Expanding geographically for a startup is always a key and exciting process where uncertainties are high and which usually brings with it a lot of pressure. While opening our first german house in January 2020 as a web developer in the Colonies tech team I was surprised at how few resources were available on this subject in the web project management field.

Given how common and critical this process can be for a startup, I decided to share the lessons that I have learned during this experience in order to help anyone facing similar challenges.

Expanding geographically for a startup is always a key and exciting process where uncertainties are high and which usually brings with it a lot of pressure. While opening our first german house in January 2020 as a web developer in the Colonies tech team I was surprised at how few resources were available on this subject in the web project management field.

Given how common and critical this process can be for a startup, I decided to share the lessons that I have learned during this experience in order to help anyone facing similar challenges.

1/ WHEN DEALING WITH UNCERTAINTY MAKE QUICK, SIMPLE AND REVERSIBLE DECISIONS

Opening a new country means uncertainty on the business level and therefore on the technical one as well. For instance, opening a coliving house in Germany meant that the company had to use a new type of business model which required new processes to be learned and automated. As web developers we didn’t know how far we had to push this automation. We had to balance between complete change and quick adaptation to make it work.

As a web developer, a complete change seems appealing as it will allow you to have a cleaner and more performant system even though it implies more work. However, in this case we didn’t know if this new business model would be required again in the future so uncertainties were very high. We decided, therefore, to follow the YAGNI principle (« You Ain’t Going to Need It ») and implement a quick and reversible adaptation to our system to make it work.

I can’t say how grateful I’m that we took this decision. For now, the new business model only applies to 10%  of our tenants and we haven’t opened more houses in Germany to date..

Reflecting on this experience a few weeks ago, Simon, our CTO, shared with us this great article which supports this way of dealing with uncertainty.

2/ DON’T TAKE COMPLIANCE FOR GRANTED AND CHECK LEGAL REQUIREMENTS THOROUGHLY

In Germany, as a landlord you cannot mix the deposit of your tenants with the cash of your company. This means that for each tenant you need to open an escrow account.

This simple legal requirement highly complexifies the modifications that we had to make to our system so as to be able to open a coliving house in Germany. Thankfully, we discovered this requirement before our expansion and were able to find a viable and scalable solution.

My point here is that you should not underestimate legal compliance when launching a product in a new country and be proactive on that matter. It could well save you time and money!

3/ FIND OUT HOW LOCAL COMPETITORS SOLVE THE ISSUES YOU ENCOUNTER AND CREATE STRONG RELATIONSHIPS WITH LOCAL PARTNERS

For our deposit management issue described earlier we needed a system that could provide a platform for quick implementation and at the same time offered an API for automating deposit account creation to support future growth.

None of the solutions offered seemed to fit our requirements. However, we eventually ended up checking how competitors were solving this issue. That’s how we found Mietwise: a German-based platform that offered online management of rental deposits.

Nevertheless, we did not want to compromise on the digital experience that we provide to our tenants and we didn’t see a way to automate our offering on a large scale. By simply getting in touch with Mietwise customer support we learned that they were currently building an API and that they were open to adapting their platform to our needs to guarantee a smooth customer experience. After a bit of human to human communication we ended up having them modify their platform to adapt to our use case.

And that was it ! Just by checking our local competitors and communicating proactively with a vendor we managed to solve a complex situation that could have limited our growth in the future. Usually web developers tend to take what is online for granted and not to reach out to the service that they are looking into. The more I work the more I think that this is a mistake since you learn so much when you speak to customer support.

4/ HAVING A FULL CLARITY

Opening a coliving house in Germany was for us a project that spanned several months with much complexity, a lot of information changing and new tasks being discovered along the way.

We were very enthusiastic to open this new coliving house but the more we advanced into the process the messier things became. We would regularly ask ourselves the following questions:

  • Who is in charge of this ?
  • What is left to do on this subject ?
  • Who should I talk to in the company to get this information ?
  • Are the people in the other teams aligned with our current vision of the expansion ?

To overcome this we put in place the following actions:

  • Designation of a person in our team in charge of the project
  • Centralization of information on a Slack channel which also made it accessible to all stakeholders
  • Definition of all tasks in a Trello board in addition to our existing project management tools. This board was dedicated to the project and allowed us to assign related tasks and follow the progress of the project
  • Identification of official or unofficial stakeholders in other teams

Be aware that these actions were a good fit for us for this particular problem but may not be a good fit for others. The main goal here is that all stakeholders have full clarity into the issues at hand. How you get there doesn’t matter much.

Conclusion

We hope these few key points will help you with your own expansion project. Remember, you can rarely get it right the first time and it is all about the learning that you take away from the experience. Going through this project has helped us a lot when dealing with other long term projects.

Written by Lionel Debauge, developer Ruby on rails at Colonies

By
Colonies