Did your company survive the first turbulent years and has already ensured a steady revenue stream? You perhaps think it’s time to go bigger, but how can you be sure when it’s the right time for your startup to take the leap and scale?

With Miami becoming a new tech hub and a gateway for Latin American companies that strive to expand to the US market, the terms startup and scale-up became king. Every week, countless headlines announce successful funding rounds enabling founders to take their companies to the next level by scaling up.

However, while many believe that the concepts of startup and scale-up are interchangeable, the truth is both describe different phases of company growth. Therefore, with these companies being crucial for the tech ecosystem development, understanding their differences is key to a successful transition.

Startups and Scale-ups: What’s the Difference?

Why does the difference between these terms matter? Because founders need to be fully aware of where they are standing with their companies before taking the leap to a bigger structure. But what defines what’s a startup and what’s a scale-up? The team size? The revenue? Let’s break down these terms.

Startup: It’s a company in an early stage. Famous investor Eric Ries, author of “The Lean Startup,” defines it as “a human institution designed to bring something new under conditions of extreme uncertainty.”

In this stage, companies usually work with product/market fit development. They are embarked on the mission to find a repeatable business model, outlining the customer acquisition costs (CAC) and working on customer segmentation. As this is a temporary stage, how does a startup become a scale-up?

Scale-up: A scale-up is a company that has already validated its products in the market and proven its business model. Startups that have reached a certain level of maturity by proving their viability and sustainability are ready to move to the next level and scale. One of the key parameters to qualify as a scale-up is an annual 20% growth over three years.

The Challenges

#For Startups

• Hiring the right team.
• Develop products/services that fill a gap in the market and make people adopt them.
• Lack of good financial management.
• Generate brand awareness.

#For Scale-ups

• Decision-making becomes more complex.
• The risk level the company can afford decreases as there are more stakeholders involved.
• The need to improve the organizational structure by adding more management levels for improved leadership.
• The need to automate more procedures to handle the complexities and the demands of the new business structure.

How To Transition From Startup To Scale-up?

Charly Esnal – Managing Director, Mana Tech

Turning into a successful scale-up doesn’t happen overnight. There are many aspects every founder should have in place to determine startup scalability. Therefore, if you think you’re ready to take your company to the next level, then read the key takeaways we have laid down below for a successful transition.

Determine the product/market fit.

According to startup coach and investor Marc Andreessen, finding the product/market fit means “being in a good market with a product that can satisfy that market.” Therefore, founders achieve product/market fit when they finally meet their customer’s needs and make them better than their competitors.

Once you have mastered this crucial aspect and finished experimenting with the strategies, including the value proposition, you are ready to move on to the scale-up phase.

Ensure a steady revenue stream.

If your startup has already secured an early funding round (seed or series A) and it doesn’t strictly depend on outside funding, the company has entered a steady revenue stream with a solid cash flow.

When you reach this point where you know exactly your ROI jointly with an established product/market fit, you’ll be ready to shift to a scale-up and proceed to later funding rounds (series B or over).

Start to functionalize your team roles.

It’s widely known that everyone does everything in the startup phase as these companies can’t afford a specialized staff. However, when shifting to a bigger structure and scaling the business, roles need to be defined, and new management levels must be created. It would be best to have a focused and productive team, with each person committed to a job and one job only.

Automate as many processes as you can.

While the company structure becomes more complex, founders need to automate processes to avoid bottlenecks and optimize resources. In addition, automation allows companies to improve data management for better decision-making while also being cost and time-efficient. So, don’t hesitate to invest in improving the IT systems and provide your team with the necessary training to be aligned with these tools before scaling-up.

Final Takeaway

Do you think your startup is ready to transition to a scale-up? We hope you have a clearer picture now and understand the key differences between these two types of companies.

Though challenges are around the corner, shifting to a more complex business structure should be smoother if you have these aspects in place. Moreover, if you plan to expand your company internationally and explore new markets, you’ll need to start from scratch with the product/market fit.

Mana Tech and Base Miami support founders on their international expansion journey with our Miami Immersion Week programs to understand the US market and how your business can make it there. Are you ready to take your startup to the next level?

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The post Is Your Startup Ready To Scale Up? appeared first on Mana Tech.

You have already validated your business model in your country, conquering the local market, and now you’re thinking about taking the leap by expanding internationally. It’s a fact that almost every entrepreneur dreams of establishing a company abroad.

However, challenges are around the corner when trying to reach foreign markets. In fact, even industry giants have failed in their international journey by thinking they could replicate their entire business model to another location.

