In the previous posts we have seen basic objectives of start-ups and how they track their success through the KPIs. What I would like to touch here is how this differs per country. More often than not the main question for startups becomes “Which markets they should focus on and what are the reasons to choose them?” While it differs a lot for each client it might be a good idea to check what variables influence the success of different target markets.

Firstly, start-ups are the strongest in the countries where they are incorporated, so that gives an advantage to start-ups from bigger markets against those that come from smaller markets. However, let’s start first with the continents as this seems to be one of the most interesting discussions, especially due to Europe being represented by many smaller countries with different languages and smaller entry costs per market and on the other hand US with one language, but much more competitive landscape.

Observing total traffic of our full exporters in the portfolio where about 60% of them are based in Europe and other 40% in the US we can see that Europe represent around 55% of their traffic, with the US taking around 27% and other 18% being split between Asia, Oceania and a fraction from Africa.

Figure 1: Percentage of traffic of start-ups per continent

Traffic per continent

Source: Nuuk Digital, Google Analytics Data

If we additionally split their traffic from the top 10 countries suddenly we see a very different trend with the US rising on the first place with close to 40% of traffic coming from there, followed by the UK and Germany. The highest ranking Asian country on the list is South Korea representing around 7.5% of the total traffic on average. Really interesting insights in terms of traffic come from Australia and Canada, which are both English speaking but end up on the bottom of the list with each representing just around 1-2 % of the traffic.

Figure 2: Percentage of total sessions of start-ups per country

Traffic per country

Source: Nuuk Digital, Google Analytics Data

Now if we take a look at how invested startups are in global markets, we can now observe how well they perform on average in these countries in their primary KPIs – conversion rate of the website.

Here we see why the US is so important for start-ups to enter, as on average they have the highest chance of scoring a conversion from the US. Indexed results highlight that 2nd and 3rd country in % of traffic – UK and Germany are significantly lower in that. The UK’s indexed conversion rate is at about 60 and Germany’s even lower at around 40. Positive surprises where start-ups perform well in general are Switzerland and Hong Kong, but they might not be as scalable due to their size.

Figure 3: Indexed Conversion rate of start-ups per country

Conversion rate per country

Source: Nuuk Digital, Google Analytics Data

To sum up we can see different countries perform very differently for start-ups and often global approach is crucial for expansion. Another interesting observation we found is that the US market is essential for expansion even though local markets, if big enough, will generally perform the best. So markets to expand to if you are not based there and that low hanging fruit might be just across the border, yet long term the US is the market that is great to have in your revenue books and represents great opportunities with California being the pearl for start-ups both from the B2C as from the B2B perspective. Let me know what you think? Observed something similar? Would love to hear from you.