Cross border start-ups: Know your limits!
New customer segments, new engines for growth and bumping off the competition are all tried and tested approaches for cross border startups to scale.
But expanding overseas?
This often comes at the cost of setting up offices in places businesses are unfamiliar with. There’s the language barrier. The culinary delicacies that always involve something disgusting, and cars being driven on the wrong side of the road
But more pertinent problems come up which can persuade even the most adventurous to stay within their borders.
To limit themselves.
What are the challenges for cross border start-ups?
Instead of focussing on the many, I have selected three of the biggest challenges that start-ups face.
The first is being a tiny company in a big world. Founders and their first employees already have thousands of things they could be doing in any given day, with scarce resources. It’s hard to know what to focus on as it is. Adding an international dimension can seem like adding extra hurdles to a track already littered with obstacles. The first step is to ask us. We can help point you in the right direction, for free.
Another challenge is the difference in work culture.
For example, the traditional working day is different depending on where you go in the world. For most in the Western Europe, it is 9am to 5pm, whereas in Japan it is not uncommon to find employees working in the middle of the night (without the possibility of overtime pay).
Then we stumble across the topic of different laws, which seem almost designed to trip you up. What is logical and legal in one country can be morally outrageous in another.
Laws can be difficult to understand at the best of times. Imagine those laws not only in a different language but also a different script. This misery is expensive: legal advice is pricey especially if you don’t know where to look. This is where Adviserly can help, we can signpost you to relevant legal advisers in different countries and save you some money in the process.
Why bother to become a cross border startup?
Those customer segments we mentioned.
Teenagers who like classical music, for example, are not exclusively French.
Readers of Harry Potter are not exclusively from India.
Any startup these days may find that their customer segment very quickly takes on an international flavour and that they need to go after it.
If you have clients all around the world, it can make sense to be closer to those clients and be a part of the local market, to set up a branch or sign a distribution agreement.
Depending on your sector, you might need clients to feel reassured that you as a business owner truly care about that market and it isn’t just another target on your hit list.
Moving to a different country to set up the startup itself can also be vital for its prospects. Every country has its own unique ecosystem that provides for businesses to compete with and learn from one another.
The ecosystem effect is real – hence the tech clusters in London and culinary clusters in Lyon. Now, that doesn’t mean you should move to Silicon Valley just yet but it does mean that moving your offices abroad could take things to another level.
Ultimately, a gift or a curse?
It is within the DNA of a startup to challenge themselves, embrace the new and disrupt the old.
But being adventurous doesn’t pay the bills. It is ultimately hard-headed business reality which determines what start-ups do, particularly when they have an investor on board.
Operating overseas is not some quixotic choice for many new businesses. It is a business necessity.
Article by Raja Khan
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