Mind The Gap

3Getting Ready to Expand: Why, Where, and How Will You Go?

“Be prepared” is the Girl Scout motto. It applies to scouting out the terrain for cross-border expansion, where the upsides are great—and pitfalls can be deadly. We think a failure story will set the proper tone.

Private, high-end social clubs have been part of the business world for centuries, because they offer an attractive combination: focused networking opportunities, plus a place to relax and unwind without the hubbub of a public restaurant. Recently there’s been an explosion of these clubs in new forms. Operated as for-profit enterprises, they have modern amenities like co-working spaces and gyms, along with a variety of dining and lounge areas.

One of the hottest venues in Singapore was a club called 1880, a magnet for entrepreneurs and other mover-and-shaker types. Then one day, seven years after its launch, members—many of whom had already paid their yearly dues—were stunned to receive an email out of the blue. The club 1880 was closing immediately. Don’t even try coming today, the email said; the doors are locked.

The culprit was a failed international expansion. Flush with initial success, 1880s cofounder and CEO—a Canadian expat—had expanded into two international locations, Hong Kong and Bali, the previous year. Bali hadn’t even launched yet, and 1880 Hong Kong capsized within months. The expected swarm of new customers paying high membership fees didn’t materialize. As the founder Admond Lee of The Runway ...