How AlchemistX supports cross-border entrepreneurs as they eye US expansion.
AlchemistX
Going Global: Key questions startups must ask themselves before international expansion.
At AlchemstX, we spend a lot of time considering which companies are the best candidates for an international expansion strategy.
Over time, we’ve narrowed the list of common denominators for companies’ best-case attempts at entering the international markets into three buckets:
1. Does the company possess a clear product-market fit (PMF) in its home country?
For most companies, it’s crucial to demonstrate traction where it’s the easiest and cheapest to do so. Unless a company is truly global in nature and must expand internationally to prove its core product, most companies should focus on achieving PMF in their home country first. Understanding how your customers behave in a familiar environment is critical to serving as the foundation of international expansion efforts.
2. Can the team Do. The. Work?
Ideating an international expansion plan for your company entails far more than hoping for introductions. In expanding to a new country, founders must be resilient when reaching out to key people. The sales process will be different than before, and company leaders must use the new opportunity to hone their value proposition and messaging for the market. A team that can show grit and adaptability will be best positioned to expand internationally.
3. Is the market right for your product and your company right now?
Deceptively simple, this is arguably the most important aspect of international expansion for a startup.
As a company grows cross-border, operational expenses often increase substantially. It’s not enough that your company has demonstrated PMF in your home country, but do you have the treasury to support an increase in marketing, sales, engineering, and other costs while trying to establish yourself in a new region? Is it worth the distraction for you to split your efforts between your home country and a new one? Most notably, how are international consumers today solving the problem your company aims to tackle?
Companies that can answer yes to these three questions have a much greater chance of success in tapping into the cross-border markets as part of an international expansion strategy.
How we engage with cross-border entrepreneurs looking to tap international markets
Global entry programs are unique in nature, given the contextual differences between startup teams and their support in market expansion.
Considering the above, many of our partnerships with entrepreneurs through AlchemistX are focused on helping them assimilate to the nuances of doing business in another country.
1. Systematically approaching a go-to-market (GTM) motion
Entrepreneurs often find it difficult to create a market entry program with a sales playbook in a new region. A successful sales function requires an understanding of how business leaders and investors connect and communicate with each other. Understanding the nuances of how business transacts in a new region is key to building a comprehensive sales playbook.
2. Switching from high-context cultural environments to low-context cultural environments
Conducting business in regions outside of your country requires entrepreneurs to understand the cultural differences that appear during the normal course of business and address these differences head-on. In many countries, what could be seen as rude or abrasive to a customer, might be normalized and necessary in another country. It’s essential to understand the impact that behavioral psychology and cultural context have on serving your customers in a region that you’re unfamiliar with.
3. Supporting founders during the transition by alleviating administrative tasks
There is an incredible amount of minutia that comes with expanding a business internationally. Tedious details appear in every direction you look when you’re running a company and can slow down progress tremendously. Exacerbated by even the most minimal language barrier, founders can often find themselves spending a disproportionate amount of time on administrative tasks that would be better delegated or coached by someone with on-the-ground experience in the market.
These are some of the core competencies that we partner with entrepreneurs on when they join an AlchemistX global entry program.
Global expansion and its impact on creating a more free world
We have all witnessed the remarkable outcomes that private sector innovation has led to over the years. Innovations like mRNA vaccines, 3D printing, and artificial organs show us what is possible when incentive mechanisms encourage us to work together and dream of a better future. Although it’s argued how much inequality persists today, it’s clear that the emergence of free market incentives and private sector innovation has had a tremendous positive impact on the number of people living below the poverty line across the world. This is a great article on the topic, and I’d recommend the purchase to read it.
At AlchemistX, we believe that international expansion for startups is a key driver of cross-border cooperation and has the potential to champion democracy and economic liberalization, resulting in a safer and more free world.
AlchemistX is the corporate and government services division of Alchemist Accelerator. We partner with industry-leading corporations and governments, take the expertise and tools that have helped make Alchemist startups so successful, and bring them to specialized programs around the world. Alchemist has become a critical hub connecting enterprise founders, VCs, corporations, and mentors.