Venturing into new markets demands a keen focus on risk evaluation and mitigation.
This was the key takeaway from the final panel discussion of Communitech Outposts’ Global Growth series in Toronto.
The goal of the four-part series was to help founders learn how to expand their businesses into foreign markets. The series was hosted by Communitech Outposts in partnership with MaRS Discovery District, the Toronto Regional Board of Trade and World Trade Centre Toronto.
“We want to encourage Canadian companies to explore international sales for revenue diversification and expansion into larger markets,” said Karen Klink, Director of Channel Partners and Founder Success at Communitech Outposts. “By exposing attendees to these insights, we aim to boost their confidence and broaden their perspective on the vast global market landscape, especially in comparison to Canada's relatively smaller market."
Communitech Outposts is an employer-of-record service that helps Canadian companies hire international talent without the complications of establishing a new corporate entity or managing foreign HR operations.
The final session in the Global Growth series was attended by more than 30 Canadian founders and focused on expansion into the Asia-Pacific region.
“We want Canadian founders to understand the importance of thorough market research and cultural understanding when entering a new market,” Klink said. “Factors such as cultural nuances, languages, and purchasing behaviors can significantly impact product-market fit, which may differ from what works in Canada to certain Asian markets."
The panel discussion was moderated by Freeda Khan, Associate Director of Global and Experiential Learning at Rotman School of Management, and included panelists Amr Abdelgawad, COO of FluidAI, Rob Auld, Chief Revenue Officer at ReadyMode, and Tom Cumming, Deputy Director (High Intensity Services) at the Toronto Regional Office of the federal Trade Commissioner Service.
Cumming talked about the need to segment markets in the region for effective international expansion, instead of taking a blanket approach to the whole area.
“A successful strategy involves targeted market approaches that align with your strengths, along with seeking assistance, including our support,” he said. “Segmenting Asia-Pacific markets based on cultural and historical differences is paramount.”
Similarly, Auld said that what works in one region may not necessarily succeed in another. Risk reduction is achieved by identifying pent-up demand and inbound interest, which further allows for gradual market entry.
“We are a SaaS company, different from traditional goods and services,” he said of ReadyMode, which makes a cloud-based all-in-one predictive dialer software. “We identified the initial demand and when it hit a critical mass, we decided to put somebody or something on the ground and that is how we figured it was the right thing to do.”
ReadyMode’s entry into Japan involved a learning curve and a deeper understanding of the culture.
“We decided to hire a Japanese national who had experience with North American companies,” Auld said. “This strategic move proved successful in bridging cultural gaps and navigating the Japanese market effectively.”
The company’s approach was based on inbound demand and feedback from customers.
“One of the biggest lessons we learned was not to simply transplant North American models into Asian markets,” Auld said. “Instead, it was essential to learn from local distributors, understand pricing and distribution models, and then make strategic hires."
For FluidAI – a Waterloo-based medtech company – international expansion demanded adaptability.
“We were facing challenges with the United States Food and Drug Administration and decided to enter Saudi Arabia and the Gulf region leveraging the distributor model,” Abdelgawad said. “Navigating different markets involves unique challenges and requires a deep understanding of the industry, culture and regulatory landscape. It's essential for startups to adapt their strategies.”
In medtech, mitigating risks is essential when transitioning from product development to commercialization, he added.
“Our strategy encompassed four core elements: obtaining regulatory approval, demonstrating clinical value to early adopters, establishing a reliable distribution channel, and securing professionals with expertise in commercial operations,” Abdelgawad said. “We sought advice and guidance and that was instrumental in our growth.”
Cumming, from the Trade Commissioner Service, discussed the role of the ecosystem and highlighted the collaborative “no wrong door” approach.
"We serve as your business development partner, collaborating with a network of partners in the public, private and quasi-public sectors,” he said. “I want to emphasize programs like the Trade Accelerator Program offered by the Toronto Regional Board of Trade, which is particularly beneficial for early-stage startups. Reach out to them to kickstart your export plan.”
Check out the Communitech Outposts webpage for more information about the employer-of-record service.