5% Revenue Triggers Expansion

A framework for how to approach international expansion in business, focusing on organic growth and strategic investment timing.

Core Strategy for International Expansion

• Wait for organic international demand before investing heavily
• Target 30% of revenue to come from outside North America at scale
• Focus initially on English-speaking markets that naturally adopt US products
  • Australia/New Zealand
  • UK
  • Parts of France
  • Other English-friendly markets

When to Invest in International Markets

• Key threshold: Invest when reaching 5% revenue in a region
• Don't actively hunt for international customers with zero presence
• Let customers find you if you're truly the best vendor
• Support organic growth when you see regional clusters forming

Product Localization Strategy

• Major challenge: Engineers often resist localization efforts
• Important to localize product into multiple languages
  • Not technically complex but often avoided
  • Critical for penetrating certain markets
  • Can limit growth if not implemented
• Start with English-speaking markets but prepare for broader expansion
• Consider localization as a key growth enabler

Success Factors

• Build strong brand in your niche
• Become top 2-3 player in your segment
• Be welcoming to international customers
• Support organic growth when it appears
• Don't force expansion where no natural demand exists

The framework emphasizes letting market demand guide international expansion rather than forcing growth in regions without natural product-market fit.