where to START and where to GO
the keys to successful internationalization: the right market, the right network, and the right focus
DECEMBER 2022
by Ferran Marti & Adrien Ezerzer
At Nina Capital, we have a bias toward founders with international ambitions. This aligns with our strengths and networks, and after working with nearly 40 international teams, we have some tips for founders who share our ambitions:
- Identify the biggest market for your business based on objective criteria regardless of your location.
- Build a strong international network from the beginning to support your growth and success.
- Learn to say no to opportunities that don’t align with your core customer base and focus on delivering value to your target customers.
Identify the biggest market.
Understanding where the biggest opportunity for your business lies, regardless of your location, is crucial. Businesses are typically conceived to operate within frameworks and regulations that can vary significantly, particularly in the healthcare sector. Understanding the rules and regulations governing the market in your own country and others can give you a competitive advantage to build a successful business. If you start your company in a small European country, it may be worth exploring whether the model could work or be easily adapted for larger European countries or even the US market. If that is the case, you should consider starting in that bigger market from the beginning.
The right market should be defined based on objective criteria, and size is not the only factor. Personal reasons may also come into play. However, having all the information available will allow you to make better decisions from the start and avoid falling into the inertia of the local ecosystems. You will know what kind of business you are building from the beginning, which will influence decisions and opportunities down the line. Keep in mind that successful businesses often introduce new products/services alongside innovative delivery methods or pricing models for their customers.
“A good GTM strategy is very, very important and you should constantly, like every few days and weeks, work and iterate on it.” — Nina portfolio company CEO
External financing, including venture capital, can provide opportunities for businesses. Venture capitalists often seek companies with large addressable markets. However, the fragmented European market and (potentially) the inability of a single European country to support large companies in the healthcare sector may make it more difficult for European businesses to obtain venture capital funding than for their US counterparts. A company built with an international focus from the beginning will have a better chance of obtaining venture capital funding. With that said —set out to find venture capital to support your market strategy rather than finding markets to support your fundraising strategy.
Build a strong international network.
Family members, friends, and local stakeholders can support you and are critical to your success. However, having a too concentrated network in your starting market can limit your growth. Building a robust international network from the beginning can become one of your most valuable assets in the future.
For example, if you only hire Spanish-speaking people, you will miss out on new perspectives while creating a barrier to attracting international talent in the future. If you only have French advisors, you will limit your access to valuable insights from other markets. If you only have German investors, you will lack connections outside of Germany. And if you only focus on local customers in Italy, well, you can see how this narrows your perspective.
“Having access to mentors or advisors who will challenge the business model from the start has always proven very valuable [ . . . ]. For us this challenge often came when we spoke to potential investors, often people who had followed the same journey in other businesses.” — Nina portfolio company CEO
Thinking big from the start is easier with a global perspective on the problem you’re trying to solve. Engaging international stakeholders from the beginning will change the way you approach your business and product. The best advisors and talent may be just an email away, but introductions are always helpful. The limitations we put on ourselves can be as simple as having our presentation deck and website only in our local language. To achieve international success, we must be prepared from the start.
“Knowing international VCs from the beginning. Having more capital and expert investors from the beginning would have saved us from making more than one mistake.” — Nina portfolio company CEO
Learn to say NO.
As Steve Jobs famously said, ‘Focusing is about saying no.’ In order to build scalable solutions that can serve a specific customer base, it’s important to focus on a homogenous group of customers and geographies. This means that we need to learn to say no to opportunities that don’t align with our core customer base and focus on delivering value to the customers we are targeting. Customers will request custom solutions to meet their unique needs and may also try to expand your operations to exotic locations that were not originally part of your plan. While you must always be open to exploring new opportunities, you need to carefully evaluate each request and ensure that it aligns with our overall business strategy and objectives. It’s essential that you develop your own strategy roadmap, as failing to do so will result in your first customers creating one for you — which you don’t want.
“There are so many things that spring to mind when I think about starting up and the mistakes I made early on and the naivety I had. I think if I had to pick one thing, is to understand the value of what you have, you only really set a benchmark on value once so make sure the stake in the ground is in the right place. Your value and how you express it should be at its most confident at the start, but often because of low confidence and/or not enough research and/or a lack of commercial understanding etc.. owners/ leaders start modestly and then try and improve as their confidence grows, but this is the harder path to take.” — Nina portfolio company CEO
It can be challenging to deny a customer’s request in the early stages of building a company; however, sometimes, customers will bring you to places where you shouldn’t go. Learning and analyzing various countries with objective criteria will help you to have a clearer understanding of where you should go.
“We wasted a lot of time trying to do things that were not at our core because we thought they were necessary. It was also probably true that we could have been more confident about our core capability, what we can do better than anyone else in the world. I think it would have helped us move faster at the beginning if we had really understood and articulated what is unique and valuable to the world about what we had (whether technology, insight, network or team). I think it probably took us more than a year before we worked this out. Time spent on challenging and understanding what is unique about our business and how this is valuable to our customers has always repaid us manyfold. You certainly don’t have to take all the advice but you do need to hear the challenges and understand why you are making the decisions you are making. If you can’t at least explain it, maybe you don’t understand it so well.” — Nina portfolio company CEO
by Ferran & Adrien
