Wednesday, May 2, 2007

European internationalisation models for Web 2.0 U.S. start-ups

I spent the week of march 5th in the Silicon Valley meeting about 10 companies and start-ups, thanks to the SF Orange Lab team support. Among them, we met successful ones in the area of Social networking, Virtual Worlds and other earlier stage projects realted to Music and e-commerce. I also met an "acceleration incubator" project aiming at helping French start-ups develop their business in the U.S. capitalising on the strong Silicon Valley ecosystem.
Beyond the cliché where we all think that U.S. start-ups have a unique way of developing their business in Europe through a first implementation in the U.K., it has been interesting to see how some of them have different european expansion strategies.
One of them is planning for instance to start from scratch an local subsidiary on a country by country basis: the idea is to use the "code" and the Brand of the mother company and then create a local legal entity with a local marketing team owning a share of it. It almost sounds like a franchising approach. The assumption here being that a local motivated team will have more chances to quickly start the take off of a local community of users and the implementation of local partnerships with Telco operators and industry players.
Another one in the same area is more relying on stronger focus on technology and in house knowledge of Telco mobile operators messaging systems (sms, mms) to ease connectivity with Telcos technical platforms. Thus making it possible to define mobile deployment strategies at Corporate level with their telco partners and accelerate then implementation at local level.
Another is more counting on leveraging their local early adopter user communities (French, Spanish, Italian..) from a US based community management team providing online dedicated support for service, technical and networking.
Finally others are aware of a time to market issue that they are already facing with their existing ressources within the US. They know it would take them more than 6 months or a year to define and implement a strong European strategy. Therefore they are keen to almost "outsource" to a powerful European Partner (like Orange) the management of their European local presence and developments.
Let's also emphasize that some of them raised funds from VCs to specifically accelerate their European development.
It is obvious that there is not one single way for a US start-up to develop itself in Europe and there shouldn't be one standardized way either for Orange to consider Partnerships with them.

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