Think global — from day one
This essay was originally published in the Hungarian Startup Report 2020.
Startups are built by people — and people naturally have a unique cultural background to work with, with all its pros and cons. Acknowledging this conditioning and optimizing it to build a successful venture translates to leveraging the former and mitigating the latter. In Hungary (and the whole region) our cultural heritage in building startups is broadly experienced as having strong innovative abilities and technical skills on one hand, lagging ambition, management, and sales ability on the other — largely attributed to a late exposure to capitalism.
The insecurity stemming from these cultural norms often leads us to defend our comfort zone and limit startups’ initial focus exclusively to domestic and regional markets for customers, talent, and capital, in lieu of a globally competitive field. Starting small before expanding is a natural and unavoidable progression path, which should be implemented vertically, instead of geographically. While it may sound counterintuitive, “validating” the product in domestic markets first — with plans of expanding internationally only after, is a misguided growth strategy.
This approach limits the founders’ ability to develop a real and unparalleled solution for a specific and universally existing problem, due to a small sample size and selection bias. While launching and growing in limited geographies may often lead to some traction, it usually results in either generic products with no competitive edge on the global scale, sacrifice of speed, or both.
In venture, generic solutions do not work, mainly because most ideas which are obvious, feasible and big, have already been done. In short it is a hundred times better to find your first users with almost identical needs spread across the globe than to find them in the same location, yet only dealing with somewhat similar problems.
Thinking global from day one is necessary to avoid wasting years on dead-end ideas plausible for the immediate geographical context, but indefensible in the long run.
Instead, building something for a genuinely interesting and underserved problem, however insignificant or even banal that problem might seem, comes with a significantly higher chance of tapping into a product market fit with real scalable potential. All big tech companies have started from this point and grown through a series of iterations and expansions to adjacent markets.
In our hyperconnected day and age, digital products will increasingly be more specialized in function and less restricted by the physical world. As such, factors like distribution, language and culture should almost never be treated as barriers to thinking global. Embracing these shifting dynamics, being curious, bold and confident is not a recipe, but a requirement, for success.
