In a recent series of events in Brazil, Saudi Arabia, and the UAE, the topic of how startups should scale across markets was a recurring theme. The concept of being “born-global” was highlighted as an important strategy for startups to consider from the outset. However, it is important for startup founders to ask themselves seven key questions before going global.
The first question to consider is what being global means for the specific startup. It can vary from targeting a specific region to expanding globally. Startups need to define their strategy for being born global and align it with their goals and resources. Understanding the scope of being global is crucial in determining the path forward for the startup.
Another crucial question for startup founders to consider is why they want to go global. Reasons for expanding internationally could range from accessing a larger market to defending against competitors. Understanding the motivation behind going global can help founders make informed decisions about their strategy and approach.
Additionally, startup founders need to assess whether their Total Addressable Market (TAM) is truly too small to support growth in a single market. Some markets may have limitations in size, making it necessary for startups to look beyond their borders for sustainable growth opportunities. Evaluating the TAM and potential for expansion is essential in determining the feasibility of going global.
The nature of a startup’s network effects also plays a crucial role in determining its global strategy. Businesses with global network effects may require a more immediate global approach, while those with local effects may thrive as regional winners. Understanding the impact of network effects on the startup’s growth and expansion strategy is key to making informed decisions.
Furthermore, startups need to consider whether they will be pulled globally by client demand or if they will need to push for international expansion. Companies serving global clients may naturally expand internationally, while those serving more local needs may face challenges in pushing their products beyond borders. Understanding the dynamics of client demand and market forces is essential in planning for global growth.
Lastly, startup founders need to assess the barriers to entry for international expansion and evaluate whether their organization is built to be cross-border. Cultural, linguistic, and regulatory barriers can present challenges to global expansion, and startups need to be prepared to address these issues. Building a global organization, culture, and product requires deliberate planning and strategic decision-making.
In conclusion, going global can offer strategic advantages, opportunities, and challenges for startups. By asking themselves the seven questions outlined above, startup founders can make informed decisions about the potential for global expansion and develop a clear roadmap for scaling across markets. Building a strong foundation for growth and understanding the unique requirements of international business can set startups up for success in a global marketplace.
