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Going Global with Your Startup
- jgrahamc 9y ago5. You’re going to need to get on an airplane sometimes Yes, this is very important. There's still nothing like human contact. I use video calls constantly all day, but still fly a tremendous amount because so much communication happens non-verbally or with higher fidelity than video provides.
- iagooar 9y agoEspecially so with your high-profile customers. There's nothing, NOTHING better than meeting your customer personally, shaking hands, visiting their office or having lunch together. Humans are, by nature, social beings. Even though, as a civilisation, we've come a long way and have created ways of communicating across huge distances, we still feel like the personal contact is so much more powerful. Never underestimate personal contact, especially when running a business.
- mrisoli 9y agoThere is a very simple reason for this, you always get more information in person. If you're interacting with a text-based chat interface you get one thing, pieces of text, not only that's all you have to make decisions, but you have no idea how much effort and time went into designing those messages for you, this translates into the simples human interactions. If you are talking on the phone, you get words and maybe a tone of voice, you get more timely information, but that is all. If you are doing video chat, you get to see the persons expressions, which is a plus, but not much more(and how many times have I seen audio/video data issues). But, if you are meeting in person, you get all of that and then some, plus it signals commitment and effort to allocate time to physically attend a meeting considering how much other options you have. These do not have precise metrics, but it drives people gut decisions.
- kwindla 9y agoIn a startup sales/bizdev context, the point you make about signaling commitment and effort is particularly important. "The founder (or CEO) showed up in person" can make a lot of things happen more quickly than they otherwise would.
- iagooar 9y agoThat's a very fair point. Might be that to a certain degree people feel in debt with the person who offered them their time, thus making a positive business decision easier.
- tlb 9y agoAfter spending years building next-level video conference systems, I reluctantly came to the conclusion that even perfect video and audio, with the ability to move around independently, didn't come close to being there in person. A hypothesis I haven't seen falsified is that smell or pheromones are part of the human bonding mechanism, even for business relationships. Another thing you lose through videoconference is the potential for violence. Even though it almost never happens in business meetings, perhaps there is a part of our evolved brain that's active when interacting with someone who could, in principle, punch you if you offended them, and even business relationships are affected by this. Underneath our sophisticated neocortex lives the brain of a small mammal.
- kwindla 9y agoOriginal author here. Happy to answer any questions or talk about other things related to working across national borders.
- deleted 9y ago[deleted]
- rgrieselhuber 9y agoI've been running my company as a globally distributed business for awhile now and I'd also emphasize #2 and #5. Also, managing a 40 person team across many time zones created interesting communication issues. Be prepared to dial in processes far earlier than you would expect to need them and learn how to manage / archive conversations that happen in chat effectively. I've found that voice / video chat is still very challenging due to time zones, varying internet connections, and spoken accents vs text. I definitely expect to see much more of this going forward though. Asian markets are on fire right now and many US companies, large and small, are focused on growth there.
- justherefortart 9y ago#7? The list only goes to 5.
- Isamu 9y agoLinear extrapolation?
- rgrieselhuber 9y agoHaha I meant #5. Edited.
- raverbashing 9y ago"Anywhere you have employees, you need an accountant and a lawyer. This one surprised me." Really? That's pretty much business 101. Doesn't need to be one person exclusively, there are offices that combine both services, but yeah. Unless you're subcontracting them. Oh and "work visas are complicated", they are, but H1Bs are much more complicated than the average (and abused by big players as well). So overall, it's a nice writeup, but pretty, pretty basic.
- rattray 9y agoBasic can be really helpful for people who don't know anything at all about a subject (eg; programmers who never took "business 101").
- munchor 9y agoI understand the surprise given that many companies these days hire full time "employees" as "contractors" in other countries. These employees are sometimes not really "contractors" (they have a fixed salary, they get benefits like paternity leave or paid time off, they have performance reviews, they can be promoted, etc.) but on paper they are "contractors". Personally I know various companies that have employees all over the world but DON'T have accountants and lawyers anywhere. These "employees" are both "contractors" and "employees", depending on which angle you look from.
- slgeorge 9y agoThat's true, but the reality is that lots of small start-ups are "doing it wrong" and will be caught eventually [0]. Most jurisdictions have firm differences between a temporary worker (contractor) and an employee. Generally, companies have responsibilities to pay things like payroll taxes for employees and not for contractors. While management and team members might consider them selves BOTH employee and contractor. The legal and tax situation is that those are different employment states and you can't be both. For a recent example see Uber in the UK. It's somewhat a tech industry thing the idea that employees can wander around the world and work from wherever they want - the tax and legal system isn't quite as fluid. [0] statistically the chance of being noticed by the tax authority is pretty small at the start which is why it doesn't happen that much. But, if you start 'employing' tens of people in a jurisdiction and don't have company tax affairs in order then it gets increasingly risky.
