Becoming A Global Saudi Entrepreneur
The idea of thinking global from day one may seem strange to young Saudi entrepreneurs. The Kingdom itself is a large market with some of its own unique market characteristics, and, anyway, who has the time, money, or management bandwidth to think globally? And aren’t most Saudi ventures inbound, focusing on marketing imported foreign-made products, both industrial and consumer? Where are the examples of the global Saudi entrepreneur? In short, who needs the headache and risk?
Consider these few examples of global ventures from other countries: Carl Bistany, CEO of SABIS® Educational Systems based near Beirut, manages a network of over 70 public and private schools from Louisiana to Lahore. Thirty years ago his father, Ralph, set up SABIS’s fifth school in Bath, UK (see my Harvard Business School case study on SABIS).
Bento Koike, co-founder of one of the world’s largest makers of blades for large wind turbines, imports all of his critical raw materials from Europe, and sells all of his finished products in North America and Europe (see my Harvard Business School case study on Tecsis).
Jorge Rodriguez of Puerto Rico founded PACIV to help large multinational pharmaceutical companies comply with strict US FDA manufacturing regulations. The company has offices with large staffs in the US and Europe (see my Harvard Business School case study on PACIV).
These global entrepreneurs are all ordinary people with extraordinary visions, ambitions, and plans.
Why should young Saudi ventures think globally from the outset? There are at least four important reasons: One is that this is where the BIG opportunities are: global markets are simply huge compared to domestic ones. Tactically, you may decide to slowly expand, but investors and business partners favor companies with big visions, as long as your feet are on the ground while your head is in the sky.
A second reason is risk mitigation: by being in different markets you reduce country-specific risk.
Regulations may change suddenly, market demand may shift, or there may be idiosyncratic events, such as a local epidemic or catastrophe. The recent swine flu fears, the coincidence of Ramadan and the end of summer this year (2009), and (in the Philippines) a weather disaster, are examples of events that are difficult to anticipate and can really harm a small venture with only one local market.
A third reason is that by competing in the global are, you are exposed to the most current trends, the toughest standards, the most demanding customers, and the fiercest competition, and these help you build a robust venture that can withstand future challenges. It is like competing in the Olympics.
And a fourth, defensive reason, is that if you think ahead, you will realize that you may not have a choice. Numerous ventures which are successful domestically wake up one day to discover that customer-hungry multinationals are swooping into a market and taking your market away from you. The Walmarts, Carrefours, and Ikeas have incredible strength and move inexorably into a new market when they decide to.
In my next blog I will discuss some of the things Saudi entrepreneurs can do to embed a global perspective into your venture from the beginning. In the meantime, believe it or not, there ARE global Saudi ventures but they are hard to find—do you know of any?
In the meantime, good luck!
Daniel Isenberg, Professor of Management Practice