| When is a good time to initiate international business development efforts?
While the answer may of course depend on your industry and what your organization offers to the market, the answer is as soon as possible or, to quote Jack Davies, Founder of AOL International: "sooner rather than later".
Why?
Many businesses, regardless of their size, focus on their home market until it becomes apparent that it is reaching saturation. Then they consider international or new business options. There are several problems with this approach. Here are four examples:
- First, by the time they are ready to expand, competitors or copy cats may have already taken the better share of the strongest markets.
- Second, such competitors may have already entered the home market.
- Third, it is not uncommon that a business' products or services may be more attractive to clients in foreign markets than they are in the home market.
- Fourth, there is a learning curve associated with international business development, like with any endeavor. The later it is started, the later the results.
Example
Let's take an example and see how even a seed financed start-up can become a global company.
Created in July 1999 in Seattle to serve the $16 billion global marketing research industry with innovative B2B and B2C solutions and services, Global Market Insite Inc. is today a leader in its class with 200+ employees and offices worldwide. Six years ago it was a start-up with, on the positive side: a visonary founder and CEO with experience as a global product development manager with a leading FMCG company, proprietary software components and advanced concepts for innovative products and services meeting anticipated demand. On the negative side, the company faced U.S. competitors heavily financed by venture capital firms while it was burning founder's capital, it had no revenue, few connections, and 5 employees.
So, how did it do it?
First, the founder and CEO built a small but highly dedicated management team with industry savvy and strong international as well as entrepreneurial business experience.
Second, GMI took advantage of the limited number of competitors of global scope to aggressively establish itself as a global leader in Europe, Asia, and Latin America. Within 6 months of international launch, the company was generating revenues, winning for instance its first project in Europe 3 months from entry. During its first three years of existence, over 80% of the company's revenue generation came from overseas activities. R&D followed a similar pattern with international outsourcing to countries such as Hungary, Bulgaria and Brazil.
Third, having developed and fully validated state-of-the-art solutions, leveraged and established solid credentials with global clients (many of who have North American operations), the company was in a favorable situation to launch its marketing and sales efforts in the U.S. in 2001 and make it through the economic slow down of the following years.
It is thanks to this global approach, accompanied by a strong e-marketing strategy and thrift, that GMI is a profitable company since 2002 with sustained revenue generation, fast growth and increasing market domination, including in the US and at the detriment of heavily financed competitors who had focused on the US market. |
