Taking your startup global

One of the cardinal canons of Silicon Valley is that startups must focus ... and focus, and focus some more.  Indeed, Sequoia Capital enshrines it as one of their guiding principles for building sustainable companies. Historically, this has also meant that startups expanded markets very cautiously beyond their home geographies. 

Enterprise players first got to big Valley companies, then perhaps to Financial Services behemoths in New York City, then to the rest of Corporate America.  Once they were big and profitable, they might have funded a London sales office to explore the European market.  Asia was usually an afterthought for post-IPO expansion.

Internet and New Media players were a little more nimble, but they too thought of global markets as icing to be applied to the cake of the US market.

Such an incremental approach to market penetration seems quaint in today's flat world.  A chip company based in China might get its first customers in India or Korea, and Internet companies like Facebook, hi5 and Orkut might see much of their growth coming from outside the US. Very early in your company's lifecycle, you are faced with the gnawing question of whether to explore distant markets - are they tantalizing merely because they are far away, or is that glitter really a pot of gold?  And how should a 20-person company target Asia or Europe anyway?

It's usually not difficult to figure out if your product or service has as much, or more, appeal outside home base.  Maybe you meet a prospect a trade show that attracted a worldwide audience, or maybe the social graph of your users, superimposed on Google Maps, looks uncannily like the highway map of the Philippines, or maybe your investors have a global perspective and can point you to promising international markets (shameless plug -  we at BRV have done this more times than I can remember).  Far earlier than you might have assumed, anyway, you're faced with the opportunities and challenges of globalizing your company.

Before you panic (or after you recover from it), remember that going international is no longer as expensive as it used to be.  It's really much more about mindset than expensive offices in downtown Tokyo or Seoul. In our experience, following a few basic guidelines can smooth your overseas expansion:

• Be ready to take an order from anybody, anywhere, anytime: simple though it might sound, one of the companies I'm involved with got a lot of international customer interest very shortly after they started selling, and had to scramble to be able to take customer calls outside US office hours and to process non-US forms of payment. Be prepared for success earlier than you might expect, and build your processes and systems for a world where at any given time somebody, somewhere isn't asleep but is, instead, ready to buy your product or watch an ad on a webpage you serve.
• Treat all your customers equally well, wherever they may be: when the US economy was the only engine pulling the world, Silicon Valley companies built products or services for the home market and when they went international, most customers had to buy the US-centric product - or buy nothing at all.  That attitude just won't fly in a world where buying power, and innovation, are increasingly diversified.  Yes, the Orkut team might sit in Mountain View, but if Brazilian users want a certain feature and US users don't, then the Brazilians should probably get it - after all, they're the largest user bloc on the site!
• Remote offices shouldn't just be sales offices: let's say you bit the bullet and employee #21 in your small startup was the head of Asia-Pac, based in Singapore.  His primary job might be Sales and Business Development, but he is also valuable eyes and ears on the local market, and your Product teams must be attuned to what he tells you.  Otherwise you'll be pushing a Valley product onto a distant customer who will feel ignored and disregarded - and might well leave you.
• Re-activate your frequent-flyer programs: even if you run a website, and never meet your users face to face, there's no substitute for immersing yourself in the culture from which they come.  In any case you can always meet local advertisers on your trips to distant lands filled with your users. And if you're an Enterprise play, then, by all means, get on that plane and meet those remote customers.

More to come on this topic ... stay tuned

Comments

[PinkConnection.com Tim]

Great article..keep it up!

[Vijay Anand]

That's a good start. Hope to see more.