Brian Armstrong

How to Start a Web Business in Another Country

Here’s a question from a Breaking Free reader:

I’m not sure if you have any experience with this, but i’m wondering since the world and borders are shrinking, what are your thoughts on opening web based businesses in other countries. Is there anything that someone should know before going at it? Most specifically the USA and Canada. There may be some legal issues as well as logistical. -Lucky from HelpYourSelfGetLucky.com

Yes, I think this is a great idea. What’s most exciting about it to me is the idea of taking a business idea which you KNOW already works in the U.S., and then being first to bring it to market in another country.

Being First Counts For A Lot

Ebay was first to market as an auction site in the United States. They reached critical mass first and therefore dominated (the value of the site is directly linked to the number of people using it so there was a high barrier to entry for competitors once Ebay got going).

However, Yahoo Auctions was first to market in some other countries (like Japan) where they now dominate. Yahoo IS the Ebay of Japan, nobody there uses Ebay.

Why not become the Netflix of Canada, or the MySpace of the Netherlands, or the Zappos of Honduras.

The reason I like this idea is that it reduces the uncertainty in starting a business. You already KNOW the business idea is good because it has been proven to work in one place already.

What To Watch Out For

You do have to move quickly and catch on to a trend early. Most of the big ones (Amazon, Ebay, Netflix, etc) I’m sure are already being knocked off. You need to get in early when you see a site that has some success. It doesn’t have to be a huge site either, it could just be doing well in come niche.

The other concern here I’d say is to take an idea where it pays to be a local. For example, doing Netflix in another country would require knowledge of the local postal system. Twitter, on the other hand, could be launched in 50 new countries tonight with few changes. Pick an idea where you will have an advantage as a local and it isn’t trivial for the big dog to swoop in before you really get going.

Finally, you do have to watch out for cultural differences here as well. Selling beef jerky in India where most people are vegetarian might not work so well.

Save The Legal Fees

Regarding the legal aspect, I’m not a lawyer, but I wouldn’t be concerned about that at all. After all, once MySpace and Facebook became popular there were literally hundreds of social networking sites that cropped up that were all basically copies, and they didn’t face legal repercussions. Add to this the barrier of operating out of a foreign country and I think it’s pretty safe.

Of course, you would never want to actually copy the code off their website (that would be illegal), or if you were an employee at MySpace and then left to start your own copy there may be an issue there.

But strictly “reverse engineering” the functionality of a site is perfectly legal and ethical I think. Thats how all great innovations are made. Take the best pieces from everything that is already out there, and then take it one step further.

Feel free to send me other questions you have about starting a business. Please keep them to one paragraph or less and include a link to your site with your question.

What other proven sites exist in the U.S. which haven’t been brought to other countries? Leave us a comment below.

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