At its very beginning, all startups is an SME (small or medium enterprise), and have challenges to develop a disruptive idea and prove it in its own original market. As this startup succeeds and scales, it may get to high valuation status, sometimes becoming an “unicorn” (a startup with valuation over USD 1 billion). Becoming big in its own country, is natural that at some point the business develops an ambition to become international, exploring new markets. That´s the moment when it becomes a MNC (multinational company). Examples: UBER conquering the world from USA, RAPPi expanding from Colombia all over Americas, etc..
Becoming international is a very difficult endeavor. It brings several challenges as: choice of target markets; understanding of new country culture; understanding new country laws; operating cross-borders (different jet lags, different currencies etc.); keep the essence of its business model success, at the same time adapting to local demands; team management remotely, among others. But how a Startup may overcome these challenges during this process?
Once have tested your business in your home country, it is not feasible to start “from zero” in every other country you decide to explore. But just opening a booth in new territories is not a trivial task. A “Softlanding” strategy should be taken, through 6 important steps:
1) Map the target-market (going to some offshore country, and particularly understanding the specific experience of Brazilian market, one of the most challenging around the world). One must define realistically the potential of business in each new country.
2) You have to open formally a local subsidiary. You must have a local partner that takes care of all formal paperwork, foreign investment authorization, tax intelligence (especially in Brazil, very complex), regulation of its specific market and intellectual property (brand, patents etc.).
3) Develop local adaptation of platform/services, regarding technical specifications, UX, data standards, integration, compliance, and customer service.
4) Adapt all Marketing Communications, according to Languages and Culture.
5) Set up the local team, helping in the recruitment workflow and HR management. You can not operate totally offshore, remotely.
6) At last, development of local partnerships and potential customers.
Brazil is one of the most challenging economies to enter. Complex tax system, modern regulatory legislation per market, Portuguese speaking population, with specific cultures in each region (practically a continent). a very competitive market. On the other hand, among the 10 biggest economies worldwide, 50% of Latin America economy, more than 250 million people in a well-balanced demographic pyramid. It has an huge potential of business, but you must know it very well to succeed. Better than knowing the market, you must find very organized partners that will help you to leverage your market conquest.
In Brazil, FCJ is the biggest Venture Builder in Latin America, one of the biggest worldwide, with operations and partnerships in dozen of countries. Here, we developed the “Bridge Brazil” program, that helps companies worldwide to understand and effectively make business here. We also help Brazilian startups to grow worldwide.
To win the game, have the right partnership!
*Authored by: Alexandre Barbosa (Head of Innovation at Bridge Brazil)