Scaling beyond borders with Klaus Wehage & Aaron McDaniel

In an era where businesses are increasingly crossing borders, understanding how to successfully scale globally is essential. In this episode, Aaron McDaniel and Klaus Børme Wehage, both Founding Partners of Global Class, share their insights on global expansion, local adaptation and the importance of mindset in international growth.
Key Takeaways:
(04:22) Assumptions about what works at home may not apply internationally.
(05:11) Cultural mindset and navigating bureaucracy are crucial.
(07:00) Market opportunity doesn’t guarantee success.
(16:08) Structured localization is key to efficient market entry.
(31:13) Autonomy for local teams drives market success.
(34:57) Balance company knowledge with local insights.
(50:26) Hard-coded practices hinder global adaptability.
(56:26) Long-term goals should shape market strategies.
Resources Mentioned: 
Aaron McDaniel - https://www.linkedin.com/in/mrbiz/
Klaus Børme Wehage - https://www.linkedin.com/in/globalscalingcoach/
Global Class | LinkedIn - https://www.linkedin.com/company/globalclasscompany/
Global Class | Website - https://www.globalclass.com
BlaBlaCar Case Study - https://www.blablacar.com
“The Lean Startup” by Eric Ries - https://theleanstartup.com/
10X Innovation Lab - https://10xinnovationlab.com/

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IYou're listening to the Global Workforce podcast with me, George Britton.

Each week, we interview an industry expert to dive deeper into the world of managing aglobal workforce and discuss the big strategic challenges that you're going to encounteralong the way.

This episode is brought to you by Omnipresent, the global employment platform that allowsyou to employ anyone, anywhere without having to set up an entity.

Designed, built, and supported by global employment experts, Omnipresent takes care ofyour international employees and contractors so you don't have to worry about payroll, HR,or compliance issues, making it easier, faster, and safer to expand internationally.

My two guests today bring with them a wealth of knowledge and experience of advisingstartup entrepreneurs and business leaders, as well as consulting with multinationalcompany companies and global governments.

Klaus Wahag is a serial entrepreneur, startup advisor, speaker, and published author. Klausis known as the Silicon Valley ambassador for his work coaching executives, entrepreneurs,and government leaders scaling and developing a global mindset.

Aaron McDaniel is also a serial entrepreneur, teacher, and author. He's a sought afterspeaker on topics such as international business, innovation, and multi generationalworkforces. He's coached young professionals and corporate executives at companiessuch as Microsoft, Deloitte Consulting, and Wells Fargo, and is currently a member of thefaculty at UC Barclays Pass School of Business. Perhaps most exciting of all, they'vecoauthored a book, Global Class, how the world's fastest growing companies scaleGlobally by Focusing Locally, which is a Wall Street Journal bestseller. So today, I'mdelighted to be joined by Aaron and Clough. Welcome both to the podcast.

Thank you, Josh.

Great to have you both with us today. How, how's your day going? How's your morninggoing?

It's going well so far. Hopefully, this will go well as well in in terms of the podcast, but we'reexcited to have this conversation.

Yeah. I'm looking forward to this one. It's gonna be a lot of fun.

So before we get to bogged down not bogged down. Before we get into the nitty gritty ofeverything, I'd love to just hear from yourselves about how you met, your backgroundstory. How did you first come across each other?

Well, that's actually a little bit of an interesting story. We met, through our wives.

Aaron actually started to learn about me when he was sitting at a restaurant in SanFrancisco, with my wife, not back then, but sort of starting to be the girlfriend. And he sawa text message coming in on the phone and he asked who is Klaus, basically.

And so he got a little bit, I guess, red faced and didn't know how to respond. But, over theyears, our relationship has evolved, not just obviously working together, but also as friendsas well.

And off oftentimes, we actually say we have to stay good friends and good businesspartners because actually our wives' mothers are best friends. So we're inherently, I guess,tied together as as human beings. But, by way of background a little bit is that we havebeen working on a consulting firm called 10X Innovation Lab, which is an an an acceleratorthat we built about, oh gosh, about six years ago, I believe.

And that is morphed into a consulting firm called Global Class. That's sort of the foundationof the book, if you will, where we wrote a book on global expansion and growth throughthe experiences of 10X Innovation Lab, and also our previous experiences being in in theinternational expansion field, where we felt like there was a lack of a common languageand vocabulary around how to actually take a company international.

And that's, some of the that stuff that we hope to share today, some of the best, best inclass learnings from industry leaders and and some of the tools and strategies that wehave developed over over the years to help companies scale internationally.

That's super interesting. So you were friends first then decided to go into businesstogether. Is it that way around?

Yeah. That was pretty risky. Right?

Absolutely.

Great stuff. Well, look.

So let let's, let's dive in a little bit deeper. So, you both have worked with a lot of SiliconValley startups and multinationals. And I've heard you talk about in many cases, the biggestobstacle to to many CEOs and entrepreneurs is the mindset. Could you tell me a bit moreabout that? What do you mean by mindset being one of the biggest obstacles?

Yeah. That's absolutely important in our opinion. It sort of has to start there.

Oftentimes when we engage with leaders, they have this assumption that what worked intheir initial market, whether you're in Brazil, the US, or wherever you are, that will also workinternationally. And so we often say and educate leaders on that global mindset, but alsohave them revisit educate leaders on that global mindset, but also have them revisit theentrepreneurial mindset as well. Because inevitably, when you expand to a new countryand a new culture, there's a need for adaptation in your business model and yourapproach. Right?

And so we often start there to kind of test the leadership team to see if they're ready andable to change as human beings as you are going through that learning process. And soone of the findings that we that we also found when doing the research for Global Class,we actually interviewed around four hundred executives. We found this pattern in terms ofmindset, around culture, around the ability to navigate bureaucracy, building coalition andbuy in, and then also around the realization that you need to apply entrepreneurialprinciples. And so we built what we call, something called the intrapreneur, mindset, whichis an evolution of the entrepreneurial mindset.

And so if you imagine, for the listeners out there, if you imagine a pyramid, it in the bottom,you have the entrepreneurial mindset, peep people who are iterative, resilient, rolefocused. In the middle of the pyramid, you have what we call a company mindset, peoplewho can navigate bureaucracy building coalition and buy in, but the tip of the pyramid isthat cultural mindset, culture curiosity, cultural, you know, mindedness, and really beinginterested in learning about other cultures to understand how you need to adapt in a givenmarket, but also inside a company culture as well. Because

once you start to build a global organization, you have to interface and interact with a,obviously, a diverse work workforce and build coalition and collaboration from within. Andso we often educate leaders on this important element. And part of also when we engagewith leaders, when we do our assessment for companies, that is one of the keycomponents. And we often ask the simple question, are you willing to change as you gothrough this process?

And if they're not willing to change, we're less likely to work with them, if that makes sense.

I mean, what one one thing that was particularly powerful about a lot, of what's happenedin the the lean agile world, and and we see ourselves as sort of a next generation layer,global layer on top of it, is before some of the work of of those like Eric Ries with the leanstartup and Steve Blank and others, these things were happening sort of independently,but there wasn't this common language around it. And now there's things that people sayall the time, like product market fit, MVP, minimum viable product, pivoting. Right? Thatlanguage didn't exist for international. And so we've created that when it comes to, like, theconcept of an entrepreneur like Klaus was talking about, as well as just how to managelocalization and other structures that to take all these best practices from our research andputs it together in a cohesive system.