So then, what lies behind the unfruitful process of positioning a business abroad? The answer is a lack of product/market fit. This is one of the leading causes why companies, regardless of their size, fail when targeting new territories.

A common mistake for founders is to be overly confident as they have mastered the local market and mistakenly decide to expand based on that presumption. Therefore, if you plan to get onboard an international journey with your startup, you must first figure out some aspects and define the product/market fit for the targeted location.

What’s Product/Market Fit?

Product/Market Fit (PMF) is a concept mainly used by startups, but as we mentioned, large companies can benefit from implementing it when targeting foreign markets. Simply put, it’s when your product fits the market and your target customers recognize the product’s value.

According to the famous entrepreneur and investor Marc Andreessen, “Product/market fit means being in a good market with a product that can satisfy that market.” Another popular definition of the concept is provided by the author of The Lean Startup, Eric Ries:”The moment when a startup finally finds a widespread set of customers that resonate with its product.”

As you can see, there isn’t one standardized definition for PMF, and you’ll find that several other thought leaders have explained this concept from different angles. So, if customers are eagerly adopting your products, and becoming promoters of your brand, you’ve achieved PMF.

However, this doesn’t necessarily imply that the same will occur when expanding abroad. In a nutshell, you can’t expand internationally without a clear value proposition for the new location and without insights into how your product serves the customer’s needs in that market. For that reason, you’ll have to outline new hypotheses from scratch to validate or introduce adjustments to your business model to make it work abroad.

5 Tips For Improving Your Product/Market Fit Before International Expansion

You’ve achieved success in your local market and are now contemplating international expansion. But first, you need to consider the following variables to avoid the common pitfalls in the process and ensure a successful landing into your target location.

Formulate The Hypotheses For Validation

You might have already validated the hypotheses for your business model in the local market. When expanding your company internationally, conduct new market research and formulate fresh hypotheses, even if you’re targeting a location that shares the same language as your home country.

Define The Target Customer

It’s crucial to define or make adjustments to your existing ideal customer profile, as customers’ habits and behaviors are not the same everywhere. You’ll have to implement market segmentation to refine the hypotheses, which is essential when you target large markets like in the US. That way, teams will work aligned with the goals of that new target customer.

Fine-tune Your Value Proposition

Unfortunately, this is one of the biggest mistakes in the international journey of many companies. Avoid falling into the trap of translating the same value proposition to a new market. Bear in mind that what works well locally may not work abroad.

First, you’ll have to identify your potential customers’ goals, pain points, and desires in the new market to fine-tune your value proposition. Then, you need to ask yourself a question and come up with an honest answer. How well does your current value proposition really fit your new targeting customers?

Narrow Your Focus On A Single Vertical

If you plan to land in the vast US market, narrowing the focus is vital. Trying to sell for everyone ends up being nothing for anyone. So, start with a narrow focus and dig deep to become an industry expert in the field. Research your main competitors and their go-to-market strategies to find your ideal fit in the new location.

Work With People Based In Your Target Market

Finding the right partners is key for a successful international expansion. Partner with accelerators and incubators, as they will lead you through the process, providing their expertise and knowledge of the market.

Their programs usually include legal and tax consultancy and also work with governmental associations. Furthermore, they can also help you build a supportive network with other founders and industry experts.

Do You Have What It Takes To Land In The US Market?

Taking your business abroad is a challenging journey where efficient use of resources is essential to succeed. By defining a PMF between your ideal international customer and your product/service, your company will be on the right track to expand internationally, avoiding costly challenges.

However, if you’re still uncertain about your target client in the new market, grappling with the initial pricing, or struggling to translate your value proposition, you may need a strategic partner.

Mana Tech‘s Market Fit program employs a proven methodology that can achieve in 3 months what typically takes companies 18-24 months, all while establishing the initial ecosystem relationships. Partner with us today and start answering those unverified assumptions before venturing to the US market. LET’S CHAT! Send an email to community@manatech.com

The post Product Market Fit: The Key for Expanding Your Business Internationally appeared first on Mana Tech.

Who Can Qualify?

The IER targets foreign entrepreneurs with high-potential startups already established in the US. To be considered:

• You can be in or outside the US, but your startup must be US-based and formed within the last five years.
  
• You must hold at least 10% ownership and play a central role in the startup’s operations, using your knowledge, skills, or experience to drive the company’s success.
  
• Up to three entrepreneurs per startup can apply. 

What Makes Your Startup a Candidate?

