The following article was originally published by SoftBank Vision Fund and is reposted here. We’re sharing it to highlight key considerations for companies exploring global expansion — a topic close to our work and the challenges our clients often face.
Consider this scenario: Your business is thriving across the United States. Demand is soaring, and growth feels unstoppable. But then, your competitor makes a bold move: opening an office in the United Kingdom and setting its sights on India.
Now, you’re itching to grow across borders. You suspect global expansion can be a way to tap strong demand for your products in at least half a dozen markets, not just in Europe but also across Asia and the Middle East. The big questions: Where should you go first? When is the right time? And how fast should you move?
At Databricks, the answers to these questions are driven by data. The San Francisco–based company pulls insights from a wide range of sources — cloud providers, third-party data firms, Forbes Global 2000 — to build what it calls the Databricks 4000, a curated list of global companies with the highest potential to become top customers. By identifying markets with a high concentration of these companies, Databricks strategically pinpoints the best places to expand.
For a company built on data intelligence, this approach isn’t surprising. It’s also proven remarkably effective. Databricks has successfully expanded into nearly two dozen countries, with nearly all of them meeting or exceeding growth expectations. This international success has helped fuel Databricks’ annual revenue run rate of $3 billion and yearly growth of 60%.
Not every company is so lucky. A study by Harvard Business Review found that most businesses lose money on international expansions, with only 40% achieving even a modest 3% return. High-profile failures are common: Home Depot famously miscalculated China’s preference for professional services over DIY, while Walmart underestimated Germans’ aversion to large-format stores. Both mistakes led to significant losses. It’s no surprise that 73% of business leaders say that identifying and entering new markets is challenging, according to research published by Phrase, a cloud-based platform designed to streamline localization of digital products.
Yet for ambitious, high-growth companies, global expansion isn’t optional — it’s a necessity. So how do you maximize your chances of success while avoiding costly missteps? To uncover key lessons, we explored the global strategies of two of SoftBank’s portfolio companies — data and AI company Databricks and cloud cybersecurity provider Wiz — and spoke with experts who have spent years guiding businesses through international expansions.
Developing a global expansion strategy
Among all the factors that drive successful expansion, experts agree that one stands above the rest: being thoughtful and rigorous about both the “why” and the “how.” This advice may seem obvious, but Katie Davies, co-founder of the global expansion advisory firm HSP Group, has seen too many companies expand for the wrong reasons. One, for instance, wanted to set up shop in Dublin because the CEO believed expansion in Ireland was a smart tax strategy. Another had a star employee who wanted to spend more time on the beaches of Thailand. “To be successful, companies need a strong, strategic, holistic ‘why,’” Davies says.
Steve Wilson, a U.S. managing partner of the London-based law firm Osborne Clarke, has witnessed a similar pattern. Companies meticulously plan their domestic strategies — conducting market research, refining business models, setting budgets — only to take a far more casual approach to international expansion. “After putting so much thought into their core business, they suddenly decide, ‘Let’s just replicate that halfway across the world in a market we’ve never operated in before,’” he says.
Wilson, who advises clients on overseas expansion, says the importance of not only planning, but also understanding the particular dynamics of each new market, can’t be overestimated. Whether it’s modeling like the Databricks 4000 or more traditional research and intelligence gathering, strategic decision making about which new markets to enter and how to approach them is the first step for any successful expansion. “The problems come when companies rush into expansion without truly understanding the landscape,” Wilson says.
After Databricks modeling pegged Japan as an attractive market, the research from its market exploration team identified the need for a different operational approach. For the European countries Databricks had successfully entered, the company built initial demand and customer relationships through a “fly-in, fly-out” model — where non-local sales reps and executives visited frequently, prior to opening any local offices or creating a local entity. For Japan, this wasn’t going to work. Japanese customers needed to know their vendors were making a tangible commitment. So instead of easing in, Databricks took a big leap — opening a Tokyo office, hiring a seasoned general manager, and aggressively staffing up. Within a year, the office had 50 employees.
Wiz took a similarly intentional approach to their foray into Japan. “In Japan, you don’t just throw a sales rep, a sales engineer, and a channel person on the ground and tell them to figure it out,” says Mike Earnest, Wiz’s VP of worldwide sales. “You have to dive in with intent and respect.” Wiz’s newly hired Vice President and General Manager of Japan, Tadashi Yamanaka, echoes that sentiment. His goal? To grow the Japanese team by hiring for dozens of roles within the next 12 months, including pre- and post-sales, support, and marketing.
Regardless of which expansion strategy companies choose, experts recommend forging close partnerships with organizations that can help create a smoother sales process, boost visibility for your product, or train the next generation of people with expertise in your product. In Japan, Wiz, for instance, concluded that solving customers’ most pressing cloud security challenges required deep partnerships with SoftBank and others from the start. Following its initial investment, SoftBank helped Wiz develop a blueprint for succeeding in the Japanese market, became its first distribution partner, introduced Wiz to local partners and customers, and helped it recruit in-country executives. Aspiration Japan, a security consulting firm with an established customer base in the country, is also helping Wiz gain access to a network of potential customers.
For its part, Databricks has created an ecosystem of partnerships with universities across France, the Netherlands, Germany, and Brazil. Its University Alliance Program equips data science students with skills in big data programming, analytics, and AI. These students then have the know-how to eventually work at Databricks or at companies that have implemented the Databricks platform. “It’s essential to find those connections that tie you to the community,” says Rory Patterson, VP of corporate operations at Databricks.
Understanding the global landscape
Successful expansions require not only being willing to rewrite the rules of engagement, but adopt fundamental shifts in mindset. A recent study from the University of Chicago Booth School of Business found that, despite the effects of globalization, cultures around the world disagree more in their moral values and belief systems than they did 40 years ago. Adapting to these differences means first taking the time to understand what they are. How do customers in the new country act, think, and feel differently than those you’re used to dealing with in your home market?