Yeah. Understood. So in your in your findings, are you saying that most companies will andthey'll have that foundational agile mindset? They might even have the company mindset,that middle layer, but it's the entrepreneurial mindset where they need to make the shift,and that's what they're that's what they're perhaps lacking for. That's that's what they'relacking in terms of, like, being able to then go global. Is that what you're finding, or have Imisunderstood?

Yeah. That that's certainly part of it. To give you a little, example of one of the foundersthat we often reference to in terms of someone that we're willing to make that change is isa guy called John Kim from Sendbird. He's Korean, and he knew that he wanted to build aglobal organization.

So he kinda put forcing mechanisms into, in terms of how he would operate as a leader. Sohe said, okay. I'm gonna get an English keyboard. I'm gonna consume global media.

But most importantly, when we benchmark against competition, we don't just benchmarkagainst Korean competition. We wanna benchmark against global competition. So it's reallythat willingness to to change and adapt, but having four forcing mechanisms aroundyourself that forces yourself to have this global mindset as well.

And one one important point about this too is this concept of being an entrepreneur is isnot just someone who leaves where they live and moves to another country or is just theCEO of a company. It's really a mindset that anyone can be entrepreneurial, and it'simportant that at headquarters, in local markets everywhere, people has this collectivemindset to be successful.

Yeah. Understood.

Klaus, one thing you mentioned a moment ago is that sometimes you talk to people andthey and they don't seem willing to make this this shift on on like a to to to really adapt tothe culture of other of of other markets. And I'm curious what the main reasons might befor that. Is it just like a hesitancy? Is it fear of the unknown? Or why might people not bewilling to to, like, adapt?

I think often it is a little bit that fear of the unknown, but it'll also the fear of of getting outof your comfort zone as well. So to give you another example of another Korean company,just now we're talking about Korean organizations here, we met with another organizationthat was around six hundred, six hundred people organization in Korea, and they hadalready expanded into multiple, different markets in in Southeast Asia, but they hadsignificant difficulties in actually expanding successfully. Part of the reason was that it wasprimarily a Korean organization.

So we asked them a simple question. How many languages do you speak inside thecompany? And they said maybe two, in term of their ability to speak, actually as an overalloverall organization. So they had purely hired people with a very Korean mindset, Koreantalent that weren't really diverse.

And the leader, when we engaged with him, it was clear to us that he weren't willing to kindof step out of his comfort zone. He barely wanted to speak English. He barely wanted toexpose himself to do things. And so it often comes from that individual fear from aleadership standpoint, at least from our experience.

But it's a bit of the fear of change, but also pro probably down to a lot of, like, theleadership appetite to change as well. Right? That's Yes, sir. Seconds. Super interesting.

Cool. And another topic I wanted to get your take on was I know that, you advisebusinesses who, to think about their global capabilities when they start expanding. And I'mand I wanted to get your take on what, scaling businesses often get wrong here when kindof looking inwardly and thinking, like, what capabilities do we have? What are they kind of,looking for, and what are they missing?

Usually, this is a a step that is skipped or or very quickly gone over. Companies say, okay.We were successful in our first market. So, of course, we have the right to be able to goanywhere else, and some assume it's gonna be done the exact same way we did it. Youknow, others obviously understand there's localization, but they don't do an in-depth lookat what their actual capabilities are.

You know, and and when we talk about capabilities, we're talking about people, processes,and platforms that would allow for the localization to happen in management at scale. Andso we we take companies through a process where we give them an analysis and they geta global capability score that really, paired with some other market analysis, helps themuncover, you know, what is the likelihood of success in different markets.

There's another concept that's part of this as well that we refer to as ability to win.

Klaus I I'm I'm a football fan as well, soccer fan, Klaus as well. He's a Manchester Unitedfan, so we often use the analogy Just because, let's say, your company pickup soccerteam has the opportunity to play against Manchester United does not mean you have theability to win against them. And so just because there's an opportunity out there doesn'tmean that that is you you have built what is needed. You have the entrepreneurial talent,etcetera. And so it it's really important to think about those people processes andplatforms, and and that's how we help companies actually build that structure.

And and it's not just something at a company level. You also need to look at it at a marketby market level because there's certain changes that a certain market would require toyour go to market and operational model, and you need to pair that with those each eachof those departments' ability to make those changes.

Yeah. So we so we look in inside the company, in terms of different factors, everythingfrom leadership alignment to how they do research, to how they support localization, tohow they hire and build teams. So really a lot of different factors that we sort of rank, andthen we give them a ranking from zero to a hundred. And so based on their capabilities, wethen can evaluate, which we will also talk about a little bit later, in terms of what complexitythat it can take on as an organization.

And oftentimes, when we engage with organizations and leadership, we we look at alsowhat are your priority growth levers as an overall company. And that is a big indicator of uswhether or not they will also have the capabilities to support international.

And so so we talk in in terms of new products, new segments, and new markets. And to behonest, oftentimes, new markets is the lowest of them all, which will then signal whether ornot that they're, committed and convinced to actually being successful internationally.

And so our role and sort of the scope of why we do the global capability score as anorganization is to help socialize what is global and build that clarity so then thecommitment towards international becomes higher. And then another element of of whatwe kinda look at in terms of capabilities is also, do they have formal ownership inside thecompany to support international?

And oftentimes, that is not the case. Oftentimes, it's like, I just ask this person to do a littlebit of research here, that person to explore that here, and it's sort of a little bit fragmented.Instead of actually giving someone the true ownership, it's a lead and drive international,and then build a team around that that becomes that discovery team and that enablementteam to support international.

Yeah. That makes total sense. I've definitely seen, like, in my experience, areas wherecompanies have stepped up on some of those some of those, some of those points there. Ireally like that point about new products, new segments, new markets.

I think in my experience, the fewer of those you can change at once, like, the more thebetter your chances of of getting in. Right? Like, if you're in a an existing market, existingsegment but a new product, like, you've got a in my experience, you've got a fair, a higherchance of winning. If you're trying to go into a launch a new product in a new segment, in anew market, there's, like, so many unknowns there that you don't even know you don'teven know what you don't know.

Right? Yeah. And I and the other point I think you touched on is the formal ownership,piece. I think that's really that's really important because I think, again, in my experience,you have, you might start to analyze certain markets, and then you start to see anopportunity.

You don't know how big that opportunity is yet, and you don't know all the competitions or,and all the partners you might have, and you haven't fully scaled out. But all of a sudden,that person has now inherited a new job. Because they've done a bit of research, and thenpeople start to see them as the owner. But, actually, they've got a day job as well, andthey're doing something else.

But it's that I think that, you know, the the decision point about when you're gonna commitand how much resource you're gonna place on some of these things needs to be reallystructured. Right? Do you do you ever see companies kind of, like, skipping over some ofthis this structure here?

One thousand percent. I'll let Aaron answer this one. I know I know what he's gonna wherehe's gonna go right now.

