Monday, May 23, 2011

Globalization & The Entrepreneur

Why US based businesses need to open their eyes.

One exciting aspect of the large web 3.0 push is the access entrepreneurs have worldwide to all the tools available online.

An interesting phenomenon though is that entrepreneurs outside of the United States have embraced the ability to expand globally much more than US based startups. This isn't to say no entrepreneurs have caught on to the globalization wave, although I think many are missing opportunities they could be capitalizing on worldwide.

I think we've forgotten the world when planning.

Thinking of the hundreds of startups I've talked with in the last year, only a handful come to mind as having a global business model. Certainly some models don't need a global perspective. A consulting firm which relies on face to face meetings is okay with a local growth strategy. Conversely, the social network looking to connect the local consumer with local businesses certainly would want to focus on proving their model in communities they are familiar with. But why not consider expanding to Canada down the road? 3 large cities are easily accessible, no language barriers, minimal cultural differences, and most important a market otherwise deprived of the overload and litany of dot com's we experience in the U.S.

Why not take the consumer luxury good auction site beyond U.S. soil? Why not appeal to aspiring writers in Africa? Certainly people in Australia could utilize an online education portal. It's a simple question of what is limiting your business model, and if there are no real barriers, would going global make sense? If not now, what about I'm a few years once you prove your business?

Maybe we are just greedy?

As well, I'm learning that many proven business models in the U.S. haven't made their way globally. This is even more mind boggling. Now we are not talking about a startup planning ahead for growth of their yet to be proven business, these are companies generating revenue, with 100% tunnel vision on a limited, albeit large U.S. market. As an example, one startup out of England is launching a much improved upon version of very soon. Features, user interface, capabilities and most important a value proposition reaching well beyond Mint's are all part of this up and coming companies model who I've been fortunate to work with. The obvious question to me was "why didn't a company like plan ahead to tackle the global market? And why was this company out if the UK able to build something which puts a successful company to shame?" I don't claim that is doing a bad job, or claim they didn't explore options. To a degree this also related to my theory that being the first mover isn't always best. Without a would the UK company have had anything to springboard from and improve on?
My point instead is that there are plenty of greatly successful U.S. Companies go have somehow forgotten the rest of the world. At least consider your own continent - Canada and Mexico are very receptive to emerging businesses, and would welcome improved upon business models.

I'm proud to say only 1 startup I am CFO is U.S. based. Canada, India and Costa Rica are the home countries of 3 amazing companies I work with, not to mention the startups I've worked with on projects such as financial forecasts, business plans, investor presentations and cash forecasting. Japan, England, South Africa, China and Australia have all produced top notch entrepreneurs with business models not yet seen in the U.S.

There's money elsewhere than Silicon Valley

Along with globalization of the startup community, there is a likewise expansion of investor capital beyond Silicon Valley. As an example, the Canadian startup I am CFO for (a first year multimillion dollar revenue startup) is actually backed by an Indian investment firm. The Costa Rica firm has investors from Europe, including England and Germany. Another startup I've worked some with is funded out of Dubai. When sending out those executive summaries, expand your search worldwide and tap into investor networks anxious to find the best of the best.
In summary, set yourself apart and think, act and serve the world. You'll be amazed what it means for your startup.

As always, feel free to contact me, Chris Benjamin Rogue CFO with any questions at the below link.

Chris Benjamin, Rogue CFO

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