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American entrepreneurs still enjoy certain home-field advantages
Although we have written about the difficult start-up environment and the critical impact it’s had on the nation’s poor job growth, it’s good to be reminded from time to time that as bad as this environment feels at the moment there is still no better place to start and build a business. Here’s John O’Farrell of Andreessen Horowitz, writing at their a16z Library:
I grew up in Ireland. With a population of only 4.5 million, it’s a tiny market—so Irish entrepreneurs have to think outside their borders from the beginning. Relative to his Irish counterparts, the American entrepreneur is born with a silver spoon in his mouth. He has the luxury of a massive home market—300 million affluent consumers, 30 million businesses, one language, one currency, one culture, one legal system—from sea to shining sea. Initially, that’s a huge advantage that allows him to build a company of significant size without even needing a passport. Google rocketed from zero to almost $350M in revenue in four years—80% of it from the United States market.
O’Farrell penned that in the context of recommending ways in which entrepreneurs can prepare to expand internationally, but much of his advice applies to any high-growth company: prioritizing markets, protecting intellectual property, choosing a well-thought-out operating model, and acquiring talent with the right “DNA” from the outset. Replace the word “international” below with a different adjective (finance, healthcare, consumer retail) relevant to one’s industry or function and it becomes good advice for any CEO/entrepreneur. Here’s O’Farrell:
- Mix in some international DNA on your management team—consider making international experience an explicit hiring criterion for at least, say, 30% of your positions. In addition to international perspective, your team will benefit from diversity of thinking.
- Make internationalization and localization experience mandatory for senior product management and engineering hires.
- Recruit board members with international experience and perspective. At my last company, Silver Spring Networks, we killed two birds with one stone, adding the CFO of Nokia to our board for both his international and financial expertise.