Navigating the Top Five Challenges in Internationalizing Your Business
he US Small Business Administration reports that 96 percent of the world’s consumers live outside the US, and account for nearly two-thirds of the world’s purchasing power. Despite these whopping statistics, only one in a hundred American companies currently exports its products and services overseas. Several roadblocks—some perceived and some very real—are holding back small business owners from capitalizing on this massive opportunity at hand.
Are you ready to go overseas?
At VerbalizeIt, a human-powered translation platform for business, we have grown from a small start-up to a global company that serves customers on all seven continents (that’s right, people in Antarctica need translation too!). Below are the top five challenges VerbalizeIt and our customers have encountered in our journey towards globalization, and the lessons we have learned along the way.
- Focus (or lack thereof): Chasing after any and every market that seems attractive is not a luxury afforded to a business with limited resources. By definition, a small business is one that may not have fully capitalized on the opportunities at home. It is therefore important to carefully consider the possibility of losing momentum in your current market as you go after new ones overseas.
We have certainly faced the challenge of focusing our energy at VerbalizeIt. The problem of language barriers is so pervasive in international business, that we quickly found ourselves stretched across several geographies and industries with not enough bandwidth to execute on all the exciting opportunities presented to us. Over time, we have developed a disciplined method to expanding our business, ensuring that every new geography we explore offers at least one of the following advantages over our current markets: (a) a larger customer base, potentially with a higher willingness to pay, (b) access to cheaper supply of labor or raw material, leading to cost efficiencies, or (c) legal, regulatory or other systemic factors that make it easier to do business.
This simple approach has allowed us to support our customers in expanding to the hottest emerging markets in an extremely cost-efficient manner, without compromising on quality and service due to resource constraints.
- Physical distance: Many organizations still consider geographic distance an impediment to international business. This should not be surprising, as small businesses are built on personal relationships and face-to-face interactions. Inserting physical distance between you and your customers, suppliers or employees may seem unnatural and compromising to your goal of providing a personalized, quality experience. However, technology today makes it not only possible, but also extremely advantageous, to be geographically diversified.
At VerbalizeIt, we have proven at tremendous scale that the benefits of internationalization far outweigh its risks. Two years ago, VerbalizeIt started with a small local community of trusted translators whom we recruited through our personal and professional networks. The strong emphasis on physical proximity to ensure culture and quality resulted in a great customer experience, but also limited our ability to serve our customers’ needs.
Recognizing the need to globalize our translator base, we began leveraging the gamut of available communications and technology tools. These tools range from Skype and Google Hangout for communication, to proprietary testing and training tools for quality assurance.
Today, VerbalizeIt is a close-knit community of over fourteen thousand translators, residing in 75 countries. The decision to de-emphasize the value of “face time” has allowed us to offer round-the-clock, quality service to our customers.
- Building Distribution: Perhaps one of the most commonly heard challenges in expanding overseas is the inability to have enough feet on the ground to acquire customers quickly and cheaply. A little creativity in looking beyond full-time sales professionals helps drastically alleviate sales and distribution challenges.
In order to scale VerbalizeIt’s business in new markets, we focus on building partnerships with aggregation points where our target customers go for related services. As an example, our partnership with Skype allows us to reach global-minded customers who already on the market for tools for international conversations. For traditional business development, we leverage our global customer and translator community to be our eyes and ears on the ground.
By creating a highly attractive customer referral program, we incentivize thousands of individuals and businesses around the world to be advocates for VerbalizeIt, without bearing the cost of full-time resources.
- Lack of Local Expertise: Starting a business is always an iterative process. Launching your company overseas can be infinitely more complex due to a lack of understanding of cultural, language, legal or regulatory nuances. While some such expertise can be built through trial-and-error over time, lack of others can prove devastating. Companies can drastically steepen their learning curve and avoid catastrophic mistakes by leaning on local experts, rather than attempting to reinvent the wheel.
Ensuring confidentiality of customer data is of paramount importance at VerbalizeIt. As VerbalizeIt grew to support customers and translators in foreign countries, we found ourselves underprepared to manage privacy and confidentiality laws that differed not just by country, but often by state.
Instead of taking a minimalist approach to managing these and learning as we go, we partnered with one of the top international law firms, ensuring that our systems and agreements were ironclad in ensuring the rights of our customers.
Today, clients ranging from international law firms to financial institutions access VerbalizeIt’s translation services with the knowledge that we have gone above and beyond in ensuring the confidentiality of their data.
- Overcoming the Language Barrier: Language barriers are by far the biggest, yet the most under-appreciated, challenge in going overseas. With only 18 percent of Americans speaking a second language, we have grown accustomed to multinational businesses pandering to our language needs to earn our dollars. As a business looking to capture international customers’ interest, it is important to appreciate that English is not the primary language for doing business overseas.
In fact, if you are targeting one of the top 15 emerging markets, there is a 60 percent likelihood that your customers speak little to no English. Couple that with the fact that over 70 percent of customers say that they would be more likely to buy a product with information in their own language. Managing your communications appropriately across your online and offline marketing, operations and customer support channels becomes critical to your success overseas.
I frequently ask our customers how they managed their multilingual communications prior to engaging with VerbalizeIt. Most often, small businesses will attempt to find friends or colleagues who speak a second language to translate for them. This is an extremely concerning approach, as there is a vast difference between being multilingual and being an effective translator.
Without such free resources, business will often bite the bullet and pay traditional translation agencies thousands of dollars for long-term contracts. Worse yet, some will turn to free machine translation like Google Translate with undoubtedly disastrous consequences.
It is critical that you not skimp on the quality of your first impression and ongoing interactions with your overseas customer. The good news is that the well-established translation services industry is expanding with new players capable of providing the quality of human translation at a price and scale more synonymous with machine translation. Do your research in finding a translation partner that can support your communications needs across all channels, do so in a cost-effective manner, and have the scalability to grow with your business.
Leading VerbalizeIt’s internationalization efforts and supporting other businesses in doing so has been an immensely rewarding experience. I have learned that it is critical to nail down your strategy and execute on your opportunities at home before looking to expand into foreign markets.
Once the time is right, it is important to look past the conveniences of language familiarity and proximity, and take a data-centric approach to identify your next markets based on socioeconomics, consumer behaviors and infrastructure.
As a company with limited resources, leaning on technology and creative distribution strategies allows you to experiment and build scale quickly without compromising on quality or incurring debilitating costs. Recognizing “deal-breakers” in your ability to operate in a foreign market should prompt you to seek out help from local experts early on.
The inability to communicate effectively with your customers in their language is the biggest such deal-breaker, so ensure that you have a reliable and scalable translation partner to help manage your communications overseas.
Kunal Sarda is the co-founder and COO of VerbalizeIt, a human-powered translation platform for business. A recent graduate of the Wharton School at the University of Pennsylvania, Kunal speaks four languages and has traveled to and done business in over 25 countries. He can be reached at firstname.lastname@example.org. More information about his organization is available at verbalizeit.com.