Softlanding or Hardlanding? The choice is yours!
In an increasingly interconnected world, startups are constantly seeking new avenues for growth and expansion. Internationalisation, the process of entering and operating in foreign markets, presents both opportunities and challenges. In this blog post, we are exploring the advantages of going the “Softlanding way” as counterpoint of the Hardlanding way.
Softlanding has been used by the economist jargon when Central Bankers need to bring inflation rate down to meet the targets. Whether inflation is demand- or supply-driven, central banks have little choice but to tighten monetary policy to lower aggregate demand and bring inflation down. Tightening too much or too quickly, could precipitate a hardlanding, which is always a narrow route.
In the startup jargon, ‘softlanding’ refers to a carefully planned and gradual entry into a foreign market. This approach emphasises both market validation (Product Market- Fit) and cultural differences, therefore building strong relationships with local stakeholders.
Instead of rushing into a new market with preconceived notions, startups employing a softlanding approach take the time to understand the unique cultural, economic, and regulatory nuances of the target market.
Some of the key features of this approach includes:
- Market Validation: startups conduct in-depth market research to understand customer segmentation, local competition, and regulatory requirements. This insight helps in tailoring products, services, and strategies to suit the new market. It helps starting with a limited product or service offering before scaling up or seeking a customer to use as a guinea pig strategy. This controlled growth helps them manage risks and adapt to any unforeseen challenges.
- Cultural Differences: ignoring the local culture can lead to misunderstandings, offenses, and business failure. Entrepreneurs need to understand the local culture to shape their products and services and adjust marketing strategies. Each country has its own norms, customs and values, and it is important that startups understand and respect these cultural differences in order to be successful.
- Great Partnerships: collaborating with local partners, such as distributors or joint venture partners, can provide valuable insights and resources, aiding a smoother entry into the foreign market.
By contrast, if the Startup does not take into consideration these features, will it fail ? Not necessarily but for sure, it will make more costly mistakes and will spend more money. Therefore Startups should opt for a softlanding instead of a hardlanding approach. The key lies in understanding the target market and its dynamics.
International expansion is a complex endeavour that demands strategic foresight and adaptability. With a customer-centric mindset, and a willingness to learn and adapt will be the driving forces behind a successful internationalization journey.