One of the most important changes expanding companies need to make? Patience. In their home markets, many ambitious, fast-growing companies thrive by acting boldly and moving quickly. These tactics don’t always translate well in new markets.
A few years ago, one of Wilson’s U.S. clients at Osborne Clarke set its sights on Germany. Eager to land customers, the company built a Berlin-based sales team. But after three months, they had closed zero deals. Leadership in the U.S. grew frustrated. “They concluded they had hired the most useless sales team,” Wilson recalls. “In reality, they hadn’t done their homework. Germans would tell you that a six- to nine-month sales cycle is completely normal for market entrants.”
The same holds true, he adds, in markets like Japan and China. “In the U.S., you can often get a customer very quickly, but they’ll leave just as fast when a competitor offers a lower price. Elsewhere the sales cycle can be eye-wateringly slow, but once you have that customer, they’ll be highly loyal,” says Wilson. Instead of adjusting expectations, the company deemed the expansion a failure and pulled out of Germany, chalking it up as a costly misstep.
Davies sees this kind of sticker shock as one of the biggest reasons global expansions fail. In order to create accurate budgets, she urges companies to be realistic about timelines. “If you do a full strategic assessment, you won’t be blindsided when something takes twice as long as you thought or costs $1,000 instead of $100,” she says. “Clear expectations about returns prevent panic-driven decisions.”
Patterson explains that before entering a new market, the company takes a meticulous approach to budgeting — not just in how much to spend, but when to spend it. In Germany, for instance, the company waited several years before investing in a key compliance certification for manufacturing customers, even though they knew it could eventually boost sales in the country by 25%.
“We build patience into our business case and try to go in with eyes wide open about the fully-loaded cost of going after a market,” Patterson says. “If you’re expecting the same return as in the U.S., your model is probably wrong.”
Navigating cultural and regulatory challenges
While winning customers and driving revenue are the primary goals of international expansion, success also hinges on the critical details that enable those sales. Overlooking them can be costly. During Wiz’s recent expansion into Japan, the company realized it couldn’t simply rely on its U.S.-based support staff to help customers resolve problems or issues with Wiz’s cloud-based software. Instead, they hired a dedicated local support team to serve as a liaison between Japanese customers and global support staff.
“In Japan, customer support and product service have to be very, very good. Otherwise, people won’t use your product,” says Yosuke Sasaki, a managing partner at SoftBank Investment Advisers. “It sounds like a small thing, but it’s actually really important.”
One key reason, adds Wiz’s Yamanaka, is that Japanese customers expect a deep level of analysis when security threats or other issues are detected. “In the U.S., people tend to jump directly to troubleshooting core issues,” he says. “In Japan, they want to understand every detail before moving on, to ensure nothing gets missed.”
Language is another essential factor. Japanese customers expect full localization — which is why both Wiz and Databricks have translated their products, documentation, and all communications into Japanese.
While language barriers are less of an issue in Europe — where English is widely used for business — companies often face other challenges, particularly employment norms and benefits.
In the U.S., competitive employee packages often include healthcare plans, stock options, and unlimited PTO. But these perks don’t always resonate in Europe. Many European employees already have public healthcare and many prefer higher immediate salaries over the uncertain future payoff of stock options. In some countries, like Switzerland and Belgium, employees are even taxed on the initial value of stock grants, making them a far less attractive incentive.
As for unlimited PTO, “if you tell someone in Europe they can take as much time off as they want, you may never see them again,” jokes Wilson. “Downtime and family time are deeply valued, and that’s also why you may not get email replies on holidays.”
Navigating these complexities before expansion can prevent wasted resources, compliance missteps, and frustrated employees. “If you don’t plan for these differences up front, your poor HR director ends up overwhelmed. Suddenly, they’re spending 80% of their time on just 10% of the workforce,” says Davies.
Building a global team
One of the most common questions experts like Davies and Wilson hear from companies expanding internationally centers on how to build a successful global team. Should you hire in-market talent or relocate key team members? Their answer: often a mix of both, depending on the region.
In markets like Japan and China, hiring experienced local leaders from the outset is critical. In other regions, a hybrid approach — bringing in leaders from the home market on a temporary basis while building a local team — can be highly effective.
Both Wiz and Databricks have successfully leveraged this hybrid strategy. Last year, Wiz Co-founder and Head of R&D Roy Reznik relocated from Tel Aviv to London to establish and lead the company’s Europe, Middle East, and Africa (EMEA) headquarters. His mission: to scale operations, oversee the hiring of more than 100 employees, and help EMEA contribute 35% of Wiz’s global revenue by the end of 2025.
Databricks took a similar approach. After expanding into Singapore in 2019, the company sent VP of Sales Heather Akuiyibo to the country for a year in 2021 to help instill the Databricks culture in this important market. She focused on hiring and training local sales reps, ensuring they understood how to highlight Databricks’ value proposition effectively. “She made sure they were pitching correctly and really understanding the product’s impact. She had a huge influence,” says Patterson.
Beyond day-to-day training, the biggest contribution relocated leaders like Akuiyibo and Reznik make is in transmitting company culture, says Steve Ciesinski, who teaches at Stanford Business School. “You absolutely need someone who’s been at the company long enough to understand its values and operations. Whether they stay for a week or a year, their presence helps set the country manager up for success,” he says.
This emphasis on cultural fit is why Wiz took more than four months to find the right leaders for its Asia Pacific Japan region, including its Japan general manager. The company needed someone with both experience running an organization and the high-growth mindset of a startup. “With customer value our north star, we have to keep the performance bar high. Hiring top talent is the single most important thing we can do as a company,” says Earnest.
