The Supper Club - Logo

A founders' guide to going global

There are key 'business life moments' in the growth story of most businesses that mark a significant change. One of these is the decision to expand into a new market, setting up an operation in a new location. Last week Supper Club members took part in a digital discussion on the how, why, where and when of going global. Guest speakers included Diane Young, co-founder of the Drum; Steve Pereira, president of marketing data company Captify; and Natalie Douglas founder of Realiti Health. All three have led businesses from a single base to a global footprint with offices in several different markets. All three cases offer interesting lessons.

 
KEY TAKEAWAYS

Fish where the fish are

Choose your market based on where you know there are lots of customers already.

Be realistic

Have the funds in place

Make sure the business is solid before you expand

Have a clear plan from the start

Be mindful of the "folks back home"

Try and build an advance pipeline

 

The Drum

"Fish where the fish are" is an old adage describing the most basic rule for effective sales growth. Diane Young mentioned it in the context of making sure people considering global expansion were following customers. For The Drum, from its initial base in Scotland and the north of England, this meant expanding first to London, then to New York. "It took us 25 years to get to London, then just another three to get to America."

This also highlighted two other vital aspects of global expansion - timing and courage. Young was clear that the only regret she had was that the business hadn't taken the leap sooner. She added that while it is easy to paint this move as a big deal, in many ways it isn't different to launching a new product or opening a new office. Her main advice was that, while there are some added complexities, founders should not be overawed or frightened to give it a go.


Selecting or recruiting the right people to get the new venture going is crucial. And while some throw lots of money at this kind of overseas expansion - and all three speakers agreed it will cost more and take longer than expected - Young said The Drum had taken a "bootstraping" approach and started slowly. But she admitted they had underestimated the difficulty of finding and retaining good people in the US. She also suggested that those considering going to the US market should look beyond the obvious markets. While there are plenty of customer in New York, for example, there are also plenty of cheaper places in the US that may be a better bet.


Another key lesson from The Drum's experience of international expansion was that it may not be quite as exciting or interesting to those staff left back home. Young said that while the founders and senior team were excited by the expansions into London and New York, there was an element of "we'll be forgotten about" by the existing team left back at base. Young said it took her some time to realise that the team just weren't ever going to be as excited about the moves as they were.


Captify

Steve Pereira, president of Captify, agreed with the points made by Young. After opening offices in France and Germany, Pereira said it was clear that there was a huge opportunity for Captify in the US. They sent over some senior staff from the London head office to start things off, initially also on a low-budget basis (WeWork desk space and so on).


The key reason for sending existing team members, explained Pereira, was to help seed the established Captify culture in the new operation. While a new operation in a new market will always take on a local flavour, it also needs to have a strong connection to the main company culture. Pereira said the another key lesson from the company's expansion to the US was the need to get the right blend of local and head office talent.


While the company had done as much as it could to establish a pipeline of clients before they moved to a new market, it was always helpful, according to Pereira to have local people, who really understood a market as part of the sales process. This was particularly the case in the US, where strong and established networks are more statewide than national.


Captify's expansion to the US, which has since blossomed and now includes a string of offices coast to coast, came off the back of a round of VC funding. This, said Pereira helped a lot. It is essential to understand that this kind of expansion will take longer and cost more than you expect. "It took us two years of losing money before we saw a positive EBIT in year three," he said.


Realiti Health

Natalie Douglas is currently working on a project that's the reverse of the UK to US expansion, bringing her US-based healthcare operation back to the UK market. But she drew heavily on her experience with Idis, a healthcare company that Douglas took from the UK into the US.


Douglas said the decision to enter the US was made because her clients were mostly based there and had started to ask repeatedly when the company would be setting up there. With no one else senior at the company keen to move to the US, Douglas upped sticks with her family and started the US operation herself.


Her key lessons echoed some of Young, in that finding good people in the US is both complex and expensive. But she did manage to recruit a very good, very smart senior team in the US and soon they were challenging the way things were done across the company. This, in itself, began to cause some challenges with the team of people "left behind" in the UK.


Douglas said she had to put a lot of time and effort into communicating with the whole company, making sure she made plenty of time to meet and talk to the team back in the UK. "You have to work hard to make yourself available and you have to keep up a high level of communication," she added.


Despite some missteps in recruitment - including a commercial director from Texas who turned out to be reluctant to leave the Lone Star state - Douglas found the US to be a natural springboard for success for the company as a whole. She grew and exited the business and has since launched her new company, which is now making the reverse expansion move back into the UK.


Douglas summed up her best advice to those thinking of expanding overseas as "make sure you know why you are doing it. Have a clear objective and know what you want to achieve."