You’ve decided that international expansion is the next move for your company. That’s great. Exciting times ahead. Now you’ve got some big decisions to make. Not least of which is ‘What roles do I need to create for this overseas expansion?’
Make no mistake, this decision is one of the most important you’ll ever make. And we know, we’ve got a fair bit of experience with this, both for companies our team have taken global, and our portfolio companies that we’ve helped expand.
Which is what leads Monterro co-founder Peter Larsson to say things like: “If you get the wrong first person in, you’ll have problems for many years. You can end up in a position where you’re a few years in, 10 people in the team, and eight of them are wrong”.
So. What are the first two roles you need in an international expansion? And how do you fill those positions? It’s actually pretty simple. And we’ve seen this play out over and over again. You need two people. Sales that you hire locally, Product or Customer Support that you move from the mothership.
Let’s talk sales
In the best-case scenario, you’ll already have a customer or two in your chosen region to help kick things off, but even if this is the case, you’re going to need somebody there from day one who knows the language and culture. And that means hiring local.
You’re going to be dependent on this person to build relationships with local businesses and convert customers. And while you may have absolute trust in the ability of your existing sales team, chances are they lack the cultural shorthand and local knowledge to build a rapport in that region.
“You should never move salespeople into a new country,” Peter continues. “If you do, you’re just setting them up to fail. And selling is such an interpersonal skill – you need somebody who understands the culture.”
And in the current climate, where remote working is often a must, it’ll be even harder for your existing salespeople to connect in the same way that a local hire can. Gustav Lagercrantz, Monterro CEO and Chairman of the Board for Next Technology and Matilda FoodTech agrees:
“Always start your new office with at least two people. One from the mothership – your headquarters – who knows your company’s technology and structure, and one from the local market who understands the sales process. And it always helps to have somebody senior on hand to check everybody is doing what they say they’re doing.”
Let’s talk product
Your product expert needs to be a long-standing member of the team from back home. This is absolutely vital. Not only will they come to the table with a ‘I know what I’m talking about’ energy that is sorely needed to buy credibility in a new market, they’ll bring company culture.
Culture is a hard thing to do from a distance, and even if you are doing everything you can to make your new outpost feel like an integrated part of a larger team, there’s nothing like having a dyed-in-the-wool employee there on the ground, infusing everything with the culture.
“It’s key to integrate international teams with long-standing employees,” says Peter. “People who love the company and know how things work.”
Gustav has a similar perspective. “Once your local salesperson has started converting local customers, your product person can start embedding your culture in the new region. Both in the office, and in their dealings with customers.”
Are you ready to expand?
Once these two positions are filled, you’ll be in a good place to gain a solid foothold in a new market. But one final word of warning: no matter how good your hires are, make sure you still are hands-on with them as they get settled.
“It’s a risk to take a hands-off approach when opening a new international office,” says Mats Ferm, CEO at Monterro portfolio company Palette Software, a software provider of Purchase-to-Pay solutions. “If you get the wrong people on board, things can go south fast. With a strong personality present in the office, like the CEO, you can quickly identify if you’ve chosen well or not – and remedy any issues fast.”
For more tips and insights about international expansion – from identifying new markets to hiring the right people – read The field-guide to international expansion for Nordic software CEOs.
