Summing it all up
We've covered quite a bit of ground together since I started this series. Here's the executive summary:
- There are simple steps you should take to lay the groundwork for international expansion from the moment you start your company.
- Before you launch internationally, you should have an explicit, well-articulated strategy.
- You should assign a qualified executive to develop the international strategy and drive its its execution, and involve the rest of the company in the process to gain their emotional commitment.
- A headcount plan and budget that cover both the "visible" and "invisible" requirements will set the business up for initial and lasting success.
Some closing thoughts
In closing, a few reminders as well as suggestions that have worked well for me:
- As the CEO, look for ways to make it clear to the company that going international is a critical priority for you personally.
- Involvement builds commitment. Take the time to get buy-in from your managers and their teams, who are probably already overloaded. Involve them thoroughly in developing the international strategy, and make sure they get the resources required to support it. Make it their plan, not somebody else's plan!
- Assign a small support team to represent the international operations at HQ and to make sure they get their needs met quickly and efficiently.
- Enlist one respected manager from each company function for a cross-company oversight team, to drive execution and run interference with the relevant departments as issues come up. The best people for this are usually not the most senior execs, but director-level thought-leaders who have the respect of their organizations. They will be honored to be chosen.
- Remember to treat international as a startup:
- Be realistic in setting schedules and milestones - it will take longer than you think.
- Be prepared to live with a startup financial profile - likely several years of losses before turning the corner into profitability.
- Report on the international business separately from the domestic business. It should be following a similar (or steeper) growth profile, but several years behind.
- Be ready for exceptions to corporate policies: Compensation for top overseas hires will be a prime example!
- Make sure everyone's performance objectives and incentives encourage support for a successful global rollout - performance reviews, 360 feedback, compensation for all key functions should include specific criteria.
- Challenge your management team to ensure company policies and processes aren't purely US-centric. A small example: All-hands meeting times that don't require overseas employees to dial in at 3 am.
- When you make your first overseas hires, give them a month at HQ before turning them loose in market. They need time to soak up the culture, value proposition, products and so on, as well as developing personal relationships with key HQ people they're going to be working with remotely for years.
- Send out regular updates on international progress—emails, blog posts, all-hands updates. One company I'm involved with, Shoedazzle, has set up a live webcam feed between their California HQ and their new London office, so the teams can see each other as they go about their day—great idea!
- Make it fun and celebrate success. At Silver Spring Networks, we launched our Brazil operation with a big all-employee party at HQ, complete with Brazilian food, music and caipirinhas. We turned the World Cup into another great opportunity to celebrate our becoming a global company, screening the matches live at lunchtimes.
- Finally, protect and nurture the international business. When the domestic business has a revenue shortfall or a product slip, it'll be tempting to take it out of international. Don't - it will send a message to your employees, overseas teams, customers and partners that international is a second-class citizen, and you may never recover.
If you're really serious about having a big impact and delivering a great return for yourself and your investors, you have to build a global company. While you may not be ready to cross the border yet, you should be talking and walking the talk as a CEO from the beginning, and building global thinking into the company's DNA. As soon as you can afford to, assign a respected manager to lead the development of an explicit international strategy and plan, with participation from all key functions of the company. Assign the resources to make it successful, and protect it when the domestic business hits a bump in the road. Remember - your growth in three years should be coming from countries you're not in today. Bon voyage!
Comments or questions?
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John O'Farrell is a general partner at Andreessen Horowitz. John led the firm's investments in Facebook, Twitter and Groupon, and works with portfolio companies on partnering, strategic transactions and global expansion. Prior to Andreessen Horowitz, John held Executive Vice President positions at Silver Spring Networks, Opsware and Excite@Home. Earlier in his career, John worked in the United States and Europe with US WEST, Booz Allen, Telecom Ireland, the EU Commission, Digital Equipment and Siemens. John has an MBA from the Stanford Graduate School of Business and a Bachelor of Electronic Engineering from University College Dublin. He speaks English, German, French and Portuguese.
[Image: Flickr user ViaMoi]