Long gone are the times when entrepreneurs used to start small and then expand their business out from national borders gradually, maybe after 5 years, 10 years, or even more. For example, Johnson & Johnson set up its first foreign subsidiary after 33 years from its founding in Montreal in 1919. Sony took 11 years to export its first product, the TR-63 transistor radio to the United States. The Gap was founded in 1969 and opened its first overseas store in London in 1987, 18 years after its founding. But now, the scenario has changed upside down, and companies are now being born globally.
When you will look at a startup now, you will find that instead of collecting everything from their native place, they expand their boundaries and hire experts from around the globe. This is because entrepreneurs now have all the required information at their fingertips from the best suppliers, manufacturing locations, to investors and employees. And in the competitive world, entrepreneurs want to onboard with people who will provide the best service in the limited capital irrespective of their location.
Global entrepreneurs are those who seek out and conduct new and innovative business activities like exporting, licensing, opening a new sales office, or acquiring another venture across national borders. And global entrepreneurship refers to entrepreneurship done on a worldwide basis. Globalization has changed the way businesses operate drastically. And the impact that entrepreneurs can have across the entire world is breathtaking. Moving out from your borders and becoming a global entrepreneur is a positive and profitable career move. The person who holds the title can be extremely wealthy, powerful, and treated as a role model.
Source: Slide Team
Advantages of Global entrepreneurship:
You get the opportunity to grow the business in new markets.
You will meet new experts and talents.
Your customer’s reach expands.
You will learn the workings of foreign markets and compete with them.
You are less dependent on seasonal trends.
Any entrepreneur that takes their brand to international markets has the opportunity to impact the society by encouraging economic growth and creating new jobs.
Challenges faced by global start-ups:
The logistical problems and psychic barriers created by distance and by differences in culture, language, education systems, religion, and economic development levels.
As startups already have so many various things to spend on and in such a situation, accommodating the world's various workweek schedules can be difficult.
Managing the different nations' political, regulatory, judicial, tax, and labor environments.
Havard professor Daniel Isenberg in his research found that global entrepreneurs must cultivate four competencies. They are:
To clearly articulate their reasons for going global
They must learn to build alliances with more powerful partners
To excel at international supply chain management
Must create a multinational culture within their organization.
Here’s How You Can Do It
Being a global entrepreneur is not a cakewalk. Various prominent companies took years to launch themselves in the global market. Now, when you are starting global, here is some advice you will need to succeed.
1. Understanding culture
You can not connect with the customers, investors, market until and unless you understand the culture of the country you want to work with. If you are not focusing on it, now is the time because no amount of business experience will help you succeed. For this, you can hire locals, and they will help you out of this.
Visit the below links to know more about the role of understanding culture in business
Significant of culture for business
Understanding a country’s culture where you want to start your business or start a new venture is like learning a success tip. It helps you in effective communication and helps you in decision making. Read more.
How culture impacts global business?
Doing business Internationally does not only mean crossing borders, but also crossing cultures. Culture has a very different influence on people’s thinking, communication, and behaviour. Cultural differences in global business can create barriers that may impact your business drastically. Read to know the impact of culture on global business.
2. Think global
The surroundings you live in have a bigger impact on your thinking. In such a situation, before going globally, it is important to understand how your competitor thinks then only you can compete with them. If you are thinking to be global from the start, start by picking founding partners that are in the locations you want to be in. Onboard with people who understand how things work in that region, the challenges you may face, how fundraising is handled, among others. Consider collaborating with directors and advisors from different industries and different parts of the world.
After the covid-19 pandemic, people believe that remote work is effective and you can take benefit from it by collaborating with people across borders through Zoom, Microsoft Teams, and other Web conferencing tools in case you are not thinking of having an office in the country.
Recommended: Effective Video-based communications Methods
3. Check the availability of funding
In the last few years, several accelerators have undergone global expansion. For example, a venture-backed by Germany’s government called German Accelerator helps startups operate in Boston, New York City, Silicon Valley, Singapore, and various other places. So, before setting up your business lookout for such accelerators that can help fund their citizens’ ventures.
Go through the below links to know more related to funding:
Source of finance for global business
Starting your business in the global market is very challenging. Among many other hurdles that entrepreneurs face, looking for financing sources is one major issue that diffuses the idea of functioning globally. Read more
Tips to secure funding from international investors
It is easy to get some good funding for your business from local investors because you know how to tackle them. But, this can be a huge problem when it comes to getting it from people who are new to you, i.e. international investors. Here are some tips to tackle them.
4. Focus on global needs
If you want to make a bigger impact, solve the problems that have a global impact. When you are solving a problem in your region, look for other regions where it can be beneficial as well. Zipline, founded in 2014 uses drones to distribute medical products. It started by delivering medical supplies from its distribution centers in Ghana and Rwanda. The company’s operation is now expanded to India, the Philippines, and the United States. The valuation of the company is more than the US $1 billion.
Another startup Brex, a financial-services company is one of the fastest-growing payment systems for startups. In 2019, Forbes reported that Brex had raised $315 million in funding and was valued at $2.6 billion.
Companies like Zipline, Brex came out with some interesting ideas which helped people both locally and globally, and that accelerated the startup expansion more quickly.
Do not miss: Do You Know How to Plan a Business Expansion?
We, at OpenGrowth, are continually looking for trending startups in the ecosystem. If you want to know any further information about the startup ecosystem or have any mind-boggling ideas, do refer to our other blogs.