During the last two decades a strong line of research has emerged in management research and policymakers’ agenda: the relationship between firms and clusters. One of the several reasons explaining the increased interest in clusters is the positive association between networks within geographical boundaries and knowledge diffusion. However, there is a strong assumption in this reasoning: clustered firms have enough capabilities to transform local interaction, which has to be also rich in information, into valuable knowledge to improve its performance. What will happen if firms in the cluster lack of skills to absorb information? What will happen if clustered firms do not have rich interactions? This paper aims to show the benefits and trade-offs existing for a Small and Medium Enterprises when at the moment of start an internationalization process managers need to decide either to emphasize the interfim interactions generated inside a cluster or to follow a standalone process without clustering