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When expanding into a new region, what’s the most surprisingly difficult element?

When expanding into a new region, what’s the most surprisingly difficult element?

Finding the right talent, taking advantage of all government incentives and figuring out the timeline can all be trickier than they seem, the experts say.

Good afternoon! Expansion — especially on a global scale — is always a time and labor intensive process, and every details matters. This week, we asked the experts to consider their experiences with growing businesses internationally and give us the lowdown on the elements of the process that typically end up being more difficult than expected. Questions or comments? Send us a note at

Brennan O'Donnell

Partner at Frontline Ventures

Frontline has the only VC fund focused exclusively on helping U.S. companies expand into Europe. As a result, we've worked with dozens of CEOs and have studied the European expansions of hundreds of startups. Companies stumble for many reasons when expanding internationally, including hiring mistakes and poor location decisions, but three areas are often the most difficult to get right.

The first is timing. It's critical to ensure you have product market fit, a repeatable GTM motion, ample funding and a strong leadership team in place before expanding. However, moving too late can easily cede market share to local competitors. Threading this needle on timing is hard.

The second challenge is what we call "success amnesia." By the time companies are mature enough to expand into new regions, they are typically performing very well and growing fast. It's easy to assume all this momentum simply transfers over into new geographies. Don't forget all the hard work that went into making the business successful initially. It's important to take the time to revalidate assumptions when entering new markets.
Finally, CEO engagement is critical for success.

Expansion can seem like a short-term project to be fully delegated, but that often leads to problems. Instead, we advise CEOs to ensure expansion is a top company-wide priority. Consider this the first step on a decade-long journey of globalizing the company and fulfilling its true potential.

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Suzan Kereere

Chief Growth Officer at Fiserv

Expanding into a new region requires addressing fundamental challenges to create a strong foundation. My top three considerations are:

Building a mindset and culture for new growth. The test and learn approach cannot be overemphasized. What drove success in the home market may not drive success in the new market. To be successful, firms have to embrace their strengths and use their assets in new ways to find a beachhead of success from which to grow. Margins, economics, partners and models may look different. It's important to operate with a start-up mindset.

Feeling local while being global. A key to success in any new market is feeling local and being embraced by the local environment. A company doesn't want to be known as XYZ from another country, but instead as the XYZ of this country. It's important to learn the local customers and partners and to create personas specific to local markets. Hire and empower local talent. Innovation is a two-way street. Bring in new ideas from the home market and take the learnings back as well.

Making the financial commitment. Success comes with time and appropriate investment. It's never as simple as putting a few dollars and people in large markets and hoping they will be able to achieve success in short order. Companies need to invest for the appropriate horizon. The size of market and use cases will be different and scale may vary across markets. Invest across your portfolio of markets and plan for revenues to come in different ways.

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Hansel Cao

Regional Director (Americas), Singapore Economic Development Board

I've helped many US companies with their expansion to Asia, and I've seen plans pushed back by months, sometimes longer, because companies simply could not find the right talent.

In my experience, there are two ways to mitigate this. The first is to channel your inner Beth Harmon, and make your talent chess moves way in advance of your decision to expand. This means deliberately hiring people with international experience from day one, who either have the networks and contacts to speed up your regional talent search, or are willing to move overseas for a short time to become employee number one outside the US.

The second way is to find the right regional partners, and this is where we come in. As Singapore's government agency for economic development, it's our job to make international expansion as painless as possible.

We know that talent is a big issue, and help companies by:

  • Publishing regional case studies and insights, such as our guide to setting up in Singapore
  • Connecting you to a curated network of hiring and recruitment service providers via our online Connections Concierge
  • Making it easier to bring eligible tech talent into Singapore with schemes like Tech@SG

Competition for talent anywhere in the world is fierce, and now that remote work is more prevalent than ever before, it's only going to get fiercer. If you're thinking of expanding to Asia, it pays to plan ahead, not just for talent, but for all parts of your business. We'll be here for you when you do.

Learn more.

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H.E. Dr. Tariq Bin Hendi

Director General at the Abu Dhabi Investment Office (ADIO)

When venturing into a new region, a well-prepared business might build a risk management plan to address challenges ranging from compliance to cultural differences. However, by focusing solely on risk mitigation, companies may end up overlooking lucrative opportunities on offer, such as the strong international support commonly available to expanding businesses. Consequently, they miss out on benefits that would have otherwise provided them with a head start in the new region. Ensuring that lost opportunities are minimized is thus mission-critical.

To encourage private sector growth, many markets offer attractive financial incentives, including tax rebates, subsidies and grants, as well as non-financial incentives, such as fee exemptions and setup assistance. Companies may also be able to access various other benefits that come from operating in certain free zones, for example, or choosing to establish under a specific business license. In Abu Dhabi, the government's steadfast focus on encouraging innovation through the private sector has culminated in an enabling business environment that equips companies with the tools for success. There are multiple incentive programs to help foreign entrepreneurs and startups get off the ground, in addition to cutting-edge incubators, accelerators, visa programs and more.

How, then, can foreign companies be certain they are accessing the right partnerships and support for growth? In many markets, investment promotion agencies typically hold this knowledge and play the connector role across the ecosystem. This is where the Abu Dhabi Investment Office comes in. As the first port of call for new businesses expanding to the emirate, we help companies understand the opportunities on offer and set them up for long-term success.

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Jeremy Kroll

President, CEO and Co-Founder at K2 Integrity

Expanding into new regions brings ample opportunity, but it is critical to understand the culture you are moving into. It's not just about learning to operate with a new primary language. First, "One must listen to understand, not to debate" when one does diligence. Ask: What are the business practices here? At what pace can your team move? What are preferred methods of communication? How often do they expect communication from leadership? Do the business practices align with your core values, or require you to adapt to local business culture, if different?

For example: a K2 Integrity client recently evaluated an acquisition that provides industrial hygiene services in frontier markets. Our risk assessment uncovered questions in media reports about certain business practices. Questions our client had to weigh included: Are these allegations valid? Are they coming from competitors in the area trying to defame the business? Are they part of a standard practice in this economy largely seen as acceptable?

Ultimately, what it came down to was partnering to co-develop a strong compliance and risk management framework to address yellow flags (before they become red) and get the client comfortable that the business practices were sound. Further, the accountability systems put in place mapped backed to larger ESG goals and standards for our client. These steps helped ensure that processes in place were hardwired into the client's executive level operating environment to ensure a culture of exchange and communication – This, alone, will reduce most real business risks.

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See who's who in the Protocol Braintrust and browse every previous edition by category here (Updated Aug. 19, 2021).

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