There are thousands of new businesses created each year all over the world. While lots of them don’t make it in the long run, there are some beautiful success stories that we can learn from. Let’s take a quick look at how ambitious startups handle their internationalization!
1. Startups are highly internationalized compared to older businesses
According to a recent report from Crane Venture Partners on the internationalization of high-growth startups (more than 88% being funded or headquartered in the US), almost 90% of them have an international presence. Even if takes 5.5 years on average for those companies to launch internationally, we have noticed that the more recent the startup is, the sooner it accelerates its global presence. It took more than 10 years for a company established before 2000 to go global, while businesses funded between 2006 and 2011 only waited 3 to 4 years.
What’s also very interesting is how US and non-US companies approach internationalization very differently. Non-US companies take between 1 and 2 years on average to expand globally! This can be explained by both the smaller size of their home markets and a typically longer technology adoption curve. It’s no surprise that the United States still leads the market for tech startups.
2. English-speaking countries are top-ranked when it comes to global expansion
Whether those startups were funded in the U.S. or elsewhere, they all choose a city in an English-speaking country to launch their international business. U.S. companies have a strong preference for London: 80% of them pick the English capital as their international starting point. London’s Irish neighbor Dublin comes next, and third place on the podium is taken by Montreal in Canada.
Moreover, non-US companies don’t even hesitate: San Francisco, New York or Boston seem to be the obvious choice for them. This shows how English still has a huge hegemony over business worldwide, particularly within the domain of tech startups. English is indeed the dominant language on the Internet: almost 26% of online users speak English, 53% of website are available in English, and it’s also the language with the highest purchasing power online.
3. Why do new companies take the risk of internationalization?
Yes, going global as a young company can be risky. Sometimes startups don’t know how to sell their service, efficiently communicate it or handle the laws and regulations in their home country so expanding to a foreign market may seem like an insurmountable challenge. So why even try? Because big rewards come with big risks.
Global expansion represents a huge revenue growth opportunity for companies, and that’s the main reason why startups take the chance. It also allows them to diversify revenue sources, and therefore, the risks. Finally, companies that go global quickly can keep their strategic position as a technical leader and sustain their competitive advantage in an increasingly aggressive market.
4. What your startup should think about when going global
As previously mentioned, internationalization comes with its own risks. A young company must find a balance between its core values and culture and the need to adapt all of those to every market. Customer requirements, costs, resellers, political and economic context are different in every country, and you can’t expect everything that worked at home to translate everywhere else. Everything needs to be thought through in advance with patience and consideration of every detail:
- How many countries should you expand to? What are the top growth markets for your business?
- What are the top issues in those countries? What do people there care about and look for?
- How should you handle content? Do you need to create customized content for every country, or could you just localize the content you already have?
- Did you think about currencies, phone numbers, time zones, date formats, local holidays?
And the list goes on and on and on…
Alex Kayyal from Salesforce Venture said it all: “The more you prepare for expanding internationally, the better your chances of succeeding.” Your company must be ready if you want to grow outside of your home market. This is not something you do in 2 weeks, because you’re basically starting your company all over again. Most of the time, customers are not educated to what you do yet, so you’ll need to start with them before anything else. But if you think about what internationalization can bring to your company’s revenue, culture and overall success, there’s not much to hesitate over!