Saturday, March 1, 2014

Lesson #168: Start Thinking Globally Now -- 3.5BN People Are Waiting!!

Posted By: George Deeb - 3/01/2014


& Comment

In 2013, Cisco forecasted how large the world's Internet-using population would be by the year 2017. The data was quite staggering. The global online user population is forecasted to grow from 2.3 billion people in 2012 (32% of the world's 7.2 billion population) to 3.5 billion people by 2017 (48% of the world's 7.6 billion population). The Asia-Pacific region is forecasted to continue to be the largest overall market, and the Middle East-Africa region is forecasted to continue to be the fastest growing market.

And, although the global user base is forecasted to grow an impressive 52% during this four-year period, the amount a data consumed by these users is forecasted to grow 175%, with the mass proliferation of internet video and a growing number of mobile devices. So, make sure you are building your technologies on the best platforms in each region (e.g., mobile phones are the primary consumption device in Africa).

Let's put this research into perspective. Today, according to Wikipedia, there are 254 million online users in the United States (representing 81% of the 314 million overall population in the U.S.). That means over the next four years, Cisco's forecast of 1.2 billion new internet users across the globe, is like quintupling the size of the current U.S. online user population. That is a lot of people coming online, most of which is coming from overseas!

So, why does this matter to a bunch of startup entrepreneurs? If one of the goals of a startup is to target as large of a market as possible, it suggests there may be "bigger fish to fry" outside of the United States, where most U.S. startups first launch their efforts. Even if we use China as one example, already today, China's 568 million internet users is more than double the 254 million online users in the United States. That means if you launched a product that appealed to the both the Chinese and the U.S. markets, you would have 2.2x the reach and revenue potential day one if you started with China.

As an example, just look at the success Berlin-based Rocket Internet has had with a global startup focus in the e-commerce space. This startup incubator/venture investor has launched over 100 global companies in the last six years, which now employ over 20,000 people in over 50 countries and generate several billion dollars in revenue. Now, that is a case study worth studying (further detailed on the Red Rocket Blog).

Don't let overseas companies globally copy your good startup ideas at home, to then build up a leading market position in these lucrative international markets before you get there. Think globally as soon as you have acheived your proof-of-concept at home, and consider partnering with key players with local expertise in the big international markets, if necessary, to accelerate your own stand-alone efforts in those countries.

The goal of this article is to drive home the point that the Internet is a global medium, with over 90% of the world's internet-using population, forecasted by 2017, to be located outside of the United States. That means with a U.S.-only focus, you will only be appealing to 10% of the world's online population. The sooner you start thinking globally, in terms of your development and marketing efforts, the faster your globally-generated revenues will follow, and the faster you will control your own international destiny.

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