International Entrepreneurship

Benefits

Staying closer to the customers is important to the success of any business. If the product is not designed or targeted to the local market, the company needs to look for other countries or locations that have demand for that product. Additionally, any local market has a certain limit in size and going global can expand the combined market. Dan Harkabi at SanDisk Corp. illustrated with an excellent example. Israel population is only about seven millions and they do
not have a substantial consumer market. To find business opportunities, Dan and his partners traveled to the U.S. to study the clients, the end-consumers extensively before implementing the idea.

Taking advantage of local labor skills is another benefit of going global. The workforce at each country has certain strengths and weaknesses that smart entrepreneurs should take into account when deciding where and how to start going global. In the presentation, Ram Ofir showed Zoran has R&D, Product Development personnel in Israel while the management team, sales and marketing department reside in the US. Each place has a unique strength that successful companies use to defend their weaknesses.

Challenges

All start-ups have limited resources and effective resource allocation is important for the company survival and growth. David Welsh warned about the breaking point when a company tries to open offices abroad for the sake of going global and does not carefully evaluate the associated costs and benefits.

Understanding of the local business environment is not an easy task. Each country has a different culture that the entrepreneurs need to be flexible to recognize and adapt the business plan accordingly. A widely successful product in a country might have no or few sales in another country. Selling software in Vietnam at the same price as in the U.S. would not able to gather much demand because it is expensive for the majority of consumers and they will more likely to use a pirated version. Sufficient and accurate research about the culture, local market, employees and government regulations is important for any decision makers of a global venture.

Additionally, I also learn that passionate and experimental attitude can lead to great ideas. As a V.C., David said he would prefer someone with a great passion, who tries to solve the “impossible” problems to someone who surrenders quickly and moves to the next project as soon as some issues arise.