I I think so it's a couple things. One, yes. That person gets in the role, but they are notgiven the structure to know what to do. They're just like, okay, we gotta go to this market.

And then they just make it up as they go along. And in that process, that sort of windowwith things, this is where a lot of time and money gets wasted, and things are morereactive instead of proactive. Like like, usually, what what happens is companies go,alright. Well, there's the market opportunity, and they'd and let's just go there instead ofactually going through a deeper process that we refer to as localization discovery, whereyou go into the market and truly understand how that market works and how you wouldneed to change your business in order to be successful there.

Most companies don't do that. They kinda go, alright. We selected this market. We're goingthere.

Let's let's, you know, let's do some initial research. Alright. We might need to change this.And then they just reactively are like, alright.

Well, that doesn't work. We gotta change. And that doesn't work that we gotta change.And all of a sudden, two or three years pass, and they're not getting product market fit likethey could if they took a more structured approach from the beginning.

And also to be honest, the risk there, if you lead with that type of process when youexpand, you'll end up actually losing trust with that local team as well in betweenheadquarter and that class start to happen if you're not better prepared. Because then allof a sudden, you have to just change ad hoc and react reactively.

And that is not the right way of expanding internationally because ultimately, to besuccessful, you need to have that trust between the headquarter and the local team andbe aligned around that strategy. And that's why we walk them through the process oflocalization discovery, making sure you do that due diligence upfront so you better align interms of what to do as you expand into new markets.

Mhmm. Yeah. Yeah. The the most common example I've seen of this is, customer led. Soyou have a big customer who says, can you do the same thing in this one market for me?

And you go, yeah. I mean, it's my biggest customer. Of course, I can do that. Then yourealize when you're halfway through implementation, actually, you know, the country nextdoor had ten times the market, like, a fraction of the competition, and it would have beenmuch easier to deliver.

And you just made this one decision to try and keep this one person happy. So I thinkyou're absolutely right. Like, you wanna see the whole you wanna see the whole jigsaw asmore much as much of the jigsaw as you can as opposed to just looking at one piece andand making us that decision. Right?

And and, actually, to your point, we we talked about the perils of organic growth, especiallyon the enterprise side, where someone will have that exact situation you talked about. Andthen not just there might be opportunities other places, but they might be buildingsomething that is what that one customer needs in the market and not truly what thewhole market need. So then all of a sudden you spend all this resource to build somethingbecause you didn't really understand. You were just building for that customer use case.And, you know, now that work can't be scaled in that market or other places. And soorganic growth is not always the right, right way.

So, what do you think are the most critical factors for entrepreneurs and startup foundersto consider when they're trying to decide which market's twenty first? How do you take thelong view here?

So I think I think this is important to tie a number of these things we're talking abouttogether in a cohesive way. I I mean, one, the the in terms of picking different markets, youdon't wanna just pick one that the CEO studied abroad at or something. We've heard allsorts of crazy reasons why people choose markets. But what you wanna do, again, takingsome of these pieces together, there's market opportunity, which we talked about, mark ormarket attractiveness.

Then there's this notion of organizational capability and and the ability to win in thatmarket. And then the third part that we've danced around a little bit, but to talk a little moreabout is this notion of market accessibility.

How much do you need to change your go to market or, or operational models to fit in thatmarket? You can't look at just one and not the other. You really need to look at all three ofthese together.

And, and so we we have a a plat a framework that we call the global growth opportunitymatrix that visualizes multiple market and looks at not just the market opportunity, and ithas, like, a size of different circle, different bubble, but on a graph shows what is yourorganizational capability to outline, okay, here's the market opportunity, but do you havethe capability to win in that market? And that's often based on how much you need tochange your business to fit in that market. And so, you know, those those together all kindof make this this comprehensive way of looking at markets the right way to choose theright market.

The other thing that's really big for us, and, George, you were alluding to this a little bitmore, is it's not what is the right market to go to. It's what's the right sequence of marketsto go to. You are not just building and and this is a mistake we see a lot of companiesmake. We're gonna go to this country and business accepts.

Now we're gonna go here and now we're gonna go here. And now you have five or tendifferent business model. You can't create global scale and manage that effectively. And sowhen you think about a sequence of market and go through this process that we taketokens through, then you're able to identify linkages, scalable localization, a conceptparallelization that we'll talk a lot about is just this notion of how can you make this onechange and have it work in four or five market, create momentum around your skin.

Yeah. Maybe just to add to that point, the latter point that Aaron, shared and introduced isparallelization, and that is one thing that we're very big on. And so that's why we helpcompanies look at market opportunities more broadly in terms of multiple markets insteadof looking myopically on one market as an opportunity to expand into.

Because as a technology company, you should get to a point where you can parallelizeyour expansion efforts, being able to launch in multiple markets and being able to supportlocalization in multiple markets. And so on the one side, we help them with the planningpiece. Okay. Let's look at what opportunities out there based on your criterias and basedon on what we call your expansion philosophy.

And then afterwards. And then let let then let's look at how how can we build that engineof growth. How can we build a new markets team that has the right tools, the rightprocesses, and then the right enablement overall to then support local teams as you scaleinto new countries. And so that is the one big piece that often resonates with a lot of theCEOs and leaders that we engage with.

They want to be able to do that because, ultimately, they wanna obviously grow theirvaluation. They wanna grow revenue and all that stuff internationally. Right? So that is whatwe oftentimes focus on and and double click on when we help companies.

And you you know, another another thing to the point of what Klaus is talking about whenwhen you're using these processes, when you're using these platforms, it's not just thingthat you custom create, but it's leveraging partners. So not having to reinvent the wheelevery time you go into a country. Great example of that is omnipresent, right? And, insteadof going and doing this one by one in every market yourself that you can partner with acompany like omnipresent and be able to have that expertise globally and be able to take,you know, kind of say this one aspect of the business, we know we have the right model toscale in different places.

And that's what also creates a lot of this, momentum growth.

Yeah. That that makes total sense. And I and I really appreciate the plug on that one. WhatI really liked you what you just said there was, the sequencing.

Because I think I I always think about it as every time you enter a new market or launch anew product, in each of those instances, you find a few different things. Right? You couldpotentially find new partners and new ways of going to market with with new friends. Youcan also find a bunch of new competitors.

And if you start if you get that sequence wrong, you might find that actually you you unlocka partner way further along the line than you could have done. You could have brought thatforward, which could have accelerated a bunch of other markets. You also could invite abunch of new competitors earlier on than you really wanted to. And do you worry youwanna poke the bear?

Would you wanna leave the bear until until the end and and kind of have a big fight at theend of the the end of the game?

Exactly. And we can't say the exact use case here because we're under NDA, but let's justsay we're working with a pretty significant financial services company. And we werelooking at eight different markets as an opportunity or opportunities in terms of plural.

And out of those eight markets, there was three markets that actually could be unlockedby acquiring a specific organization.

Right? So because you're looking at multiple markets, it also gives you the opportunity tolook at opportunities that can unlock multiple and not just one single lock a singularmarket. Also, you can then look at, from a product perspective, if, can you launch thisspecific solution in multiple markets? Does that resonate or no?

