What it takes for an international start-up to succeed

What does it take for a international start-up to succeed? There are a lot of advice available for anyone that want to start a company. We listened to the experts and put together the following analysis:         

Very few start-up companies succeed internationally; regardless of how good their ideas may seem, said Jennifer Vessels of the Silicon Valley based company NextStep, when she visited Oslo recently to share her 25 year’s worth of experience in global sales.

So, what are the common mistakes made by start-ups when they move beyond their local market?


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Professor Carl A. Solberg from the Norwegian School of Management (BI) recently presented the results of a survey that was conducted for Innovation Norway. The survey was entitled ‘Five drivers for success abroad’. It explores the question of whether there is an explanation for why some succeed and others do not; is there one single recipe that small start-up companies with international ambitions can copy? The short version of the answer is, not surprisingly, a big, fat ‘no’; but there is still something to learn from the survey:

Relationships are complicated, and what is relevant for a player in one industry, may well be less important in another market. For instance, a small IT company will encounter completely different challenges to that which face a large industrial firm with many employees.

As a small start-up company with global digital ambitions, Cloudnames can and will learn from our network of contacts; we’re taking on-board all the good advice we can get. So, what did I learn from Carl Solberg and Jennifer Vessels? Did their findings have any implications for us? The short answer to that question is ‘yes’; and maybe you can learn something, too…

Successful companies often have active owners and a board that is engaged. Behind the most successful start-ups are entrepreneurs who have a burning commitment; they do it not for money, but to change the world, said Jennifer; using Steve Jobs as a perfect example. If you create value ​​for people and give them something they want, it will change their life, and the money will follow.


To plan, or not to plan…

Does it pay to plan your activities thoroughly? A surprising conclusion from BI’s survey was that planning did not matter. It found that there was no detectable difference among those who planned and succeeded, and those who planned and failed. Perhaps it is because markets develop so fast that planning becomes a waste of time. The question is; do you throw yourself into it and learn on the fly?

According to the textbooks I read during my schooldays, market analysis was highlighted as alpha and omega. They suggested that any self-respecting business had to work seriously with market analysis to succeed. So, are you not surprised to hear that one of the measurable negative factors is planning too much?

Another key element for success Jennifer Vessels talked about in her presentation was ‘looking for paying customers from day one’, describing the following, ‘typical’ start-up mistake: waiting for a product to be entirely complete. In fact, with a ‘brilliant’ product, one is never finished; it should be continually developed for all eventualities and for all customer groups who might use it. Her advice was to ‘throw yourself into it’; focus on sales, get customers and make changes to your product or idea according to the feedback you receive from customers. In other words; do not waste time trawling through market analysis, meticulously planning for the development of a ‘finished’ product. Acquire paying customers who are willing to talk to you about their concerns. Learn everything about your customers and develop your product based on what they think and what they would change.


The local connection

Two more crucial factors of the BI survey struck me as particularly important pieces of information; firstly the importance of finding local partners and secondly, connecting with local networks.

The obvious prerequisite for success with a local partner is that you can establish a mutual win-win relationship. Yet there are many stories of small innovative IT companies that are being greeted with open arms by a large international partner, only to be let-down; you go to a trade show, present your brilliant product, meet the perfect partner, sign the agreement and then, a month later, the deal is forgotten.

To succeed, according Vessels, you must document mutual benefits, meet often, socialize, repeat the documentation of mutual benefits, continue socializing and continually focus on the benefits of your relationship.


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Start small

Another observation is that small start-ups too often attack the whole market. I frequently smile to myself when I talk to young entrepreneurs who are at the early phase of a project; on the spreadsheet they show you how big the market is, and say “if we only can take 1% of the market”..

As Jennifer explained:

“Instead of going for everything, why not attack one ‘small’ sector; for example, the financial, banking and insurance companies on the north-east coast of the United States? Then, you can find the names and address in the Yellow Pages and call them”.


Graft hard

And, last but not least, one more piece of advice to glean from the BI survey is that there are no easy fixes; building an international start-up takes a lot of hard-work, and this hard-graft is found in challenging traditional sales techniques.


Top 7 drivers to succeed as an international start-up:

  1. Look for paying customers from day one
  2. Do not wait until your product or service is ‘finished’, but make good-use of customer feedback
  3. Do not plan yourself to death; it may be counterproductive
  4. It may not be useful to spend time on thorough market analysis
  5. Find local partners and networks
  6. Foster a burning commitment; entrepreneurs who do, succeed
  7. Look for active owners and a board that is engaged


And finally, throw yourself into it and learn along the way. Good luck with your innovative idea and international efforts!

This article is written by Jan Sollid Storehaug, CEO Cloudnames.

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Please contact Cloudnames if you have questions or need help! You can send us an email directly with your questions to: hello@cloudnames.com


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