Your startup needs to show it has great potential for growth and can create jobs. You can prove this by:

• Qualified investments: A minimum investment of $264,147 from a qualifying investor.
• Government grants: At least $105,659 in qualified government awards or grants.
• Alternative evidence: If your startup doesn’t fully meet the funding requirements, you can still show its potential to scale up and create jobs with alternative evidence.

Key Program Features

• Initial parole period: Up to 2.5 years for eligible entrepreneurs.
  
• Potential re-parole: An additional 2.5 years may be granted based on funding, job creation, or revenue.
• Maximum stay: Up to 5 years in the US.
  

Application Process

• Fill out Form I-941 and pay a $1,200 fee.
• Expedited handling may be requested.

Next Steps

For further details about the application process and the latest information, visit the official USCIS International Entrepreneur Rule page. These guidelines will help you navigate the process with confidence and shape a successful future for your startup in the United States!

Learn more

The post The International Entrepreneur Rule: A Guide for Foreign Startup Founders appeared first on Mana Tech.

International expansion is a lucrative market for entrepreneurs to consider with the potential to significantly improve revenue and fundraising opportunities. However, succeeding internationally isn’t an easy venture and takes careful planning and consideration. It’s important for any entrepreneur to understand what the impact is going to be on daily operations and if the rewards actually outweigh the risks.  

 Faced with the challenge of market entry, companies often consider one of two strategies: 

1. “Hire a sales guy.”
2. “Find a partner.”

Unfortunately, neither of these approaches work in the early stages of market entry. On the contrary, it usually takes a lot of time and money for entrepreneurs to learn that lesson. Expansion is expensive. Time is money and companies often burn hundreds of thousands of dollars over many months pursuing a “dead-end” strategy.

So, where do you start? This article will go through the six steps you need to take to ensure your startup is ready for expanding your business internationally. 

1. Assess your readiness

The first thing you need to do is ask yourself: Is my company ready for such a move? Expanding a company comes with its own risks, which is why you need to conduct an analysis of your team and resources.

• Make sure your finances are plenty enough to maintain operations in another country – Companies tend to underestimate the economic burden of expanding their operations. Keep in mind that you could spend 18-24 months funding the whole process until you start to see revenue.
• Analyze your company’s capabilities – Knowing your strengths and weaknesses is a good indicator of whether you should go international or not. For example, is your company meeting its current goals? If not, then you should postpone your expansion until your business is meeting its goals.
• Analyze your product/service for readiness – Ensure there’s a need that you could satisfy in that market, trademark your goods, and comply with all the local regulations required to operate correctly.

2. Make sure everyone is on board with the expansion

Your team will be the backbone of your expansion; this is why it’s fundamental that they agree with the idea and share the same vision as the founders and stakeholders.

For the expansion to be successful, you need to set up a “beachhead” with essential personnel to lead this adventure. For this to happen, everyone on your team, including your family, has to be on board with the idea, as well as comply with all the legal requirements to move to the destination.

3. Conduct a deep-dive market research

It’s critical to understand everything about the new market you’re about to enter. Each industry has its unique characteristics, making it advisable to concentrate on one ICP to gauge the impact of your product and the potential benefits. This includes:

• Research economic, cultural, governmental and regulations.
• Consider the market size, trend, and growth rate to determine how long it will take before you see a return on your investment. 
• Prepare a market segmentation analysis to establish where your product/service will fit in the local market.
• Prepare product gap analysis against local products. Are you going to need to invest in your product to be competitive?
• Spend the time to prepare a detailed competitive analysis on all areas e.g. Pricing, Marketing, Product, Messaging.         

4. Establish your business model & go-to-market strategy

To sell and market your product properly, you need to have a clear and comprehensive strategy to determine how you’ll differentiate yourself. While it’s important to think like a local, you must also stay aligned to your home country’s corporate goals and objectives to retain brand identity. 

The most basic aspects you should address in your strategy:

• Define your expansion SMART Goals – long and short term.
• Review your business model – we suggest using the Lean Canvas Model. 
• Define your target audience – When entering a new market, we recommend narrowing it down to one Ideal Customer Profile (ICP) and one product or service.
• Define your distribution model – How will the product or service be delivered to the customer?
• Prepare your product messaging and positioning – What’s being sold and what is its unique value proposition? We also love creating a WOW! Statement – a simple, crisp and easy way to explain what your business does.
• Evaluate your revenue and pricing model – What kind of revenue model and what level of pricing do we anticipate will be competitive and successful in the marketplace?