Or is there a a different element that you don't have within your product portfolio? Let'sjust say for, let's say, your your bank and you do lending, say buy now, pay later, there isthat, in two markets that's in an important element of expanding into, oh, we don't havethat capability. What do we then do? Do we then build it ourselves, build that internal,capability, or do we then acquire a business that gives you that capability to then scale intothose those countries?

Right? So you can be much more planful in the way you actually go to market as anorganization overall.

And here's the interesting power behind what SaaS was talking about as well, is in each ofthose two situations he talked about, those countries were in different continents.

And guaranteed that the company would not have thought about it if they looked at thingslike most company do market by market. But in mapping that out in this way, you all of asudden can identify different continents and totally un unconnected things where thereactually are connections that exist.

Yeah. That's super interesting. Maybe let's let's dwell on a bit more detail. So you'vespoken about how different employment markets have different approaches.

Could you talk a little bit more about that? So how you might you know, how businessscaling into, say, Europe might take a different approach to, say, scaling into the MiddleEast, for example.

Yeah. Sure. Let me let me just start by broadly saying that, you know, localization again inour book is, one of the core elements that we talk about. Right? It's really, really importantto adapt. And I'll just I I actually watched the the Arnold Schwarzenegger documentaryyesterday, and it was kinda interesting, actually.

He obviously Pumping iron.

What is it? Is this the old one, like, pumping iron from the seventies?

It's no. It's the new one on Netflix. It's actually pretty cool. So so kind of the the thelearning from that was even how he needed to adapt as a human being and also in termsof bodybuilding.

Right? In Europe, he started to do a lot of bodybuilding competition all over Europe and hewas bulking up being very, very strong and very, very buff. Right. But then, and he won alot of competitions, but then he actually came to the US and he lost initially becausebodybuilding was different.

You had to be leaner and not as like bulky if you will. And so he was often called a balloonbelly when he, when he went to competitions in the US. And so he had to adapt hisbodybuilding practices.

And what did he do? He took the guy that won, that won over him in one of thecompetitions, and he wanted to train with that guy to learn about his methods so he couldlean himself down so he didn't have that balloon belly so he can compete much better andthen win. Having said that, obviously you have to take a lot of different approaches interms of employment when you go into new countries. And one story that we often shareis, Talabat, which is a last mile delivery platform in the Middle East. And one of the thingsthat they actually came, came against when they expanded into Oman was that they hadspecific, regulation and requirements of hiring Omani people in the country.

And it was really, really hard for them to do that because the talent there was not as goodas the talent that they had available in Dubai and etcetera. So that, created a lot of tax onthe organization in terms of training and development and getting them the skills that theyneeded to work inside a fast growing technology company.

Another element, for example, is, hiring and firing and all that stuff, you also need to bevery conscious of. And for example, in Korea, it's really, really hard to fire in Korea. In fact,you have to actually go talk to employees and almost agree to fire that that person. And soyou have to be very careful and conscious around how you manage regulation in thosedifferent countries. Another simple example I just share with you is in the Philippines,there's a there's a thirteenth salary.

Right? So, at the end of the year, you give that additional salary as a thirteen month salary,because that's just a part of the culture and and how you actually sort of give thatrecognition to an employee at at the end of the year.

Yeah. No. We've we come across a lot of these situations ourselves as I'm sure you canimagine. I think in your experience, how how much of a factor does employment regulation,like, how big a, part of the decision is that in, you know, for you and your clients whenyou're thinking about these things?

The it's huge.

So much so that and and not just for hiring on the people side, really, for everything. So wewe take company through a process we call the business model localization canvas, wherethey take their validated model. And in order to get to what your hypotheses are for newmarket, you have to go through a process where you answer certain key questions, talk tostakeholders.

But in getting those insights, you run everything through two key filters, governmentregulation and culture that affect all aspects of the business. And so, you know, what whatKlaus just uses those examples, one was a great government regulation example, and onewas a great culture example. And how, you know, in hiring, but it also worked with product.It also worked with, you know, channel. It it it works with with every aspect of the list. But,so to answer your question, it is core. Government regulation and culture are both the twopillars that you have to think about in the process.

I would I would say, however, oftentimes, companies are almost solely focused on go tomarket, which in our language is marketing, sales, and product.

But that operational side of things, they often forget, and that is the administrativeadministrative side of things in terms of compliance and employment law and everything,as well as also infrastructure, supply chain for for physical product and and then, then techstack for digital products. But then also the organizational side in terms of how do youmanage local teams, how do you allocate the right resources in terms of do you allocateregional resources to support that that expansion, or do you build an entire team or tosupport that expansion, a local team? But that administrative side of actually launching andscaling is oftentimes a little bit forgotten and is not on the forefront when they actually dodiscovery in in new markets. So that's why we built a very specific framework that kindaforces them in to think about the entire business model when they go do discovery andbook before they actually select new markets.

Yeah. Yeah. I mean, I think the obvious answer to that is that it's just not the exciting sideof things. Right? Especially for US US company going, hey. I wanna I wanna get into theEuropean market. You know, it's a single currency.

Like, you know, I could I could set up an office in France as there's a great talent there. Icould start, you know, I could start trading very quickly. That's the that's the prize, but thenthey often overlook. Well, the fact the fact of the matter is France has the second highestemployer cost in the world.

They also, you know, they have a much, much more, employee friendly, set of regulationsin, in France compared to the states. You can't just fire somebody at will as you can in thestates. And the other thing that often catches them off guard in my experiences are whichwhich mean they don't need benefits? All the benefits are provided by the state or, like,within a in a completely different or in a very, very different way to to the states.

Those are those are some of the things that often get, you know, that's not quite asexciting as, like, yeah. Yeah. We're gonna attack Europe and look at the size of the market.Right?

That's right. And and it's not just even on the higher end side. It's even just on a regularbasis. We we had a great case study we included in our book about Apple and how theywould do employee surveys in China.

And everyone was like, yes. We love working here. It's great. But the, the attrition was wasterrible.

You know? Like, everyone just kept leaving. They had to turn over employee afteremployee, and they would have these anonymous, these anonymous surveys. And eventhough everything's themed anonymous, people would not answer because of thebusiness culture.

They wouldn't answer honestly. And so it was very hard for them. They'd use differentmethod to even communicate with their employee.

Yeah. Totally. Awesome.

By the way, I have a disclaimer. I have nothing against France. It's a great market. Greatpeople. Okay. Huge opportunities for any US companies explaining to France.

Yes. Perfect. I wanna come back to something you mentioned earlier. So we talked a littlebit about, autonomy and trust and commitment to, to market. So, Klaus, you've writtenabout the importance of autonomy when entering new local markets. In your mind, why isthis so important, and how can you go about building this as a as an expanding company?

That was one of the big pieces that Aaron and myself, we focused on. It's a core elementto do it successfully. That's just the reality. Because without trust, without the autonomy,you're likely not gonna be successful.

So on the autonomy side, you need to be able to grant that autonomy to local teams tothen identify and understand how can you successfully operate in that market. What is thatright go to market? And being having that trust between the local team and headquarter,they will then grant that trust for them to actually implement what is that right strategy. Soit's really important that this is actually nurtured inside the organization.

