CENTER FOR INTERNATIONAL BUSINESS EDUCATION AND RESEARCH
(GT CIBER)
WORKING PAPER SERIES
94002

Global Start-ups : Creation Forces & Success Characteristics

by Benjamin Oviatt & Patricia Phillips McDougall

Executive Overview

In the past, both management theory and popular expectation have depicted new ventures as beginning domestically and expanding internationally only after a period of growth and maturation. Global start-ups, however, are increasingly in evidence. These new ventures coordinate multiple activities across several countries adn are international at inception.

We identify six forces driving the creation of global start-ups : (1) All the best resources may not be in one country, (2) Easier and more suitable financing may be available in foreign countries, (3) Global markets and customers require some start-ups to be international, (4) Rapid world-wide communication means competitors react quickly, (5) Only world-wide scale will support the venture, and (6) Domestic inertia is difficult to overcome.

Research reveals seven characteristics associated with global start-up success : (1) A global vision exists from inception, (2) Managers are internationally experienced, (3) Global entrepreneurs have strong international business networks, (4) Preemptive technology or marketing is exploited, (5) A unique intangible asset is present, (6) Product or service extensions are closely linked, and (7) The organization is tightly coordinated world-wide.

While the number of global start-ups may be small now, current technological, communication,and transportation advances presage significant increases in their future numbers.