By Tony Bailetti
This is part two of a two-part series that throws the spotlight on the need to develop prescriptive rules and practitioner-oriented models that can help technology startups operate globally upon or shortly after inception.
The lessons in this series are extracted from reading the literature and examining 21 companies that globalized early and rapidly. They were first published in the October issue of the TIM Review, a journal that provides free and unlimited online access to high-quality articles about technology and global entrepreneurship.
Part one covered the lessons learned from the literature. This post will share the lessons learned from examining publicly available information on 21 startups in 12 countries that globalized early and rapidly.
The three main findings are as follows:
1. Startups addressed a problem that was pervasive globally
We found that each of the startups that increased foreign sales early had rapidly addressed a problem that affected a large and growing number of organizations and individuals in various geographies.
2. Collaborative entrepreneurial processes drive early and rapid foreign sales
Startups increased their foreign sales rapidly because they delivered shared services to a global, large-scale, multi-party community that enabled different actors to act entrepreneurially.
Consider the case of 360Cities. This startup maintains the web’s largest collection of geo-referenced panoramic photos created by a network of thousands of expert photographers from around the world. The company increased its foreign sales rapidly because it enabled hundreds of professional photographers worldwide to act entrepreneurially and collaborate with:
- Large companies (e.g., Google, Microsoft, Nokia, and Flipboard) that operate mapping platforms for the purpose of providing location-based services
- Advertising agencies, publishers, application developers, and travel industry service providers who license content for use online and in mobile and tablet devices
- Digital marketers, venue owners, and team managers who undertake projects to support large events
Airbnb enables landlords to act entrepreneurially. The startup provides a marketplace that enables people to take vacations in other people’s homes, apartments, boats, castles, islands, and cabins. Landlords increase their income by continuously renting extra space effortlessly and increase their listing’s exposure in a pre-built community. Travellers are the customers who compare options and interact with landlords to lever their funds as much as possible.
Canonical works with the open source community to deliver Ubuntu, and it sells enterprise, engineering, and consumer services. Ubuntu is a free operating system that powers millions of desktops, netbooks, and servers around the world. More than 20 million people use Ubuntu servers, and 22,000 new websites a month are built on Ubuntu servers. Canonical and a network of independent software vendors, resellers, and original equipment manufacturers lever the Ubuntu code to generate revenue. Canonical, which was founded in 2004, has staff in more than 30 countries and has offices in London, Boston, Taipei, Montreal, Shanghai, São Paulo, and the Isle of Man.
3. Web processes provide important support to startups’ early and rapid foreign sales
Of the 21 startups found to globalize early and rapidly, 18 (86 percent) generate their revenue from the sale of digital goods and services (i.e., web-based services, software products, and software services). It would be difficult to explain the rapid internationalization of these 18 startups without describing how they relied on the World Wide Web and its underlying electronic communications structure, the Internet, to create and deliver value to their foreign customers, suppliers, and partners.
Startups that globalized rapidly adopted and deployed a wide array of innovative web-based processes. These processes linked external value-creating actors around the world to the internal processes of the company in innovative ways — deployed innovations not offered previously — and enabled the companies to innovate on a continuous and efficient basis.
Conclusion
The main motivation for contributing this post was to highlight the need to develop norms and practitioner-oriented models that can help technology startups better manage their early and rapid globalization. We hope that entrepreneurs and those who service them will increasingly focus their attention on the development of approaches and models that can assist management teams to globalize their startups early and rapidly.
Tony Bailetti is Associate Professor and Director in Telecommunications Technology Management at Carleton University. His research, teaching and community contributions support innovation for the purpose of generating revenue for young technology companies and developing the regional economy. He has published in Research Policy, IEEE Transactions on Engineering Management, Journal of Product Innovation Management, and R&D Management.
