The pandemic broke with what was established, marked a breaking point for all of humanity and taught us that everything can change overnight. This disruptive phenomenon also generated a paradigm shift in the startup ecosystem which, in a post-pandemic context marked by recession and uncertainty, demands a new type of company.
In this stage, the new generation of startups should aspire to be a camel instead of a unicornaccording to the definition of Alex Lazarow, and develop a resilient, cautious structure, committed to the long term and with a business model based on customer needs.
Due to the lack of financing of the venture capital, these startups must be able to traverse the desert and survive without water and without food, for long periods of time, just like a camel. Their ability to manage their resources efficiently will allow them to stay afloat.
Unlike unicorns where growth takes precedence over revenue generation, camel startups will seek a balanced relationship between their growth and income stream to guarantee sustainable development, a quality that in a context of global uncertainty makes them attractive in the eyes of more cautious investors who choose less exposure to risk.
Although resilience and the ability to survive in adverse conditions are part of the DNA of Argentine companies, in an increasingly complex situation, it is key and a priority to atomize risk.
Unlike unicorns where growth prevails over income generation, camel startups will seek a balanced relationship between growth and income flow to ensure sustainable development
In that sense, regionalization is an unavoidable move to overcome some limitations such as the size of the Argentine market and the unpredictability of macroeconomic variables. Launching into new markets will allow the business to grow and diversify the risks to sustain the operation.
But, facing the design of a regional expansion strategy implies, in principle, asking some questions such as what type of company am I and how am I going to manage my human and financial resources.
To minimize the risk associated with any expansion process, it will be essential to anticipate and project different opportunity scenarios, such as the possibility of working closely with local companies within the framework of a collaborative scheme, developing B2B businesses or helping large corporations innovate. In that sense, the explosion and mass use of APIs allows companies to collaborate with each other organically.
Beyond the experience in the place of origin, regionalization implies attending very precisely to the particularities of each country and it may be necessary to re-validate the solutions with new users.
According to data collected by Endeavor from the expansion experiences of different entrepreneurs, lhe three main difficulties they had to face are: hiring local talent, adapting the team to the local culture and adjusting the business model to the target market.
Taking these challenges into account, it will be necessary to carry out an exhaustive study of the country to which it is intended to disembark and humbly assume that, beyond the experience in the place of origin, regionalization implies attending very precisely to the particularities of each country and it may be necessary to re-validate the solutions with new users.
An expansion strategy will involve adapting the corporate culture, customer service models, marketing and commercial strategies and even security policies to the new market. In addition, it will be necessary to go out and look for new suppliers and talents that adapt to the needs of the company.
Knowing the regulatory and tax aspects before choosing a destination is another of the great challenges that startups must analyze before making any decision. In this sense, as mentioned above, an alternative could be that part of the (non-strategic) proposal consists of facilitating a B2B format in which the product connects via APIs with another company already established in that country and, that way, more services can be offered to its ecosystem.
Undoubtedly, the decision to go beyond one’s own borders implies a great challenge. However, the possibility of gaining new markets is worth this effort in itself.