How to take your startup global, without going bust

New York: your next office?

With high operational costs and exorbitant rates for office space, international expansion ain't cheap – here's how to do it sensibly

Zkipster is a guest list app that started in Switzerland. Its co-founder Daniel Dessauges and I are Swiss.

Six years ago we organised events in Zurich and our guests had to wait in line because we used cumbersome paper guest lists.

It was frustrating, so we created a guest list app to connect the cloud and mobile devices in real time. The app worked, but we quickly realised our market opportunity was not in our home country; to grow our business we needed to take it global and set up operations close to our customers.

But how could we, as a startup with a small team, cover a global market? We didn't have enough team members to be in every country, and showing face everywhere we have clients would be too expensive. As a startup, we needed to be selective about where and how we grew our local presence.

Here's how international expansion worked for us; hopefully it can inspire your next move.

Go global, one country at a time
The good news is: not every market is ready for you to scale. Some may never get to that point – others just need a boost. We decided to start with the US as our biggest market and use New York City as a launchpad for our global market strategy. Many international brands have their headquarters or marketing department in New York.

In 2011, Daniel and I moved to Manhattan to relaunch Zkipster. No warm welcome awaited us. As a bootstrapped foreign company, we had to start with a painful visa application process, with zero name recognition in the US.

Our operational expenses, including office rent and legal fees, were higher than anticipated, which is why we worked out of coffee shops and co-working spaces. The security deposit for our first office lease was exorbitant, putting a big dent into our operating budget. The lawyer's fees alone could have knocked us out but we were fortunate to find a legal counsel that believed in our business and agreed to partner with us.

It took a lot of hustling and bustling and partnership building to get our name out. But we always knew the Big Apple was the right place to start. From New York, we planned our global roll out by market potential, customer demand and feasibility. Hong Kong and the UK were the first countries to be added, followed by Brazil in 2014. It's easy to add a market but if you don't have a strong follow up plan in place you may find yourself in trouble.

You can't grow your local presence without a local office
Our product is cloud-based and easy to set up and use. It's tempting to think that business apps can sell without a local presence. In reality, the app can sell to any place with internet access, but it happens rather randomly and often prospects in exotic destinations find us more by luck than referral. To grow your business, you have to establish a local presence.

Our biggest growth comes from countries with local operations. For example, we've been handling check-ins for client events in the UK since 2009. In the beginning, we travelled to London to assist clients and meet with prospects. The UK business grew modestly year on year, mostly through our brand clients that had events in multiple cities across the globe. But since we opened our office in London in 2013, our UK business has grown by 200%, adding a new slate of companies to our client roster.

Now the UK is our second largest market after the US. We see similar growth patterns in Hong Kong and São Paulo. On the product side, we also used multi-currency payment processes to accommodate local market needs.

Corporate culture cannot be taught, it needs to be experienced
We evolved from a small team in New York, sitting in the same office and time zone, to a global micro-multinational with a workforce on three continents. It's important that everybody in an organisation shares the same values and brand positioning. We don't use any paper and connect ourselves through the cloud. We launched a collaboration platform that unites the whole company on one dashboard and cuts down on email. Being small but global means that you have to make sure everybody has instant access to the information they need.

There is something to keep in mind though: face time. To build a business on the cloud alone is an illusion. My co-founder and I spend about 30% of our time with local teams. We also meet prospects, clients and thought leaders as much as we can. It's important to take the time to share our vision – it's more than an app; it's a way of living.

Turning an event check-in app into a fast growing global startup has not been always a smooth journey. It can be done by focusing on your key markets, keeping your overhead costs low and building a strong team culture.

David Becker is co-founder of Zkipster 

Source: http://www.theguardian.com/media-network/media-network-blog/2014/aug/05/how-to-startup-global-costs-tips