And if it's not, it often kinda creates this us versus them mentality that oftentimes is thereason for why things fail. I I often compare it a little bit to when you start an early stagestartup. One of the big reasons for why things fail is because of people and misalignmentamongst the founding team. And the same applies a little bit here in terms of with the localteam and then the headquarter.

They're together. They should be collaborating together to make that successful. Right?And so you absolutely wanna avoid that.

Now in some cases, trust is already there. Right? You send someone over. You understandthat person is a great leader and can actually help you drive that business locally.

In other times, for example, with Flexport, they actually hired someone called Jan vanKasteren in Netherlands. And I believe, the COO and Jan, they were basically former,colleagues at Bain. Right? Is that correct there?

BCG. BCG. Whatever. They're the same anyways. Right? So, but they were formercolleagues, so they knew each other very well.

So they had that established trust. And so Jan became that that, that, GM in Europe tohelp drive the business, for Flexport. And so that's good. If you don't have that trustinitially, you gotta make sure you actually work towards building that trust.

And in our opinion, it's not just bringing that person over for a week or two and just say hiand and goodbye again and good luck and and expand. You gotta make sure you actuallyset up these formal structures to enable that communication happening between bothparties. And one is obviously spending time together physically where you can kinda seehow each other interacts. But another part is, like, you're setting up proper cadences whenyou interact and interface with each other to build that common understanding and andstrategy for that market.

And then making sure you continue to commit to that. Because oftentimes what happens alittle bit, from our experience is that that local team and then, that local lead is sort of alittle bit of an island and working a little bit more siloed and then has to navigate theheadquarter by themselves.

Whereas in our opinion, people at the headquarter side, they need to help removeobstacles and support that team. And so you gotta make sure you access set of formalstructures to then enable, the expansion to add.

A couple a couple other points.

One is that this autonomy and trust is not a static thing. So we we have this concept wecall the autonomy curve or the, autonomy curve Where early on when you're launching, youneed to give more autonomy, like Klaus said, to find that product market fit, to understandhow it needs change. But if you just leave every local market with high autonomy, thatcreates that problem where every country is different. And so over time, as you enter moremarket, you need to lower that that, autonomy a bit to create that system and growthengine.

But not to the same level, but as you move to more mature in a market, you actually needto give a little more autonomy to get more than just that surface level of of customer baseto actually get deeper market penetration, become a market leader. So it's almost like youstart high, you go lower, and you increase a little bit more. The the other thing that thatkinda ties some of this together, what Klaus was talking about is, and we find a lot ofcompanies get this wrong, it is finding the right balance between company knowledge andlocal knowledge. And so often companies over index on one versus the other.

They go, we're gonna send someone from headquarters, and we're gonna do things thecompany way, but they miss out because they don't have native local understanding. Andthen like Klaus said, on the other end, if you just hire someone local market, but don't helpthem build that trust and ability to get things done and cultural alignment at headquarters,you're not gonna be successful. And so there's not a magic formula of, oh, hire this personhere and this. But the idea is to be purposeful about creating a system that allows for bothto exist to be successful.

Yeah. I think these are really, really interesting points.

Like, I've certainly experienced some of these, growing pains myself in my career. Like, oneof the things that I've so I've spent a lot more a lot of my career building sales teams. Andone of the things I really pride myself on is building really consultative sales teams. Right?

So, like, really listening to the customer, really understanding their problems, and thenguiding them through with education and knowledge. Now that works really well in certainmarkets, but other markets, there might be a different approach. And you've got to try andfind like, the that might actually be really, really effective and really impactful, but it'sfinding that balance between, like, the like, you say, like, the company culture, the localculture, and finding something that works works both ways that that keeps a degree ofconsistency, but also doesn't, like, turn all of your customers off in a certain in a certainspace.

Right?

So Yeah.

Cool. Let me jump into a different topic now. So, one of the things I wanted to get your takeon is, the best operating model to set up, in different, in different countries when you'reexpanding overseas.

Companies are typically thinking about, setting up a foreign entity or maybe hiring somefreelancers or finding some kind of option in the middle.

What's your take on, like, the best way to make a decision about that? What kind of factorsshould should be going to people's decisions when they're when they're making, calls likethis?

Yeah. So one, you need to think about the requirements of the local market like regulation.Klaus Kate is a great example of Taliban and and Oman.

So you need to understand that local context and and make the right decision based onthat. But it's not a decision that's made in a vacuum. So companies that work with us, theway we guide them, it it two key elements to help make that decision. One is around whatwe call our expansion philosophy.

Sort of that North Star when you're going to expand. And and what that is is it's sort of likea guiding light that says, okay. Everything from a growth model to how you plan to operatein that market. Some companies say we wanna go into one region and blanket that wholeregion.

Others say we only wanna go to large markets and be the number one or number twoplayer in those markets. There's different plating. But then there's also a level oflocalization versus control and how much you wanna adapt for that market. And so a greatexample would be Apple.

Apple very much was like, we need to own a hundred percent of any entity that we have ina country. And there are a number of countries that said, no. You have to have a localpartnership. So in in the Middle East, East, they they, you know, came to that cross thatchallenge.

They wanted to enter the market, but there was a requirement they had to have a localpartner. So they decided, until Apple was a unique case, they got an exemption for this.

If they weren't able to overcome that obstacle, they wouldn't enter a market. So there'sthat, that expansion philosophy in Norstuck.

The second part of it has to do more with, with timeline and implementing your, in yourplaybook. And so we work with companies to say it's not just, okay, we're gonna do thisone model. And and, you know, playbook is not just a checklist of item to go to. It's actuallya system from prelaunch to product market fit.

And there's different milestones that happen at different points. And the way we work withcompanies, when you hit a milestone, certain resources are unlocked, people are unlocked,you know, different levels of localization become unlocked, and different models becomeunlocked. And so there might be certain milestones that you set up that might triggergoing from contractor to a foreign subsidiary to, you know, any kind of local presence orotherwise. So the importance is aligning all of those regulation expansion philosophy andthe milestone and stage that you're at.

Yeah. I really like that concept of milestones. I've certainly seen a lot of our clients doingthings like that. Like, even starting starting, like, with a very early discovery then to, like,initial traction, building some kind of momentum with go to market before you then stopputting boots on the ground and then then it's going from there. So I think that makes thatmakes total sense. Yeah.

I mean, there there was there was another client we worked with, and they had alreadyentered a couple market.

And they were looking at their next market. And we said, well, when are you gonna enteryour next market? And they're like, oh, yeah. When we get more growth in our existingmarket.

And we're like, okay. Well, you know, where where is your whole structure of milestonesthat can tell you when to unlock that? And they didn't have it. And basically, they had beenkind of going around in circles, analysis paralysis before we came involved to help givethem that structure.

Yeah. No. Yeah. So I think it's really common. It's a really common thing is just to overoverlook some of these points, but I think they can be really, really important.

Let me take your take on workforce expansion. So for example, how can a US companyscaling into other countries start to think about preparing their workforce for globalexpansion? What should they, what should they be thinking about if they initially operate inone country and then they're starting to build a cohesive company culture across borders?

