This summer, the Smith School of Business and Dingman Center for Entrepreneurship welcomed MBA students from Peking University, our partner school in China. Their enthusiasm for everything American — our universities, our financial markets, our TV shows, our music (apparently John Denver in particular) and especially our malls — further highlighted the disproportionate interest foreign individuals and firms have in the United States compared with our interest in them. This fervor is not unique to Chinese visitors, as we host delegations from around the world that are anxious to learn anything they can about how we teach entrepreneurship and incubate start-ups. Yes, it is flattering that other countries want to learn from us — but are we doing enough of the same? Beyond outsourcing developers and finding low-cost manufacturing, are our entrepreneurs doing enough to become global entrepreneurs?
I’m going to venture an educated guess and say, “No, not really.” After speaking with hundreds of entrepreneurs in the past few years, there are only a handful that are tackling a problem also experienced in Brazil, leveraging technology developed in Israel or targeting customers in China. The companies that are doing this are attracting the attention of investors. One of those companies, CirrusWorks — a start-up we have worked with at the Dingman Center — immediately piqued the interest of regional angel investors because they are targeting Asian markets first. Although their unconventional approach to testing their product in a foreign market appeared naive to some, other investors welcomed the contrarian strategy since most start-ups begin locally and then diversify abroad as they grow. Because the U.S. growth rate ranks 127th , I’d argue that more start-ups need to take a “world is flat” approach to starting their businesses. Given such feeble rates, start-ups may never experience the double-digit domestic growth rates that are typically viewed as milestones and therefore may never explore the global appeal of their product.
While exploring this issue with faculty experts, I learned there are some exceptions. They pointed out that recent research has shown an uptick in transnational entrepreneurs, immigrants to the United States who leverage knowledge of this country and their home country to start global, high tech start-ups. It makes sense that those knowledgeable and comfortable with multiple markets would be more likely to embark on a global venture. However, as a whole, U.S. entrepreneurs need to change their mind-set to take advantage of international trends and opportunities:
Think global, start local. Start-ups need to understand and solve global problems. Uber began in Paris in 2011, before many major U.S. cities, demonstrating the global pain point of inefficient taxi service.
Find comfort in what is uncomfortable. Talk and learn from people from different cultures. Travel to places with language barriers. Get lost on subways and experiment with food. The ability to partner with international companies and comfort travelling to meet a potential customer will give you a competitive advantage.
Understand every business is a global business. I repeat. Understand every business is a global business and every entrepreneur is a global entrepreneur. For those of you who use the business model canvas as a planning tool — think of your canvas and look at which box represents a global opportunity. Is it a customer segment, a manufacturing partner or a distribution channel?
As entrepreneurs, advisers and investors, let’s learn from our zealous global peers. They are learning from us.
Elana Fine (@elanafine) is the managing director of the Dingman Center for Entrepreneurship at the University of Maryland’s Robert H. Smith School of Business. This column was adapted from recent blog post.