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As the founder of TripScout, and as someone who has traveled to over 75 countries, I spend a lot of time with startups, investors, and incubators in emerging markets. The resourcefulness, drive, and vision I see in these markets continues to inspire, and convince me that the “next big thing” is increasingly likely to come from Cairo, Mexico City, Nairobi, or Saigon. The talent and access to technology are there, but these markets have to overcome significant challenges. Reliable power, high-speed internet, corruption, and lack of resources are real obstacles emerging market startups have to face on a daily basis. However, if you are an emerging market startup, I have noticed a few consistent, but easily avoidable, issues that may be holding you back from your Silicon Valley peers.
1. Remove the information gap
The latest and best thought leaders for growth, product development, and business topics are household names in the Valley, but are often unknown in emerging markets. Do not try to navigate complex topics on your own or rely solely on your local accelerator. Let the best in the world be your digital mentors. These experts have poured out their knowledge into blog posts, books, and interviews. Here are some of the best that you should be following to accelerate your business:
- Online Marketing: Neil Patel (also see his company’s blog at QuickSprout and KISS Metrics), Noah Kagan
- Growth: Gabriel Weinberg’s Traction: A Startup Guide to Getting Customers
- Sales: Predictable Revenue
- UI/UX: Lovely UI, Mobile Patterns, Capptivate, Pttrns
- Social Media: Gary Vaynerchuck and Buffer’s blog
- PR: Dmitry Dragilev’s Criminally Prolific and Trust Me, I’m Lying by Ryan Holiday
- Copywriting: Neville Medhora’s Kopywriting Course
- Content Marketing: HubSpot
- Blogging: ProBlogger
- SEO: Moz
- Business & Investment: Ask the VC, Brad Feld, Paul Graham, Fred Wilson
- Creativity in Businesses: Chase Jarvis
- Managing Through Challenges: Hard Things About Hard Things by Ben Horowitz
- Prioritization: Essentialism
- Podcasts with great business guests: Tim Ferriss, James Altucher, Lewis Howes, Amy Porterfield, Dale Partridge.
2. Stop complaining about investors
“There are no investors here.” This is the number one thing I hear from founders in emerging markets. I get it; it’s a lot more challenging for you, but every startup faces hurdles so stop complaining and find a way around it. An increasing number of investors do not care about location. As one of my former investors, Paul Singh, likes to say, “Lazy founders complain. Smart founders ask, ‘How can I get the attention of people who aren’t here?’” First, how much are you actually hustling and conducting a methodical fundraising process? Do you have a pipeline of every investor who has ever invested in a local startup, every early-stage investor in the region, every rich local entrepreneur, and everyone interested in your industry and size? Have you aggressively -without being annoying- pursued them and conducted hundreds of meetings, meticulously crafting and refining your pitch? Are there other sources of funding you can pursue to fund the business– like having the team do freelancing work, paying in equity, or finding alternative short-term revenue streams? If you are not getting funding, focus on improving your fundraising process, increasing traction, better communicating your vision, and finding creative alternatives. Every problem has a solution, and every moment spent complaining about your reality is waste of time.
3. Get over your idea
Every time I sit in a café in the Mission District in San Francisco, I cannot avoid hearing every surrounding table share their next startup idea to some random venture capitalist or unassuming barista. When I am in emerging markets, all of a sudden early-stage founders act like they are on a clandestine operation. Get over your idea. You are a million times more likely to fail because you cannot find customers or a business model, than someone taking your idea and running with it. Companies are often too busy with their own plans to steal your idea, but even if they do, you can’t steal execution and passion. There is a good chance someone else is already working on a similar idea anyways. Businesses die because they do not make things people want to pay for, or they move too slow and lose momentum, not because someone swiped their golden idea ticket from them. Forget about competitors all together and talk as openly as needed to get early customers, validate your product, and attract talented people to help you.
4. Identify your cultural biases and get over them
Every culture is different. It is why I love traveling and have visited so many countries. I learn a new way of doing something from every place I visit. Emerging markets have many cultural traits that may be great for society, but restrictive for developing high-growth companies. They vary from country to country, but identify any specific cultural hurdles you have and get over it fast. Some common examples include:
I. Fear of failure Treat nearly every decision as an assumption that you will test and validate. This means you will probably be wrong more times than you are right, but you need to give yourself as many chances as you can and you only need to be right a couple times to succeed. Test different marketing tactics, product features, and business models. See what works and move on quickly when something does not. Make this a core part of your company’s culture.
II. Modesty Your job is to develop a thesis, bet big on it, and convince customers, employees, press, and investors of your vision. You cannot be an effective founder by being overly modest. This does not mean you act like an arrogant jerk, but be confident and speak with conviction about your vision.
III. Patience You should have a long-term and patient view, but be very impatient daily and weekly. Startups require urgency. As a startup, you should think in hours and days, because you will not usually have quarters and years if you do not reach your milestones. Track daily metrics and make sure you are driving everything forward each day.
IV. Work ethic Some developing countries amaze me how hard and long they work. They are hungry, driven, and seem to be making up for lost time. Other developing countries have a more laidback work culture. They start late, take a few long coffee or tea breaks, and then leave in time for dinner. This type of work ethic will make it nearly impossible to build a high growth startup, so either change or pick a different career.
5. Deeply understand your data and business model
Emerging market startups tend to lack proper data and analytics. Any good startup should know their LTV, CPA, ARPU, unit costs, conversion rate, churn rate, etc. You should know by heart the math that underlines and drives your business. How much did it cost to acquire each customer? How much do you make from each customer? How much does it cost to service each customer? When do you hit your goal or run out of cash under different scenarios? What are the key variables that could change your outcome for good or bad, and how are they trending?
6. Take advantage of developing world insights and have the confidence to think globally
As an emerging market startup, you have unique insights into problems in the developing world that startups in the developed world do not understand. The way you think about electricity, payments, connectivity, entertainment, services, and many other aspects of society are different because of the realities on the ground. This is intuitive for you, so leverage your insight. Make your product work for your market and there is a good chance it will work throughout Africa, India, Southeast Asia, Latin America, and the Middle East. While you should think about solving those local issues you know, have the confidence to think global. Capital, technology, and talent are increasingly global, so there is no reason international unicorns cannot increasingly come from emerging markets.
7. Invest in your ecosystem
A good startup ecosystem can be a powerful resource to a new startup. It provides affordable places to work, peers and mentors who can collaborate on ideas, a pool of talent for hire, needed services, and investors. Growing a good ecosystem and getting the most out of it does not happen naturally, it takes work. You need to spend time giving back, sharing what you learned, and participating in events. The better the community grows, the better all companies do, as there will be more investors and talent available. The most important thing an ecosystem needs are successful companies though, so do not spend all your time at events. I have also seen several cities with more incubators than startups, which is never a good sign. Good ecosystems must start with companies. Nearly every good ecosystem has emerged from a handful of entrepreneurs who built a successful company, hired and trained people locally, made early employees and investors a lot of money that spawned the next generation of startups, and had the desire to give back.