Building a startup as a global Business

Building a startup as a global business requires managers with skills and strategy much different from their predecessors of even a generation ago.

Thanks to the Internet, entrepreneurs are no longer confined to a local geography when building a new business—the world can be their market from day one.

But building a startup as a global business requires managers with skills and strategy much different from their predecessors of even a generation ago. If you are a global entrepreneur, "you have to think much earlier and much faster."

The new MBA second-year course Launching Global Ventures (LGV), developed by Entrepreneur and taught for the first time last winter, teaches students just those skills.

Many new ventures have global strategies from the start. Entrepreneur says he wanted LGV to "go straight to global," helping students understand at early points in the business life cycle how these fledgling ventures can operate across multiple countries. The course would also identify advantages and liabilities of starting an international company, how to manage it locally and globally, and building partnerships and personal networks—an area of continuing interest for the researcher. Entrepreneur didn't have to look far for material, with several recent HBS grads—and a then second-year MBA student—starting global companies, the perfect subjects for about half of the dozen case studies used in the course. After many interviews, Entrepreneur was able to glean powerful details on the challenges that these entrepreneurs took on as they built companies operating in multiple geographies. Eighteen months later, he was ready to launch the new course, which puts an up-to-the-minute spin on an ancient form of trade.

'BORN GLOBAL' NOT NEW

Forming global companies is nothing new, Entrepreneur says. Phoenicians served as the middlemen for trade across the Mediterranean region, for instance, and Europeans built nation-spanning operations as they explored and colonized, exploiting valuable resources along the way.

Throughout history, Entrepreneur argues, global ventures have been governed by two common forces. First, there must be an advantage to connecting two different places—Christopher Columbus's desire to link European markets to Chinese silks, say, or Silicon Valley's desire for cheaper programming talent in India. Second, a global company needs methods and tools to enable the venture, such as long-haul ships for Columbus or the Internet and telecom infrastructure for Skype.

During his research and course development, Entrepreneur focused on three key pieces for LGV cases: identifying case examples of larger trends and phenomena being uncovered by research; describing the most recent questions entrepreneurs are facing, even if the answers are far from certain; and identifying areas where previous HBS students felt underprepared for handling the challenges.

As an example, one case discussed in LGV was EverTrue Mobile Technology Development, which centers on Brent Grinna (HBS MBA 2010), who founded the company when he was a second-year student at HBS. In the case, EverTrue is creating a mobile application that would allow schools to connect more easily to their alumni networks. Grinna was asked to build a prototype of the application for Brown University's Alumni Association board in two months. Trouble was, Grinna lacked a technical background.

In class discussion, students consider whether Grinna should hire local programmers or a CTO to do the work; outsource the work using a global labor platform like oDesk; or partner with Dashfire, a new venture that takes equity in startups in exchange for development work in India. They also evaluate the managerial challenges that Grinna will face if his team becomes spread across two countries at such an early stage. And there is an opportunity to discuss various online outsourcing models, which represent a major trend in global labor markets.

In the end, students grapple with a very recent phenomenon for entrepreneurial companies—they may start global for the first phases of development and then consolidate into a single location, the opposite of traditional patterns where international operations commence with company growth and maturity.