Interview with Henning Kruthaup: International Expansion at Sparheld
Every month we speak to great entrepreneurs and awesome companies who have taken the leap and expanded into new markets. This month we spoke to Henning Kruthaup from Sparheld who shares with us his experience and tips for international expansion.
Thanks for joining us Henning! Can you tell us a bit about yourself and sparheld.de?
My name is Henning Kruthaup, I'm German and based in Berlin. I have been building websites since I was 14. I studied Marketing and Economics at Missouri State University in Springfield, Missouri, USA before working as a product manager for Spreadshirt in Leipzig, Germany and Rocket Internet in Berlin, Germany. Ten years ago I founded my own company, Sparheld International GmbH, here in Berlin. Sparheld International GmbH operates some of the biggest coupon portals in Europe. We are active in German (Sparheld.de), France (Reduc.fr), Italy (SignorSconto.it), Spain (Cupones.es), Sweden (Rabattkalas.se) and Denmark (Rabathelten.dk). Every day, we help thousands of users to save money shopping online.
Why did you decide to go international with sparheld.de?
We thought, if it works well in Germany, it must work in other countries as well. We wanted to see how it would work, so we gave it a shot with a limited budget to validate our assumptions. We did and it worked out.
How did you prepare for internationalisation?
We were young and fearless back then! We hired people from each country, switched to talking in English in meetings and got started. We focused on getting things done and didn't think about the problems. If we discovered any issues, we simply fixed them along the way. That's it. We really didn't prepare, to be honest. However, our product was/is fairly simple compared to other companies, our costs to expand to another country were really, really limited and we were able to pay the expansion from the existing cashflow. Therefore, we were in a really special situation that allowed us to do it this way.
(Wow, that is lucky and certainly an unusual situation! We would always recommend people prepare for expansion!)
How did you measure your success?
Overall, we want to create the best coupon portal in every country, helping all users to save money when shopping online. I am also very happy if all of my employees are happy. Nonetheless, in the end, we primarily measure success by the numbers. Long-term, we need to be profitable in every country that we operate in.
Being in several markets for many years, what can you tell us about the differences between countries?
I get asked that question a lot. Personally, although we only operate in Europe, I do believe that there are big differences between the countries. Consumers tend to shop at different times, the basket sizes and paying behaviours differ, and you have some special events in each country such as the Summer Sale in France, which don't really exist in Germany anymore. But ultimately, the differences are marginal. We decided to have the same platform in all countries and that there is no need to make individual adjustments for every country.
If you had to start again, what would you do differently?
I would have expanded even further and faster. We limited ourselves to a couple of countries. However, the work becomes proportionally less for every country that you expand into. Expanding faster, before it is too late, would have been the right thing to do. Besides that, I would not expand to Eastern Europe, India or Finland again. We were operating websites in each these countries at some point. However, you really need to understand their culture and need to localize your product to get a foot in the door. We would have needed to make adjustments to the platform that we had decided against.
If you had to give one piece of advice to a company looking to start expanding internationally, what would it be?
Just Do it.
There are so many reasons to do it. It changes the company and brings it to another level. Most importantly though, looking back, operating in multiple countries has probably saved the company multiple times. One year, several countries were not performing well compared to others. Next year, it was exactly the opposite. Diversification is a really good thing.