Five tips for every startup thinking about going global

Wikipedia photo

Not that long ago, only the largest and most profitable companies could afford to build a multinational enterprise. Today, with Skype, LinkedIn, Google Docs and other services in the cloud available at little or no cost, even a small tech startup can become a multinational. And should.

If you aren’t building an international operation, I guarantee your competitors in Tel Aviv, Shanghai, Berlin and Sao Paulo are grinning with delight at your inaction. International is not about cheap labor. It’s about entering growth markets and leveraging talent.

At Livemocha, we announced in September of this year a major partnership with an influential Brazilian education company. Dozens of emails arrived afterward asking me how we pulled this off in such a fantastic country that will soon host the World Cup Soccer and the Olympics. Brazil is a vibrant economy growing at four times the U.S. GDP and filled with 200 million talented people.

Here are a few lessons I’ve learned from building international business ventures since the mid 1980s, now reinforced with this latest effort. Don’t be shy. Jump in. It’s a most excellent game!

  • Focus. It’s a huge planet with seven billion people. Don’t go global – pick one country outside the U.S. and serve it well. In our case, we picked Brazil because it represented over 20 percent of our member base and about 35 percent of our revenues. That was a happy accident from having a website localized into more than a dozen languages. In our case, the market taught us where to focus.
  • Become an expert. Study, study, and study some more. Study the target country’s language, history, and culture. Meet immigrants from that country. Call on the Ministry of Trade and ask for help. Use every opportunity to get an introduction to someone with expertise in your target country. Wikipedia and Google have mountains of useful information; Livemocha and LinkedIn have thousands of contacts you can make to learn more of what’s going on right now in your target country. There is no excuse for ignorance.
  • Hire expertise. You may have a product or service in high demand, but even then you will only scratch the surface without local help. Recruit someone with experience in the U.S. and in your target country, preferably with business and government connections. We were lucky and found Pedro Costa, the Honorary Consul responsible for establishing trade relations between the State of Washington and Brazil. He rocks. Contact me if you want an introduction.
  • Be shrewd. The rules of engagement in the rest of the world are never as chivalrous as they are in the U.S. You must assume you are at a disadvantage as an outsider. Never assume anyone wants YOU to win. They don’t. THEY want to win! Initially, you can use infatuation with American technical prowess or fear of American innovation as leverage until you can build real economic influence. And even then, you cannot let your guard down. This is not your turf and won’t be for decades, if ever.
  • Act with honor. An overseas operation is not for you alone. Your every word and deed reflects upon all Americans. Always tell the truth and serve your customers brilliantly, even if it means financial loss. Honor is worth far more than money. Honor buys forgiveness and ensures another opportunity for you and for those that follow you. Doing business overseas is not a solo sprint. It’s a marathon relay and we are all counting on you to represent us well. If you enter a new market, you will live with the honor assets and liabilities left behind by antecedent American businesses, politicians, and soldiers. Be smart. Leave a mark worthy of your name.

If you are a web services company with a promising application – mobile or otherwise – you are already in a global competition. Wake up. If you aren’t explicitly selling to a market outside the US, you are already late to the party.

And if you aren’t collaborating with talent outside the U.S. you may be in for an unpleasant surprise when they come stepping on your turf.

Michael Schutzler is the CEO of Seattle startup Livemocha. You can follow him on Twitter @CEOsherpa.

  • Stephen

    Excellent advice from a guy that really knows what he is talking about!

  • Roger Cole

    Understand, want to promote your own company here. Could do a better job with giving valuable advice

  • Lincoln Jerry

    One of the most useless posts I have seen on geekwire. It should go under Sponsor post.

    • Ross Cranwell

      I don’t really see it as a Sponsor post – he talks about his company’s experiences, but that’s necessary in order to explain this topic.

  • http://twitter.com/CEOsherpa Michael Schutzler

    Am bummed about the comments. My intent was to make the post relevant & current from recent experience. Lesson learned – I will only talk about prior experience in these posts.

  • Anonymous

    Why do we get a total platitude like “act with honor,” but no coverage of the real thorny issues such as how to come up to speed on and comply with with foreign labor laws.

    Also too bad the article focuses on the specific use case of opening a large labor shop in a single country, when I think more startups face the use case of how to create small local sales offices in many countries and sell/support broadly across the globe.

  • Steve Chayer

    I’m not sure how I missed this article when it came out but have a question for the author. Does this advice apply equally when launching a new consumer product?