When and How to Internationalise Your Startup

When I joined Delivery Hero as a late co-founder, they were already the number 3 player in online food orders in Germany

I was the first boots on the ground in Brazil, which was one of four strategic markets. Also on the list were Australia, Mexico, and Russia.

The usual suspects—the US and UK—already had fierce competition (Seamless and Just Eat), and we wanted to focus on big markets with low competition and a large population of people who regularly ordered takeaway food.

It seemed like the perfect plan.

And like all perfect plans, it hit reality with a resounding thud.

Over the years that followed, I learned firsthand why international expansion is so hard. Yes, going global ultimately helped Delivery Hero reach its IPO in 2017. However, I’ve also seen CEOs attempt internationalisation, only to retreat within months.

If you're building a consumer or prosumer SaaS product and can sell to the world from your HQ, this post isn’t for you.

But if your expansion requires boots-on-the-ground teams—sales, marketing, ops—then before you jump in, I want to share a few lessons that might save you from costly mistakes.

3 Reasons You Should Internationalise

Running an international team may sound glamorous, but the joy of long-haul flights quickly wears off. You need a good reason to put yourself through the pain—here are the most common ones:

1. You Want to Increase Your TAM

Not all companies want to become unicorns, but for those that do—and their investors—TAM (Total Addressable Market) is an important consideration. Your TAM can be a ceiling on the size of the company you can build. 

Some top-tier investors, such as Sequoia and Insight Partners, won’t invest if they can’t see a big enough TAM, even if you’re the category leader in a relatively big core market.

Becoming a regional or global player can attract capital and help you achieve a bigger outcome.

2. Your Customers Demand It

If you have an enterprise offering, like SalesForce or Notion, you have multi-national—ideally big logos—who want to use your product in their other geographies. 

For B2C companies, your customers want you to expand when it makes their experience better. Take Airbnb and Uber—the more countries they operate in, the stronger the value proposition. This is an example of an international network effect.

When customers drive expansion, you get a head start, and your existing customers can help you win new customers in the new geography.

3. You Want to Access US Investors

When it comes to venture capital, the US is still the biggest capital market. However, tapping into it means you might need a US presence, since many funds only invest in companies with a local presence. 

This alone can be an incentive to enter the US market. However, as a big market, the US is also very competitive and requires a lot of investment to see it through. 

If one of these reasons sounds appealing, it’s time to slow down. Here’s why internationalising would be a terrible thing to do.

3 Reasons You Absolutely Should NOT Internationalise

The honest truth is: internationalisation can be a massive distraction. And for founders fond of shiny objects, there’s a risk of miscalculating the investment required. Here are three reasons you should stick to your core market, for now at least.

1. Your Core Market Can’t Grow Without You

In the early days, internationalisation is founder-led. As the founder, you will play a huge part in its early success. And it will take more time, more energy, and more problem-solving than you realise.

The mistake you want to avoid is to realise six months in that your core market is suffering because you’re stretched too thin, and then needing to cut the new markets to refocus on your core.

That’s why you need to ask yourself:

• Is your go-to-market motion stable and repeatable?
• Can you close sales without being involved in every key deal?
• Are your organisational rhythms and culture well-defined and strong?

This is a high bar, and if the answer is “not really,” fix your home before you roam.

2. You Don’t Have a War Chest

Internationalisation eats up a lot of capital.

Establishing a local presence often means hiring commercial, marketing, and operations people, complying with local regulations, and adapting your product in ways you can’t always predict. You need to have enough cash in the bank to fund expansion until it becomes profit-generating.

When entering the US, founders are often surprised by the cost of hiring, especially salespeople. It’s often more expensive than your core market.

And there’s often a chicken and egg problem: the VCs that want the bigger TAM or a US presence don’t want to fund the initial set-up. They want you to already have an international footprint with traction.

This often results in taking a risky bet that traction and investment will come through before the money runs out. 

3. Your Model Doesn’t Work in Other Markets

Does your value proposition actually make sense in a new geography? There are many things to consider, but here are the key ones:

• Regulatory barriers. When regulation is driving demand in your core market, it might not apply in other geographies. Conversely, local regulations may even prohibit your product in new markets. And if you are in a regulated industry (finance, healthcare, etc.), the cost of complying and applying to local markets can be time-consuming and expensive.
• Different consumer behaviour. The way people buy and sell varies a lot from country to country, both B2B and B2C. For example, Delivery Hero started in Germany, where small businesses were fine to sign contracts online; however, in Brazil, face-to-face interactions were needed to do business.
• Tough competition or ecosystem. If your target geography has established competitors or if the suppliers/customers have stronger bargaining power, it can alter the unit economics and make growth prohibitively expensive.
• Divergent use cases. Sometimes, a new market wants a slightly different use case for your product. While it sounds like a small tweak at first, this can quickly require divergent product roadmaps, which leads to huge complexity.
• Unexpected localisation requirements. In the early days of expanding Delivery Hero (before we took the M&A route), localising products was far more work than we expected. We had to figure out local mapping software, customise delivery areas, localise addresses and payment systems, and add images to menus (the norm in Asia). We estimated a year of work… but it took at least two.

