My idea about creating a start-up is that it has to be a global one. A global start-up is one that is targeting the whole world.
Being global or being local is a very complicate dilemma:
- Should you focus on adapting your web2.0 application to local uses?
- Or should you rather try to create general applications that can be used by anyone but maybe not in the most suitable way for everybody?
You probably have seen the HSBC (bank founded in Hong Kong in 1865) advertising campaign in your own country. HSBC claims itself as the world"s local bank. The topic of HSBC advertising campaign is that the same thing can be interpreted differently by people in different places. Thus it is of vital importance to have a local background, even tough you are a global player. In other words you cannot be global if you are not local.
I totally agree with HSBC in this. Furthermore, I would go a step further and say that the only management structure that allows you to be local and global at the same time is a decentralized approach. I learnt this in my current company, which is also a global and local player at the same time.
Most Internet start-ups begin local and become global some time later. However I know a clear exception: FON(company building a community of people making WiFi universal and free) by Martin Varsavsky has followed a multi-national approach from the very beginning. While the whole orchestra was directed by Martin in Madrid, different groups of entrepreneurs were working in America, Europe and Asia at the same time to achieve Fons goals in their respective countries.
My idea of global start-up is based in this model. We can define it in the following way:
I am thinking on a 3 region approach. A co-founder is necessary to coordinate work in each region:
| Region |
Co-founder |
Software Development |
Marketing |
Start-up Financing |
| Asia |
Identified |
+++ |
+ |
+ |
| Europe |
Identified |
++ |
+++ |
+++ |
| USA |
Not yet identified |
|
+++ |
+++ |
In other words, I believe:
- Asia should focus on software development due to the low labor cost. However marketing is also important (local people would be required for this). Start-up financing will have a minor role in Asia due to cultural differences and above the fact that venture capitalists are more rare here. I will be in charge of Asia because I have being living here for some time, can follow (simple) conversations in mandarin and I do not feel like quiting China. Asia will be a very difficult region.
- Europe will have a central role. At the end of the day, my co-founder and me are Europeans. My co-founder will be in charge of this region. At the beginning of the project there will be an important focus on the development of a prototype. When the prototype is ready, the focus will be on looking for Capital and Marketing in different European countries.
- In USA, our efforts will be focused, above all, on Start-up financing dealing with Venture Capitalists and on Marketing issues. By the moment we have not yet identified a co-founder in America and I hope we can have one soon. Working in USA is not necessary from day 1 of the start-up. Activities in US will start once the prototype is operational (several months later).
This is is still very preliminary. However I am aware of several problems in this geographical model:
- Being of scattered may not be practical for team working
- Important part of the budget will be expend in the cofounders' inter continental travels to participate in conferences or interviews with Venture Capitalists
- According to this article by Paul Graham (one of the partners in Y-Combinator), "Start-ups prosper in some places and not others. Silicon Valley dominates, then Boston, then Seattle, Austin, Denver, and New York. After that there's not much. Even in New York the number of start-ups per capita is probably a 20th of what it is in Silicon Valley. In towns like Houston and Chicago and Detroit it's too small to measure." We do not really know where we are going to be based in US, but I am aware of the extremely importance of location... I hope this will not be one of those factors that will kill our project.