- HugThem 9y agoOne thing I would love to know more about is how European SAAS startups handle invoicing and taxes. Afaik the tax situation in Europe is super complicated and you have to charge the tax of the country the customer is from. I am in Europe and want to start a SAAS service that caters to individuals and small companies. I wonder if it is feasible to do so in Europe. Do I really have to ask each customer where he is based, if he is an individual or a company and then tax him accordingly? Do I have to create invoices? US based startups seem to simply not care. Even big companies don't. They just ask for your credit card number and thats it. For example I used Amazon Mechanical Turk recently to outsource some work. And there simply is no way to get an invoice from them. Do European startups have a big disadvantage in this regard or am I missing something? Are there services that abstract that away? Deal with all the invoicing and tax issues?
- Xeoncross 9y agoAdd to that the additional questions about accepting crypto currency payments.
- zerostar07 9y agodo you know anything about it? I would like to tinker with something like that, but how does it work
- meredydd 9y agoThe tax stuff is a bit of a pain, but you can buy things (eg Stripe plugins) to make collecting the necessary data much smoother. In short: If you're supplying digital services to consumers, you need to charge them Value-Added Tax (VAT) in the country they're in, not the country you're in. If you're supplying to businesses, you charge them VAT where you are. You need to collect certain evidence with each transaction, to prove which category/country your customer is in. The search term you probably want is "VAT MOSS". This officially refers to the "Mini One-Stop Shop" provided by HMRC (the British tax authorities), which tries to ameliorate the situation. You still need to charge people the right amount of tax, but then you can just upload a quarterly spreadsheet saying how much revenue you got from each EU country. But "VAT MOSS" is also used as a catch-all term for the whole cross-border digital VAT kerfuffle. It started out as a well-intentioned attempt to close a tax loophole, but it was clearly drafted by people with no understanding of how computers work. (There are actually "FAQs" about how, precisely, to handle a German citizen with a British SIM card making a mobile transaction from a train journey crossing the Italian-Swiss border...as if this were something a website could reasonably detect.) But, as I say, there are decent solutions you can use, and you just spend a couple of days implementing one of them.
- edouard-harris 9y agoPractically every pain point listed here is a startup waiting to happen.
- exolymph 9y agoOr possibly a startup that's already happened but hasn't scaled yet :P
- simonbarker87 9y agoOn the shipping front there is a nice expression that you only air freight the 2 Fs “fresh flowers and f* ups”. I would say though that shipping large goods internationally is easier in my expiernece than small individual orders, for that amount of shipping cost it is far easier to get a good service that can keep things moving than for an individual order.
- vgf 9y agoOver the course of several companies, I have noticed something special regarding China (in the context of expanding there, from a western country): 1. You inevitably hire a local person to handle this market. 2. Because of the combination of language issues and timezone differences, communication suffers. All of your communication is via your one local person. 3. Your Chinese country manager decides that the Chinese market is significantly different from every other country in the world, so your product needs to be rebuilt to address the local market. Fortunately they can hire lots of people very quickly and relatively cheaply. You don't really have any insight to say whether they are right or wrong. Comment: I feel this tends to be a combination of a) empire-building strategies and b) ignorance of the rest of the world, and a specific assumption that China is special in some specific way, which often turns out to be false.
- mcmoose75 9y agoI run the US office of a German startup. I'd add the below: 1) Issuing employee equity across countries is difficult: There are good US solutions to prevent employee equity/ option holders from needing to pay taxes before liquidity, and similarly for good German solutions to the same problem. Getting these two systems to "play nice" with each other is challenging. 2) Time zones: If possible, I'd think about time zones when expanding internationally. SF->Europe is brutal (8-9 hours), which is a major reason we put our US office in NYC. I wake up at 6, check email, and have half a day to work with the Germans during their work day. If I were to be on the West Coast, even by starting at 6am it's already 3pm in Germany. 3) Visas: A good option for international companies expanding to the US is an E-2 "investor" visa- these make it easy for employees of the foreign HQ to come over to the US for a few years as long as the foreign company is investing substantial money in the US organization (I think over a couple hundred $K is enough)
- baybal2 9y ago1. Snail mail is your friend Not only it is cheap, 1 week deliveries are some times possible on Finpost, Singpost, Swedish Post and most well known, HK Post. Establish small warehouses in those countries. 2. Do not have legal presence in as many countries as possible. Countries do not tax purchases of their citizens abroad (no VAT, hooray) 3. Be secretive (or at least until you can afford to do things the way "big co." do) 4. If you 100% need to have physical presence in the country, you are doing something wrong. 5. If you 100% need to have a team meeting in person with an ability to rent an office for work for some time, only consider no hassle visa countries. Singapore was once super hospitable to internationals: hire whom ever you want, from where ever you want, but now they did a U turn. They also largely cancelled their legendary high income individual visa (a de facto residentship permit given just for agreeing to live and spend money in Sing.) Vietnam, Thailand, Malaysia, PRC, Pakistan have no problem at all giving out long term business visit visas to all and everybody. For as long as you get your body on their side of the border, you are free to do whatever you want for the duration of the visa unless you do something really stupid. 6. If you are really insistent on having a single physical workspace, consider places out of beaten path: look for countries that are cheap to live in, yet fancy, and without bureaucratic culture. For example, say Kazakhstan (their capital ranked 1 in Economist's list of cheapest megacities to live in) or Pakistan (they have an actually working FDI assistance and protection program.) There, locals are ready to almost worship the few foreigners who want to spend money in the country, plus they are the kind of countries where you can buy anything for money including the disposition of authorities. Also check for possibility to do split tax/salaries legally in the country (pay base in the country, and a project premium/stand alone consulting payment to a proprietorship in their home or third countries.) 7. Consider the fact that the majority of world's middle class lives outside of the West today and that you get more opportunity for the money in markets that are not yet as mature as in the West. 8. Middle class outside outside of the West is easier to cater to: in the West, you gave a plethora of different classes all qualifying as paying middle class, with their own subclasses, and vastly varying demographics. Compare this to Central and South East Asian middle class: age 25-35, 90% technical professional occupation, %60-%70 with families/couples, highly geographically clustered, employed full-time, mid to high property ownership, mid to high light vehicle ownership, almost all with higher education and second language knowledge. 9. P.S. Pakistan has fabulous 200GB 4G data plans for only ~$90 a month.
