Reprint: R0812J
For over a century, start-ups began by focusing on their home markets. More and more, however, are now being born global—chasing opportunities created by distance, learning to manage faraway operations, and hunting for the planet’s best manufacturing locations, brightest talent, most willing investors, and most profitable customers wherever they may be—from day one.
That’s not easy. In his research, Harvard professor Isenberg has found that global start-ups face three challenges. First are the logistical problems and psychic barriers created by distance and by differences in culture, language, education systems, religion, and economic development levels. Even something so basic as accommodating the world’s various workweek schedules can put a strain on a small start-up’s staff. Second is managing the challenges (and opportunities) of context—that is, the different nations’ political, regulatory, judicial, tax, and labor environments. Third, like all new ventures, global start-ups must find a way to compete with bigger incumbents while using far fewer resources.
To succeed, Isenberg has found, global entrepreneurs must cultivate four competencies: They must clearly articulate their reasons for going global, learn to build alliances with more powerful partners, excel at international supply chain management, and create a multinational culture within their organization.
Entrepreneurs shouldn’t fear the fact that the world isn’t flat. Being global may not be a pursuit for the fainthearted, but even start-ups can thrive by using distance to gain competitive advantage.
