What Happens When International Expansion Really is an e-Expansion?

By Adam Breeze and Global Expansion Summit Founder Fernando Faria

“If a country requires us to set up a physical presence in order to serve that market, it’s less attractive for us as a business”, said the CFO of a FinTech company recently in a phone interview with our team.

“The most important things we look for when entering a new market is how they treat our people (immigration), our data (information) and our money (taxes)”, another top executive added.

“International expansion feels very entrepreneurial for our company. It’s like a start-up within a start-up”, according to the Head of European Expansion of a fast growing US-based tech company.

What do all these statements tell us? They tell us 3 things:

  • The way companies expand abroad is changing
  • Technology is the driving force behind this change, regardless of which sector
  • Current inward investment strategies are outdated

Let’s examine all three conclusions:

The way companies expand abroad is changing

  • They see new markets as a start-up operation and run those deployments with this mindset.
  • They want lower financial commitment to setup new operations.
  • They want a nimble workforce, with highly aggressive incentive packages, but less protection (security vs flexibility).
  • They want to keep the ability to fail fast, change plans and re-start.
  • In short, they do not want to make decade-long commitments to any particular market, which is exactly what some old-fashioned investment promotion agencies are trying to encourage.

Technology is the driving force behind this change, regardless of the sector

  • Technology is no longer a sector.
  • Today technology is like energy or money.
  • It is a pre-requisite and an assumed asset for any company.
  • It permeates everyone and every company.
  • Today, the way a country treats company data integrity and privacy is as important as the way they treat taxation or immigration.

Therefore, any fast-growth company in any sector relies on technology to increase their reach and improve their productivity. This has a fundamental impact on their expansion plans because of the ubiquity presence technology affords them.

Current inward investment strategies are outdated

  • Countries or regions with a smart inward investment strategy understand the first two points above better than their peers.
  • We’ve recently written about the Long Tail of Globalisation as being the ability of smaller companies to quickly deploy a multi-market global expansion strategy.
  • It is no longer enough to hire B2B lead generation specialists to compile vague prospecting lists.
  • It is no longer enough to organise trade missions to woo large corporations to expand.

However, upon close examination one can find a fair amount of irony in this scenario: the realisation that the best way to engage with high-growth tech-first companies is via good old face to face contact.

As much as technology enables the actual deployment, the decision process is still led by human beings (well, at least until robots take over!) and these executives need access to reliable advice and information before deciding where to go next.

This is why industry events, start-up mixers, founder meet-ups, roundtables and networking opportunities are so important. Perhaps more important than ever, considering the barrage of online information available. The ability to find a needle in a haystack can’t be overstated.

Those who can in the end sift through all available data and find the right market for their company are miles ahead of the competition.

As an industry veteran recently said: “It’s the global expansion gold dust!”