’t know what
you don’t know. These unknowns could become issues that will end up causing significant delays.
Not just to your expansion, but to your roadmap as a whole. Seriously.
And on the subject of starting small, don’t try to migrate your entire product portfolio at once. Identify a vertical that you can gain success in, then land and expand.
“The most important question you can ask is: What impact will this market have on my current roadmap? You can divide the markets and identify opportunities, for instance revenue potential, but you’ll get a sense of all that stuff. For some regions, expanding is like starting a new company.” Peter Larsson – Co-founder, Operations, Monterro
And that’s it.
We hope that’s given you the insight you need to start identifying good potential regions for your international expansion.
At this stage you’re probably thinking who’s going to work in this new region and how do I find them? And how do we ensure smooth integration of the new region with our current setup?
Good news – we unpick both of these in detail in our CEO SaaS guide to international expansion.
It’s packed full of expert insight including the five rules of international expansion that we recommend you memorise ASAP.