Before continuing, ask yourself these questions:

• Can my core market grow without me?
• Do I have significant capital in the bank?
• Will my model work well in other geographies?

Yes, yes, yes? Ok, let’s continue.

Deciding Where to Go

Deciding on new markets falls under the remit of the CEO. It’s one of the three strategic decisions that will position the company for success (along with deciding on the value prop and which capabilities to build).

However, that doesn’t mean you need to make the decision alone. Lead the process but share the work. 

Creating a scoring system for new markets can ensure you check all important considerations before making a decision. The criteria might include some of the following: 

• Market Size
• Strength of Local Competitors
• Customer Behaviour Fit
• Presence of Existing Customers or Partners
• Regulatory Complexity
• Local Investor Presence
• Talent Availability
• Language Requirements
• Legal Risks & IP Protection
• Political/Economic Stability
• Cultural & Physical Distance 
• Time Zone

I also recommend breaking large countries into regions or even cities. Rather than think of the US as one market, you might look at expanding just to New York, or the East Coast, which can help you concentrate on building network effects and brand awareness in a small area.

Closing Your First B2B Deals

Many of the European founders I coach moved to the US to lead their expansion, at least temporarily.

A few chose East Coast cities like New York, Boston, and Miami to make travel back to Europe easier. Others moved to the West Coast to be nearer to the big VC firms.
As a general rule, they took responsibility for landing the sales (just as they did in their core market). 

As getting 1-2 high-profile local customers can make it easier to sell to other companies, it sometimes makes sense to undercut the competition to get started. Some companies invest in placements in analyst reports (such as Gartner) to reduce the perceived risk of doing business with foreign startups in the eyes of big customers.

By rolling up your sleeves and getting your first international customers, you’ll also learn how different sales motions and cultures can be. It’s one thing to read about how it’s different, and another thing to experience it.

For example, the UK and the US speak the same language (well, they try to), but each has a very different approach to sales.

Building Local Teams

Once you have some traction in the local market, your next mission is to scale the sales. This is when you build your initial team.

You want to keep this team small (say, max. six people) so it feels like a startup and you can achieve fast feedback loops.

You want that early-stage energy again—daily standups, everyone in every meeting, learning every week.

Remote work has been “all the rage” for the last few years, but there are real advantages to opening a local office, including:

• Attracting candidates who want a sense of team spirit
• Helping you instil your culture in the new team
• Generating excitement and momentum, particularly in commercial teams

Your first commercial hires matter enormously. You’re not just hiring salespeople—you’re hiring missionaries. And as they are strategic hires, be willing to offer an appealing comp package, both in terms of salary and equity.

Look for people who:

• Have a proven local network of potential customers
• Understand your product’s space
• Have seen internationalisation before

It’s extremely helpful to work with people who’ve worked in an international company because they tend to “get it” more. For example, they might have worked for a company entering their market, or a local company approaching new markets. 

You might also consider hiring from local competitors. Look for people with at least 2 years of tenure (a proxy for performance). Not only will they bring local knowledge, but you might also slow your competitors down, so they are often worth overpaying for.

As a foreign company, you can use your differences as a strength. Consider onboarding all new employees in your home country. This becomes a great perk to attract talent who want to travel the world and build new relationships. It helps you indoctrinate your cultural values as well.

Operating in Multiple Countries

As you grow in the number of international markets you operate in, you’ll end up building a team in HQ to manage the local GMs.

As a heads up, every market will tell you, “We’re different.”

They’ll ask for custom features on the roadmap, unique workflows, and local integrations you’ve never heard of.

I know this because I lived it. And to be fair, as a local GM, your market is different.
The art of managing international teams is to find common ground and prevent the roadmap from becoming Frankenstein’s monster. If you’ve been following international politics, you know this isn’t easy.

At Delivery Hero, we let local leaders own sales, marketing and operations, and HQ focused on educating the local markets with best practices, experience sharing, and fresh insights.

A Scratch on the Surface

Hopefully, I’ve convinced you that internationalisation isn’t a strategy for early-stage companies who are still building out their core markets.

However, it can be a multiplier for companies with strong foundations, as long as you invest your time and money accordingly.

And if after this you still want to enter international markets, bonne chance, mucha suerte and good luck!

Related Reading

• How to Scale Sales at Your Startup
• What it Means to be a CEO
• How to Organise Your Leadership Team
• Why Founders Need Coaches, Not Consultants