Building the Global Startup Part 5: In Summary

This is the final installment in a five-part series on building a global company from the ground up.

Summing it all up

We’ve covered quite a bit of ground together since I started this series.  Here’s the executive summary:

  1. There are simple steps you should take to lay the groundwork for international expansion from the moment you start your company.
  2. Before you launch internationally, you should have an explicit, well-articulated strategy.
  3. You should assign a qualified executive to develop the international strategy and drive its execution, and involve the rest of the company in the process to gain their emotional commitment.
  4. A headcount plan and budget that cover both the “visible” and “invisible” requirements will set the business up for initial and lasting success.

Some closing thoughts

In closing, a few reminders as well as suggestions that have worked well for me:

  • As the CEO, look for ways to make it clear to the company that going international is a critical priority for you personally.
  • Involvement builds commitment.  Take the time to get buy-in from your managers and their teams, who are probably already overloaded.  Involve them thoroughly in developing the international strategy, and make sure they get the resources required to support it.  Make it their plan, not somebody else’s plan!
  • Assign a small support team to represent the international operations at HQ and to make sure they get their needs met quickly and efficiently.
  • Enlist one respected manager from each company function for a cross-company oversight team, to drive execution and run interference with the relevant departments as issues come up.  The best people for this are usually not the most senior execs, but director-level thought-leaders who have the respect of their organizations.  They will be honored to be chosen.
  • Remember to treat international as a startup:
    • Be realistic in setting schedules and milestones—it will take longer than you think.
    • Be prepared to live with a startup financial profile—likely several years of losses before turning the corner into profitability.
    • Report on the international business separately from the domestic business.  It should be following a similar (or steeper) growth profile, but several years behind.
    • Be ready for exceptions to corporate policies—compensation for top overseas hires will be a prime example!
    • Make sure everyone’s performance objectives and incentives encourage support for a successful global rollout—performance reviews, 360 feedback, compensation for all key functions should include specific criteria.
    • Challenge your management team to ensure company policies and processes aren’t purely US-centric.  A small example:  all-hands meeting times that don’t require overseas employees to dial in at 3am.
    • When you make your first overseas hires, give them a month at HQ before turning them loose in market.  They need time to soak up the culture, value proposition, products and so on, as well as developing personal relationships with key HQ people they’re going to be working with remotely for years.
    • Send out regular updates on international progress—emails, blog posts, all-hands updates.  One company I’m involved with, Shoedazzle, has set up a live webcam feed between their California HQ and their new London office, so the teams can see each other as they go about their day—great idea!
    • Make it fun and celebrate success.  At Silver Spring Networks, we launched our Brazil operation with a big all-employee party at HQ, complete with Brazilian food, music and caipirinhas.  We turned the World Cup into another great opportunity to celebrate our becoming a global company, screening the matches live at lunchtimes.
    • Finally, protect and nurture the international business.  When the domestic business has a revenue shortfall or a product slip, it’ll be tempting to take it out of international.  Don’t—it will send a message to your employees, overseas teams, customers and partners that international is a second-class citizen, and you may never recover.

In conclusion

If you’re really serious about having a big impact and delivering a great return for yourself and your investors, you have to build a global company.  While you may not be ready to cross the border yet, you should be talking and walking the talk as a CEO from the beginning, and building global thinking into the company’s DNA.  As soon as you can afford to, assign a respected manager to lead the development of an explicit international strategy and plan, with participation from all key functions of the company.  Assign the resources to make it successful, and protect it when the domestic business hits a bump in the road.  Remember—your growth in three years should be coming from countries you’re not in today.  Bon voyage!

Comments or questions?

I welcome your comments and questions.  If the comments box is not showing up below, click on the title at the top of the post and it should appear.

7 comments
  1. Mark Liffmann said:

    John – You series on "Building the Global Startup" is one of the best business blog posts I have ever read. I led the effort at SunPower to take our business unit (the residential and light commercial business unit) international. Your blog aligns extremely well with our experience, both the things we did right and the things we messed up. I am saving this series in my archives to turn to regularly to guide my thinking in future efforts.

    • John O'Farrell said:

      Mark, Thanks for the feedback. I'm really pleased you found it relevant!

      Best of luck in your next efforts!

      John

  2. Enrique Menor said:

    Hi John,
    Really outstanding series!
    I'd like to point out an upcoming trend some global companies are implementing as well in order to balance the "country origin" and "top market" centrism. They are sending top level senior executives to lead smaller regional operations in emergent markets such as Africa or Latin America. With such moves, they get a clear message to the entire company about the potential for growth and strategic importance of these still small markets.
    A very interesting side effect to this move is that Regional CEOs are relevant people to their organizations. Thus, when they ask for resources or support their voice is heard. Their share of the total business might still be small but they have a clear understanding of the global strategy and are actually there to make it happen. Their understanding of the mission and core values of the company make it much easier to align local operations and the people involved with the global culture and objectives of the company.
    It's easy to understand if you compare how locals feel when every now and then a big wig drops by as opposed to have her on your starting team on a permanent basis.
    Thanks for these posts.

    • John O'Farrell said:

      Enrique,

      Great observations — thanks!

      John

  3. George said:

    John,

    Firstly, thanks for writing this series. I can only echo the previous commenters on how outstanding it was.

    One minor point – the url for this part is listed incorrectly in the library section of the AH home page. The home page links to http://a16z.com/2011/10/04/building-the-global-st… (which resolves to "Page Not Found") when it should be linking to http://john.a16z.com/2011/10/04/building-the-glob….

    You can still get to Part 5 by clicking "Next Entry" from Part 4 (which is how I eventually found it), but it would be a shame for others to miss out on the finale because they don't realise that.

    Anyway, thanks for the fantastic series. It has given me plenty to think about for my business idea!

    • John O'Farrell said:

      George,

      Thanks very much for the feedback and for pointing out the URL problem. We'll get that fixed!

      John

  4. Daniel McDonald said:

    John,

    Thank you very much for this series and for all of your blog posts. As a business school student I find them very educational and enlightening.

    They really open my eyes into just how much goes into business.

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