Non-US Startups Need to Look for Opportunities beyond Silicon Valley
This is an excerpt from article written by Alexander Chachava, managing partner at LETA Capital venture fund. You can read full article in Russian here.
Translation by Valentin Dombrovsky, head of market relations at Excursiopedia.
[Non-US startup might explore 2 opportunities]
You can go to Silicon Valley, but period of adaptation and obtaining necessary connections takes not less than 10 years, so it’s better to go there before you finish school. You’ll see that if you look at the stats of most non-US billionaires from Silicon Valley.
There’s informal statistics that was gathered by my acquaintances — graduates of prestigious university. They sent interview requests to leading US entrepreneurs. In US it’s common to answer to such requests even among most notorius entrepreneurs — especially if it’s request from Ivy League university student. Student who had American 2nd name got 70 % answer rate, student with Russian 2nd name — only 40%. I suspect that students with other foreign 2nd names (Chinese or Indian) also would get such stats. If you’re not a graduate from prestigious university, didn’t make couple of successful projects in US, then it will be even harder to get answer from leading entrepreneurs or venture funds, not saying about attracting big investments.
Another possible strategy for non-US startup is to break stereotypes and to use weaknesses of US companies.
Superfluous funding doesn’t only give power — it also brings some weaknesses. US companies often underestimate and don’t understand markets beyond US and don’t start monetizing there for too long. At the same time Chinese economy soon will take back its 1st place in the world which it lost 3 hundred years ago. European market is not less than US — interesting markets in Asia grow fast, multimillion population of Africa and South America gets used to new technologies, so there’s place where to work beyond US.
And what’s most important — there’s handicap of 3–5 years in most popular spheres. During that period it’s possible to create foundation that will allow to defend market from US expansion for a long time. In Russia we have examples of Yandex, VK and Gett which will definitely show itself in competition for Russian and couple of European markets.
In Russia we still have high-class web developers. We don’t have enough experience of creating products that are used in many countries. We can’t allow ourselves to stay on home market for 3–4 years as US companies do — in most spheres our market is no more than 1–2% of the world market. For example, connected car solution that was made by our portfolio company Remoto competes with several US startups. Some Japanese and Korean automobile companies already equip their cars with Remoto solution. The company is growing business in China actively. In 5 years 75 % of cars will be created in this region.
You can build world leader in your niche before US unicorns will come to other countries. Lots of Russian startups have such opportunities. What they need to do is to start working actively on international markets.
This is an excerpt from article written by Alexander Chachava, managing partner at LETA Capital venture fund. You can read full article in Russian here.
Translation by Valentin Dombrovsky, head of market relations at Excursiopedia.
