As the world becomes increasingly borderless, companies of all sizes have to rethink global strategies to stay relevant in an interconnected world.
Startups are not immune to the globalization of business, and despite the venture capital money flowing around the bubble of Silicon Valley, there are a myriad of opportunities that startups just can’t afford to ignore when going global.
Embracing the digital world with an open approach is only the first step. Startups who look for local and global investment opportunities will see the pay-off as they grow. Telefonica Digital’s Wayra initiative for tech startups is a great example of this in action.
Here are three key strategies for start-ups to think about when trying to reach a global market:
• Don’t Ignore the Global Market Potential: Outside of the US, there are emerging markets that aren’t as well-known as Silicon Valley, but hold great potential. Latin America is one of those areas, and has been a crucial location for Telefonica. In areas of Latin America, we have seen interesting opportunities that are less available in the developed market. For example, although Latin American houses some very tech savvy cities, the smartphone penetration is only around 15%, leaving a big opportunity for companies to find solutions to offer lower cost smartphones.
• Think Through Market Challenges: There is a surge in demand for digital services. No matter where they are in the world, people want to be connected, but they don’t always have the same device, which can make it difficult to reach the greatest number of people across the world. Taking a service global is relatively easy when you offer unregulated services globally, such as Facebook or Twitter.
However it becomes much more complicated when you are operating in regulated environments like financial services. In our view, partnerships with organizations that understand local markets, including local culture, operating environments and laws, present a great opportunity to gain the required expertise and understand what can be incorporated into products to make them more global.
• Ordinary Doesn’t Mean Boring: Start-ups often feel pressure to think of a new, unique innovation that will change the world. While it is important to think out of the box when developing products, there are markets, like mobile payments, which have a long shelf life.
The New York Times recently wrote about the Square/Starbucks deal and said it may be “the year’s most important venture capital deal.” Reporter Steven Davidoff wrote that with all the mobile payment competitors in the market, this could have been looked at as an ordinary deal, but Square used a popular technology (mobile payments) and pushed it to the next level.