Thursday, November 02, 2006

Globalization and Silicon Valley

I was on a panel on global venture capitalism this evening. This type of subject, 10 years ago, would not have been newsworthy as international expansion was considered an afterthought usually funded by an IPO proceeds. Well, today, the room was full of entrepreneurs whose companies are at a seed and early stage and this was a very lively discussion. Anne, the moderator, asked a very thoughtful question: why does it truly matter for entrepreneurs in Silicon Valley to think globally? The answers from the panel were:

1) Outsourcing development in countries such as India, China or Eastern Europe lowers the cost of developing a technology significantly;
2) The United States has lost leadership in certain key technology area: for instance, in the mobile industry, it is better to get an early traction in Asia and Europe as traditional players in the US won't move fast enough;
3) The Internet has enabled the creation of truly global companies: if we take the example of Jaspersoft, an open source business intelligence. The technology has been developed in Romania, productized in and marketed from Silicon Valley and consumed equally between US, Europe and Asia.

Increased revenue line, lower cost are the trademark of globalization and compensate the risks associated to going global early (IP issues, legal and HR related issues....).

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