5. Leverage influencer and network relationships in a foreign market

Look for influencers in the markets you’re interested in and develop a relationship with them well before you begin expansion. These “customer discovery” meetings are excellent for transforming assumptions into “hard” facts and adjusting to the go-to-market approach as necessary. 

These are not sales meetings. The primary goal of these meetings is learning to test the key assumptions around your business and gain insights about how best to internationalize your company.

Who you know is all part of the game and these “Sanity Checks” could potentially evolve into a partnership or lead to mentorship opportunities, guiding you through the industry and the new market.             

6. Test the waters

Testing concepts is always a good idea, especially before undertaking a massive action such as international expansion. With the ease of global connectivity facilitated by technology, it’s now simpler to begin to test the waters in your home country and develop your initial offer to your ICP.

• Website adaptation guidance: you may need to make changes and will almost definitely need to have a US-specific website that reflects the US positioning.
• Create a US landing page and drive campaigns targeted towards your ICP.
• Adapt all collateral to be in the local language.
• Create a video explainer demo that can easily showcase what you do. 
• Create case studies – even better if you have a client already in the local market.
• Build out an initial network list.

Last but not least, don’t be afraid to change and adapt your strategies. Trial and error are standard practices and an ideal way to know something works in a particular market. Remember, what worked for you in your country, may not do so in other latitudes because of different cultures, habits, or a changing ecosystem. Adapting your efforts to the new market will allow you to maintain your expansion until you reach your goal.

If you’re able to implement all these steps, your business expansion will be easier to handle and will lead you to more and unique growth opportunities at a steady pace.

Interested in bringing your ventures to the US? Sign up for Mana Tech’s accelerator program and let us help you in your entrepreneurial journey.

The post 6 Steps to Take Before Expanding Your Business Internationally appeared first on Mana Tech.

If you’re thinking about going global with your company, first you need to know if you’re actually ready to expand. A good starting point is to understand the advantages to see if it’s a step worth taking. Here are a handful that we believe are the most important

‍Establish New Revenue Streams

New markets mean a new customer base, and with new customers come more revenue streams. Going global allows your business to cater to a different customer base with other wants and needs. So, if your international market analysis is correct, you should be filling a demand not yet too exploited.

‍Access a Unique Talent Pool

Expanding to a new territory opens the door to accessing local, high-quality talent that your company may not count on thus far. Embedding your business in a new culture means hiring local talent to help you navigate the challenges more smoothly.

‍Improve Market Perception

Few things are so important nowadays as establishing a substantial presence for your brand. Credibility is a crucial factor here, and going global helps you achieve that goal. Customers see that you really mean business and that you’re thriving, thus increasing your brand’s credibility.

‍Stay ahead of local competitors

When you establish your business in a country, you need to find a way to gain a competitive advantage. Going international helps you do just that. Although you will most likely find some sort of competition abroad (direct or indirect), you are still gaining a competitive edge over your local competition.

The post What are the advantages of international expansion? appeared first on Mana Tech.

Most companies think they can enter the US by “partnering” their way to sales. This is almost never true – at least not in the beginning. The one who needs to figure out how to sell your product here is YOU. Once you have “cracked the code”, and only then, you might be able to find partners to sell it.

Partners will often “localize” the product, which might include preparing local language marketing, approval and other details of taking the product to market. For startups, this is mostly not a viable go-to-market.

What do you recommend?

The truth is, you will need to re-prove your value hypothesis and market fit, in the US, before you can get someone to take on your product and amplify your efforts to get it to market.What kind of proof is that? The best proof you can get is happy customers. Preferably a bunch. That means you will need to sell directly to customers first. At least until you have some solid reference accounts.

Unfortunately, there is no shortcut to doing that.

To get your product into the US market and get to a repeatable sales model, you need to plan on one or more founders coming to the US and doing 1 – 2 years of solid groundwork.

The post Why don’t I just partner with a sales company in the US? appeared first on Mana Tech.

Companies cannot outsource the job of figuring out the market and getting to a repeatable, profitable and scalable sales model. This will usually require the presence of one or two founders in the country. “Hiring a sales guy” before you figure out the market almost always goes wrong. The right people to figure out the market and the sales strategy are the founders. Sales guys – and channel partners – come later.

Some steps to consider:

• Figure out our ONE IDEAL CLIENT PROFILE (ICP)
• Figure out the SINGLE USE CASE we would focus on
• Proving that our ideal client demographic would pay
• Figuring out the best way to find and sell repeatedly to that one demographic
• Hiring one or two external sales people who are a good fit for that particular sales model (e.g. know the demographic, the industry dynamics, the business problem)
• Scaling that later with additional sales people

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