Why your startup should build locally but always with an eye to world domination
Wednesday, January 27, 2016/
A startup in many ways is all about growth and there’s no shortage of discussion on why Aussie startups need to think bigger than just the local Australian market. Steve Blank even suggests that you’re either born global or you die local.
So what does that mean for startups in Australia? What functions of the business should be global and what should be local?
These ideas have been shaped from my experience growing GO1.com and graduating from Y Combinator in the US.
First, you need to build a product that a few people love – this is what the whole reason for building a company should be in the first place.
At this stage of the operation you shouldn’t even be focused on growth, you should instead be narrowing your market and focusing on a hyper-specific niche. We adapted and evolved many times in response to our initial customers’ feedback and needs.
Once you’ve built a product that people love, you need to take the other risks out of the business. For many companies a primary risk and assumption is their go-to market strategy or their sales model. How will this work? Will it scale?
This is the opportunity to really think big. If you’re focused on the Australian marketplace you will be squashed by a better-resourced and more aggressive international competitor that can leverage a much larger customer base.
The second step, after building a product that people love, is to test out a sales model that you think will work internationally. And as soon as you have enough resources start proving that it does work overseas.
We are going through that process at the moment. From the early days of GO1 we were fortunate to have customers around the world thanks to inbound leads from our website. But our sales model needed to be proactive as well and for that we have dedicated teams of account executives.
At present our sales team in Brisbane is still larger than our US sales team. That’s crazy when the market in the US is at least 10 times larger. We’re proving out the model in the US with a small team, and then, once proven, we’ll scale the operations there.
Selling into the US (or any other market) doesn’t mean you necessarily need to relocate all your other business functions to that market. I was initially surprised at how vocal VCs in Silicon Valley and the wider Bay Area were about keeping development teams away from there.
But it does make a lot of sense. While much of the best development talent calls San Francisco home, the competition is incredibly fierce and salaries can become very expensive.
So while it is critical to consider how you will sell globally, Australian companies have an advantage if they can successfully build locally.
There is a growing list of Aussie companies that have proven this model, including Envato, CampaignMonitor and Atlassian.
And I think there are a lot of reasons at present to be optimistic about building locally. The local startup ecosystem is much more mature than what it was even two or three years ago, and the federal government’s language around innovation and growth businesses sounds promising.
So if you’re growing a startup in Australia make sure you take advantage of all the opportunities present domestically, but still keep your sights set on the global market.
Andrew Barnes is the co-founder and CEO of GO1 and is based in Silicon Valley. You can follow him on Twitter.
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