Guest author Gary Whitehill resides on the board of advisors for the Dell Center for Entrepreneurs.
In our hyper-competitive global economy, startups are just as likely to find their first customers in Paris, France, as in Paris, Texas. The barriers to international commerce continues to crumble at a dazzling pace, paving the way for the rise of what SmallBizTrend’s Anita Campbell calls the “micro-multinational.”
Until recently, the designation “multinational” was reserved for giant corporations. This is no longer the case. In a 2007 report, the Council on Competitiveness quoted a USA Today survey revealing that, “of venture-backed software startups created since 1999, nearly 40% have employees outside the United States.”
More importantly for startups, “global firms received more than twice as much funding from venture capitalists as firms with U.S.-only operations.” In addition to targeting a wider customer base, internationalizing your startup can be a competitive edge in securing funding.
Launching a micro-multinational is a complex endeavor, a few critical best practices can help smooth the way.
Internationalize Your Company
In all likelihood, your company’s website will be the primary point of contact between you and potential customers around the world. While a reliable translator is indispensable, several elements beyond mere “Language” settings are essential to making international customers comfortable doing business with you:
Payment Flexibility: In the United States, most online purchases are made with a debit or credit card. This is not necessarily the case in remote regions of the world. Allowing customers to pay in a variety of ways can bolster conversions. Accept payments via PayPal, American Express’ FX International, Xoom or Moneybookers.
Local Support: Ideally, you will be able to hire - or contract - at least one representative in every country or region where you conduct significant business. If your budget doesn’t allow for local full-time employees, be sure to forge strong partnerships with suppliers and agents on the ground. Providing customers with local contacts helps builds confidence and can be a competitive sales advantage.
Maria Springer, co-founder of LivelyHoods notes that, “trust is key in markets swimming with empty promises and 'cheap' products. We train our Kenyan sales reps equally on customer service and product knowledge. Also, when an in-person conversation isn't possible, an unexpected phone call to the customer about their purchase goes a long way.”
At last resort, if you don’t have employees or third-party representatives on the ground, offer telephone or online chat support in the local language during local business hours.
Beyond helping with efficient resolution of customer issues, having employees “in the field” gives your company valuable insights into local cultural idiosyncrasies. As Jake Ludington suggests, “Go local in each new global region by focusing on the full picture. Marketing communications need to be consistent with the region.” Your domestic marketing strategy may not translate to the international stage. Entrepreneurs should tailor their products, and especially the presentation of their products, to the target market.
This can be more difficult than you think. For instance, you may not know that in Malaysia, English-speakers say “yes” to indicate that they heard you, not that they agree with you. In Japan, meanwhile, discount pricing is often seen as a sign of an inferior product.
“Cultural fluency” is not easily acquired. A native German will liekly understand German culture better than even well-informed American. The best way to “go local in each new global region” is to partner with an expert, better known as a “market native.” Working with cultural ambassadors provides a deeper understanding of your target customers’ needs, which in turn enables more finely honed marketing.
Do Your Prep Work
“Many entrepreneurs in foreign locations express frustration in trying to reach customers outside of their own country, but their efforts seem halfhearted and more like bad excuses,” says Tristan Kromer, founder of Lean Startup Circle.
Locals will have the most accurate perceptions of existing demand for your product or service, so “start by going through your first- and second-degree connections on social media sites,” says Tristan. Fellow entrepreneurs may also be able to help. Talk to your friends and contacts and learn from their overseas experiences.
It is also worth consulting the experts. Attorneys specializing in international trade, intellectual property protection and foreign tax law; international accountants; and export officials are all valuable resources. Indeed, the federal government has an entire site dedicated to “helping U.S. companies export” (Export.gov: its market research tool is especially useful).
No one is saying selling around the world is easy, but it is easier than it has ever been. More lucrative, too.
Image courtesy of Shutterstock.