Well, I I think I'll I'll start a little bit from a higher level, if that's okay. One of the importantthings that we often talk about and, and try to help organizations to think about is actuallystarting to communicate themselves as a global organization.

Because once that, communication start to happen from a leadership perspective, that willpermeate down into the organization.

I know this is a little bit extreme, but we often work with companies also from Japan, fromKorea, etcetera, where they have a much more centralized approach in terms of operatinga business and also much more and very specific culture, you know, around that market ifyou if you will. And and so you need to be, communicative once you want to almost drivethat change inside those type of organizations. And we often see the example of Rakutenwhen they were scaling as a business. Migitani san, who is the who is the founder ofRakuten, he recognized that, okay. Great. We have built some initial success in Japan, butmy inspiration is to build a global company. So he was very proactive in communicatingthat.

Also, there's a little bit more of an extreme example. He said, okay, great. We're in Japan,but we're gonna start to speak English. We're gonna make sure we adapt our culture andwe get out of out of our comfort zone and make sure that this is a global businessenvironment inside the company.

And that then led to them also defining a a talent strategy around let's let's not just hireJapanese people inside into the organization, but let's actually go and find internationaltalent to bring inside the company. And so by communication and by a planful talentattraction, and development, you can then start to actually prepare the organization forinternational growth. And part of what we often work with organizations on, as well is tohelp think about how can you build that pipeline of entrepreneurs inside the company.Right?

We believe that's important because as you build a global organization, you need to havepeople a little bit more agile and willing to change. And also you need to have people whoare a little bit more willing and able to actually build coalition buying, not just inside theframing of a headquarter, but internationally. And then they need to have that culturemindset as well to kinda inter interact with other cultures also.

And part of the process before actually, when go actually through the the process ofbuilding that GIGO matrix or the global growth opportunity matrix that Aaron alluded to alittle bit earlier, we also have them go through what we call local knowledge mapping insidethe company. Great. Let's look at your diversity overall, but let's also look at what type oftalent, international talent that also have experience in other markets do you have insideyour organization.

And are some of that talent, relevant to some of the markets you're exploring, and can youutilize that talent or local knowledge in those markets? Right? So in our opinion, you haveto be very intentional around your talent development, your talent mapping, and talentattraction, and then obviously be communicative as a leader to say, we're building a globalcompany, not just a Japanese company or a US company. Because then you also avoid alittle bit that us versus them mentality, but it's actually talent that wants to build a globalorganization as a process.

It's also a lot of little thing, and to the point of us versus them mentality. At the simplestlevel, and a lot of executives at headquarters don't think about this, is when do youschedule median? Do you schedule medians at times that are convenient for you? Or doyou, you know, do you do it in a in a more egalitarian way where you schedule times thatare good for those teams as well.

Like, you know, and this goes back a long time. Like, we we talked to a number ofcompanies where, they would have a dev team across the world, and they would keepscheduling meetings that times that were good for them that was in the middle of the nightfor that dev team. And and what does that communicate to Klaus' point around us versusthem? And and what is and and what is that mentality at headquarters that it's like, yeah.

Yeah. Yeah. They're gonna adapt for us because we're sort of the center of the universehere. So even little things like scheduling meetings in a more roundabout fashion to make itconvenient and inconvenient for everybody, given that time zone reality is is a good thingto do.

Maybe just throw in just another comment here, and I'll use the Rakuten example as well.When it comes to meetings, one of the things that they're actually very intentional aroundis facilitating communication and feedback loops between the different markets thatthey're in and the different regions. And so at Rakuten, they they hold something called anasakai, which is in in classical terms or at least American, probably also in in in Britishterms, if you will, like town halls. Right?

And so, every, like, week, they have, like, a town hall where sits down and talk about, like,what is the strategy, what is the culture, and how do you how do these things tie together.Right? So they have this town hall, and then three lay three hours later, they send it out toEurope, they send it out to the US, etcetera, based on the time zone that they're in. At thesame time also, these regions also encouraged to have town halls themselves at theseasakais.

But they also do it, and they also record it and send that back to the other regions.

What then happens is that there is this constant communication and flow happeningbetween the different markets of region that gives insight into what is that what is actuallyhappening and sort of continues to kind of nurture that global mindset inside theorganization. Now it's a little extreme to do it every week, but, the intentionality aroundcommunication is certainly something that we encourage, for the companies that we workwith.

I think that's such a I think that's such a good point. It's the intention behind the the action.Right? I remember a few years ago, I got picked up on this.

So I wanted to do a, I wanted to to create a, career growth framework for the team. And soI needed I need to do a workshop, but I've got people in all sorts of different countries andin different time zones and everything else like that. So I was like, right. Geraldine, I'll get asmany people as I can into our office in London, and then I'll get a few other people to dialin, and I'll get on a laptop, a couple of laptops, and then they'll be able to see the thing andparticipate.

And my colleague was like, hey. You can't you can't do that. We're a remote first company.You need to give everyone the same opportunity.

Like, what if they can't participate? What if they can't see the board? Like, they're notgonna see the board when you're doing your squiggly writing, and they're gonna wannahear everything that's being said in the room. So, of course, we shifted to a, like, you know,a Miro board and a Zoom room, and there was a much more it was it was way easier to geteveryone.

It's like a level playing field. Right? And the intention yeah. Maybe we could have gotslightly more out of the team that were in person and, know, if we did the other wayaround.

But I think it's the intent behind it of giving everyone, make everyone feel like they are like,they have an equal seat at the table. Right? Right. Yep.

Cool.

Another thing I wanted to get your take on, and this might have happened, I guess, in a fewcases in the last few years, but companies that that have scaled too quickly.

Are you finding there might be pitfalls for companies that try and do too much too soon?And especially, we've certainly seen in, like, the tech sector in the last couple of years of,like, hypergrowth and then, you know, flattening out. What's your, maybe you see anexample of this?

Absolutely. I I think what what I'm reminded of is that that fairy tale of the tortoise and thehare.

You know, the it's not about just getting out the gate fast. I I think another analogy I'veused before is this notion of, like, if anyone's ever done a group scavenger hunt, the teamsthat win aren't the ones that say, like, let's just scatter off in every direction and go do this.The teams that win say, let's take two or three minutes and figure out our list of things wegotta get and what different people can do and create a little system. Right?

Takes a little time, but ultimately that's what equals success. And something I I think I wastalking about earlier was just this notion of, you know, if if you don't do that, feed anditeration is the focus. Let's go be successful here, then here, then here. And thencompanies hit that wall when they get into five or ten markets because they didn't create acohesive system and a foundation for growth.

And so you you have to set up those structures. You have to get that alignment around,like, the importance of of global. You have to build the right teams. We talked a lot a bitabout that.

So, there are a lot of problems with doing that. Now the the other side of it too, and and Ithink we're starting to see this more, is companies, especially that were born during COVID.

They're virtual first. Right?

And then they attempt to be born global. Like, they say, oh, yeah. We're gonna beanywhere and everywhere. And, like, to be clear, just because you're in an app store in ahundred and twenty countries does not mean that you're actually, like, in a hundred andtwenty countries.

Right? There's a big difference as, you know, chores between having employees physicallylocated in a place and operate in that market versus just going up on an app store. And so,being born global is not the solution either. You need to find product market fit in anestablished market first, and then do these things we've been talking about throughout tocreate that foundation to enable that scale later.

