“Throw off the bowlines. Sail away from the safe harbour. Catch the trade wind in your sails. Explore. Dream. Discover.”
Mark Twain encourages us in his famous travel quote to sail to new shores. It’s a familiar dream shared by many startup founders who aspire to ‘make it’ on the international stage and conquer new markets.
Many quickly find, though, that setting out on a market-expansion adventure isn’t always plain sailing. there are different cultures to consider, different languages, struggles, perspectives, pain points and regulations.
It’s not impossible, though, and many European founders have gone on to reach global success. The best way to learn is to listen, so, we decided to chat with some of these entrepreneurs to discover their expansion journey, key takeaways and top tips.
Christian Kroll, Founder and CEO, Ecosia
Born in Berlin, Ecosia’s search engine plants tress with its ad revenue. So far, the startup has enabled over 20 million users to plant over 150 million trees around the world – restoring landscapes, protecting wildlife and decarbonising the environment.
For Chrisitan, successful expansion rests on three pillars: team, marketing and investment.
“Team: In any case, you should hire people from the country you want to expand into. Otherwise, you will probably lack an understanding of the market. In addition, the people should be excellent generalists in my opinion, since many different tasks await them. After all, expanding into a new market is almost like creating a new startup, so you need pragmatic people with a sense of entrepreneurship.”
“Marketing channels: The marketing mix can be completely different from country to country and this is something to figure out for each market. (e.g. Influencers worked well for us in France, but not at all in the US).”
“Investment: I would not underestimate the investment costs associated with market expansion. It is not only the cost of employees but also many other costs (translations, press agency, …) and in addition, you also bring some complexity into the house. I often see that companies should better concentrate on one market first instead of expanding like crazy.”
Fabian Foelsch, Founder and CEO, Braineffect
Founded in 2016, Braineffect develops food products and supplements to give consumers the perfect mix of nutrients to balance out stress, stay focused and positively affect the brain.
Fabian recommends taking a ‘waterfall’ method to expansion – go step-by-step and learn as you go.
“There is an ultra-aggressive strategy in internationalization, where you quickly go into many countries and see what happens. This can have advantages for some startups – but I wouldn’t recommend it, especially to smaller startups, because it ties up a lot of resources and is risky. We, therefore, opted for the so-called waterfall method, which means tackling one country after the other, so that we could directly apply the learnings from one country to the other. This has proven to be very successful!”
“Another tip: I would recommend developing your own internationalization playbook, which you also develop further with each new market experience. Then it is important to keep in mind that the legal frameworks are sometimes much more divergent – even within the EU, which many may not think – than one might think. Especially in the area of food, medications, or supplements as in. Therefore, in most cases, you need a local label and should definitely find out in advance which country has which regulations or market entry barriers.”
Jonathan Kurfess, Founder and Chairman, Appinio
Hamburg-based Appinio helps companies make better decisions through real-time market research. The startup collects consumer responses to give companies insightful data in real time. Currently, it’s used by over 2000 companies across the world.
According to Jonathan, it’s important to do your groundwork: make sure you have the right person in the right market.
“Nail it before you scale it. When you expand to a new market you either have to go there yourself as a founder or you need to find and hire a founder-type of person. Not a manager! The person needs to be scrappy, persistent, have a no-f**ks-given attitude and does not think it is beneath him/herself to do also the less-interesting tasks. Experienced managers do not know how to build things from the scratch.”
“It is furthermore important do start with a small team that succeeds in building traction – we have started with a “pizza box team” which consists of the Country Manager, Marketing, Sales and 1-2 Business Development people. All supporting functions came from HQ. We learned that it pays off to give Country Manager P&L responsibility and then incentivize them on EBITDA performance – then they rock the boat.”
Daniel Garnitz, Founder and CEO, Faaren
Faaren launched in 2018 to enable automotive stakeholders to become car subscription providers. It offers a white-label software solution and car subscription marketplace – shaping a subscription-based future of mobility.
Daniel highlights the importance of building strong networks in your target markets – be local and take expert advice!
“I think the most important is to build a strong network – a successful expansion will heavily depend on it. The rest are formalities, which typically take so much more time than we assumed. For example, we set up our US Inc parallel to hiring our first staff, which resulted in the fact that we could not pay them the first months because it took forever to get our company’s tax number… So make sure you calculate a lot more time than you’d normally do – it will take longer!”
Jacob Haeger, Marketing Lead EU Expansion, PLEO
One of Europe’s most familiar fintech startups, Pleo has been making workplace expenses simple since 2015. Pleo offers smart company cards that enable employees to buy the things they need for work, all while keeping a company’s finance team in control of spending.
For Jacob, international expansion means you need to really analyse your product market fit – there’s no space for assumptions.
“When you enter a new market you no longer necessarily have product market fit. A new market may look similar on paper but even very small differences in habits, regulations, languages or software use can undermine your value proposition. Don’t assume you need to adapt to everything in the market, test and learn, but also don’t go and commit to a large launch with dedicated headcount until you’ve established that fit. Be patient until you do.”
Robert Heinecke, Founder and CEO, Breeze Technologies
Cleaning up air quality since 2015, Breeze Technologies has been recognised as one of the most promising European startups by the European Parliament and the European Commission.
Robert recalls the importance of creating references when moving to a new market and advises pilot projects.
“We have had very good experience with looking at several interesting markets at the same time and searching for pilot customers. Once you have found a pilot project in the new market, you can – assuming the appropriate project size and constellation – work with the organization as an anchor customer, create a reference and use it to approach the next batch of similar potential customers. The advantage with this approach is that you can evaluate several markets directly in a relatively resource-efficient way.”
Born in Hamburg, NautilusLog has digitized the maritime and shipping industry, replacing paperwork from clipboards to logbooks with an easy-to-use app.
Otto highlights the importance of thinking beyond logistics and finance. Personal touches are importance, and you need to build relationships based on trust.
“First, we looked at certain aspects in a quite “German” way and decided purely on economic factors. But what we found out quickly is that knowing the market (on a factual basis) is one thing, diving into it personally and face-to-face is priceless. For example, internationally, decision-making processes are much more multi-faceted. Getting to know these processes was important and helped building trusting business relationships – in the end one of the keys of success abroad.”
