Planning for Globalization Now
Planning for Globalization Today
Growth-oriented entrepreneurs should be thinking about globalization sooner rather than later. "I've seen many American-based startups with attractive innovations" that attract partnership interest from Fortune 500 companies, says Kathy Chiu of Venture Catapult, a consulting firm that helps small enterprises establish a presence outside their home countries. It's at that point that the problems begin.
"The startups are lured into thinking they don't need to worry about globalization until they get much bigger," says Chiu. "The Fortune 500 product companies too often are not in a position to implement the startups' innovation directly. They refer these startups to their manufacturing partners in Asia, where the startups find they must also educate and work with many other players along the supply chain. The process causes unexpectedly long sales cycles, eating up precious runway while limited capital burns away."
As an example, she points to "a startup with a great wireless technology that spent 10 years going through periodic changes in market focus and in its management team. It was always on the cusp of—but never reaching—viability. Its roster of minority investors consists of a who's who of famous U.S. consumer electronics companies. Each time several large industry players would be enthusiastic about incorporating the technology into its products, the startup had to provide significant engineering support to the module makers, the component makers, and sometimes even the industrial design house, all of which are in Asia. The juggling act prolonged the sales cycles so much that the startup would eventually miss the market window and had to start all over again finding another niche. Had it started the operation with a more global approach 10 years ago (see BusinessWeek.com, 9/21/06, "Whatever Happened to 'Small' Business?"), it might be a dominant player in consumer electronics today, rather than a 10-year-old startup that still hasn't found its niche."
If You're an Entrepreneur Fantasizing About Becoming a Venture Capitalist…
This holiday card from early-stage venture-capital firm BluePrint Ventures may give you a chuckle or two, especially if you think VCs care only about replacing the president and setting up operations in China.
Suggestions for Investor Presentations
Susan Wu, an associate at Charles River Ventures, advises early-stage entrepreneurs to demo their prototypes, preferably early in the presentation, to encourage questions. Entrepreneurs should also offer to change their presentations in the middle. "If you're uncertain in which direction to take your presentation midway through, don't be afraid to ask your audience what they would like to hear more about." At the other end of the spectrum, she says, "If your presentation gets sidetracked by too many questions that you don't think are critically important to understanding your business, don't be afraid to say, 'I would be happy to answer those questions offline, but since we only have 15 more minutes, I want to make sure I get to the really important stuff about X and Y.' " (For more advice, see http://reality.org/2006/12/11/art-of-the-pitch-avoiding-common-presentation-mistakes/.)
Lament of the Venture Capitalist Blogger
Every blogger can empathize with Santo Politi, a partner with Sparks Capital. He sought forgiveness from his readers on Dec. 19 on his blog for failing to post for three weeks. "I am through with 'blogger pressure,' " he wrote. "I shall post frequently from now on." His readers were sympathetic. Said one: "Post whenever you can and get a rhythm. For me it appears that I've settled into a one-post-a-week flow…for you it may be much more or even less. Just blog."
It apparently continues to be difficult for Politi—as of Jan. 7, he hadn't come up with another posting.