The concept of Lean Startup has become worldwide famous because of its efficiency. The methodology’s approach help companies create a product that customers really want. In the meantime, it helps them avoid unnecessary spending of time, effort, and money.
The methodology incentives entrepreneurs and managers to first develop a very basic prototype of the product, good enough to test the idea. This is to receive the first feedbacks from potential customers. Therefore, entrepreneurs can understand if the market really needs their solution or not. And if so, they can invest time and money to develop the perfect product.
Moreover, at uGlobally, we apply the exact same concept for companies that are starting their global expansion. We use lean strategies that enable businesses to validate new markets more efficiently. Instead of using traditional processes that require hours of effort and very reasonable investments. In this article, we will describe the Lean Strategies we use in detail.
Here is an overview of the Lean strategies to validate international markets:
Here are some more details on strategies to validate international markets:
Accelerator programs
Accelerator and incubators are organizations focused on helping tech companies develop their products, launch it in the market and scale.
Each program has its own structure, but the vast majority of them will provide your company with strategic mentoring, relevant connections in the market and even a kick-off investment.
Accelerators and incubators are usually focused on earlier stage companies, with a concept and/or an MVP without much traction. They usually do not charge money of the participants, but can take small equity of the projects.
Getting enrolled in an international accelerator/incubator program is an excellent strategy for entrepreneurs who want to start their business on a global level. You can either go for an international-oriented program in your country or apply to programs in other countries.
Stage: Early-stages
Speed to market: Fast
Investment: Low
Risk: Low-medium
Physical presence: Required
Other benefits:
– Assistance to develop your product
– Assistance to create entry strategies
– Support to develop a global expansion strategy
– Help with visa
– Possibility to receive investment
– Local connections
– Industry-oriented
Here are two great examples of accelerator/incubator programs that can help your company’s global expansion:
- Lisbon Challenge, in Portugal
- Startup Chile, in Santiago
Trade missions
Trade missions are trips organized for a group of entrepreneurs with the main goal of exploring a specific country/region.
The organizers usually build the schedule based on general interests that entrepreneurs have when going to a new country. Therefore, it usually includes visits to embassies, chambers of commerce, local organizations and foreign investment agencies.
The missions can give you a great overview of the business climate in the target-country and the incentives that it offers to attract foreign companies. However, it is important to consider that it is very general and not focused on “doing business”.
Stage: All stages
Speed to market: Slow-Medium
Investment: Medium
Risk: Low
Physical presence: Required – short term
Other benefits:
– Local connections
– Connection with potential customers and partners
Disadvantages:
– too general, not focused on closing deals.
Events
Participating in events, exhibitions, and trade fairs is a great strategy to get international exposure and get connected to your industry in other countries.
Although the big events are great to get to know new people, we highly suggest you look for those that are focused on your industry. This is where you will usually find more potential customers/partners willing to do business.
Don’t forget to prepare your project’s presentation in advance, get your business cards and try to talk to as many interesting people as possible.
Stage: All stages
Speed to market: Medium-Low
Investment: Medium
Risk: Low
Physical presence: Required – short-stay
Other benefits:
– local connections
– Industry-oriented
Strategic partnerships
One of the most common strategies to access a new market is to join forces with local companies that complement your sales process and/or your product.
A software that helps to organize a company’s countability, for example, could set up partnerships with local accountants instead of trying to sell their product to each company individually. This way, the office can offer more innovative approaches to their customers, and the software company gets a local sales force which is already experienced in that market.
Stage: all stages
Speed to market: medium
Investment: low – high
Risk: medium
Physical presence: depends on the partnership agreement
Other benefits:
– local and industry knowledge
– high involvement of other parties
Clients
Although this is one of the most straightforward options to access a new market, it’s not common to see companies trying it.
If your company has a customer that operates in other countries as well, why don’t you offer your solution to their other branches? This strategy is a great shortcut to get your first customer in a new market and understand if your solution is just as valuable in there as it is in your home market.
Stage: product already validated and with traction in the local market
Speed to market: medium – fast
Investment: low
Risk: low
Physical presence: not required
Other benefits:
– easier access to the first international customer
Challenges:
– this strategy does not give you as much flexibility to test different approaches regarding your business model and pricing as others would do.
Soft-landing
Different than ‘traditional’ missions, a soft-landing schedule is specially designed with the goal of connecting its participants with potential customers, partners and service providers. The soft-landing agenda is built In a way that takes into account the company’s individual needs when entering that specific market.
These programs are usually developed together with local partners once they have more experience and valuable connections in the market. In the tech scene, these partners are usually local accelerators, incubators and tech parks.
At uGlobally, we offer soft-landing programs in over 10 countries in partnership with these organizations. You can check our list of options by clicking here.
Stage: product already validated and with traction in the local market
Speed to market: fast
Investment: high
Risk: low
Physical presence: short stay
Other benefits:
– easier connection with potential customers and partners
– assistance from market experts tailored to your business needs
– acquisition of hands-on experience in the market
Challenges:
– this strategy requires more preparation than previous ones
By yourself
In addition to all strategies mentioned above, the entrepreneurs also have the possibility to explore a company by themselves. This strategy is usually opportunity-driven, often associated with pre-existing relationships in another country or a potential international customer that reached out to the company.
The main reason why this strategy is less popular among the tech scene is that the process is usually more complicated and resource-consuming than other options. Startups, per definition, have less available resources as ‘traditional’ companies. As a consequence, they tend to search for assistance throughout each of their lifecycle stages – including international expansion.
Apart from these difficulties, this strategy gives the company higher independence in the process, as well as a higher speed to make decisions and change plans during their expansion.
Stage: product already validated and with traction in the local market
Speed to market: slow
Investment: high
Risk: medium-high
Physical presence: recommended
Other benefits:
– possibility to do everything according to what you believe would be the best approach
Challenges:
– this strategy requires more preparation than previous ones
– high investment of human and financial resources
