Executive Director, The DMZ
Canadian startups need to think internationally in order to succeed. Learn how the DMZ can help mitigate the risk involved in expanding to new global markets.
Despite Canada’s small market, many Canadian startups are not exploring the potential that global expansion may bring to their company.
While every founder wants their company to access new customer bases and capital, only about 12 percent of small businesses in Canada currently export their goods and services. However, for companies who want to look into expanding, it might be time to start looking global from the get-go.
“The majority of tech startups don’t realize it, but they are in a business that can be global from day one,” says Abdullah Snobar, the Executive Director of the DMZ. “We need to help tech startups and early entrepreneurs see themselves as exporters, even if they don’t have a physical product.”
The DMZ has helped to raise over $1.5 billion in seed funding for startups and has provided mentorship and support, utilizing its worldwide network, to turn Canadian startups into world-class, global tech businesses.
Looking beyond Canadian borders
According to Snobar, for Canadian startups in a small domestic market, considering global expansion is a necessity, not a nice to have. This was the case for Softdrive, a DMZ incubator company, where only 3 percent of their total addressable market was in Canada.
“The US has about 24x the amount of organizations than Canada, making it critical for Softdrive to expand internationally,” says Leonard Ivey, Founder of Softdrive. “If we don’t, we’d be stunting our growth significantly and mitigating our chances of success.”
However, there are a few barriers that make global expansion difficult for Canadian startups. For pet-tech company Charmy Pet, navigating the regulations to comply with federal agencies like the CFIA and U.S. FDA was one of them—but the support of the DMZ and their connections made the process much easier.
“We were fortunate to have the support of the DMZ and their in-house supply chain experts to help us expand,” says Zach Sheng, Co-Founder and CEO of Charmy Pet.
Building a reputation in a new market, while trying to find support, trustworthy global partners, and dealing with cultural differences, can be difficult. “It can take a few years for a startup to build a solid reputation in their local market and transferring that trust to a global market is challenging,” says Mohsen Omrani, Co-Founder and CEO of OPTT. “A good way to bridge local trust to a new market is being associated with reputable organizations, like incubators and VCs, with proven track records.” It helps to have a team like DMZ in your corner where these past experiences can be used as leverage.
How the DMZ’s network can help
But Snobar says one of the biggest barriers to expansion is the founder’s own mindset. “If they don’t want to go global, then they’ll find every excuse not to go. But there’s always risk anywhere you operate,” says Snobar. “If you don’t look to expand into a new market, someone else will.”
For those who do want to expand globally, the DMZ offers founders a deep understanding of different local ecosystems, countries, and economies through their network of global offices and incubators in over 10 countries. For example, if a Canadian startup wanted to expand into India, the DMZ could connect them to other founders and partners in their field who are already involved in the Indian market. This is due to the DMZ being an enabler to global expansion—they can help founders access peers who’ll understand their journey and their struggles.
“There’s never been a more important time than today to think about how to take your business and expand to your full potential,” says Snobar. “The whole team is glad we’re helping in that journey with creating opportunities for founders entering these new markets.”