The instant you put a .com next to your company name, your business is open to the entire world. Hell, any domain would do. Why is a global product and marketing strategy becoming more relevant and crucial for startups today?
The one argument is that startups should go global because the markets are larger, the customers make decisions faster and they are less price sensitive than those in emerging markets. Plus having access to the internet not only opens up more customers, but also means more skills and more funds are accessible. But is it really that simple?
While Africa is home to more than one billion people, only about 6% of the continent uses the internet. This is half the rate in Asia-Pacific and below a global average of 36%, the International Telecommunication Union (ITU) says. Having said that, a handful of countries including South Africa, Kenya and Nigeria are hovering around, if not exceeding, the global average.
There are many startups that are making a name for themselves internationally. Ghana-based Dropifigot first place in the global Startup Open Competition 2012 and won the top prize funded by the US-based Kauffman Foundation. More examples include South African-based Agriprotein and Paperightboth of which have snatched up international awards.
Open source, crowd and collaborate
While your horizon is broadened once you open up to a global audience, your online presence gives you exposure in terms of an audience of customers, as well as potential investors. More people means more wallets. There are more financing options out there. Apart from the VC funds, the use of the crowd is growing more popular each day.
Kenyan-based open source project Ushahidi is a great example of using the international stage to its advantage in terms of collaborating skills and funds to achieve its goals. Instead of developing its software in three days, it’s able to be built in merely three hours. Moreover, the fact that the software was developed to be open-source (and had international relevance) meant that a global workforce could better collaborate and better define the product.
The same goes for Ushahidi’s more recent BRCK initiative. The project managed to raise more than its target goal on the crowdfunding platform Kickstarter on 4 June using an international audience. Ushahidi’s Eric Hersman elaborates:
“We live in possibly the most interesting time for technology in history, where we’ve created this incredible thing called the internet, connecting us globally while at the same time getting to the point where the people who can code software can also ‘do’ hardware. An era where analogue and digital are democratized and the making of both attainable by anyone with a computer.”
Ushahidi was also able to create products that solve real African problems while having international appeal.
Other local ventures that have successfully raised funds using international platforms such as Kickstarter include Tatjana Buisson’s POSTICK, Pleasant Company Games’ Ancient Terrible Thingsand a bunch of other art, music and social initiatives.
Demographics: 0 Behavioural marketing: 1
Once your business starts operating online (marketing, product, or both), it almost goes without saying that having an invested interest in behavioural data or psychographic targeting is crucial. So why limit your startup to geographical location?
By using social media and other analytics, demographics are becoming less and less important. A recent study by MasterCard grouped online personas into five categories. These range from the “cautious” to the “care-free trigger happy spender”. Importantly, the stats stretch across borders. Thus culture, age, sex or income class has become less relevant while online behaviour has become more so.
Advancements in cloud computing, an increased online audience and innovation in translation are all contributing to the ability to go global from day one — reaching an audience that was previously not visible and accessible to you.
Given the right infrastructure, an entrepreneur can reach and compete with those across the globe.
But… (there always is one)
Software development is one thing, ecommerce is another. Although information and communication flattens the world considerably, demography does however play a role when you’re operating with physical products. Lack of logistic infrastructure for instance, COD (cash on delivery) method of payment preferences and mobile popularity all play their parts in defining the local contexts.
Being an entrepreneur with a global agenda does not mean necessarily expanding to a larger audience on day one but the international context should nonetheless be considered from day one.
Take root, experiment locally, and exit beta with a regional, if not international, expansion.
The case with China’s tech startup scene, for instance, sees companies popping up across the country with ease. Most of which are clones and needn’t compete with their international counterparts.
This is mostly due to the great internet firewall and, of course, a monopoly over language. It helps startups grow with relative ease and once their roots take hold, they are capable of taking on international companies and greater audiences. They might have an international agenda, but they will only expand once they are strong locally.
As you’d guess, the more “relevant” or “appealing” your product is, the clearer and more likely you’ll get international recognition from an audience and VC firms alike.
Though international investors often remain skittish about African startups, there are more and more cases on the rise, such as with international VC firm Rocket Internet supporting local startups carrying regional agendas like the Nigerian-based ecommerce startup Jumia. Other firms that have shown similar policies include Intel Capital, JPMorgan and Summit Partners.