Why the Rest of the World Matters for Silicon Valley

The Valley has long propagated the idea that nowhere else on planet earth matters much. The thinking goes that “since we are the center of all innovation and everyone follows what we do, there’s no need to draw inspiration from overseas and no need to focus on the distraction of international markets.” This may have been true for most of history because our universe was largely disconnected but today insular founders may disrupt themselves with the very technologies they create to connect the globe.

In the world of today and even more so in the world of tomorrow, entrepreneurs must adopt a global mindset to thrive and survive. How?

Inward — Out: Global Markets

The truth is that companies with limited resources are well served by attacking a small market segment and dominating it before branching out into other areas. In the world of yesterday where bits and atoms incurred significant friction traveling across geographic boundaries, it made sense to segment markets based on those same geographic boundaries. But as that friction deteriorates with advances in technology, market segmentation by geography makes less and less sense.

As one example, consider that a father and son in asia had more in common with each other than they did with a similar duo in the west up until even a generation ago. But now many would say that millenials around the world, because they are connected like never before, have much more in common with each other than they do with their parents in the very same country. As products, information, and culture travel across borders more seamlessly, CEOs must understand the nuances of global markets to survive.

Outward — In: Global Inspiration

Founders must not only focus on expanding outwards to a greater degree, they must also focus on drawing inspiration from the rest of the world like never before. As one example China for most of its history copied products from the US, but we’re now seeing the opposite flow in various verticals. Sources say Facebook Messenger’s product roadmap is essentially a list of current features from Wechat, which is far more advanced than any messaging platform we have in the west.

This is now more relevant than ever before, but the reality is that Silicon Valley always took inspiration from the rest of the world. Steve Jobs incorporated design elements into Apple products inspired by from eastern philosophy. In fact the foundation of almost every startup in the Valley (innovation accounting and the Lean startup method) was modeled after an Asian idea (Just in Time Manufacturing from Japan).

Heuristics can help as we build products and companies, but can also hurt if we fail to adjust them when necessary. The idea that international does not matter worked well in the local and linear world of yesterday, but in the exponential and connected world of tomorrow, entrepreneurs and investors who fail to adopt a global mindset are toast.