On May 1, 2014, Business and startup communities gathered with public policymakers for an event hosted by the Global Innovation Forum @ NFTC and LivingSocial, in partnership with eBay Inc., Intuit, Tech Cocktail and ideaspace DC, to discuss how entrepreneurs are engaging in the international marketplace thanks to Internet-enabled technologies.
Participants explored issues from the importance of localizing your product offerings and salesforce to the challenges of being able to move talent internationally to support the needs of startups.
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.
Development organizations are leveraging technology to extend their global reach. At a World Trade Organization forum, Alex Counts, President of the Grameen Foundation, highlighted how his organization uses mobile technology to deliver pricing, weather and crop treatment information to farmers in some of the most remote parts of the world.
Devin Wenig, President eBay Global Marketplaces, delivered an opening keynote at an event held by the Global Innovation Forum, and co-sponsored by Intuit, entitled “The Global Startup.” Devin helped to launch a new report describing the success of technology-enabled traders around the world.
Taking your startup international may be intimidating, but it could be well worth it in the end. According to Lindsey Grossman, “If you are exporting to one country, you should be exporting to ten.” In other words, once you make it work in one country, the opportunities to scale to other countries is limitless.
Several Key Themes from the Discussion Emerged, Including ---
— The Dramatic Impact of Technology on Trade —
The easy part was launching this business online…the difficult part was manufacturing globally … On the customer side, we have customers in all 50 states and in 40 countries. The interesting thing is we haven’t done a thing to market globally, and have let people self-select into our brand.
Fifty years ago not many startups would have built in international activities into their business plans. The great promise of the Internet is that it democratizes global markets.
You can’t be a tech startup these days and not think about a global strategy. Even if you try, you won’t be able to ignore it for long – there are very few boundaries, so you can wait for them to come to you, or start thinking about it as early as possible.
We never imagined and never set out to be a global startup, but then we started to find all of these tools … from BigCommerce to QuickBooks to UPS Mail Innovations. Within a year, we were exporting to around 40 countries.
— The Importance of Diversifying Exports —
I think most of the startups and small businesses that grow, they may start with one market … and they usually stay pretty small because it’s tough to develop those relationships, but luckily as we’ve heard from the other panelists, that’s not the case with the Internet-based model.
If you are exporting to one country, you should be exporting to 10 … We are starting to see some momentum. Obviously, the technology is there to enable this and that smaller [companies] are able to make connections with business partners around the world.
— Challenges startups face in foreign markets —
We think of the higher transaction costs of international shipments at a business level. Passing along the cost of shipment to the customer or thinking about customs duties – It just comes back to margins. Do we think about it at a policy level? No.
As a small business starting out, you are facing really basic issues – what are customs procedures? At first, we went to the post office and filled out customs duties by hand. We spent about an hour for every two customs forms at the beginning … Luckily, we found online tools and surrounded ourselves with smart advisors who helped.
The difficult part was manufacturing, was the supply chain. I tried to do a lot of outreach over email and over video chat, and that only got so far. I realized I needed to take a trip. I got on the ground and it was an iterative process.
Infrastructure can be a big challenge. We are very lucky to have high Internet and credit card penetration for e-commerce. In other parts of the world, credit card penetration was really low and in some cases was an impediment to accessing those markets, though there are really creative ways around that. Our operations in Indonesia had a fleet of mopeds to deliver vouchers for cash-on-delivery.
— The Rapid Growth of Mobile —
Our business has changed more in the last 24 months than it has in its entire history. And the thing that’s driving that is globalization, mobile and data. Everything points back to those three places … Those are the big waves that are driving not just e-commerce, but they’re driving what we see as innovation around the world.
Connectivity, Internet and computer access really varies, but everybody has the phone. … If you’re not being mobile, you’re really going to miss out on a lot of growth opportunities.