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Nine Tips For A Successful Startup On Foreign Soil

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Growing and scaling a startup, whether it's in an exciting new market or a competitive and saturated one, may not be as straightforward as you'd like -- especially if you want to launch in a foreign country. From inadvertently designing offensive logos, to failing to protect your intellectual property or simply being unable to penetrate your target market, a lot can go wrong. It takes some savvy business skills to ensure you don't return home with your tail between your legs.

What advice do those who are experts on creating startups on foreign soil give?

1. Don’t be cheap

“Professional advice can seem expensive when you're starting out, but heeding unprofessional advice will undoubtedly be even more expensive,” says Simon Galpin, Director-General at Invest Hong Kong. He continued, "While it’s true that capital is the lifeblood of a startup, the cost of bad legal advice, poor translation and cheap accountants will, in most cases, end up being even higher than what you would have paid for good, local professional advice."

(Credit: iStock)

2. Pack your bags and go

Visiting a country where you want to do business is the best way to find out how your customers live, think and operate. In today’s world of Skype, WhatsApp and IM, doing business from your desk is easy but as much as you need to trust and empower your team abroad, going onsite to meet people face-to-face is equally important. This is true especially in countries across Asia, where in-person interaction is more appreciated than it is in western cultures that rely heavily on conference and video calls for communication.

Non-profit organization Slush.org makes technology startup conferences happen on a global scale. "Even if you don't have a physical presence in your target market, pay a visit to the grassroots community,” says Martin Talvari, Chief Strategy Officer at Slush. “They’ll make you feel like a local and you’ll get to know the right people who can help you move forward. Don't blatantly sell your product or ask to be promoted--be useful for them and make it a win-win situation.” After you’ve made the personal connection, Talvari, who also founded Science Knows No Country says, “Later on, it's easy to stay in touch via email or Skype."

3. Do what you know and love

Mawgan Batt is Founder and Director of The HK Hub, a comprehensive online guide to living, working and playing in Hong Kong. She says with 80 per cent of startups failing to get off the ground, it’s important to be passionate about your product. “When I moved to Hong Kong, I was overwhelmed by the pace of life and the density of the city. I didn’t know where to find the best shops, bars, restaurants and things for my children and initially relied on word of mouth to find my feet. This made me realise the need for a website that pulled together all the fantastic things on offer all in one place and so The HK Hub was born!” Batt says, “I don’t think it would have been so successful if I wasn’t 100 per cent in love with the idea of providing the best guide in the city.”

4. Prepare and be patient

So you've started your business and want to be present across the whole of Asia? Depending on your business, this could require pretty heavy investment in technology, people and infrastructure in places you’re probably not too sure about. Let the business lead your investment. Sunita Kaur, Managing Director at Spotify in Asia says, “At Spotify we ensure we have a strong local music catalogue and a demand for the product before we take the plunge into a new territory. We believe that if you’re going to roll out a music service to music fans who demand excellence, you want to be sure everything is perfectly in place for launch. We all need to think about the long-term game."

5. Find partners who can help

“Trusted local partners with market expertise are key to expanding and scaling in emerging markets,” says Paul Ahlstrom, Managing Director of Alta Ventures, a leading venture capital fund in Latin America. “Before expanding into any new market, we start traveling years in advance to those countries. We map the market and find the right trusted partners to work with, and research the risks and upside of doing business in that geography.” When scaling internationally, find partners with local market knowledge of business basics like tax, legal, and regulatory compliance, and seek relationships with those who can assist with early customer traction and distribution.

6. Acquire local partners

Every company has different touch points and requirements for rapid scalability across global markets. CQS International is an eCommerce insurance solution provider, offering consumers the coverage they need at a price they can afford. CQS CEO, William Nobrega says, "As an eCommerce company focused on insurance products, our success strategy consists of building a highly advanced proprietary technology platform, and then acquiring small to medium-sized insurance brokers in each country. This provides us with an immediate customer base, database, licenses, infrastructure, and most importantly, a pool of highly experienced and talented management assets.”

“Post acquisition integration is never easy, but by overlaying our online technology over the current infrastructure, we can quickly scale up revenues and build a common brand and culture," Nobrega says.

7. Seek opportunities to learn from each country entry

Recent research has found technology-based startups (in particular) are more likely to succeed globally early on, especially compared to traditional industries, where internationalization often happens at a more gradual pace.

"My colleagues studying the internationalization of software firms found that there was a specific structure and ordering to the more successful companies in what they learned along the way,” says Chuck Eesley, Assistant Professor, Management Science and Engineering at Stanford University and board member of Startup Chile. He continues, “First were the rules or heuristics for selecting which country to enter and how. Secondly there was timing and how to tell if a market was ready; and thirdly, ‘prioritizing’ which countries were best to enter after they’d been successful in a neighboring country.”

Hong Kong, for example, is a special administrative region within China that sets its own tax rates, has its own convertible currency pegged to the US dollar, enjoys free flow of talent and information, and operates a judicial system that is independent from the government. In other words, it combines access to China (and the rest of Asia) with low barriers to entry with a stable environment.

8. Don't ignore market conditions or country customs

Entrepreneurs are usually leaders by nature but blindly leading from the front, in a market that you don’t know and understand could lead to bad outcomes. Cultural sensitivities, language barriers, local customs, ambiguous regulations and other factors mean that leading from the trenches may, in many cases, be the clever thing to do.

Marketing and business start up specialist Matthew Reede says, "There is always a difference between markets, especially in the Asian region. As Founder and Director at Habitat Travel he says, “Spending time on your UX (User Experience) by testing your product in a foreign market and understanding local buying habits before you take a tech idea live is paramount to success.”

9. Choose your IT platform wisely

Ajit Melarkode is Managing Director at Rackspace Asia-Pacific, a managed cloud company. His advice, “Pick a platform where you can fail quickly and pivot very fast if required!” He says, “Today most businesses from taxis to healthcare are becoming IT businesses of sorts, so this invariably means picking an IT platform that can help you to achieve this. Cloud computing allows you to test ideas quickly and achieve results or not, fast.”

Launching a business in a country where you’re not a native has its challenges, but it’s far from impossible, and the benefits can be sizable. Have you launched a startup in a foreign land? What tips would you add?

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