Maybe just add a a a quick point here to the point of speed and iteration.

Sometimes and often we've seen companies being very focused on just moving to marketvery, very quickly. And from a a tech stack standpoint and technology, we see oftentimescompanies forking the code for new markets. Right? They say, we're just gonna build forthis market and just focus on that, and then for this market and focus on that, and thenhere and here and here. And what then, that prohibits is your ability to also parallelize yourlocalization, saying you make an ad adaptation for the product in, let's say, Lithuania.

Can you also use that in Germany or whatever? But because they forked the code somuch, they can't really do that. Right? And so that then, you know, prohibits your yourability to quickly scale the business across a multi geographic footprint. And so oftentimes,we then come in, and obviously see that inside the company, and we say, you need to pullback a little bit more and think about how to platformatize your technology so you can thenenable that growth future. And so it's really, really important to kinda think aboutcomplexity along the way as you wanna scale and expand to new markets.

That's super interesting. Sorry. Go on, Aaron.

I was I was gonna say to to to the point of what Klaus was talking about, it jogged, anotherstory in my mind. And you were talking about common mistakes.

This process doesn't just start once you start expanding the other market. It actually canstart before that. The mistake that a lot of the companies make, especially companies thatcome from big market, is they hard code their business for that market. And then itbecomes very hard to make adaptations from that because that flexibility was not built in.

We were kind of poking fun at France before, but a good case study that that we share inour book is around BlaBlaCar, the world's largest carpooling platform. And, Frederick, theirCEO, helped implement a concept at the company early on that they called building for twomarkets. So even before they launched in their native France, they thought about theSpanish market as well. And and they thought about Spanish regulation in terms oftransportation.

They thought about their act and differences in language. And so it became very easy forthem to add country three, four, ten, twenty because everything wasn't hard coded forFrance. That flexibility was built in.

Yeah. That's super interesting. It's I I think it's such a common mistake, isn't it? And you findso many startups that will start a business, have have a, you know, degree of hard codingin their platform.

And then after two, three years, all of a sudden, they're gonna launch the whole newversion, and they need to completely, you know, push the old version out there. Thosethings are painful. It take a long time, a huge amount of resource. And you've gotta figureout the migrations.

That's a painful, painful thing to go through. Right?

It's not something you wanna go through.

I think the other thing I was thinking what you I was gonna say a minute ago, class. You youyou got me thinking. How did how did companies get to that situation? Because I think itmy feeling is it's probably a couple of things.

It's probably people operating in silos and going, hey. Like you say, I'm in Lithuania. I needthis thing. Let's build that.

Let's get that out the door. But not really thinking about the other so it's a bit of solidworking. There's also probably a bit of over indexing on the autonomy, scale that youmentioned earlier on. Right?

Yeah. Hundred percent. It it is that over indexing, on autonomy, and, obviously, you wannabe careful of that. So part of what Aaron talked a little bit earlier about was that autonomycurve. And so part of, when the autonomy is high is when you actually do a lot of thediscovery efforts and mapping out what needs to be done, etcetera. But then you have tomake sure you align with your overall organization in terms of what needs to be done orwhat can you do, and how do we then manage that complexity. And that's why theeconomy then, lowers.

And so, to our point a little bit earlier, don't make don't don't don't go into, a situation whereyou just allocate a bunch of engineers to that market, and they just go and build for thatmarket. Right? You gotta think about that, possibility of a parallelization of your business inthe future.

So the next thing I wanted to get your perspective on was, local employment laws andbenefit.

This is something we kind of mentioned a little bit, earlier on. But, in your mind, how dostartup founders and scaling companies navigate different employment laws andregulations when they start their expansion? So something else I wanted to get your takeon was navigating employment laws and benefits. How do startup founders and scalingcompanies tend to think about navigating different employment laws and benefits as theyembark on their journeys?

So, I mean, I I think the well, there's there's what mistakes are currently made and whatcompanies should be doing. And and what they should be doing is understandingeverything first. Understanding regulation, understanding culture ahead of time, makingthat part of the process. Right? And and this is where some of the concepts we talkedabout before come together. One is this notion of localization discovery and understandingit proactively instead of reactively.

Secondly, is not looking at things one market at a time, but looking at things collectively.Because it might be that there's similarities in different markets that make it easier. Youknow, you went back to the conversation around whether you should have contractorsversus a foreign subsidiary, etcetera.

Understanding a sequence of markets helps you make those decisions. And then, like wetalked about before, you're not in this alone.

Bring in strategic partners and experts like omnipresent who understand all of thesedifferent markets from an employment perspective, who can help you map out the rightway to enter the market and the right sequence of markets to go into to help you makethose decisions proactively instead of react.

And then that that's actually what we do when we walk through companies that process ofdiscovering new markets. We often bring in partners, you know, omnipresent and the like tohelp them give those answers so we mitigate against that risk before they decide toexpand to new markets.

Another just quick, quick comment here is that, in the Bay Area, for example, we see a lotof Japanese companies expanding to Silicon Valley, and they always complain aboutattrition rates and not being able to retain the talent and and everything.

And the simple reason for why is that the benefits are not, you know, comparable, andeven the salaries are not comparable. And they're not even willing to change because theyhave to adhere to to the overall company policies about we can't adjust these things. Andso it's a very, like, rigid headquarters, sort of focus around. We cannot change some ofthese things for for new markets. And so as you can imagine, they're not able to competefor talent and, hence, won't be successful in that market either. And so we rarely see aJapanese company being successful in Silicon Valley, even just from a talent attraction andretention standpoint.

It's also a cultural thing. Right, Klaus? Like like Yeah. Exactly. Hopefully, people stay atcompanies longer in Japan. In in, Silicon Valley, they stay less, and companies from otherplaces don't take the time to understand that and don't set the right expectation and theright plan.

That's super interesting because it because there's definitely, like, the employment law andthe benefits side of things, but there's the cultural aspects as well about longevity. Right?Like, it's it's actually an interesting really interesting point. Like, how many people in SiliconValley will actually be working for, like, foreign foreign con foreign companies when there'ssuch a dense amount of capital in that in that area? Like, it seems it seems like a, it wouldbe quite a rare thing. Right?

Exactly. Yep. Yeah.

Okay. Cool. I've got a couple more things I wanna I wanna touch on. I know I'm taking up alot of your time.

I wanted to get your perspective on, like, the short term versus the long term view. Like, Iguess in a lot of these decisions and all these dichotomy businesses are thinking, okay. I'veevaluated a number of different markets. I can see that US is huge, but it's gonna be a biginvestment.

It's gonna need, like, a degree like, a huge product lift. But I can also see some markets onmy doorstep, which could be lower hanging fruit, quick wins. How do you talk to yourclients about, like, taking a long term view with some of their international expansionstrategies?

Well, we we we talk about initially, their overall goals.

What is their philosophy as an organization? So one of our client wanted to ten x their userbase. I'm not gonna say the specific numbers because maybe they can search online, andit's through a significant number that they wanted to reach. And so to reach that goal, youalso have to take a long term approach in terms of evaluating new markets. And so that'swhy the global growth opportunity matrix asset tool to do that resonate a lot with thatorganization.

