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This article was published on November 2, 2021

3 vital lessons I learned expanding our startup into new markets

There's no silver bullet when it comes to expansion, but hopefully these lessons will help you along

3 vital lessons I learned expanding our startup into new markets

Alright, you’ve built a decent product. You believe you have a product-market fit and you’ve been able to acquire a fair amount of traffic through organic and paid channels. But… your growth rate is starting to stagnate.

So, you decide to put out more content, tap into more channels, widen your targeting, increase budgets, among other things. You wait a few weeks but quickly learn that even though all of your efforts have helped, it’s just not what it used to be.

In essence, what this means is that you’re starting to hit the ceiling in your operating region. So, it’s probably time to expand your business geographically — and this is exactly what happened to my company.

When you find yourself in a situation like that, you begin exploring the idea by reaching out to friends, colleagues, and investors for advice. Moreover, you start looking for silver bullets which will help you crack a set of new markets and grow your business exponentially.

Great idea! Except for the fact that these silver bullets don’t exist. But going through this whole process has taught me some valuable lessons that can be of help to you.

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Packhelp going international

Let me provide some background. Packhelp is a packaging marketplace and we make it easier for D2C brands, e-commerce, agencies, and much more, to source and design custom packaging. Figuring out what you need, where to get it, how much to pay for it, how to ship it; it’s all time-consuming, and, frankly, annoying. We aim to get rid of that hassle for our customers.

Anyhow, towards the end of 2020, I sat down with our CRO and started evaluating the idea of building our team to expand into international markets in which we didn’t yet have a presence.

We’ve been quite successful with growing our business over the last few years. We started with Packhelp Studio, our SMB business segment that offers low quantity orders of customized packaging. Later on, we had enough interest in larger, more complex orders to launch and grow Packhelp Plus. Since then, we’ve been developing all kinds of features, products, and software — some more successful than others.

However, throughout all of this time, we couldn’t shake the feeling that, while running a centralized operation is successful, we can get a lot more out of our core markets if we actually focus on them. Thus, relatively quickly, we decided to create the Expansion Chapter.

So, we kicked off and accomplished the following by April 2021:

  • Hired 20 people in five new markets (ca. 10% of our entire team)
  • Launched localized sites in three markets
  • Launched two new currencies
  • Launched new pricing across these markets
  • Kicked off collaborations with local artists
  • And set the foundation for becoming trusted local business partners

So let’s take a look at the three main learnings from the last few months

1. Hiring: There is no magical source of suitable candidates.

First of all, write strong job descriptions. Be clear, be specific, and be genuine. If you half-ass it, you’ll get half-assed applications.

Then, identify the top three to five recruiting portals in a particular market and post paid job descriptions. These can run from a few hundred euros per month to €1500. If all goes well, one or two months is all you need.

Source directly, as well. Dig through LinkedIn, your network, and get your colleagues to help the search. If you’re having a particularly hard time, hire an agency to help. Not any agency though, be picky and precise. They tend to be pricey (typically 20-25% of a yearly salary) but are worth it in some cases.

Still, be aware that they often don’t take responsibility after you hire — so be picky!

In terms of selection, optimize for talent and cultural fit. Remember that many low performers manage to join good companies and anyone can make their CV look impressive.

Last, but not least, ensure a great candidate experience. Be quick, be respectful, and be honest. This alone often makes or breaks the result.

2. Focus: Expansion is not a side project

Dedicate a person to own business expansion. This expansion should be the person’s number one priority at any given time. Moreover, this ‘Head of Expansion’ should be separate from the core business.

Secondly, plan for expansion business-wise, meaning: create a dedicated budget, include in revenue forecasts, create specific revenue targets and KPIs, and create roles within core teams for your expansion needs. Don’t go deep with stuff you can’t plan for, but be specific with things you do know already.

But the most important thing is to over-communicate!

Ensure that everyone knows what the plan is, what needs to be done, and if anything changes. And regularly remind them of these things. Otherwise, things will go wrong, timelines will be missed, and people will not complete tasks as per your expectations.

3. Results: Don’t get too excited about the launch

Noticeable effects of expansion will depend heavily on your business. However, it’s generally a good idea to not expect a massive spike in your business performance, nor it being sustainable. It may take some time to move the needle.

Also keep in mind that, after launch, there will be bugs and other issues that you’d not expected. This is fine; just be ready to fix them. Have resources ready in your products, development, operations, and marketing teams. 

Building a brand takes time and hard work. It’s pretty likely that nobody really knows you in the new market. A couple of paid ad campaigns or a few blog posts will not make you a well-known player. Hit every possible channel, and keep it up for a few months.

Final thoughts

First of all, every business is different — in terms of the product, business model, culture, strategy, among other things. So I don’t mean to assume that these learnings apply to everyone.

However, I guess that most executives considering international expansion may derive something from this article that’ll apply to their situation.

So, let me leave you with the following. Don’t idealize international expansion in terms of immediate effects, nor belittle it in terms of time, effort, and resources required.

Treat it like a sizable investment. It may not be easy or provide instant gratification, but it may bring significant returns in the long run and allow for plenty of further growth opportunities.

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