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How to go from startup to a global business entity

Wednesday November 01, 2017,

6 min Read

The difference between a startup and a global business behemoth is the scale of operations. While startups take baby steps to reach their target market, global entities are already doing it on a massive scale on all corners of the world. Large entities are already established and enjoy the market’s backing, which gives them a competitive advantage. This makes the task of a startup to scale difficult, even with the Internet’s might on its side.

But, that shouldn’t stop you from tapping into the global market. One step at a time, with each cautious step it is possible to go from startup to a global business entity. Peter Thiel, in his book Zero to One: Notes on Startups, or How to build the Future writes, “EVERY MOMENT IN BUSINESS happens only once.” if you seize the right opportunity, make the right move, your business will skyrocket from being a garage-based startup to a global business like Facebook, Google and the rest.

Going global requires a massive effort from the Founders part. There are several challenges and pitfalls hidden in plain view that need to be traversed successfully.

In what is to follow, we explain the several measures that a startup can consider to expand its business on a global scale.

Look at the industry from a bird’s eye view

- Who are you the customers who make up the global scene of your market?

- Who are the existing players in the industry and how well do they fare?

- Can your target market be segmented on the basis of age, preferences, spending habits, etc.?

- How big is the market size right now and how much is it expected to grow on an annual basis?

These are some vital questions that help size up your startup’s global mission. You might also want to do a SWOT (Strength, Weakness, Opportunities & Threat) analysis to know how well your business fits to the industry and its demands.

Once you have a grip on the industry, you can work on pitching the business on a global scale at selected market regions. However, prior to that, you must check whether the business model is permitted and recognized by the legislation of the target market. That brings us to the next point.

Validate business model to regional legislation

The biggest challenge in growing a business on a global scale is in validating the business model to regional legislation. Each country and its State has varying legislations that prohibit or restrict the running of certain business models.

Take for instance the case of Airbnb, the world’s most popular online booking website. The company ran into legal hassles in the city of Barcelona where it had advertised rental properties that fell outside the norms of the local housing and tourism regulations. As a result, Airbnb had to cough up fines amount to a meaty €30,000 to settle the lawsuit.

Now Airbnb was able to survive the aftermath since it was already a global conglomerate and had deep pockets to fund the legal battle. However, a startup running on a shoestring budget may not be able to tackle such legal hassles easily. Hence, the need to validate your business model to regional legislations before investing resources and kickstarting operations.

Devise separate plan for each target market

Each market region has its own cultural, social, political and economical sensitivities. No market is ever the same. What works in one place might bomb in another.

For instance, UBEReats - the on-demand food delivery system is simply inadequate to overtake the 125-year old dabbawalas network of Mumbai. The local crowd prefers relying on individuals whom they can see face to face and trust than mobile apps that do the same thing in a digital manner without a face.

Sticking situations like these are hard to retreat from post launch of a business on a global scale. If not planned properly, it will also burn unnecessary funds making your startup idea a big question mark. Remember, you have to sell your business not just to customers, but also investors and employees.

Adapt your marketing & sales channels to regional languages

Language plays a critical role in marketing to the globe at large. If you thought you can translate your ad slogans to regional languages using Google Translate and use them in your regional campaigning, be prepared for nasty surprises.

Pepsi’s China ad campaign led to a drastic erosion of its brand image because the ad slogan was not properly translated to regional language. The ad slogan as envisioned by Pepsi read as, “Pepsi brings you back to life”. Unfortunately, it took them to realize that the translation was erroneously done as, “Pepsi brings your ancestors back from the grave!”

Well, it pays to have professionals language translators  to do the task for you rather than do it yourselves and run into mishaps like these. Not just ad campaigns, even the product brochures, instruction manuals, warranty statements, legal contracts, etc. need to be translated and proofread by language experts to escape blunders like Pepsi’s.

Empower local teams to take strategic decisions

People in the line of fire have a better sight of the target than the commanders back at the control room. The same battle scenario suits well for business decisions while expanding globally too. Sometimes it is better to empower local teams to take strategic decisions that will help the business achieve its long-term goal.

For example, the production technique can be more labor intensive than capital intensive. In Asian countries, the cost of labor is cheaper compared to European continents. That is a serious advantage which the C-Suit at US or UK might miss to see. If the local teams are empowered to make the right decisions, they might be able to bring in better results aligned to the global expansion strategy.

This decentralized decision making is what has helped Amazon expand its sales and delivery networks across continents within a short span of a decade. The same success story applies to Alibaba - the eCommerce giant too.

In The End, Observe. Improvise. Perfect.

A startup matures into a global entity when it moves out of its comfort zone, the place where it was founded and won its first customers to the global marketplace where cut-throat competition is the norm.

Several challenges will have to be encountered when going global from local. Surpassing these challenges with strategy and decentralization is what helps a startup mature into a global business entity.

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