Growth of high-tech Born Global startups: US market entry challenges and solutions

Abstract

Over the course of the last 20 years, the world has seen a rising number of small and medium enterprises accelerating their internationalization process and becoming global players from their early days, basically from inception. These firms enter many different new markets simultaneously and incur in entry challenges that larger and established firms don’t face when internationalizing. Few qualitative research has been done on Born global firms’ life cycle associated with internationalization challenges and solutions. However it permitted the creation of an hypothetical general market entry challenges framework. This study aims to identify early-establishment internationalization challenges and possible solutions that international Internet-based high-tech startups face entering the US market. To analyze in depth this topic, in collaboration with FireMatter LLC, a Silicon Valley business development services firm, we created “FireMatter Views 2014” global online survey. Our findings show that internationalization challenges of international Internet-based born global startups fit the general pattern proposed from the analysis of previous research. Managing sales opportunities from afar, lacking of US funding and partners are the top challenges, while seeking funding, partners and transferring the team to the US are the top solutions implemented. However results also show that high costs and product localization and/or adaptation are important obstacles to US market entry, adding new issues to the general framework. This research is of great interest for the different Governments, various institutions and public and private associations or firms, as well as incubators/accelerators and future entrepreneurs.