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It's challenging enough to 'bloom where you're planted' and grow a pioneering startup in your hometown, with support from people who have trusted you for years. What if you're ready to explore other markets elsewhere in the nation? What do you need to know?
We consulted four tested authorities on startup growth from different sectors, including shared workspace, transportation, and food and liquor. Their advice crystalizes into four general principles.
1. Know your people
The importance of onboarding the right people right away is no secret, and our experts mentioned it repeatedly. “We work relentlessly hard to find, interview, meet, and hire the right people in our new markets,” said Bryan Goodwin, VP of Sales and Retail Partners at Drizly. “They are the foundation in that market, and it's mission-critical to get it right.”
Drew Frey, Marketing Manager at PivotDesk, emphasizes the importance of assembling the right team, starting with the first hire. “This person is going to be the lifeblood of your company in the new market,” Frey said, “attending events, speaking on stage, and being the face of your company in countless other activities."
“Our interview process includes extensive scenario challenges throughout,” said Katie Shanahan, Location Launch Marketing Manager for Door to Door Organics, a food startup. “This process works well to identify the candidates who approach every challenge with optimistic and thoughtful candor.”
Each new market will bring inevitable growing pains. Hire people who have the strength to grow with the company.
2. Know your partners
When your business touches down in a new city, you will need to embed it with the others already doing business there. “Building relationships is critically important and shouldn't be overlooked,” Frey said. “There's nothing like physically going to the emerging market and talking with people in person.”
“We love working with the city, universities, and residential-building and private parking lots to bring our cost-effective and sustainable transportation option to a new group of residents, students, businesses, and visitors,” said Kaleb Miller, Marketing Manager at Zipcar. “Our relationships help us target the best and most convenient parking locations for our members.”
Establish partnerships before you even begin to do business in a new city and continually nurture them. “We work hard before we enter a market to establish mutually beneficial relationships with our partners,” said Goodwin. This starts before we ever get there and lasts long after launch.”
3. Do the math
It's easier to approach a community in a helpful manner if you're willing to do some hard analysis first. Drizly quantifies each of its new markets “academically, carefully, and very thoroughly,” Goodwin said.[ibimage==29751==Medium==none==self==ibimage_align-right]
“Unfortunately,” said Shanahan, “this is not a quick study. Many hours are spent to ensure the company's customer acquisition and marketing launch objectives can be met within our timeline and budget.
Zipcar takes great care in its market research, down to each city block and individual member. “By analyzing our vast historical database... and the trends we have the benefit of analyzing across multiple metropolitan areas, we are able to look at each market on the hyper-local level.”
4. Get in where you fit in
“Find your niche,” said Frey. “If you are launching in Austin, chances are your bootstrapped startup is not going to be able to compete at SXSW. Take advantage of smaller conferences and tradeshows. They might not be as sexy as the bigger events, but you'll be in front of the right group of customers.”
You must choose your new outposts with care. “In terms of targeting new markets,” said Miller, “we typically target large, densely populated markets with a strong public transportation system, as well as areas where it is difficult to find parking and the overall costs of car ownership are high.”
Zipcar zoomed in on Sacramento and Providence because they were close to cities wherein the company had already established itself, and people were thus more receptive than they might be in Hayden Lake, Idaho.
Know the landscape. Know precisely what you're getting into. Get the right people and partners on your side. And, most importantly, be prepared to give your new home away from home as much as you get from it.
“There are people out there who want to help you succeed and genuinely care about what you're doing,” Frey said. “Pay it forward and prepare to be amazed with the results.”
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