We live in an increasingly globalised world. Unlike what we read in history books and despite recent political rumblings, economies no longer stop at national borders. In some cases such Europe and SE Asia, economies even span beyond continents meaning that goods and services move freely between different national and regional consumer groups. This poses great opportunity for entrepreneurs and companies seeing as possible consumers of products and services steadily grow in numbers.
Having said this, we can’t ignore the fact that increasingly globalised economies also pose a problem especially for young and aspiring entrepreneurs. Economies are becoming increasingly interlinked – this means that they also become more complex and tricky to navigate. Every entrepreneur in history has asked themselves the same question: ‘Where do I set up?’ This question is now more important than ever. Despite the internet and increasingly linked economies, location can still mean the difference between breaking or ‘making it big’.
London is of course a great location to get your idea finalised and even possibly started. The city boasts a dynamic and welcoming ecosystem complete with abundant venture capital funding options. We have an exciting mix right hre – the ‘City’ (financial services and consulting), the great startup locations such as the Silicon Roundabout and Shoreditch, and thousands upon thousands of people with interesting and disruptive ideas whom one can meet and exchange ideas with. London is the gateway to both the other side of the Atlantic and the European continent. However, each startup is unique and has its own unique requirements. Although London is a welcoming entrepreneurial space it can be very easy to start feeling overly comfortable and losing the cutting edge drive and potential that makes startups truly cutting-edge. So here are a few things to consider:
Why go abroad in the first place?
Yes, why bother? Well, we all know there are many other great startup locations across various continents: Tel Aviv, Helisinki, Istanbul and Glasgow to name but a few. However, we have found that the following factors are important in the decision-making process and should always be considered before booking that plane ticket.
Each entrepreneur must ask themselves:
What sector or industry am I operating in?
Where do I get the best possible market access for my products and services? Plus where is the niche I am in most prominent? These questions are fundamental and should ideally occur long before a decision to re-settle is taken. Sectors and industries have very different territorial and financial features and are subject to unique dynamics – so do bear this in mind!
Where are my customers? What about the ecosystem?
Remember you are selling a product or service. Products and services don’t sell themselves (any entrepreneur will tell you that you have to push your business and sales before getting anywhere). Selling means an exchange between two parties; thus make sure you are in proximity to your customers! The definition of proximity may of course vary depending on your niche. Nevertheless, it is vital that you set up in or near the midst of the people whom you would like to exchange with. It’s not only logical but also the best way for you to field-test your startup.
Secondly, being situated within a constructive and helpful ecosystem is absolutely vital. You could be running the best startup in the world, but if you’re not in the right environment that best serves you in terms of support and opportunity, you’re likely squandering your potential and will encounter very frustrating situations.
What are the costs of relocation (financial, possible resulting inflexibility)?
Do the benefits outweigh the costs? Every re-location poses costs as well as opportunities. Think of the following situation – remember when you first moved in order to attend university? Moving was expensive, right? Certain risks were attached (paying rent and bills on time, orienting yourself in the new university environment, making good connections with people, being successful at your studies). You hoped that this risk, which also presented a great opportunity, was worth it. Moving a startup is not very different from this except for the fact that it isn’t just you and your luggage, but a business. The decision to relocate must thereby be preceded by considerations around finance, staff, and whether the opportunity is sufficiently great. Make you have a plan B, C and D if things don’t work out as you imagined (and remember, this is normal!) Entrepreneurs are flexible and inventive. This means that almost any situation is – to an extent – salvageable.
Regulations and visas
This can be very easy to overlook but is incredibly important! Even though economies are largely interlinked now, sector, industry and immigration regulations are not completely homogenous. Make sure you do your homework! Being subject to differing legal and regulatory requirements can be quite a shock so it’s best to avoid this by informing yourself as much as you can, and asking experts where you can.
What support is offered?
Even though globalisation and free markets are terms we hear in lecture theatres, seminars and on the news it would be a mistake that free markets make business thrive alone. Governments and financial institutions manage economies by incentivising certain sectors and practices while doing the opposite to other parts of the economy. Thus it is also quite important to make sure there is a reasonable amount of support for your startup out there!
Finally, please make sure to think about whether the global common access to the internet really means customers all over the world will buy your product. Remember that engaging with customers and keeping connected to them is very important. Relocating may enhance or destroy that connection. Whether this would be the case is up to you to work out – make sure that you are as certain as you possibly can be!
Good luck! Bonne chance! Viel Gluck! ご幸運を祈ります!