At many companies, international expansion is no one’s job, but everyone’s job. Who should lead it? Where should it live organizationally? And should its home and influence remain intact over time? In this post, I’ll discuss why inevitably, growing into new markets is a cross-functional endeavor. It’s also one that tends to evolve over the life of a company. At most companies, international expansion usually plays out according to one of five scenarios.
Scenario 1: The Sales Team Leads the Charge
The most common scenario is for Sales to take the lead with international expansion. They’re in charge of bringing in customers, after all, so it’s a natural conclusion that when you want international customers, you hire salespeople. Depending on how big you want to bet, you can have them sell remotely, hire them locally in the markets you want to target, or you send current salespeople over to those markets to build up a local presence, hire more people, train them up, and so on.
However, even if you start your international expansion efforts in the Sales org, that isn’t where it begins or ends. The Marketing team will at some point be tapped to generate leads and traffic for the markets your Sales team is targeting, so alignment between these two teams is a must. Similarly, if your Sales efforts succeed, your other client-facing teams (Client Service or Customer Success and Support) will also have to diversify by time zone, geography and language, simply in order to map to any Sales-led expansion efforts.
The risk with this approach is that various teams can become misaligned, leading to a disjointed local customer experience. Marketing might decide not to support certain geographies if they haven’t been consulted prior to Sales hiring decisions by geo. Client Service, generally a step removed from these decisions, might not have allocated resources to support the customers in those new markets either. When teams are not aligned, it can have major consequences. Customers might have a negative experience, which leads to poor brand perception early on in a new market. Not being aligned cross-functionally on what the local experience should be can greatly hinder marketing efforts, and ultimately slow down sales.
Another risk with Sales-led expansion is that sometimes sales teams can sell very well into the early adopter cohort of a new market. The challenge comes when the sales team starts to hit the mainstream of the market before the Product side is ready. Buyers in the mainstream, who represent the majority in any local market, typically want a complete product. However, the journey to achieve product-market fit happens one country at a time.
This leads to a difficult scenario where Sales has to continually lobby Product in order to make changes or accommodations for international customers. Yet, Product teams will often counter Sales by pointing to the track record of international success: “We’re doing really well in local markets. How do we know we should spend time on this? How do we know this isn’t just noise from a few loud customer voices?” It becomes difficult for Sales to argue that Product needs to evolve further for international markets when what you’re selling is by all measures already a success in those markets.
Scenario 2: Marketing Decides Where to Focus
Another, increasingly common scenario with international expansion decisions at modern companies is that Marketing ends up leading the charge into new markets. This is very common among digital natives and marketing-driven companies. Insights from web traffic, lead flow can highlight what appear to be ripe local opportunities on the surface. Companies that have robust partner marketing or reseller sales channels often see big potential in new local markets. Those businesses with a strong digital or content marketing muscle tend to quickly see their website traffic diversify geographically, without that even being a stated intention.
But there are risks with a Marketing-led expansion path too. Leaning on market “pull” too heavily can take a business off-course. In some cases, the sales team might not be prepared in terms of time zone or language (or even country of employment) to handle the types of customers that marketing is pulling toward the business. Or, they might be able to close that business in partnership with Sales, but perhaps the rest of the business will face challenges with currency, payments, renewals, collections and so on.
It’s very common for a company creating a new technology to be inadvertently pulled into a market that has a fundamental economic mismatch with their pricing model. For example, companies in a developed market often see pull from developing markets, or vice versa. I like to think of these economically mismatched markets as having promise in the long term, but representing “undertow” in the short term. If you follow the pull with zero resistance, you can get pulled under in the process.
Just like with Sales, there can be challenges when international growth is led by Marketing on the Product side. Just because there are a lot of people hitting the website from other countries, it does not mean they will convert, or sign up. And even if they do end up as paying customers, it doesn’t mean that they’ll have a great experience with your product or service and want to stay with the company long-term. It would be easy for either of these teams to say, “We’ll let the rest of the business figure out all that other stuff,” but that’s not a team player mentality, which is what international expansion requires.
Scenario 3: International Grows from the Product Side
I’m a huge believer in product-led-growth (PLG) and freemium pathways because of their huge potential to streamline and facilitate many aspects of growth, including international expansion. More and more products are available to people around the world at the time of launch, especially if they’re launched into global marketplaces from the start that give them instant reach into many countries. In many ways, leading with product into international markets can be a dream come true, especially for visionary CEOs who view their companies as “global natives.”
