Is Your Startup “Born Global”?
A relatively new term is being used to describe businesses that launch, not in their domestic market as might be expected, but rather, overseas in a foreign market. Sound risky? Not your style? Well, not so fast -- it might actually be worth considering.
Let’s face it, we are a nation of startups and it can sometimes feel like we are faced with a crowded stage for launching any new product or service where “new” can be an overused term. Plus, if we take a look at populations in general, it’s easy to see that 95% of the world’s people live outside of the United States. Add in the emerging economies and consumer trends around the globe and you can quickly see why seeking new customers overseas might start to sound like a pretty good idea.
Despite this, standard business advice will tell you that you must first find success in your own domestic market before you can justify expansion into overseas markets. Aha – but what if you decide your company will be “born global” – forget domestic market share, you’re going to jump into the deep end first and find a market abroad. What are the benefits?
Be the outsider. To start, plenty of people only consider something truly “new” if it comes from outside of their own borders. Why not take advantage of being the outsider and try on the role of exotic foreigner? Position your business as uniquely American and set yourself apart from the competition. Plus, there still exits plenty of goodwill built into the Made in America brand. You might be surprised to find that in many countries it can work to your advantage, too.
Reverse leverage. Once you begin to generate interest in your business from markets overseas, you may find that you get an upsurge in interest from your own backyard. Funny how that works, isn’t it? It can be hard to get the attention of a crowded consumer market at home, but once you’ve found a niche abroad, why not leverage that attention with your home audience? Let people know about your successes overseas and you may find it leads to more interest on the domestic front.
Connections lead to more connections. While I’m not suggesting that growing your business overseas from the very start will be easy, it may end up being worth it. You see, sometimes by simply putting yourself “out there” you begin to make connections and those connections lead to more connections. And that can be where the fun really begins.
How do you know if being “born global” is for you? Some thoughts:
- Your inquiries come largely from outside of your domestic market. If you are finding a trend among your foreign customers, research the market potential.
- You have inquiries coming from customers that will use your product with operations that can reach an even larger international market. Some customers are actually sourcing potential products for their own market. This can lead to new distribution channels or licensing agreements.
- There are little or no trade barriers associated with your product. If you plan to manufacture domestically and export overseas, check to find out about tariffs and trade barriers related to the countries you are interested in.
- You have a high value relative to transportation and other logistical considerations. Shipping costs can be expensive. Look into the landed cost or consider licensing to keep overhead in check.
- Customer needs and interests are similar related to your product and its impact across different countries. Though the marketing message may need to be tweaked (make sure you research this thoroughly to avoid embarrassing cross-cultural misinterpretations) you might be surprised to find out how similar other foreign markets can be.
- Your product has the ability to scale growth along with its increased market share – through either brand/product expansion or manufacturing capacity. Growth projections are helpful in determining if you can afford costs associated with establishing overseas market share.
- Your company or someone associated with your team has international business experience or you have strong resources at your disposal to support international business. This is always a bonus, though not necessary. If no one on your team has direct experience, there are loads of indirect experience via articles, videos, blogs, books, and other publications that can help you navigate international business decisions.
So get out there, startup baby! There’s a big world just waiting for you to explore.