Enabling Startups to Innovate Globally

May 1, 2014


This article appeared in Ideas Lab on May 1, 2014

Jake Colvin is Executive Director of the Global Innovation Forum and a Vice President with the National Foreign Trade Council.

Should startups care about global markets?

Kavita Shukla thinks so. Through her company, Maryland-based Fenugreen, she has exported Freshpaper—a product that prevents food waste by keeping produce fresh for up to four times longer—to dozens of countries around the world. On their own accord, Fenugreen evangelists have taken her innovation everywhere from Haiti to Malawi.

Fifty years ago it would have been hard to imagine entrepreneurs carving out space for an international strategy in their business plans, but today’s technology serves as a global connector between businesses and customers of all sizes and types.

The Internet is helping to democratize global trade and innovation as online marketplaces, social media, peer review sites, financial services, and logistics platforms enable trust, create communities, and lower the cost and complexity of international relationships.

As a result, engagement by startups like Fenugreen in the global marketplace is growing.

eBay reports that 94 percent of the smallest of its U.S. commercial sellers export, and that 81 percent of all of its small businesses, sell to five or more foreign markets.

The same phenomenon held when eBay looked at its sellers across select developing countries from Peru to South Africa to Thailand. Over 95 percent of the commercial sellers across the eight countries that eBay examined were exporting, and those exporters engaged an average of 30 to 40 foreign markets.

While small businesses and startups often do not have the ability to hire a fleet of lawyers to help them navigate the complexities of customs and legal procedures abroad, or the luxury of spending a significant amount of time on global business development, they are far from unsophisticated.

Take Hugh and Crye, a menswear retailer based in Georgetown in Washington, D.C. From sourcing to sales to monitoring, CEO Pranav Vora has created a truly global business from scratch.

Pranav sources his line of dress shirts, ties, and pocket squares everywhere from America to Asia and, like Kavita, has exported his products to customers in dozens of countries around the world. He has also developed a series of relationships with global certification organizations such as Arlington, V.A.-based Worldwide Responsible Accredited Production and the Brussels-based Business Social Compliance Initiative, which both monitor and improve factory conditions in the countries where he sources his clothing.

Fenugreen and Hugh and Crye represent the work of an entrepreneurial generation that, far from being intimidated by customs duties and language differences, is building international relationships and actively engaging a global audience. However, these entrepreneurs are also buffeted by government policies, which can either enable or constrain their global reach.

Fenugreen, for instance, requires reliable access to an open global Internet to operate the suite of services – from BigCommerce.com to QuickBooks to Skype to UPS – that enable Kavita to run her business from anywhere in the world. At the same time, high tariffs on her product, Freshpaper, have stunted the company’s international growth in select foreign markets.

Governments can also lend an assist to globally minded startups, as Chile has done through its Startup Chile program, which attracts entrepreneurs from around the world to Santiago.

Later today, Kavita of Fenugreen and Pranav of Hugh and Crye will participate in an event hosted by the Global Innovation Forum and LivingSocial in Washington, D.C. to discuss their global journeys. That conversation is in support of a White House Business Council Startup Global Design Workshop to be held on May 2, which will build on the Obama Administration’s National Export Initiative to help startups explore and better use the resources available to help entrepreneurs go global.

These days, thanks to the technologies that are enabled by an open global Internet and transparent and nondiscriminatory trade policies, it’s amazing what startups are capable of doing globally.