How To Start A Web Business In Another Country
Here’s a question from a Breaking Free reader:
I’m not sure if you have any experience with this, but i’m wondering since the world and borders are shrinking, what are your thoughts on opening web based businesses in other countries. Is there anything that someone should know before going at it? Most specifically the USA and Canada.
There may be some legal issues as well as logistical.
-Lucky from HelpYourSelfGetLucky.com
Yes, I think this is a great idea. What’s most exciting about it to me is the idea of taking a business idea which you KNOW already works in the U.S., and then being first to bring it to market in another country.
Being First Counts For A Lot
Ebay was first to market as an auction site in the United States. They reached critical mass first and therefore dominated (the value of the site is directly linked to the number of people using it so there was a high barrier to entry for competitors once Ebay got going).
However, Yahoo Auctions was first to market in some other countries (like Japan) where they now dominate. Yahoo IS the Ebay of Japan, nobody there uses Ebay.
Why not become the Netflix of Canada, or the MySpace of the Netherlands, or the Zappos of Honduras.
The reason I like this idea is that it reduces the uncertainty in starting a business. You already KNOW the business idea is good because it has been proven to work in one place already.
What To Watch Out For
You do have to move quickly and catch on to a trend early. Most of the big ones (Amazon, Ebay, Netflix, etc) I’m sure are already being knocked off. You need to get in early when you see a site that has some success. It doesn’t have to be a huge site either, it could just be doing well in come niche.
The other concern here I’d say is to take an idea where it pays to be a local. For example, doing Netflix in another country would require knowledge of the local postal system. Twitter, on the other hand, could be launched in 50 new countries tonight with few changes. Pick an idea where you will have an advantage as a local and it isn’t trivial for the big dog to swoop in before you really get going.
Finally, you do have to watch out for cultural differences here as well. Selling beef jerky in India where most people are vegetarian might not work so well.
Save The Legal Fees
Regarding the legal aspect, I’m not a lawyer, but I wouldn’t be concerned about that at all. After all, once MySpace and Facebook became popular there were literally hundreds of social networking sites that cropped up that were all basically copies, and they didn’t face legal repercussions. Add to this the barrier of operating out of a foreign country and I think it’s pretty safe.
Of course, you would never want to actually copy the code off their website (that would be illegal), or if you were an employee at MySpace and then left to start your own copy there may be an issue there.
But strictly “reverse engineering” the functionality of a site is perfectly legal and ethical I think. Thats how all great innovations are made. Take the best pieces from everything that is already out there, and then take it one step further.
Feel free to send me other questions you have about starting a business. Please keep them to one paragraph or less and include a link to your site with your question.
What other proven sites exist in the U.S. which haven’t been brought to other countries? Leave us a comment below.
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Lucky said,
Wrote on August 6, 2008 @ 12:46 pm
Brian, Thanks for the this post.
Have you ever considered doing a semi regular podcast? If you did, I would be the first to subscribe.
[Reply]
Brian Armstrong reply on August 7th, 2008 1:17 am:
Yep, I did some for a while called “Interviews with Self Made Millionaires”. You can see some of them here:
http://www.startbreakingfree.com/category/interviews/
For some reason though I could never get excited about doing it. It took a long time to schedule with people and edit the mp3’s. It didn’t really fit into my “semi-retired” lifestyle, haha. Who knows, maybe I can find a way to fix that though, like to just bring a tape recorder when I’m to have lunch with someone, and then give it an assistant. Not sure…
[Reply]
Lucky reply on August 7th, 2008 10:07 am:
I’m not talking about interviews. That could be part of it but I was thinking more along the lines of a “how to break free” podcast. Give some of your insights, what has worked and what hasn’t.
No one is going to get excited about doing a podcast when they have no idea if anyone will ever hear it. Once you build an audience, you’ll feel the rush.
I’m not here to convince you though. Just a thought.
[Reply]
Brian Armstrong reply on August 7th, 2008 2:32 pm:
It’s a good idea for sure. Thanks Lucky.
Lucky said,
Wrote on August 7, 2008 @ 10:11 am
On another note… I just heard about this guy in Germany getting sued by Facebook for coming too close to their design. I guess you can “sue over borders”. But he could have easily gotten away with it if he had the same idea with a fresh design and a little different functionality.
In the e-bay vs yahoo example, you can’t patent an auction, even if online auction has never been done. but if yahoo in Japan looked exactly like e-bay, there might have been a few lawyers involved.
[Reply]
Brian Armstrong reply on August 7th, 2008 2:34 pm:
Thats true. I suppose you don’t want to copy the design. Just the functionality.
I got into a little bit of hot water with my College Student Tutors site (http://www.collegestudenttutors.com/) because it’s design was similar to Basecamp (http://www.basecamphq.com/). I’ll need to be more careful about that in the future.
[Reply]
Creer un site said,
Wrote on August 18, 2008 @ 5:43 am
An other point is that some business always followes the same road, for example, in Europ, the market starts in UK, then in DE and FR, and in ES, IT and PO. It particularly exact in the web, once you see a biz coming in FR, it’s high time to start the It and ES website :-)
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