FH JOANNEUM University of Applied Sciences

[Sector]

How Startups Can Successfully Navigate Market Entry

Prof. Dr. Doris Kiendl / Head, Department of Management; Head, Institute of International Management at FH JOANNEUM University of Applied Sciences

Education

Doris Kiendl holds a PhD in law from University of Graz (Karl Franzens University), and a master’s in legal studies in comparative European and international law from the European University Institute, Florence. Following a long and successful career in the private sector and higher education, she joined FH JOANNEUM in 2003 as senior lecturer on the International Management Program where she works closely with established and prospective startup founders and runs international workshops and research projects on global entrepreneurship. She also lectures on EU law, international business law and international arbitration.

When it comes to initial market entry, Doris recommends startups take the time to find out what customers need. Focus on the problem first rather than go straight to their solution. “Often,” she says, “startups fall in love with an idea, which is good. It’s always good to be passionate about your idea, product or service. But you need to validate whether it really solves a problem.” Test your minimum viable product early on in a small niche market experiencing the problem you aim to solve. Embrace customer feedback, whatever it is, and use it as a learning opportunity. If customers don’t love it, be ready to tweak, pivot or even change altogether.

Once domestic success is assured, the next step is expansion to global markets. Doris explains that while many factors are similar to initial market launch, foreign markets come with added complexities. Start by doing your homework in the same way: research market volume and customer needs and preferences, and test your product. To improve the chances of success at this stage, FH JOANNEUM instructs students in forecasting, modeling and analysis tools like Porter’s Five Forces, PESTEL, Blue Ocean Strategy and market-size calculation, among others.

A different culture may mean different needs and preferences. “One of the traps startups sometimes fall into is assuming the values and preferences of their local communities and the domestic market will be similar abroad.” As an example, Doris points to the success of newspaper subscriptions in Austria and Slovenia, where people like to have their paper delivered to their door to read over breakfast. Attempts to introduce the same model in Croatia failed as more outgoing Croatians prefer to buy the paper during their morning walk and read it over coffee at a bar.

Most important tips for startups:

Focus on the problem, not your solution. Always start with the market gap you’ve identified, the problem you want to solve, and the needs and preferences of your customers.

- Validate your assumptions and do your homework. Get customer feedback as early as possible and be ready to adapt your product or service accordingly. Forecast, analyze and plan thoroughly before expanding to a new market.

Work with local partners. This will help you understand the culture in your target market and avoid pitfalls.

Be a good networker and open to new possibilities. Keep your eyes and ears open as you walk through the world. Sometimes, inspiration and opportunities come when you least expect them.

Make use of education. Talent and passion are good starting points for entrepreneurship, but there are lots of tools you can learn to increase your chances of success.

It’s also important to understand the new legal environment and regulations. A business model that works in one country may face restrictions in another. “There are countries like Austria where certain trades are highly regulated,” says Doris. “Healthcare, for example, where access requires having to prove specific qualifications.”

In addition to understanding the legal frameworks and instruments necessary to operate in a new country, you need to know whether the law on paper matches daily practice. In Austria, that’s pretty much assured. In other markets, however, especially in emerging dynamic ones or countries with institutionalized corruption, the gap can be wider. Predictability, the reliability of institutions and bureaucratic processes can also be variable.

To navigate the pitfalls of foreign-market entry, team up with partners on the ground who understand the local market and culture as well as the political, economic and social situation. These might be chambers of commerce, agencies, banks, mentors or coaches. Make sure you have sufficient resources and capacity to scale and meet the demands of the new market. Take time to understand market volume as well as your production and distribution capacities. Make sure a lack of financing isn’t a barrier, too. Austria, for instance, has a well-developed system of seed financing thanks to various governmental and nongovernmental organizations, but it is less fortunate when it comes to venture capital, so cash flow can be an obstacle for growing startups.

Success is never guaranteed, says Doris, but doing your homework, testing the waters, forecasting and networking all help. As does keeping an eye on the competition and creating a multidisciplinary team with all the skills you need. Students at FH JOANNEUM get a headstart with this by being connected to the university’s international network and collaborating with other founders from a range of backgrounds. “It’s really wonderful to work with these founders,” says Doris, “because they have a lot of inspiration.”

About

Offering high-quality interdisciplinary education and practical training, FH JOANNEUM is one of Austria’s leading applied sciences universities. Its Department of Management focuses on fostering leadership and entrepreneurial mindset so students can realize the potential of new products and services, capture new markets, leverage digital tools, manage resources and boost productivity. The Department also collaborates with international corporate, institutional and academic partners in a range of sectors to run business and entrepreneurship projects and connect students to supportive and entrepreneurial ecosystems.

[Contact] Email: info@fh-joanneum.at Telephone: +43 316 5453 - 0

It’s really wonderful to work with these founders because they have a lot of inspiration.