Going Global: How To Make

International Expansion A Success

François Cazor
Forbes Councils Member
Forbes Business Council
COUNCIL POST| Membership (Fee-Based)
May 11, 2021,09:40am EDT

Co-Founder and CEO of Kpler, the leading provider of AI-based

transparency solutions in commodity markets.

Countless cautionary tales tell of failed international expansions by

businesses of all sizes. For a founder, this only illustrates how infuriatingly
difficult it can be to know when and where to grow your business
internationally. Simply put, such expansion is costly, complex, time-
consuming and frankly, scary. 

Take this scenario — a company is founded in a country where next to no

local market demand exists for its product. This would appear to go against
every rule of how a business should be run. And this was the exact situation
our company, Kpler, found itself in. We launched a pioneering data and
analytics platform for commodity markets in a city — Paris — that isn't an
influential location for this industry. 

This meant from day one, the traditional expansion route — rely on your
local market and scale country-by-country — was never an option. Instead,
for us, the rulebook went out the window. We had to build an international
company from scratch because overseas markets offered the only chance
for the business to succeed. 

As this serves to highlight, there's really no one-size-fits-all approach for

how to expand internationally. Yet, I believe there are a number of
strategies that can help founders to tackle this tricky issue.
Don’t underestimate how challenging the process is.

At the outset, it’s crucial to remember launching overseas can't happen

overnight; each country you expand to is like creating a new startup. Of
course, the same issues rear their head: building local leadership, sales and
more. However, as a founder, you also face many additional (and
unforeseen) local market complications. This can range from basic things
like opening a business bank account to more complex issues like
complying with country-specific legislation and regulations. 

With this in mind, expansion should be a step-by-step strategic process that

considers the true cost and time involved alongside the potential
opportunities new markets offer.

Align products with clients and their locations.

Expansion for the sake of expansion or chasing after a mythical market you
assume is untapped is unlikely to succeed. By contrast, the ideal recipe is to
align, as closely as possible, product or service development with the local
market’s needs. 

For example, we opened our first international office in Singapore as our

product could fit the specific needs of the important LNG trading
community within the city-state and in Asia. What’s even better is that we
were able to replicate this approach when establishing a U.S. office in
Houston. Again, our product had been developed further to address clients'
exact needs in that geographical area, who have a strong focus on crude oil
and refined products.   

Of course, this approach isn't available to every company — not every

product or service is destined to be a complete fit. However, our reason for
such a methodical approach was very much influenced by the fact that we
are a bootstrapped company. External funding from VCs could not be used
to fuel frenzied international expansion aimed at achieving scale overnight.
Yet, the basic lesson remains: Make sure you can justify the significant
investment into a new market by forensically assessing if there's a real
appetite for your product or service. 

Hiring locally makes a world of difference.

Beyond market fit, the most essential factor in international expansion

rests on your ability to attract the best local talent. The reasons for this are
simple. First, people who already live in the area you're expanding to will
undoubtedly understand the local market better than you ever will. Just as
importantly, though, having close proximity to clients matters far more
than you think. It's often overlooked, but it establishes credibility and
authentic relationships with your clients, thanks to a shared experience.

However, in the early stages of expansion, recruitment isn't without its

challenges. You're likely to encounter some local candidates who are
completely unaware of your business and who, rightly or wrongly, may view
your company as a risky commodity when compared to larger competitors.
This causes a strange dynamic when hiring — potential recruits interview
you. As mentioned in a previous article, this situation can ultimately have a
positive impact, though. It causes you to look beyond a CV and hire a
candidate you can envisage growing into the role. 

Regardless of their profiles, these in-market employees are, in effect, your

first boots on the ground and will play a crucial role in determining if an
expansion will be a success. Thus, invest a lot of time and effort into the
recruitment process to find the right employees. 

Disperse your talent.

As international expansion gathered pace, the traditional temptation was to

open more and more offices globally while retaining a headquarters that
acted as a mothership. This model saw the mothership richly resourced and
staffed, while other locations acted merely as satellite offices. This could,
unfortunately, lead to deep organizational dysfunction and disengagement
from employees who worked in these unloved, under-resourced offices.

Of course, the impact of the Covid-19 pandemic has upended this approach
completely — we switched to a remote-first working model in just 48 hours
and canceled most of our office leases. Yet even before moving to remote
working, we had decided to disperse senior management across the world
and offer employees the flexibility to do the same. Working in an office or
not, having well-resourced teams working in the same time zones has
played a pivotal role in maintaining a consistent company identity and
culture, regardless of geography.  

Building a viable international company is no easy feat, but if successful,

you’ll see that the benefits go far beyond just a boosted balance sheet. On a
short business trip to our first international office soon after it opened, a
team member shouted “Welcome home!" as I entered. It was then I realized
for the first time that the company was fully alive in a different part of the
world without either me or my cofounder, Jean. 

Any founder would be proud of that.