Global Startups

On July 2, 1962, Sam Walton opened the first Walmart Discount City store in Rogers, Arkansas. Walmart incorporated and grew into new states over the years to follow, but it wasn’t until 26 years following the grand opening of the first store that Walmart opened stores in a different country.

Many young businesses realize their idea could work just as well abroad as on their homeland. As a result, companies are beginning to skip the initial growing stage and launch internationally to pool resources from across the world. A company could choose to incorporate in the state of Delaware, but Switzerland may provide better tax advantages. Suppliers may offer a product or component a few hours away, but suppliers in Asia may provide even better prices.

It’s even become cheaper to work with suppliers and vendors from other countries. A quick selection process is available for free with a web search, and online directories categorize data and contact details. The only limitation is initial funding.

A few obstacles as well.

Launching internationally has a few more obstacles that companies launching in one market would not experience.

• International laws and tariffs: Setting up shop in a new country does not provide the founders with a native’s advantage. Most markets are supportive of capitalist companies coming in, but each market requires a separate analysis to review every part of your business to assure compliance.
• Cultural limitations: Messages and packaging would have to be translated, but companies also may have to observe how natives view products or services in that industry. A separate logo or company name may have to be created.
• Time zones: Some suppliers are hard enough to reach during normal business hours. Dealing with suppliers who can sometimes be fourteen hours ahead of your clock could affect the outcome in times of crisis.

Entrepreneurs have to be able to articulate to their investors reasons why they are going global, and larger revenues, economies of scale or first mover strategy are not justified reasons. Entrepreneurs also have to realize that relationships between the suppliers they want to work with have the potential to destroy their company. Supplier relationships should not be created with the intention of saving the most money; instead, they should be created with a potential ally in the industry where both parties can depend on each other.

When an idea has the potential to work well in multiple markets—and startups find ways to gather investors and distinguished members for the board—entrepreneurs may be willing to deal with the hassles of launch and navigate unknown territories to build a promising, global organization.