Follow the sun: Learnings of business expansion from the East to the West
Business expansion is every entrepreneur’s dream, but a complex reality. It requires organizations to navigate and overcome multiple cultural challenges. It can be easy to be swept up in the frenzy of initial success and rush to expand into other regions, only to discover that the process is difficult to cope with. However, taking cues from my prior experience, an important lesson I learned is that you need to speak local before “going global”.
Over the past seven years, I have built my now-global technology business, Near, in the East, before successfully expanding into Europe and the US markets. Near uses AI to make real-world data actionable, by harnessing the power of the world’s largest dataset of people’s behavior. In fact, just this month, we closed a $100 million Series D funding round, with the primary investment coming from London-based PE firm, Great Pacific Capital. With this, we will continue to invest in data, as well as scale up our business in existing and new markets.
Expanding Near globally has been a successful journey thus far – our product is now available is more than 20 countries across the globe – although it did pose certain challenges. There are only a handful of companies that have successfully scaled from East to West and Near is one of them. I believe starting from the East taught me a lot about breaking into new markets and made expansion into the Western markets feel relatively easy.
Understand your markets
A prerequisite for a successful global expansion is to understand the nuances of each market. It is important to bear in mind the cultural differences of the market to personalize the customer experience. It is incorrect to treat a region as one market. Asia-Pacific, for example, has a high degree of cultural diversity and each country has its own set of business etiquette.
Expanding from the East to West benefitted us in this sense because we had a relatively strong understanding of the fragmented markets of South East Asia. Not only are there cultural and consumer differences throughout this region but the nature of the data (the core to our offering) itself is very diverse in the East compared to the West; it is more sporadic.
Through the expansion process, we learned that in order to ensure the best chance of success, we had to take a tailored approach in the way we did business in each country and that it required additional investment from us to familiarise ourselves with each market’s nuances – both business and cultural. In Japan, for example, I learned about the decision-making process called ‘Ringi’.
Ringi is a collaborative decision-making process from all levels of seniority, following the initial proof of concept. This can mean business deals may take longer than usual to be agreed upon, even if initial meetings are positive. This is critical knowledge to have when expanding into Japan, as organizations will need to factor additional budget to compensate for the longer lead time on new business. Whereas, in western countries, decisions are planned, communicated, justified and implemented by the senior management. Without this understanding, teams can also be easily disheartened when leads don’t convert within the timeline they are used to rather than viewing this as a necessary process.
Invest in local talent
Investing in local talent is imperative for any global business. For us, our local teams have become advisors of cultural intricacies. It may be tempting to manage a business remotely to cut costs, especially when you are simultaneously expanding into multiple regions, but it is important to have a team on the ground that is full of local knowledge and context. As you grow, clients also expect you to have an accessible local team to engage with.
Before expanding globally, it is critical to define the company’s mission and ensure employees across locations work towards achieving this. After all, a business is only as good as its people. If you are lacking internal core values or a company ethos and don’t have loyal employees that you can trust to represent the business around the world, then you’re setting yourself up for failure. This doesn’t mean stifling different cultural business practices or innovation, simply that it is important to strike a balance between encouraging freedom to act on innovative ideas while maintaining and working in line with company goals.
Going global is all about going local
When it comes to entering new markets, tailoring your approach, educating yourself and your team about the unique cultural intricacies, investing locally and maintaining a strong business identity are all critical factors for creating a global company. Global expansion is never going to be an easy process — but persevere, because it is worth the struggle.
Published in Information Age