By Jerry Haar
What do Skype (Internet/software application), Mavi (clothing), HTC (smartphones), and Cochlear (medical devices) have in common? These firms from Estonia, Turkey, Taiwan and Australia, respectively, are all "born global" companies — enterprises whose genesis stems from a major (and sometimes exclusive) focus on foreign markets rather than their own ones.
The phenomenon of born global companies has been growing rapidly in recent years; and our own community of South Florida benefits from this trend. Witness FIU’s recent Americas Venture Capital Conference now in its third year where many presenting companies were born global, such as Open English, a Coconut Grove firm that targets Venezuela and other Latin markets, and Idea.me, an Argentine crowdsourcing company, akin to Kickstarter, with subsidiaries in five countries.
Just what are the forces in the macro-business environment that are spawning and nurturing born global companies? They include: access and affordability of technology; the democratization of innovation — for example, Priceline required $3 million in technology in 1997, but could be launched today with only $1,000 in start-up funding; lower costs of travel and communication; ever-lowering barriers on trade, investment and financing; and the continuous migration of talent.
At the firm level, there are a number of characteristics unique to born global companies. First, they are very active in international markets from or near the beginning — they have to be. For example, with 1.3 million people in Estonia — half the population of Houston — there are not enough current or potential Skype customers to make the enterprise worthwhile. Although the tech sector dominates born global companies, these firms are also found in processed foods, consumer goods, furniture and other areas.