This document discusses when startups should focus locally versus globally. It argues that startups should stay local if they have no customers, revenue, or language skills in other markets. However, startups should consider going global if their local market is small or local investors are too conservative. The document recommends doing both local and global markets by starting locally while also using platforms like AngelList to connect with overseas investors and customers.
1. Startups: Go LOCAL or GLOBAL?
(Do BOTH!)
@DaveMcClure
@500Startups #vsf2012
Venture Startup Festival
Seoul, Korea (Nov 2012)
2. This Talk Is About…
• 500 Startups
– Internet Seed Fund + Accelerator + >100 Intl Startups
• Assessing Global Markets
– (# users, by language/geo) * (avg $ GDP) * (% internet) = avail online spend by lang/geo
• Why You Shouldn’t Go Global
– You’re a Crappy Little Startup with no customers, revenue, or funding
– You Don’t Speak the Language (not very well, anyway)
– Your local market is >50M+ users, and nobody else is going after it
• Why You Should Go Global
– You Live in a Small Country / Startup Ghetto
– There aren’t any local market investors worth a famn.
– There ARE local market investors, but they might be predatory, too revenue-focused, risk-averse
– Your customers and partners are in [X] (where X = California, NYC, London, Beijing, Brazil, etc
4. 500 Startups
Mountain View, CA – Founded 2010
• Seed Fund & Startup Accelerator
– $50M under management
– 16 people / 8 investing partners
– 10,000 sq ft / Silicon Valley HQ
– SF, NY, MEX, BRZ, IND (+ more)
– 700 Founders / 200 Mentors
– Focus: Design, Data, Distribution
• 400+ Co’s / 100 Intl / 20+ Countries
– Wildfire (acq GOOG, $350M)
– Twilio
– SendGrid
– TaskRabbit
– MakerBot
– Viki
– 9GAG
– Tapastic / Tapas Media
– [Korean startup TBA]
5. GeeksOnaPlane.com
(my excuse for an Intl road trip w/ geeky friends)
• Travel The World with Geeks & VCs
• Meet MORE Geeks & VCs in other countries
• Learn about Intl markets, technology, people
• Get drunk & eat great food with friends who
don’t speak your language
• East Asia (3x), Europe (2x), LatAm (2x), India
• Next: Middle East, India, SE Asia, Africa
6. Global Languages
• English: 1-2B+ ppl, most online, high GDP, modest growth
• Mandarin: 1B+ ppl, lots online, med GDP, flat growth
• Spanish: 500M+ ppl, some online, med GDP, strong growth
• Arabic: 500M+ ppl, some online, low/med GDP, strong growth
• Others:
Hindi, Portuguese, French, German, Japanese, Russian, Korean,
etc
7. Global Markets
• US/Can/UK/AU (400M+): big market, not much growth but lots of spend
• Europe (400-500M): not much growth, many lang, high GDP
• China / E. Asia (1B+): lots of ppl, growing usage / GDP, flat growth (pop.)
• LatAm (500M+): Brazil, Mexico, Argentina, Colombia, Chile; LOTS growth
• India/Pak/South Asia (1.5B+): lots of ppl, growing mobile, strong growth
• SE Asia (600M+): Indonesia, Vietnam, Thailand, Philippines; strong growth
• Middle East / Arabic (500M+): growing mobile, lots of future growth
• Africa (700M+): growing infrastructure, lots of future growth
8. How to Assess Global Markets
• 1) # of ppl / language speakers by geography
• 2) % internet usage (web, mobile, smartphone, etc)
• 3) $ Avg GDP / $ online spend / disposable income
• Online spend / lang, geo = (#ppl) * (%internet) * ($GDP)
– % Growth rates of ppl, lang, internet, GDP
• Currency, country, culture, etc
• Online distrib’tn platforms (search, social, mobile, video, etc)
• Online payment methods / credit card distr
• Physical goods delivery / logistics
• Social media usage / behavior
• 3 markets in 1: rich, middle-class, internet poor
9. Distribution Platforms
Customer Reach: 100M+
• Search: Google (also Baidu, Yandex, Yahoo-J)
• Social: Facebook, Twitter (also TenCent, Sina, vKontakte)
• Mobile: Apple (iPhone, iPad), Android
• Media: YouTube (Video), Blogs, Photos, Music
• Comm: Email, IM/Chat, SMS, Voice
10. Why You SHOULD NOT
Go Global
because ur a tiny little startup,
you don’t speak the language,
& your local market is big enough
11. Why Stay Local? Because it’s HOME.
• You don’t speak English (well enough).
• Your solution won’t travel well / you won’t localize it well.
• There’s not as many people competing locally.
• Your local market has 50M+ users.
• You have customers / revenue.
• You have great living situation, family, kids, etc
12. Why You SHOULD
Go Global
Because u live in a tiny little country,
local investors are too conservative,
don’t write*enough+ checks
and/or give u crappy, low valuations.
13. Why Go Global / US / China?
(because California is *awesome*)
• It’s BIG. (US, China are huge markets)
• All the [rich, online] customers are here.
• All the investors are here (Silicon Valley)
– also: Local Investors Screw You / Don’t Invest / Low Val$
• All the platforms & partners are here (Silicon Valley).
– NorCal: Google, Facebook, Twitter, Apple, Android, YouTube
• Because you watch too many action movies and rap videos.
• Because you love California / NYC. (hey, we understand )
14. Angel* List: It Rocks.
(angel.co)
• Startups & Investors
• Activity & Metrics
• Platform & APIs
• *ps – not just for Angels,
not just for USA