Why I Think Non-US Startups Are Playing on a Skewed Arena
1?? Where you lived (schooled, worked at) matters
? You get better team.
? You get better business network.
? You get better VC networks.
I've been in sales and in the VC world and yes PLG (Product-led-growth) works but sometimes I wish more founders built Microsoft Teams(SLG-sales led growth) rather than Slack(PLG) because
A) Early adopters buy the founder’s mission rather than a sleek UI/UX.
B) With a 10:1 ratio, I’ve seen more first-time founders land +$20K annual contracts with their first enterprise deals than B2C founders making that revenue with ad or transactional models. Seriously.?
2?? Market size
A dollar is 1335 KRW as of now.
I had a burrito for $20 at SFO. $20 is not considered the same value when you convert that into KRW. My wife and I had a full-course meal at ICN (Korea’s airport) for the same amount and it was a mind-blowing quality. The same economics apply to the startup world where a Korean startup needs to sell to 2-3 Korean users to compete with US companies for the same revenue. Since investors know this, even with the doubled traction, non-US founders get valuation discounts.
3?? US is the epicenter of the world's economy- Even the rich Koreans are here
It was less than two decades ago that made-in-Japan electronics were considered top-notch.
I wondered when did #Apple become the best mobile manufacturer. Remember the Sony Erricson cellphones and the CD players?
Why did Apple win? Well, all the rich people started coming to the US and more and more wealth started accumulating here, pushing the average of spending on goods higher and higher.
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US economy can sustain the hyperinflation of products and thus companies are incentivized to build expensive products. Thanks to this, now we think it's perfectly normal to own a space-grade Titanium case on our cellphones - #iPhone15Pro for just $1200.
After a decade or two, consumer products made in the US are dominating the market.
4?? US is the epicenter of the world's tech innovation
This means customers in the Bay Area are exposed to the newest IT trends and consumer behaviors.?
With so much talent, people here are the ones writing the world’s latest Science textbooks and papers (#Stanford, #SpaceX, #Snowflake) and leading the consumer trends (#Tiktok, #Holywood) - meaning the US chooses what is going to be next mainstream.
The cultural, regional, and time lags play into delayed business and product decisions for the non-US companies. That is why Korea’s conglomerates like?#Samsung, #Hyundai, #Hanhwa all have their Venture offices in the Bay Area. That is why most Korean unicorn founders are based in LA or the Bay Area - to keep track of the latest innovation/consumer trends.
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Although not easy, this puts my job as an Investor at 500 Korea in Seoul, 10 hrs of flight from this center, more worthy of a challenge and the perfect breeding ground to hone my investment thesis - I need to be able to identify the best of the best talents who could learn with minimal data and fail faster to pick up their pace against the startups building in the US.
I totally love the underdog stories.
Witnessing the unbelievable density of incredible talent in Silicon Valley, meeting Tim Cook at a restaurant or bumping into the founder of Cresta , Zyd at a bar on Sandhill road, it seems like I am definitely in the shoes of the underdog for now. But just like how the saying goes that the rise and fall of an empire are never predictable, we are yet to discover which next cities and countries will lead humanity into the next decades.?
New venture models and markets will continue to be born, new or the re-discovery of philosophies will set new societal standards and will demand changes in the way consumers and companies behave.?
Fullstack Website & AI developer | ReactJS | React Native | Node JS | Next JS I Salesforce | Worked on 60+ Web-apps & 10+ Mobile apps | Building SAAS Products & MVP for Startups
1 年While it's true that the United States has several advantages when it comes to startups and innovation, it's essential to remember that opportunities and challenges exist everywhere in the world
Linguistics, Translation, AI | Startups & Tech | UC Berkeley Alumna '23
1 年My short input- a lot of students their uni choice after high school/community college based on what they want to do during their uni years in the USA. I often hear students want to go UCLA/USC over UCB because they want to party and have fun. It's valid, but I do tell students who I mentor to choose for their dream job/what they wanna do after graduation. I personally chose UC Berkeley (Tho I got rejected from ucla ??) because it's closer to Silicon Valley, and I wanted to make a lot of connections with people in the Bay Area. Yeah, I totally agree with you on the first one!