Many entrepreneurs that want to have a global presence often struggle with how to build one. With high-speed Internet, high-quality voice and video communication services, and more funding opportunities for startups, it’s never been easier to tap into the global market, says venture advisor Chenyang Xu.
“Today’s world is increasingly interconnected,” says Xu, an IEEE Fellow. “In the last five years, I think the [entrepreneurship] activities around the globe have only intensified as many forms of accelerators, incubation investment entities, angel investors, venture capitalists—you name it—have become global and mainstream. The other big, driving force is that many nations have adopted growing entrepreneurship as a national strategy.”
Startup hubs have sprung up in many countries, he notes. Boston, Tel Aviv, New York City, and Silicon Valley are no longer the only viable places to launch your company or find talented people.
“A new generation of technology entrepreneurs are emerging around the globe,” he says. “There will still be entrepreneurs who focus on serving the local market, but I think this new generation of global technology entrepreneurs is going to be a major force to shape the future of the economy and innovation. They will significantly transform how people live, work, and study elsewhere.
“Becoming a global technology entrepreneur is increasingly common, but it’s not easy. To succeed and seize the immense opportunities requires acquiring a new mindset and new skills and contacts.”
Here’s his advice on how to succeed in the global market.
CULTURE IS KEY
Understand the culture of the country you want to operate in and how technology can help, Xu says.
“Culture is at the core of everything,” he says, “and no amount of business experience will help you succeed.
Become immersed in the region’s business constraints and regulations, he advises. To help you with that, hire locals. They will understand these issues and be key to building businesses and partnerships, he says.
Consider setting up your company to be global from the start, Xu says. Begin by picking founding partners that are in the locations you want to be in. Select people to sit on your board and advisory board who understand how things work in that region, the challenges your company might face, how fundraising is handled, and what the talent pool is. Your directors and advisors should come from different industries and different parts of the world.
“I believe global startups should be multilocal,” Xu says. Multilocal companies operate locally in more than one region of the world.
That could mean having offices in multiple locations—which can add complexity to managing people, especially if it’s a small team.
It can be expensive to lease offices when you’re just starting out, especially in an area such as Silicon Valley. Instead, consider using coworking places. Nearly every large city has some.
“They make having an office in different locations more affordable and scalable as you add more staff,” Xu says.
Also, don’t feel the need locate to the popular tech hubs because you think that’s where all the good talent is. Xu says you can find solid performers in just about any major city.
But, he says, you don’t always need to have an office in the country in which you operate. During the COVID-19 pandemic, people have learned that remote working can be effective. Employees now collaborate via Zoom, Microsoft Teams, and other Web conferencing tools.
“Remote working and remote commuting have become the new norm,” Xu says, “and I think this new behavior will persist even when the pandemic ends.”
MORE FUNDING AVAILABLE
Several accelerators have undergone a global expansion in the past few years and now have offices around the world. They include Founders Space, Plug and Play, Startupbootcamp, Techstars, and Y Combinator.
Xu notes that countries are setting up development offices around the world to help fund their citizens’ ventures. German Accelerator, a venture backed by Germany’s government, helps startups operate in Boston, New York City, Silicon Valley, Singapore, and elsewhere. Through Innovation Centre Denmark, the government in Copenhagen is helping Danish companies break into new markets including in Boston, Munich, and Seoul.
IDENTIFY GLOBAL NEEDS
Consider solving problems that have a global impact, Xu says.
“While you might start off solving a problem in your region, think about whether the solution could be used in other parts of the world,” he says.
Zipline, which uses drones to distribute medical products, is one example. Founded in 2014, the company is based in Silicon Valley. The startup—which designs, builds, and operates its own small drone aircraft—started by delivering medical supplies from its distribution centers in Ghana and Rwanda. The company has since expanded its operations to India, the Philippines, and the United States.
“They now have a valuation of more than US $1 billion,” Xu says, “and through venture funding have raised over $200 million. This is really a remarkable model [of global entrepreneurship]. I didn’t think it was possible 10 years ago that you could impact the world, help these developing countries with new technology, and still [make a profit] during the startup phase of a company.”
Another example is Brex, a promising financial-services company tailored for startups. Brex uses artificial intelligence to assess the credit risk of early-stage startups. The founders had set up financial-services companies in Brazil. After gaining experience there and seeing some success, they moved to San Francisco in 2017 to launch Brex. It is one of the fastest-growing payment systems for startups. Last year Forbes reported that Brex had raised $315 million in funding and was valued at $2.6 billion.
“If you can solve the problems that matter both locally and globally, the solution can actually help you accelerate your [startup] more quickly,” Xu says.