The Business Expansion Dilemma 

As a startup, the decision of business expansion is an important one. 

For one, expanding your business shows that your business is indeed working. Your product or service is creating value, so much so that expanding your organization is the natural next step in your product’s evolution. From a startup perspective, expansion can lead to a ton of good: larger global network, stronger fundraising prospects, new sales and growth opportunities. The whole nine yards.

However, expand too quickly and you could easily become overwhelmed, losing sight of your company’s mission and vision. While expansion may be feasible in one aspect of your business, another facet of your organization may struggle to sustain a similar level of growth. 

The fact of the matter is that expanding your business comes with its fair share of ups and downs and caveats. You can’t grow your startup without expanding, but it can also be so risky, especially for a small company. Staying within your area of expertise is safe and stable, but expansion opens so many doors and creates new opportunities and partnerships. 

That being said: as a startup, how do you go about scaling sustainably?

How to Approach Business Expansions as a Startup

Expanding your business can be simple, depending on how you go about doing so. Whether you’re looking to expand overseas or simply expand your team, business expansion is simply having your presence in a place that is different from where you’re currently located. However, the simplest actions come from the hardest decisions, with the hardest decisions being resolved by a bit of introspection.

Know Your Business, and Yourself

Before expanding, you should have mastery of your company, products/services, messaging, business model and most importantly, value.

Value is an important factor in the decision to expand because it represents a lot more than just what your customers gain by using your product or service. Attributes of your app or service that are desirable and are easier to sell, successful sales conversations that you can learn from and apply, and even dense areas of usage around the globe where value is created. Understanding the subtle interactions of your business and how interactions lead to sales is crucial is expanding, especially in overseas markets.

Before jumping headfirst into writing an expansion strategy, you should first ask yourself if you need to expand in the first place. This isn’t just a guessing game, too- there a couple signs that your business is ready to grow:

• Revenue: Your cash flow is consistent and strong, with multiple revenue streams working in your favor and proving the need to scale- expansion will work towards increasing revenue
• Customers: Your customer base is rapidly growing around the world, with positive feedback in key regions revealing potential expansion areas
• Favorable Market Conditions: Many times, opportunities will present themselves and just make sense; whether you find market congruence or another factor that justifies expansion, always keep your eye on a region

These are just a few of the indicators that it might be time to expand.

Business Expansion Overseas

A competent business expansion plan is synonymous with cementing a presence overseas, and rightfully so. A strong international presence can open the door for many opportunities, including increased sales, growing client base, stronger partner networks, and expanded teams.

Before creating your overseas business expansion strategies, you must determine where you want to expand. This isn’t as simple as covering your eyes, throwing a dart at a globe, then expanding wherever the dart lands; expand where you see the most potential for your business. You can determine potential in emerging markets through various criteria:

• Congruence with Current Customers: Do users within these emerging markets fit your current user persona? And will the inclusion of additional customer segments benefit your current customer base?
• Thriving Startup Communities: Are there communities within certain regions that are striving to solve problems, and will your products or services accelerate their development?
• Success Patterns: What aspects of your business are successful where you currently operate and where can you emulate this success? This research can be done through visiting these regions themselves and networking with people within these communities

These criteria can help in determining potential expansion opportunities, but only paint a small portion of the full picture. To get a better understanding of region characteristics and international product market fit, it’s important to network with other professionals in desired locations. In addition to this, detailed market research will be key in unearthing thriving and innovative communities, product pricing, and more.

One thing to note about overseas market expansion is pricing sensitivity. Depending on the value of regional currency compared to your product’s home currency, pricing in a new region will vary wildly. One example is pricing of hyperscaler resources overseas in comparison to US pricing: oftentimes, hyperscaler pricing will be higher in overseas markets when compared against the US dollar, as well as taking regional resource limitations into consideration. The result for many of the startups located in these emerging markets is less buying power, higher cloud costs, and barely-accessible resources.

At Lyrid, we work with local data centers to figure out pricing that works best for both parties, offering regional pricing for our end-users to access powerful resources that encourage cost savings.

Finding the Right Business Partner

Your business partner overseas is as important as the business partners working with you as you built your company. Why?

For many founders, an overseas business partner is their first point of contact in a new market. However, finding these partners isn’t easy. Your business partner has to be trustworthy, as driven and involved in your business as you are, and looking to understand and know everything about your company and how it operates. 

This process isn’t quick as well - our current partner in Lyrid Savannah was with us for over a year before deciding to sign on! Although finding the right partner might be tedious at the moment, having a competent business partner who’s as enthusiastic about your business as you are makes all the difference when building a presence overseas!

Business Expanding Misconceptions

Growing your business is daunting, especially when the topic of overseas expansion enters the conversation. Expansion is all-consuming and expensive, taking all of the resources from your current location and allocating them to another place around the globe. Or so that’s what most founders think.

You don’t actually have to break the bank or go all in to expand, in fact, we didn’t. 

For many companies that deal with virtual products, expansion can be done extremely cost effectively. You don’t need full fledged teams and insane budgets to expand, just one person is enough to create a spark and expand. For expansion in Lyrid Indonesia and Lyrid Savannah, one person in each region was enough to create a strong brand in these regions, growing within equally strong startup communities.

Expansion doesn’t have to be a headfirst endeavor as well, you could first test the market before going all in. This can be done by working with your business partners to gauge potential product success in different markets as well as finding competitors and niche communities. 

At the end of the day, expanding your business shouldn’t be a rushed process. It takes time to do a task as important as expansion diligently and competently, opportunities may come and go but sustained growth will always prove to have the most return.

Lyrid Expansion

Lyrid started as an idea in the United States, then steadily expanded to Indonesia thanks to Lyrid Indonesia, and has finally reached Kenya with Lyrid Savannah? But how did our latest expansion come about?

I’ve always wanted Lyrid to have a strong global presence; we found success when we entered new markets in Indonesia and have looked towards Latin America and Africa for our next brand because of their strong startup communities, high tech talent, and opportunities ripe for data centers. Coincidentally, the GDP of these regions were similar to that of Indonesia, making things like pricing a bit easier to approach.

While we are still looking to expand globally in Latin America, our foray into Africa began with our current managing director of Lyrid Savannah, Karington Hezekiah, reaching out to us wanting to sell software development services. Karington already has his own business in Nairobi, with his software development skills being used within various different projects. Instead of taking up his offer, we counteroffered and proposed partnering with us instead! After some due diligence and a year’s worth of conversation, Karington decided to sign on.

All of the ingredients came into play perfectly:

• Region Identification: Kenya, a region with a growing tech scene, familiar GDP, and startup communities looking to solve problems
• Business Partner: Karington, a business owner who knows his way around the area and is enthusiastic about Lyrid’s mission
• The Right Opportunity: With the help of Karington, we made our own opportunity and fabricated our luck, setting up our brand in Kenya with no complications

We got lucky with Karington and his help in cementing Lyrid in Kenya. Truthfully, business expansion like this requires laying seeds everywhere and seeing where a tree grows. Opportunities grow like fruits and once you see one, if it looks ripe enough to you, take it! 

Rest assured, there is NO right way to expand! Our approach to expansion works within the confines of our business model and us being an international presence will make it easier for Lyrid to enter new markets.

Growing your business is hard, no matter if it’s overseas or within your neighborhood. Despite this, many startups take the risk of business expansion and find once in a lifetime opportunities, setting themselves up for success down the line. 

If you’re interested in expanding your business globally, check out our platform. We help you deploy to our global partners all from the comfort of your home. If you’re looking to chat about expanding your business, feel free to chat with me anytime, I’m always interested!

Thank you for reading!