Are you thinking about entering a new market? Before you do, remember this; no matter your company’s revenue, reputation, or reach at home, when you enter a new market you must act like a start-up.
For many people, the word “start-up” conjures up images of young, t-shirt-clad founders hunched over Apple laptops in funky incubators. This is not what I’m referring to. Dress code and environment aside – what matters is a start-up attitude. You’ve got to be ingenious, anticipatory, agile and, above all, tenacious.
This is precisely the kind of attitude a company needs to adopt when looking to grow its business abroad. I learned this firsthand after being sent by a Canadian organisation to open an office in India and then another 21 offices across the globe. Naively, I thought the organisation’s reputation (it was Canadian, after all!), credentials (it had run multi-million dollar projects elsewhere), operations (it had highly experienced headquarter staff who regularly dealt with international funding) and reputation at home would basically merit a red carpet welcome in a new country. The reality was quite the opposite.
In some countries, we weren’t able to open a bank account because my organisation lacked a domestic credit history, we faced challenges hiring people because of HR law nuances, we couldn’t get the company registered because of company law quirks and we were unable to find an office because we had no local tenancy history. All the resources and will of my headquarters weren’t always helpful to solve these problems on the ground.
The challenges a company will face in a new market, like the ones I faced, are not dissimilar to those faced by a start-up. Similarly, the relationship between the new international office and its headquarters is like the relationship between a start-up and its funder – the funder gives direction, guidance and support but it is ultimately down to the start-up founder to make it happen.
In my case, I eventually realised my approach was not working and changed my mindset accordingly, combining my headquarter support with a proactive, determined approach on the ground. By changing my mindset, I approached the market, clients and challenges differently. I found a different way to register the company (contracting through a service provider to pay employees), anticipated challenges rather than being surprised by them (drafted worst case scenarios and matching contingency plans) and became more agile (hired experienced consultants across the country to serve clients in person and online). By doing this, I was able to double our client base as well as decrease the service cost per client. My offices eventually became the most innovative and productive in the network.
Above all else, I learned that tenacity matters most. When I couldn’t get my office’s internet and telephone hooked up properly, I went directly to the local telephone company and demanded to see the Managing Director. I was told, of course, that he couldn’t see me, so I replied that I would wait until he could. I sat down in the waiting room, opened up my laptop and worked for four hours, until I finally met with the Managing Director and never had an issue with my telephone connection again. Having learned the start-up mentality the hard way, I now insist, in my role as a Canadian Diplomat, that the companies I work with adopt this approach from the outset.
Talk of Unicorns (billion dollar start-ups) and countless other success stories makes running a start-up seem like a piece of cake. The reality is more likely to resemble entrepreneur Ben Horowitz’s experience, who said, “As a start-up CEO, I slept like a baby. I woke up every two hours and cried.” Risk and uncertainty are both certainties in taking your business to a new market. But businesses can lean on me, my organisation and others like mine to provide help.
We are able to help manage some of the risk by introducing businesses to trusted cross-border networks, facilitating access to government financial programs, organising subsidised delegation visits to markets, matching them to buyers and agents, assisting with branch office set up, and helping secure access to the right talent at the right time.
One approach I’ve championed to help companies expand internationally is the Next Big Idea contest; an international business plan competition for ambitious, globally-minded tech companies. It offers two winning companies from Birmingham and two winning companies from Ontario two weeks, all expenses paid, in a business incubator. It gives them unfettered access to mentors, business development assistance and support for opening an office in a new market. By bringing together partners from the public sector (Government of Ontario, Canada), academia (Ryerson University in Toronto and Aston University in Birmingham), incubators (DMZ in Toronto, the leading university-based incubator in North America, and Innovation Birmingham) and the private sector (Natwest and Wragge & Co) we are able to offer a low risk, high reward opportunity to companies interested in entering new markets.
For many companies intent on international expansion, the notion of having a start-up mentality may feel like a backwards move. This couldn’t be further from the truth. Being ingenious, anticipatory, agile and tenacious will allow you to stay one step ahead of the competition. Adopting this mentality is less daunting when companies realise there is a support network in place to facilitate expansion. You’ll dramatically improve your likelihood of capitalising on opportunities and you’ll be infinitely better prepared to overcome the challenges that will inevitably come your way.
By Aaron Rosland, Commercial Counsellor for the Government of Ontario, running the Next Big Idea (NBI) Contest in partnership with NatWest