Going Global: What Startups Miss When Expanding Into New Markets

Expanding internationally is a thrilling prospect. A new region can mean new customers, bigger contracts, and faster growth. But for startups, global expansion often brings more risk than reward because the commercial foundations aren’t ready.

Startup Genome’s research on 3,200+ high-growth startups found ~70% scaled prematurely, and those that did almost never broke past key revenue thresholds. International expansion before you’ve aligned product-market fit, regulatory readiness, and partner strategy is a classic form of premature scaling; one that burns cash and time across borders.

Below are some of the biggest misses we've seen at Agrotera Group:

Miss #1: Ignoring local incorporation and compliance
Each region has its own tax, employment, and corporate governance rules. Expanding without a strong incorporation strategy can lead to penalties, lost contracts, or even forced withdrawal.

Miss #2: Picking the wrong partner
A shiny local partner might not have the reach or influence you need. Without due diligence, you can get locked into relationships that don’t scale.

Miss #3: Scaling too fast
Winning one contract doesn’t mean you’re ready to open three offices overseas. Expanding without proven product-market fit drains resources and confuses investors.

Miss #4: Misaligned joint ventures
International JVs can be powerful, but only if structured well. Misaligned incentives often kill partnerships before they deliver.

A good example of expanding globally too fast would be Katerra who filed for bankruptcy in 2021. Katerra started out with a grand vision to completely reinvent construction using prefab technology, automation, and supply-chain integration. They had billions in funding, including from SoftBank, everything sounded great on paper but Katerra decided it was ready to go global before the model was really nailed down. Instead of focusing on a few strong projects and learning the local ropes, Katerra tried to do everything, everywhere, all at once. They built a huge factory in Arizona, bought an architectural design firm, then launched subsidiaries in India and the Middle East and this was all while still trying to prove their own modular manufacturing process worked at scale.

In India the company partnered with a local construction group to speed up regional delivery. But the partnership didn’t mesh as the local team was used to conventional construction timelines and regulations, while Katerra wanted to automate everything. What looked like synergy on paper turned into constant friction over compliance, sourcing, and cost. While at the same time in the United States, Katerra’s own plants were struggling to deliver finished modules on time because of supply chain breakdowns and material mismatches. The company couldn’t meet contractual delivery terms overseas because every region required new certifications and local approvals that the US team hadn’t anticipated.

Katerra tried to scale before its product, partnerships and compliance processes were mature. By the time they slowed down to fix the issues, the cash burn had already hit critical levels. In 2021, after burning through more than $2 billion, the company shut down.

Katerra’s story is as much about overreach as it is about misalignment. The partners weren’t ready, the local incorporation strategy was an afterthought, and the company didn’t build in enough time to learn from early markets before expanding. Going global isn’t a sign of success; it’s a test of discipline. A structured commercial plan needs to be in place along with the revolutionary concepts and technology. Learn from Katerra’s story—ambition isn’t the problem, sequencing is.

Closing Thoughts The smart path forward: Build a phased expansion plan that tests assumptions before you scale them. Start with representation, validate demand, and solidify markets and processes before signing anything big. Seek partnerships that truly align with your core drivers and fill capability gaps rather than add complexity. Only then should you establish local offices or formal JVs. With the right commercial scaffolding and disciplined pacing, you’ll expand globally without burning capital or credibility.

Thinking about expanding internationally? We’ll help you navigate incorporation, partnerships, and strategy so you scale globally with confidence. Let’s map your next market together. Contact Agrotera Group today for a consultation.