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“Global Or Die: Is There A Future For Local Startups?” |
Michael Arrington from TechCrunch asks: “Is there a future for local startups?”. His answer: “No.”. His advices (I marked those statements bold which were most enlightening to us):
- Think global as you create the business
- Move to Silicon Valley
- Create an original product: new and different
- Do not create a copycat, unless your goal is only to get acquired
- Try to raise funds from world-class VCs
- Hire people from all nationalities as much as possible
- Register your domain names in the key countries you are interested in (and the large ones you are not interested in)
- Protect your brand Worldwide
- Make a site that is language ready day one, even if you launch in English
- gather an international community since day 1
- Talk to the most active members of the community to help you understand their market and become evangelists there
- Create an application that lets your community translate the site by themselves
- Languages are not the same in all the countries they are spoken
- Do not think that Europe is the U.K.
- Manage costs properly
- Never do a 50/50 deal with anyone
- Do key partnerships with large local players
- Never trust that if the partner is large your service will be a success
- Create an international reseller program
- Kill your local copycats
- Buy your local copycats if you can’t kill them
- Be very pragmatic
- Do not apply any of this to Asia
- Do not apply any of this to Russia
- This advice only applies to Internet startups
The detailed article can be read on TechCrunch.
My advice to Michael: “Lists should never encompass more than 10 items”
Also, as long as most consumers think local (which will always be the case), there is room for local offerings. Of course, global companies may offer localized products. But in knowing the local market better and reacting quicker to local changes, local start-ups may have a comparative advantage and thus also have a future.
Nonetheless, we at WhatsYourPlace.de think global and will soon launch our international platform =)
comment by Tobias — March 13, 2008 @ 3:04 pm
Of course, local start-ups have a chance and yes they have a comparative advantage, but they never reach the size of a global player. At the end the bigger fish always eats the smaller fish ;)
The web makes it easy to provide localized versions of a product and so there is always a company which targets the global market and thus gets more money from VCs – money to buy smaller localized companies.
comment by Martin — March 13, 2008 @ 9:36 pm