Continuing in our series on what investors look out for when evaluating a start-up, this week we look at the importance of global thinking.
Investors are increasingly looking for a start-up’s ability to think on a global scale. This is especially relevant for a country with as small a market as Singapore. Entrepreneurs in a larger market like the USA, for instance, may be excused from global thinking because the USA offers a large enough market for the testing of new ideas, products and services without needing to go global.
In comparison, Singapore has a very small market. While it is not impossible to carve out a niche for yourself in Singapore, success will be limited.
Allow us to use an analogy. A small neighbourhood provision shop, one that caters to the needs of residents in the nearby vicinity, will never think of expanding to outside of their neighbourhood. The owner of such a shop may experience a comfortable period of success if they have no competition. As their definition of success will be dominating their particular industry within their neighbourhood, having done so, they will see no reason to innovate or expand.
Similarly, a start-up that is only concerned with creating a local business will not have much incentive to expand to an international market. Investors will not be keen on supporting a company that has not considered how they seek to expand beyond the domestic market.
While in some cases it is necessary to start out small, it is important to, at the very least, outline in your business plan how you and your team intend to grow your business on a global scale, rather than find success in the domestic market first and then consider expanding to the international markets.