Gone are the days when U.S. startups focused primarily on the U.S.A.
These days, if you’re a startup, chances are good that you’ve got deals
going in other countries, especially in the content arena.

You’ve probably seen them on international flights. They’re the ones who can sleep on the plane, with or without sleep inducers. They don’t need to consult a world clock to figure out the time in Paris or Beijing. They work for multinational companies, but they´re not necessarily at big companies like Motorola. More and more, they’re working at U.S.-based wireless startups with overseas connections.

Global mobile social networking company mig33 originated in Australia before moving to California.

The reasons U.S.-based startups look for business overseas vary about as much as their businesses. Sometimes it helps to get business overseas to establish credibility, especially given the challenges of getting a deal with a U.S. carrier. It also helps in learning what works in other places, like Japan or Korea, and how that might translate to the U.S. market. Or an American CEO might know someone in Japan who knows someone in Europe.

Still, the challenges are many, especially if venture capital is involved. It’s expensive to maintain overhead in multiple locations, in addition to finding local expertise in legal and financial matters. Sometimes venture capitalists want their CEOs to be based close to them in the United States, but the startups need people overseas. Basically, it involves taking on some responsibilities of a multinational company without the inherent resources that big companies have at their disposal.

LEARNING ABROAD
The U.S. market is great for getting talent to accelerate a company and being close to stakeholders, but a lot of thought leadership obviously is coming out of Europe and Asia. “You can’t wait to sort of have the big success in the United States and then replicate it overseas,” says Mei Lin Ng, founder of mig33, which was founded in Perth, Australia, before relocating to Burlingame, Calif. Mig33 operates a global mobile social network with more than 10 million registered users. Most users are in Asia, but the network is growing in Europe and the United States. “There’s a lot of learning you gain overseas and can possibly bring it to the U.S.,” she says.

Very few mobile companies are U.S.-centric today, agrees Sean Byrnes, CEO of San Francisco-based Flurry, whose flagship service provides access to personal e-mail accounts and news from mobile phones. Flurry is used in more than 200 countries.

Flurry actually expected to roll out its service with U.S. subscribers, but the company made its sign-up process so easy that it more or less accidentally found people joining from all over the world. About 20% of its users are in the United States; the rest are outside. “They find you,” he says.

Driggers: With locations around the world, videoconferencing is an important company tool.

Gemini Mobile Technologies, based in San Mateo, Calif., also has operations in Japan and China. All three offices are peers of each other, says Gemini Mobile CEO Scott Driggers, who founded the company with Japanese executive Hiroshi Ohta and Chief Technology Officer Michael Tso, a former chief scientist at Inktomi.

Gemini Mobile, which recently made its 3D mobile social networking platform eXplo available for the Chinese market, employs about 40 people in the United States, about 40 in Japan and 50 in China, plus a handful of salespeople in Europe. Operating on an international basis requires consistent communications, so video conferencing gets used a lot, in addition to in-person meetings.

LOOKING LOCAL
One reason it works so well, Driggers says, is the company was integrated from the very beginning, rather than being pushed out to people as a U.S.-based company. “We’ve met with success because in those [overseas] markets, we don’t look like a foreign company,” he says. “A lot of people think Japan is the headquarters, and the same with China.”

Mig33 founders Steven Goh (left) and Mei Lin Ng, who dreamed up the concept for their company in a library coffee shop, say corporate location is becoming less important due to the virtual nature of the Internet.

Driggers’ international expertise goes back to his early years in the international marketing division of AirTouch Cellular, which supported new cellular licensees in Germany, Spain, Sweden and Italy. For a while, he also was based in Japan for Vodafone AirTouch, and way before that, he was part of the U.S. Olympics handball team that traveled extensively.

Generally, Japan is well-advanced in the wireless market, which is something Gemini Mobile tries to leverage. It helps to deliver products in Japan, where expectations are especially high, and move to other parts of the world, he says. “We always have to keep in mind that what we’re building has to be scalable and somewhat modular so we leave ourselves enough flexibility” to adapt to other markets without entirely having to rebuild the product, he says.

Of course, employing people in different regions means employee benefits will differ. While it’s quite unlikely for a company to pay for U.S.-based residents’ transportation to and from work, it’s standard procedure in Japan to pay for an annual train pass, for example, to be used back and forth to work. China, which is oozing with opportunities, will play a big role in Gemini Mobile’s future, Driggers says. Gemini Mobile has made the approved vendor list for two major Chinese companies.

Because it was established early on in the U.S., China and Japan, Gemini executives didn’t need to convince outside investors that they needed funds to maintain overhead in multiple locations. That wasn’t the case for mobile advertising firm Enpocket, which back in its early days in 2001 was a bit of an experiment in that its founders wanted to launch a startup that was global from Day 1.

Baker: Wanted to be a global company on Day 1.

Enpocket’s founders figured it would be hard establishing a presence in different continents around the world, but they knew they could learn by doing business in Japan and London, import that to the United States and vice versa, says Mike Baker, former CEO of Enpocket, which was acquired by Nokia last year. Baker is now vice president and head of the Nokia Ad Business.

FIRST STOP: LONDON
The company did mobile advertising in Japan in 2003 with what is now Softbank Mobile, and that provided case studies about the Japanese experience, which did not directly translate to the U.S. market but nonetheless gave the company traction, he says. It helped that the team consisted of one American and two British executives; the firm actually established its London office before opening shop in New York.

A similar thing happened at Shazam seven or eight years ago. The founders of the company, which developed a technology to identify songs when they’re playing on the radio or in a bar, were based in the United States, but they couldn’t find funding at the time, so they set up shop in London, where they did find venture capital. The company has since done deal in 45 countries, but ironically, the U.S. represents its biggest market today, says CEO Andrew Fisher.

More recently, Mobile Complete, founded about five years ago, decided it had to be global from Day 1 because the true value of its product is connecting developers to phones so they can test their applications without having to buy and activate hundreds of phones. With headquarters in San Mateo, Calif., the company now has offices in the United Kingdom, Germany and France, with a presence elsewhere, but the company doesn´t want to get ahead of itself.

“We´re also going to Japan, but that´s it for now,” says CEO Faraz Syed. “We don´t want to spread ourselves too thin. The whole vision from Day 1 was that the mobile space is a global economy and the true value of our product is to connect global developers to global networks.”
Indeed, the Internet means users will find ways to use a company’s products or services regardless of its physical location. Says mig33’s Ng: “We’re all in such a virtual world nowadays, it doesn’t really matter.”