The term “born global” has been around since the 90s when a publication by consultancy company McKinsey described the case of young Australian firms that were able to export at a very early stage in their company history. This was extraordinary at the time, as exporting to other countries was supposed to be an “add-on” only for mature and big companies.Today, the idea of what qualifies a start-up as a born global differs. In some countries, born globals are those firms that internationalize in their early company years. In other countries, only companies that operate internationally from day one are the “real” born globals. Operating on an international scale sounds attractive to most of us, but what is the actual benefit of growing global at an early stage?
Born global helps with your home market
Thinking international from day one can help companies with their domestic market activities. Karl Viertel, CEO & founder of Alyne (now part of Mitratech) from the InsurTech Hub Munich, says, “We knew from the beginning that we had to be international due to Munich’s talent pool which is full of international professionals. It was quite clear that we cannot live in a German bubble and that’s why we established English as the main communication language in our team from the start.” This helped Alyne to attract the right international talent in Munich for their SaaS RegTech solution. Thinking from a global perspective and including networks from other contexts also helped Alyne with initial sales. Karl Viertel acquired his first client in Australia through his private network that he built while working in Australia for some time before becoming an entrepreneur. Not focusing only on Germany first made Alyne “internationalize by accident” as he says.
Developing a product for a single market and developing a product for the global market is a big difference as adaptation factors like regulatory issues are part of the initial strategy. One essential factor in setting the preconditions for internationalization right is language. It can include focusing on one global language. Karl Viertel and his team at Alyne created their software in English and only focused on English-speaking countries. Consequently, they had to say “no” to countries with a good product-market fit, in terms of language specifications - such as Spain and France. “We decided not to invest in language-specific countries before we have enough market share in English-speaking countries.”
A look in other (smaller) countries
Being a start-up in a much smaller market than Germany often means that founders inevitably have to think globally. An often-cited example is Israeli founders that successfully connect to global markets without cutting the cord to home. Founders in Israel often budget from the outset for travel to markets beyond Israel – especially to the US. A study found that Israeli entrepreneurs are rapidly realizing that their home market is too small and that venture capital from the US. is essential, which is why they are eager to travel the world. Some scale-ups no longer establish their pilots in Israel but directly in the destination/end-user market.