I’m going to take over the world!
It’s really fun to say that. It’s even more fun to take action toward that goal.
Our world has gotten smaller. Way smaller. Globalization is an unstoppable trend. But as they say, the trend is your friend so why not take advantage of it? I don’t care how big or small your business is – there are huge opportunities out there for you beyond the shores of your country (assuming yours has shores).
The real trick is understanding what globalization can do for your business then figuring out how to exploit those opportunities. Today I’ll cover some simple notions around what the global opportunities are and in the next post I’ll more importantly discuss a few key ways to capture them.
Going global is intimidating. It sounds huge. You need a passport and visas (and we know what a joy those processes can be). You need to understand new languages and cultures. And heaven forbid you have to take a coach class 14 hour flight across the ocean (trust me, it’s painful). Okay. So get over it and dive in.
To illustrate today’s points, I’ll use examples from two businesses I’m running: thoughtLEADERS (leadership training) and TiXiT (discounted event tickets). Sure, they’re simple businesses but they’re microcosms that will help get the following points across.
Think about it simply – opportunities exist in terms of revenues and costs. It’s not that hard. As far as how to capture the opportunities, it boils down to market entry, product/service delivery, and communication. So let’s go global! Here we go:
Understanding the Opportunities
From the revenue side, if you have a good product or service here, there’s likely a market for it in markets outside your borders. You just need to think through how it might need to be positioned differently.
For thoughtLEADERS, we have to first realize American-style leadership doesn’t translate to all cultures. Nonetheless, our frameworks and approaches are absolutely relevant in many markets around the world. Selling those services just requires us to articulate what the core of our service is and then understand how a particular culture might best receive said benefits.
I’ve recently been lucky enough to teach our Structured Thought and Communications course and Leadership Maxims course in Hungary, Ireland, and Vietnam. Soon I’ll be teaching our thoughtLEADERSHIP course in Colombia and our Building Resilience course in Singapore (and if you’d like us to come teach at your organization just drop us an email and we’re happy to discuss).
Yes, we’ve made modifications to the examples and exercises we conduct in class depending on the culture but the core of the service has remained the same. Teaching executive communications in Chicago is different than teaching it to an audience from China, Japan, India, Vietnam, Singapore, and Australia (all in the same classroom!) but nonetheless, with some slight modifications to our service based on the local culture, the programs have been successful.
As you think about the revenue side of the equation, you must think big. Once you understand the core of your offering and how you might have to modify it for different cultures, you must look at the entire revenue pool before cutting it down and determining a specific focus for your business.
An example: at TiXiT, we help venues sell unsold event tickets. We’ve assessed the opportunity to be huge in the U.S. alone. There are over $1B worth of unsold tickets to major sporting events and theatre shows every year in the U.S. TiXiT works directly with the venue to sell those unsold tickets at a discount (by the way, if you’re not a TiXiT member yet, you should be – we’re about to add a whole host of events for this fall – just sign up here).
Anyway, as we ran some valuation scenarios to understand our exit opportunity (yes entrepreneurs – from day one of running a start-up you MUST think about how you’re going to exit and for how much) we arrived at some big numbers. Then we asked “how can those numbers be bigger? Like ten times bigger?”
Then it hit us – go global. They sell tickets globally, right? There are unsold tickets to events in other countries too. The core of our service will definitely apply in other countries (with some tweaking to how we sell and market). Sure, that global expansion is our third growth horizon because we’re staying focused on our market entry strategy. Nonetheless, we know about and more importantly will pursue that revenue outside our borders when the time comes.
The bottom line on the revenue side is to define your core offering, identify the markets where it would be the most compelling, and seek that revenue out. Start building that focused list of markets you’d like to penetrate (we’ll get to how to penetrate them in our next post).
The Cost Side of the Equation
As far as costs go, this isn’t new news. You can get lower factor costs in a host of other countries. From call center outsourcing in India to product manufacturing in China to web development in Eastern Europe. The talent is out there. You just have to be savvy enough to find it and use it.
First, take a hard look at all the costs your business incurs (or better yet, the things you want to do but they’re “too expensive”). Now ask yourself “If I could reduce the cost of that item by 20%, would it be worth the effort to do it overseas?” This is the sniff test to see if you’ll get enough return for the additional complexity of doing something outside your borders.
For TiXiT, our biggest cost is technology development. Writing code isn’t cheap and for a web start-up that’s bootstrapping (like all good start-ups should and as we explain HERE) going overseas for development can be a huge cash saver. We did exactly that.
With the help of a partner (Big Kitty Labs) who has existing overseas relationships we got the best of both worlds – a domestic team to manage our relationship and business requirements/technical requirements coupled with overseas low cost development. The results were great. Check out their work here at www.tixitbox.com and I think you’ll agree.
Risk is also a huge factor on the cost side. You need to be judicious with either how much you send overseas or what categories you source globally. You might want to start with “non-core” elements of your business that can easily be switched back to domestic suppliers (e.g., call center services, non-core raw materials, etc.). There’s nothing worse than civil unrest disrupting the core of your supply chain during your busy season.
The bottom line on costs is make sure whatever you’re taking overseas is big enough in terms of financial impact and low enough on risk that it makes sense to add that complexity to your business. I’ll talk more about how to capture global cost opportunities in the next post.
Hopefully this gives you some motivation to think about growing your business globally. The opportunities both in terms of revenues and costs are fantastic. I know it can be intimidating but given how much smaller our world gets every day due to technology, you can’t afford not to evaluate the opportunity.
In the next post I’ll offer some thoughts on market entry, product/service delivery, and communication. While you’re waiting for that post, why not leave us some comments below on your thoughts and experiences with globalization. Tell us what has worked for you (and what hasn’t). Help out your fellow readers.