But there’s a risk here too. To grow, product teams need more than just word-of-mouth, integrations, an open-source play, or viral adoption from free users. All of those things are great, but have their limits. To grow globally, most PLG-focused companies invest a hefty amount in Marketing to drive sign-ups, traffic, and interest. Even those that are primarily marketplace and integrations plays still need to invest in marketing to developer communities. And most of these companies have Sales teams too, who carry their own quota and revenue dependencies.
One risk if you lead international from the Product side is that both the the downstream and the upstream dependencies for your international customers can be challenging. Increasingly, go-to-market teams on the product side think about the entire customer journey, and not just the user experience. This is a fantastic evolution, but the increased complexity of doing more and more “in-app” can make it hard to figure out where the points of engagement should be with Marketing, Sales, Customer Success and even teams like Billing and Renewals. For this reason, even if you lead international from within Product, there can still be plenty of points where the international customer experience breaks down.
Another very real risk is that Product teams tend to focus on the majority of users and customers, versus on small cohorts that might represent even larger total addressable markets (TAMs) than their current “majority” does at present. Any local market will start out as a small percentage of your global total compared to the domestic market at most companies. A very common scenario is that Product teams will overlook the local needles in favor of the global haystack, because they want to solve for widespread pain points that will impact the entire customer base.
Scenario 4: The Operations Team Devises the Plan
At some companies, operations can lead international expansion, providing both strategy and operational support. These teams usually have access to all the data and analysis tools to help the company make good decisions and formulate the best possible strategy for expansion. In the best companies, a solid Ops team is the glue that holds other functions together. But where international operations is concerned, the complexity is even greater, because the glue has to hold in many more directions — across functions and across geographies.
When ops teams are given plenty of authority and respect, they can have tremendous impact and lead the charge for international growth. But when they’re not given enough influence in the organization or end up siloed, it can be very hard for them to make a real difference. Ops teams end up having the challenge of coordinating everyone, but ultimately someone, usually at the C-level, has to make the final strategic decisions.
One of the risks with operational teams leading the charge is if they become too data-driven and end up focused on data instead of insights. A common phenomenon is that when companies gain access to more data, they hire more analysts to look at the data every which way, but in their attempt to make sense of it all, they forget to actually talk to customers in local markets. Hiring one person to simply listen to what the customer really wants is more powerful than hiring a herd of data analysts. Beware of the temptation to drown in your data, because it only gets more complex when you start looking at it by country, by language, by region. This is where other teams often become frustrated, because while the data can be interesting, it’s not very helpful unless accompanied by clear and actionable next steps.
Scenario 5: A Cross-Functional Team Steers the Ship
Your company might start out your international journey with any one of the above scenarios. After all, international growth can be led from, and succeed, from any or all of these functions. In fact, your company might actually go through all of these scenarios at various points in time. High-growth companies change pretty quickly, and have lots of leadership transitions and reorgs along the way.
But ultimately, if you’re experiencing international expansion at your company for any significant duration, you’ll eventually arrive at a scenario in which a cross-functional team needs to steer your international growth. Otherwise it won’t be successful!
No matter where international expansion starts organizationally, one thing is certain: it’s going to evolve over time. Change is inevitable, and you should set your expectations accordingly. At most companies, international expansion never has a singular home that stays that way indefinitely. It can be led from nearly anywhere, but as companies mature, it’s less of a game with a quarterback, and resembles more of a relay race instead, with each function playing an equally important role to deliver a successful customer experience in multiple markets at once.
For this reason, if you are passionate about international expansion at your business, you’ll continually need to evaluate the “gravitational pull” within your company at any given point in time, in order to figure out where you need to advocate next for more attention on international, from places that already have prominence. It’s typical that not every function, or even all teams within functions, will care as much about international as others do. This is true even if that function is charged with international growth! So, you have to constantly seek advocates in multiple places.
International Growth Can Never Be Centered on Just One Person or Team
One final reason international expansion is a team sport is that it involves continual practice and constantly high performance levels from all involved. It’s never “done” so long as your company remains in business, and no one person can do it alone. What keeps most of us going is the excitement of seeing our companies grow into new markets, helping our business reach customers in new places, and the gratifying feeling of seeing all the players come together to achieve something globally great. The revenue targets we hit and the customer counts that grow are symbolic to us, like trophies or medals. They are clear and visible reminders of how hard we’ve worked and what we’ve accomplished out there in the world. But that’s not why we do it, really.
We do it for the love of the game.