And so it starts with the overall goals because when you set those overall goals andaspirations, it kinda is a forcing mechanism to think that way, if that answers your questiona little bit. And so we then try to kinda help them navigate in building based on that fieldphilosophy and based on those goals, what are the right criterias to think about as youwanna grow and scale? And so I think Aaron mentioned this a little bit earlier, but with thatclient, their stated goal was very, very high, but their actions were very short term orient.

Meaning, they were looking at markets that were closer in proximity, but also only twentyand forty million population.

And so if you compare it to the ten x goal, which again is very, very high, if you're talkingabout a big number, their actions didn't match the philosophy and overall goals. And sowhat we wanna do as part of the process when we engage with leaders, say, okay. Let'smatch those things. Either you give a little in terms of your philosophy and overall goals asan organization to match your current actions, or you change your current actions to matchthe overall goals. And so it's really, the stuff that we spend a lot of time on in building thatalignment around growth levers, but certainly also around what is the overall philosophythat then can drive the actions for the business.

Yeah. It makes total sense. Cool. Okay. Last last big question for you for the day then. So,we've had a number of different guests on the podcast talking about, the resurgence ofcross border m and a's and and actually, inorganic growth being a really key part ofinternational strategy.

I'm curious to get your take on this. So how many of the founders that you work with areconsidering this as part of their, future, and what would you have what advice would youhave for any scaling company that's considering this as as part of their arsenal?

Yeah. I I think it's, one, don't think about it in a vacuum.

Two is also to realize that, and I don't have the exact numbers, but I know there's lots ofevidence out there that most acquisitions fail.

They do not work. And so the output of that global growth opportunity matrix exercise in asequence of markets, the next step we take companies through is actually what we call theentry mode, the market market entry mode modality matrix. Right? So we actually takethem and say, what is the right build by partner localized strategy for that market?

And that's not just, Hey, cool. We found this awesome company. It's directly related tothose other concepts we talked about before. Market accessibility.

How much would you have to change if you did this yourself versus acquiring a company?And ability to win? You know, if, if you have high ability to win and there's not a lot ofchanges you need to make to your market, it doesn't make sense to buy. You can just go inand do that yourself.

But if you have a low ability to win and there's a it's a very low accessibility market, there'sa lot of changes you need to make. There's a lot of complexity. Then it would make senseto actually do that acquisition. So going through and then again, not looking at it onemarket by one market, but looking at that that whole cluster of markets you're interestedin, because there might be a good m and a candidate that might not be great.

That might not be the answer for that one market, but might be the answer for five ofthose markets. And all of a sudden that you that's where you can create some scale andgrowth.

And maybe just a a couple of comments. I I spoke to a a Japanese company, the other day,and that person was in corporate planning and development, which is typically thedepartment that is partly handling international, but also m and a's and everything.

And it was said that most Japanese companies are looking at m and a's because it's sohard for them to expand themselves.

And so acquiring other businesses the way so part of it is also cultural as well. And if youkinda think about it from a a Japanese perspective, the high ability to win is typically prettylow because of the gap between other markets. And then because it's very to to Erin'spoint a little bit earlier, hard coded for the Japanese markets, so the accessibility is alsovery low. It's because it's low ability to win and low accessibility, it typically falls into that mand a zone that we talk about in the market entry modality matrix. So that's one part.

Another part is we often see a lot of companies having international within the corporatedevelopment function.

And naturally, if international lies within corporate development, the the leaning towardsacquisition will be pretty high. So oftentimes, when we also engage with with clients, weoften recommend, not having it within that function, in our opinion, because there will be abiased approach to looking at international from an m and a lens. So separate that, have anew market team instead, have them interact in interface with corporate development, andthen make the best, you know, decision based on the insights that you do in that marketand also based on, obviously, the whole market entry modality matrix that you sort of havedeveloped, that we have developed as an organization. So we have a more clear eye viewabout the decisions you make based on that ability to win end that market ex accessibilityconcept.

I I think that's a really interesting point about international being being within the corporatedevelopment team. Like, there's that concept of if you're a hammer, everything's a nail.Right? And if that if that's where you live, if that's where you're reporting IS, theneverything just becomes an acquisition time even if it's to fixed or not. Yeah.

And, actually, to to that exact point, when when to the point that that we were talkingabout about go to market versus operational concepts. We we use this iceberg analogybecause most companies only think about that go to market side. And usually that'sbecause product or maybe sales is leading the market discovery. So of course, they're onlygonna be thinking about go to market. They're not gonna be thinking about, well, how dowe hire people and what are the legal ramifications? And so if it's about having more cooksin the kitchen, not just on the go to market side, but on the operational side as well.

That is a great point because we often see that that is very functional led in terms of whodoes the discovery, and then that person looks through that lens, whether it is product,whether it is sales, but you wanna make sure you do it more from a cross functionalperspective and you interface and interact and involve other people from the organization.And that's that's partly also why that new markets team becomes an important mechanisminside the company that is cross functional, that looks through all these different lenses,and that then develops playbooks to help enable that growth in the future so you canactually pair parallelize.

Yeah. Awesome. That makes total sense. Listen, guys, I've had such a blast on thispodcast. I have learned a huge amount from you. We've covered so much ground.

If you were to finish just by giving both of you individually, like, your your three toptakeaways, you've got a company right now who's considering going international for thefirst time. What would be your key messages for them?

Well, we've we talked about it a few times in this podcast. One thing is, don't just assumethat what worked in your market will work internationally.

Make sure you do localization discovery when you go to new markets.

Also make sure that your bias in selecting a specific market, is not the case.

Look at multiple markets and evaluate accordingly and based on complexity and compcapabilities and also the future aspiration, hopefully, for a technology driven business toparallelize the company. And so part of what we wanna, message is don't just think of thatnext market, but sequence of markets, and then build your capabilities to be able toparallelize, your company in multiple markets at once.

And I would say, one, when you're looking at new markets, it's not just about marketattractiveness.

It's about the accessibility of those markets and your organizational capability, your abilityto win in those market.

Two, create a system. You need to have this structure. It's about creating an operatingsystem, which is something that that we help companies build to actually go from globalaspirations to global scale. And then finally, going back to that comment about the threegrowth drivers Klaus talked about, new markets, customer new customer segments andnew products. If you're really looking to exponentially increase your valuation or marketcap, new market is really the way to go. Really hard to find a new customer segment thatcan two or three act what you currently have or a new product set that is going to basicallyreplicate your company three or five times over. But there's a world of opportunities outthere.

Yeah. I couldn't agree more. I've definitely felt that pain myself.

My key take would be would be probably to to buy the book. Maybe my second would beto be to chat with you guys. So if so, if you wanna find out more, what's the best way forthem to get into contact?

Well, they can go on global class company dot com, or they can also simply reach out tous, either aaron at global class company dot com or klaus at at global class company dotcom. And my name is not spelled with a c. It's spelled with a k, which is oftentimes whatpeople think.

Fantastic.

Brilliant.

Alright. Thank you both. It's been a pleasure. I've had such a great time. We appreciate youcoming on the podcast.

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