26 June 2020
Startup Flight #10: What we learned from expanding to two new regions
Hi there! My name is Charlotte and I’m Co-Founder & CEO of Equalture (a hiring software that leverages gamification to debias hiring for SMBs) and living in the most beautiful city in the world: Rotterdam. Being an entrepreneur for 4 years now and building my second company together with my twin sister, I get a lot of questions from other founders and people thinking about starting their own company.
Since I believe that every single founder experience can be helpful to other founders, I decided to translate these frequently asked questions into a blog series: Startup Flight.
In this tenth blog: What I learned from expanding to two new regions in Europe, the UK and the Nordics.
Finding the right time to expand abroad: Our checklist
Growing internationally can be either your greatest opportunity or heaviest pitfall. Why? Well, because timing is everything. If you do it too early, you can terribly fail, while entering international markets too late might cause a huge competitive disadvantage.
So what’s the right time?
Although you definitely shouldn’t trust on my opinion only, this is what at least helped us assess whether the timing was right this year. We did an extensive research in which we tried to answer the following questions:
Category I. Internationalizing our ICP
- Have we already revealed our exact Ideal Customer Profile (ICP)? → If not, then don’t expand abroad yet (because you will then lack of focus)
- Can we accurately estimate/calculate our ICP market size in Europe? → If not, don’t expand abroad yet (because you don’t know yet whether your ICP is big enough or if you should re-assess your ICP)
- If we know our ICP market size in Europe, then do we know which regions are most promising? → If not, don’t expand abroad yet (because you might try to enter the wrong market)
- Can we use a similar sales strategy in these regions? → If not, don’t expand abroad yet (because you might want to research sales strategies first)
- Can we do sales virtually? → If not, don’t expand abroad yet (because building a local sales team or traveling a lot is very expensive)
When we could answer all these questions with a quite confident yes, we moved on to the next set of questions.
Category II. Broadening our ICP nationally
- Do we have any clue of possible extension of our ICP (for instance company size/industry)? → If no, expanding abroad becomes more attractive (in our case the answer was yes, by the way)
- Let’s say we extend our ICP, would this then require a lot of product development? → If yes, expanding abroad becomes more attractive (in our case, the answer was again yes)
- Let’s say we extend our ICP, could we then do sales with the current team or should we build a specialized team? → If no, expanding abroad becomes more attractive (and here our answer was again yes)
And after answering these questions as well, it became clear to us that it was a smart move to expand abroad. So that’s what we did.
What we did next
So by answering all these questions, we basically did the entire research into new markets, which allowed us to start implementing our strategy right away. We decided to go for the different markets at the same time, namely the UK and the Nordics. For both locations, we hired a native Business Developer who could help us understand the business culture. Once we hired these two colleagues, we were ready to rumble.
By the way, in order to determine our new target markets/locations, we looked at the following aspects:
- (Growth of the) market size (in our case the number of scaleups between 11 and 100 people);
- Competitive landscape;
- Similarity with our current sales strategy;
- Openness to innovations.
What we did wrong
June was the first month in which we actually got more non-Dutch customers than Dutch customers on board, which indicates that we are doing not too bad. There are also some thing, however, that I would have definitely done differently with the knowledge that I have now.
Mistake 1. Two regions at the same time.
We now have customers in both the UK and the Nordics, so our strategy is working. I do believe, however, that we would have been able to internationalize faster if we would have focused on one location first. Simply because focus helps you. But instead of that, we had to investigate to different regions, onboard two different colleagues and gain a name in two different markets. Quite a challenge.
My first advice, for that reason, although we are doing fine now, is to start with one location first. Tweak your sales formula to this new region, A/B-test to find out what works, and combine leanings of two different regions in order to enter the third one even quicker.
Mistake 2. Content is king. And so is your network.
Gaining a name in another country isn’t just a result of spending enough advertising budget. It’s about showing expertise and being connected to the right people.
People don’t care about an unknown company that overloads them with banner advertising. And they surely won’t remember your name. What they will remember, however, is content that helps them. Valuable insights, practical tips and tricks and thought-provoking discussions. The magic word here: Content.
Another thing that really helps is your network. Doing sales in a new country is like the domino effect. Once you make the first impressive name in that market fall for your company, more will follow soon. Believe me. So you’d better build a network first and have your content ready.
Mistake 3. Sales approaches might change, but your messaging shouldn’t.
Finally, don’t drastically change your sales approach. We have a quite bold sales approach here at Equalture, which is called the Challenger Method. We challenge our customers’ status quo by revealing the actual problem behind their problems and showing them the (financial) impact of these problems.
In the beginning we thought that this approach might be too direct (or too Dutch ;-)), especially in the Nordics. Experience has proven, however, that softening our approach, hoping that it would fit the Nordic market better, didn’t help us at all. So we went back to our trusted messaging that worked here in The Netherlands. And yes, we made some vocabulary changes in our messaging, but we didn’t try to fully align our messaging with each different region. Because in the end, our message is what we believe in.
What we did right
Like I mentioned, luckily enough we are actually realising our dream to expand abroad. And although we might not get a 10 out of 10 for our expansion strategy, at least we now seem to understand how it works. So this is what we did (and are doing) right.
We align our content with the different regions that we are focusing on. And this doesn’t mean that we share UK content with the UK only, but just that we know what triggers people’s interest in these different locations and how to act on that.
So for instance we are organizing webinars and recording podcasts with UK and Nordic speakers every now and then. And the good thing about doing this, is that we not only make valuable content, but also enrich our network by inviting influential guests for our webinars/podcasts. After all, it’s all about gaining a name.
Founders love to help, so why not asking for help?
The second and even more important thing that we learned is asking for help. Because who can better inform you about market trends than a founder who’s originally operating in this region him-/herself?!
You don’t need to invent a new bicycle when trying new roads. You might just need some new wheels to do so. And that’s all about asking for help.
My final last tip: keep using your learnings to experiment in new regions. Don’t overwork yourself by trying too many regions at the same time, but also prevent yourself from lagging behind your competitors. It’s your task as a founder to keep researching new markets and do some first experiments. After all, you can learn a lot through reading, but practice is still the greatest school of learning.
Today I can proudly share that we already have customers in 7 countries. And that’s not because we had such a rockstar expansion strategy. It’s just because we kept trying, even though we were aware of our mistakes. Being aware of it, however, is a different thing from pulling the brake.