While many countries are making it more difficult for foreign workers to set up startups abroad, there are others around the world that are proactively doing the opposite.
For example, Chile successfully put itself on the map as an international startup hub thanks to the government-backed accelerator program, Start-Up Chile. But there’s also been a steady rise of U.S.-based entrepreneurs moving to other countries like Mexico, Argentina, Colombia and parts of Brazil to work remotely, for established tech companies, or to start their own companies.
As more and more entrepreneurs and tech workers make the move to regions like Latin America, many of these innovators are also starting to stay long-term, creating an exciting new energy.
So what are some of the key advantages to building your startup abroad? Over the past six years, I’ve worked closely with more than 30 startup companies that have a global presence, and many of the entrepreneurs have some compelling advice on how to operate a company in another part of the world.
Here is some of their advice as to why going abroad could be a great move for your startup, too.
1. Access top global talent to grow your team
GroupRaise is a company headquartered in Houston, Texas that helps raise awareness for social causes by working with local restaurants that donate back a percentage of their profits. The startup was accepted into the government-backed Start-Up Chile accelerator program in 2014. While in Chile, GroupRaise’s CEO and Houston native, Devin Baptiste, realized there were some key advantages to keeping a permanent office abroad.
After the six-month accelerator program ended, he decided to stay in Chile with part of his team to continue scaling their operations more efficiently. After a few months of negotiation, GroupRaise received follow-on funding from Start-Up Chile to help them stay in the country and continue growing their team.
The GroupRaise team became enamored with how the accelerator program was able to attract people with a wide range of entrepreneurial backgrounds from all over the world to Chile. Baptiste affirms that by keeping a presence there, his company had an incredible recruiting advantage. They were able to hire top talent from a pool of international professionals at a fraction of what it might cost to hire someone with the same set of skills in the U.S. or Europe.
Having an office in Latin America was also a key selling point for GroupRaise when recruiting talented people seeking opportunities abroad.
The option to work remotely or abroad is becoming a major draw for restless millennials. In fact, 50 percent of millennials say that flexible work hours and the freedom to work from any location would improve their work/life balance, and 63 percent say they’re more likely to join a company that offers the option to telecommute.
2. Build new skills and relationships abroad
At the age of 23, Adrian Fisher moved to Argentina from Scottsdale, Arizona and began building simple websites, eventually growing his business to a 20-person team. After a few years, he pivoted and decided to build his own product that would solve a local problem he often experienced in Argentina: paying rent.
In South America, it’s common to pay rent in cash and via a courier service, which can be very risky for both the person paying rent and the property owner. Couple this risk with extremely low consumer confidence in Argentinian banks, and Fisher saw an opportunity for a payment system that would allow people to pay their rent in cash at safer locations throughout the city. Unfortunately, the business didn’t take off in Argentina, so Fisher made his way to Chile to test the market for his idea there.
In 2011, Fisher’s company was selected to participate in the Start-Up Chile accelerator program. The company quickly became the largest rental payment system in Chile. However, after a failed attempt at raising follow-on funding, Fisher’s team split up, and he decided to start over with a new business model. With determination to solve the many pain points in the local real estate industry, Fisher created PropertySimple, a full-stack platform of social tools for real estate agents, which recently closed a financing round of $3 million from U.S. investors and has a growing team in Chile and the U.S.
As a serial entrepreneur abroad, Fisher’s advice for anyone interested in working remotely or setting up a company abroad is to simply get out there and do it, especially if you are young.
To successfully start a business in a foreign country, it’s important to work with a local expert that can meet with you and help you build key relationships in the beginning. Having patience and being persistent does pay off in the long run.
3. Access emerging markets and opportunities
A few years ago, entrepreneur Brian Requarth bought a one-way ticket to Colombia, started a few local businesses, and then turned his attention toward creating the ultimate real estate marketplace in Latin America.
The result, VivaReal, is now the largest real estate marketplace in Brazil, with more than 20,000 advertisers and more than 20 million visits per month. VivaReal quickly went from four to more than 600 employees and raised more than $74 million to date. While the marketplace was available in multiple Latin American countries at first, Requarth realized that there was more potential if they focused the platform in Brazil.
Brazil is the fifth largest country in the world and the second most populous in the Americas behind the U.S., with a population of more than 200 million people. This population is largely middle class and based in urban environments, which creates a consistent demand for new goods and services.
Brazilians spend roughly 32 to 38 hours per month online and more time on social media than anyone else in the world. If it makes sense for your business, Requarth’s advice for anyone establishing a startup base in Latin America to take roots in Brazil as soon as possible.
VivaReal took off in Brazil, and Requarth moved most of his Colombian team there. He also brought on a co-founder to help grow the company. Having a local expert on the team can be a critical component for success, especially when it comes to helping build trust with investors.
It can be an incredibly rewarding experience to start a company in another country, and if you have a good product, it’s important not to underestimate the value of your solution. The way you’re solving a specific problem could be unique and different enough to generate value elsewhere.
With more and more entrepreneurs making their way abroad, an exciting new wave of global collaboration is taking place. If you’re thinking about establishing a presence abroad, there are plenty of emerging startup hubs to experience different cultures and promising business opportunities.