This year’s Founders Schmaus of the Humboldt Founders Club was dedicated to the topic of internationalization.
In the fireside chat, three founders shared their experiences with taking companies international and discussed what really matters when making this move.
Sebastian Schulze is the founder and chairman of the board at Fit Analytics as well as managing partner at AllocNow, a global leader in cloud software for sustainability and carbon accounting. He also took part in the fireside chat at the Founders Schmaus. We want to make important insights and tips on internationalization available beyond the event itself, which is why we interviewed him on the topic.
You have a lot of experience with internationally operating firms. At what point in a company’s development does a founder decide to take the step toward internationalization?
Founders should start thinking about internationalization from day one, since it has major implications for company building, hiring, strategy, financing, and more. The decision of whether, when, and how to internationalize depends heavily on individual factors such as market potential, the team’s competencies, the competitive landscape, access to capital, and the legal framework. There is no one-size-fits-all answer, but internationalization should always be part of the strategic considerations from the start and revisited continuously.
What was the biggest challenge for you in the process of internationalization and which mistakes do companies often make in the beginning of this journey?
One of my biggest challenges was always transferring company culture to new locations. It requires a great deal of sensitivity and communication to preserve the company’s identity while developing its culture across all offices. Another key point is assembling the local team. For me, cultural fit is more important than professional qualifications. From my experience, a member of the founding team is best suited to build a local team and establish the company culture at a new site abroad.
How does a company find out whether it matches an international market structurally and with its products?
From my experience in the B2B software sector, the best approach is to speak directly with potential customers in new markets. This can be done very efficiently without immediately opening a local office. We have found it valuable to have one of the founders make the first customer contacts and explore the market.
How important do you consider it to have local employees on the ground?
In the B2B software space, I’ve observed that internationalization within Europe can be effectively managed from Berlin. We’ve had very good experiences with talents from various European countries who manage their home markets from Berlin and then spend limited time locally, for example, attending events and customer meetings. For markets outside Europe, especially those with significant time differences, we’ve found that having local teams is more effective.
Which special challenges exist with regard to cultural and legal differences?
Cultural differences were particularly noticeable between Europe and regions such as Asia and North America. One major challenge was fostering and further developing a consistent company culture across multiple sites and regions. On the legal side, we encountered significant differences, especially in labor law. Early on, we made the mistake of not seeking local legal advice, for example, regarding employment contracts, in order to save costs. Looking back, I would do things differently.
You studied at HU as well as in Paris, but are now based in Berlin. Which country would you still find exciting to live in for a longer period of time?
As a founder, I was responsible for new customer acquisition and internationalization for many years. This meant I traveled extensively and spent a lot of time in other countries. Nowadays, I travel less for work and enjoy family life in Berlin. In my current stage of life, I don’t feel any urge to live in another country for an extended period.
