Pittsburgh Technical Council

Tech Companies are Global at Birth

Tech Companies are Global at Birth

Article Published: December 31, 2014

By Mark V. Santo, Esq., Marco Q. Rossi Associati

If the plethora of Silicon Valley start-ups is testament to anything, it’s the indisputable fact that they are born global. This fertile valley of disruptive technology is a dynamic melting pot brimming with entrepreneurs from the world over, and the diversity of the founders in these companies by definition imbues them with a “global DNA”.

I was reminded once again of this amazing attribute of tech startups during a recent business trip to a client in Asia. This particular company is the world’s fifth largest in its particular market, a global market rife with fast moving technology advancements, disruptive startups and, of course, mergers and acquisitions among companies of all sizes. My client is publicly traded and has more than 50,000 employees worldwide and billions in revenue yet, is confronting perhaps its most formidable challenge in its 100-year existence: the transformation from an Asian centric organization into a truly global enterprise.

Turning a domestic-centric multinational into an agile global organization is no small task: it’s herculean in a sense. It entails recruiting and nurturing adroit managers outside of the home market who think globally and can effectively manage and communicate to a culturally diverse workforce; a product development and manufacturing strategy which severs its legacy ties to full employment within the home market and becomes agnostic with respect to the situs of manufacturing; a business development function which can look across the globe in terms of investment opportunities, and yet at the same time, realize that  certain regions of the world may have particular product needs vastly different from the customers in the home market; and an agile M&A team who can quickly respond to an opportunity and marshal the resources to get a deal done promptly wherever it may transpire. Most of all, however, globalization of a large enterprise starts at the top, beyond the executive suite with the Board of Directors. A homogeneous board of directors overseeing a global enterprise is a surefire way to shed market share and erode shareholder value. Only with input from directors from diverse regions of the world can a company be imbued with a global mindset.

Technology startups however are free from these legacy restraints. Many tech startups, particularly those founded near leading universities, attract the best talent from across the globe. To see this in action here in Pittsburgh, take a stroll on the campuses of Carnegie Mellon or University of Pittsburgh; the diversity of students is truly startling. The vibe one gets from these campuses is electric, and one can only imagine the disruptive business plans being hatched in dorm rooms and around coffee tables. From these universities, new companies are in constant formation and the founders are often a hodge-podge of nationalities, with each member bringing to the table his or her cultural attributes. 

Product developments within a fledging startup founded by a multi-cultural team have a leg-up in terms of fashioning a whole product offering, i.e. products and applications which are designed from the ground up to compete in global markets. Business plans in turn address global markets, either in the near term or in the outlying years. Workforces are diverse and sensitive to cultural differences. In short, these types of culturally diverse startups are born with distinct advantages over many a legacy-bound multinational and often prove disruptive to the markets they serve.

Yet, cultural diversity in a startup is not a guarantee of success, since so many other factors come into play which ultimately determine a young company’s fate. Nonetheless, it is axiomatic that a young tech company born with global “DNA” is more attuned to the demands of the global marketplace, the ultimate crucible and final arbiter of a technology company’s fate.

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