„Focus on your market“ is a phrase that founders hear from many startup coaches, and it’s a legitimate one. But even if startups initially focus on the German market, they should still look beyond the national horizon. Thinking globally does not just mean scaling abroad with your own company. Internationalization is also about finding know-how and resources abroad, as well as having important international competitors on the radar screen. There are several reasons why it is worth thinking globally.
We have described the three most important ones for you in detail:
1. Financing from abroad
Sooner or later your startup will need an injection of funds to grow. If you are looking for support from a business angel, it makes sense to look internationally. For certain industries, you will find top investors in Germany, but some areas are much more advanced abroad. A foreign investor will then be able to better understand your identified problem and solution and can give you a more technical assessment. In addition, the mindset of foreign investors is sometimes quite different, it is known that US investors invest larger amounts faster than EU investors do. A US investor often thinks in bigger terms and asks: What milestones could you reach faster with an extra $10M? How do you become a billion-dollar company? If you have a very high capital requirement, it makes sense to connect with US investors who have already invested in German startups in your industry (McCooe 2022).
2. International team expansion
Ever thought that your dream team partner might not even be based in Germany? Or the perfect employees? To be prepared for the future challenges in recruitment, employee satisfaction and digital collaboration, global and holistic approaches are needed. A global mindset in the team is not only welcomed by investors, but also helps you break out of the usual thought patterns (Zinner & Nippold 2022). This can be helpful in topics such as selecting the appropriate technology, implementation and scaling. If you are global, you think global!
3. Competitors abroad show the way
What works abroad can also work in your home market. Researching foreign competitors who have already been successful is worthwhile! When it comes to the question of the right customer, for instance, it makes sense to look at which target group the foreign competitor has focused on. This can give you important information about how to position yourself. You can also learn from the mistakes of your competitors. You can read customer reviews and understand what led to the competitor’s success. But also, what the customers complain about. What is their USP? Which marketing approach do they follow? How does the sales funnel function? And what materials are available to your competitor abroad at perhaps better quality or lower prices? In your research, be sure to consider cultural differences, which can also make the difference between market success and failure.
If you want to learn more about cultural differences, read our blog article „Avoiding cultural mistakes when scaling globally – here’s what to watch out for!“