Internationalization insights: expand rapidly, take risks but pick your battles
April 13, 2023
When companies are expanding internationally, the stakes are high. The wrong decisions can cost startups their entire runway, and the right decision can speed up their growth drastically. In this article, FIBAN partner Palava Global was interviewed on internationalization secrets, and what investors and startups should know about global expansion.
According to Salla Hänninen, CEO of Palava Global, investors increasingly want to see founders use data and professionals to help them make calculated decisions instead of taking unnecessary risks.
For scaleups, it’s not enough to look into one or two markets, and internationalization is typically in the company roadmap. It can be a struggle for startups to, first of all, identify, which market to enter or how to enter a market that has been identified. For some, it can also be difficult to find the right partner or pilot customers in a new market.
“One of our customers had opened three markets outside of Finland, almost quite randomly, and came to us. Not only were they uncertain if these were the best potential markets for them, but they also knew that investors wanted to see if they could make sound decisions based on data. Our market selection tool Market Scanner helped them identify the best markets to enter with the funding and to convince investors,” Hänninen describes the growth of one of their customer cases at Palava Global.
When money is scarce, growth still needs to be fast
The reality for most startup companies is that they can’t afford to test a market as money is limited. “Most startups can’t afford to waste their money on the wrong market. Until now, there haven’t really been any cost-effective ways to get help for making the right decision,” Hänninen says.
The more established companies that do have resources for internationalization, still need to optimize using their resources. “We can help companies find the next markets and enter those markets strategically”, Hänninen underlines.
According to Hänninen, there is no such thing as finding your market too early. It’s a lesson she learned working together with Priorit.io.
“They wanted to start before their product was ready. Therefore they were able to introduce it to the right customers in the target market as soon as the product was ready, “Hänninen says.
“It’s about asking the right questions to make the right decisions,” she adds.
Keys to international growth: product, passion and timing
When it comes to succeeding in internationalization, the product is vital, but networks, timing and passion play an important role, too. Hänninen mentions seeing this while working with Geego Kids.
“When you’re eager to help customers to solve their problems, eventually you will succeed. Having an amazing product is not enough, you also need to find the right people at the right time and approach them with the right message”, Hänninen sums up while analyzing the growth journey of Geego Kids.
“There are so many passionate startup founders out there, and I’ve been lucky enough to get to know many of them. I’ve learned that there are too many amazing growth companies that never reach their full potential. For many of them, it’s because they wait too long to find their best markets and their customers in those markets – which is what we want to prevent from happening,” Hänninen underlines.
Hänninen gives one important tip to all startups looking to internationalization for evaluating if the risk is worth taking: Whenever you need to make a decision related to the company’s international growth, estimate how much it will cost. “Decide whether you can afford the gamble or not. When resources are limited, you have to pick your battles”, Hänninen summarises.
“During international growth, many risks are bigger than in the home market – yet growth companies need to expand rapidly and systematically to stay alive,” Hänninen coincides.
About Salla Hänninen and Palava Global
Salla is the CEO and co-founder of Palava Global. She specialized in international business and market entry strategies during her studies in the UK and has since been determined to help as many growth companies as possible. Palava Global has been helping growth companies since 2018, and has been FiBAN’s partner since 2020. They are known for cases with Lyyti, Hoiwa, Priorit.io, and Poppamies, to name a few.