- mindcrime 9y agoGood stuff. You can easily get surprised. We had not even thought about "going international" to any meaningful degree, and then out of the blue a prospect from Canada calls us. At that very moment, I had NO idea what would have been involved in doing a deal with them... taxes, payments, etc., etc... all totally beyond my ken.
- jqueryin 9y agoJust a heads up that the YC blog spits out far more data than it should when it errors out. I received a 503 and encountered this: Service Temporarily Unavailable The server is temporarily unable to service your request due to maintenance downtime or capacity problems. Please try again later. Additionally, a 503 Service Temporarily Unavailable error was encountered while trying to use an ErrorDocument to handle the request. Apache/2.2.24 (Unix) mod_hive/5.5 mod_ssl/2.2.24 OpenSSL/1.0.0-fips mod_auth_passthrough/2.1 mod_bwlimited/1.4 FrontPage/5.0.2.2635 mod_fastcgi/2.4.6 mod_fcgid/2.3.6 Server at blog.ycombinator.com Port 80
- btown 9y agoIs this really problematic from a security perspective? Presumably anyone malicious is already running a script-kiddie package that is actively probing for vulnerabilities, so would it even help such an actor to know what library versions you're using?
- rsp1984 9y agoI run an international Startup as well and we ship stuff around the globe too. It sounds like the author has good experiences with DHL. Unfortunately that has not been the case for us. Too many delayed packages, customs trouble and general incompetence made us switch to FedEx a long time ago. Haven't had a single problem since then. Although I'm German I can't recommend DHL to anyone in good conscience.
- jacquesm 9y agoSeconded, I used to ship a lot of stuff using DHL and have transferred all our business to FedEx or the US bound stuff and other carriers locally and within Europe. DHL caused us no end of trouble with breakage (more so with packages marked fragile), lost packages, late packages and so on.
- mceoin 9y agoAs a side comment on the ideology of going "global first", startups from smaller countries (with smaller markets) are almost forced to adopt this mindset from day one. Many advantages from going US only first: same currency & language, homogenous culture, huge market, etc. The main disadvantage though is that you don't learn how to operate in an international environment until later in the business life cycle, at which point the institutional DNA is harder to change. Your competitors will be taking a global-first mindset, so it's something to think about.
- zerostar07 9y agoSo , tax accounting and immigration paperwork are areas ripe for innovation. There is an unjustified amount of effort and time going into accounting, which should be automated in western countries.
- j45 9y agoThere is some nice advice in comments and articel I had a few more things that helped with a platform that I built that went global: - Internationalization - bake it into the bread from the beginning, the cost is marginal, relatively speaking. Internationalize the UI for sure, and make design decisions relative to having reasonable multi language support for any user type content. It won't be perfect out of the box, but you will have a huge head start when you have to optimize rendering of languages. - Localization: The forgotten sibling of internationalization can be critical when going for an experience to show a native experience that is local and inviting to the user. - Equality for the international user: Consider your browser configuration globally and not just North America, which is typically better equipment, higher screen resolution, faster internet connections, the latest browsers, etc. This doesn't mean avoiding using the latest and greatest, but consider it. As much as I like React, lighter libraries like Vue can be a little less heavy. Lean, mean, and fast go a long way when you have a user on an off-shore platform needing to access something required to do his job. - Mobile first - the world is mobile first, North America is a mix. For many people, depending on the country, the mobile is the only device they have, through which they have to accomplish tasks that others may complete on tablets or laptops. Consider this in your design and also try using only a phone for a week to do what you do normally on a laptop - it can be eye opening. Thanks to folks who have reccomended services like Chargebee - sharing current resources that solve neccesary problems like this help a lot. It's great to be able to take money in any form rather than force a user down a particular path.