How to leverage and think globally, learning from the survival strategies of countries that do not have a large market in their own country
Introduction
I was in Dublin, Ireland when I started this writing. Ireland is a very small country, but its capital city, Dublin, is the 12th largest city in the world's tech city rankings. It has tax advantages and is also the European headquarter of Google and Facebook.
It has tax advantages and is also the European home of Google and Facebook.
I had a very stimulating discussion with wonderful local entrepreneurs and engineers about technology and startups, including AI and robotics.
I tried to write down what I felt about a country that does not have a big market (not physical size) like Ireland.
I Have a Better Chance of Meeting the Head of Your Country
Going back a little to the end of June, I chose Helsinki, the capital of Finland, as my first destination from Japan. I entered Europe from Helsinki because there was a direct flight from Japan and then I was going to visit Russia. It's safe and climate-wise, summer is the best season. There's strong government support.
For example, if you prepare a certain amount of capital to start a business, the government will give you half of it or give you a loan with a low interest rate. There are a number of startup communities, one of which is "Maria01".
This building is a former hospital site that has been turned into an incubation facility for startups, with many accelerators, VCs and startups moving in.
Since their home market is small, they make products based on the assumption that they will target overseas markets. In other words, the premise is global from the start. Famous startups from Finland include gaming startups such as Supercell and Rovio of Angry Birds fame.
What struck me when I spoke with Mike from SAMPO ACCELERATOR, was that he said, "I think I have a better chance of meeting the head of your country." Finland is very small, including the national institutions. Because it is a small organization, it is made up of trust, and even the top of the country can be reached through trustworthy people. In other words, they are close to the administration and its leaders. His logic is that if you can get to the top of Finland, you can meet the top of Japan from there. That seems faster than tracing it back to Japan's own country as one for 120 million people, doesn't it? I was told. Indeed, with a population of 5.5 million, both the head of Finland and the head of Japan are in the same position. In this way, taking advantage of the small size of the organization and applying large leverage has become an important way for them.
A Government-Encompassing Startup Ecosystem
Next, I headed to Estonia, which is often named as an IT powerhouse. From Helsinki, you can get to Tallinn, the capital of Estonia, in about two hours by ship.
Estonia is also within the EU, so we didn't have to go through passport control, and when we got off the ship, we were in a different country. Incidentally, I saw some Finns who came to buy things from Helsinki because the prices are cheaper than in Helsinki.
e-Residency is probably one of the things that Estonia gets a name for in the media. Such progressive government initiatives can be seen in the attitude towards startups. For example, at a start-up event in Estonia called Latitude59, the president of Estonia is participating and giving a speech. It's hard to imagine the prime minister coming to a start-up event in Japan, but I think it's an indication that the administration is close and the country itself is willing to take advantage of the start-ups.
Because of these efforts, several Estonian startups have been largely successful in raising funds, and there are also four unicorn companies such as the Fintech company Trasferwise.
The following is the current state of Estonian startup funding and Exit, published on the Google Spread Sheet, which is open enough to include a list of failures.
Funding, Failures & Exits of Estonian Tech Startups 2006-2019
The distance between the startups and the government is so close that the government itself wants to be taken advantage of and felt that it is an inclusive startup ecosystem.
Incidentally, no "estcoins" have been issued. Not only in Japan, but many media outlets are reporting on Estonia as an IT country, and there is a little bit of a frenzy in the news about coins like "Estocoin" that have yet to be issued, as if they had been decided to be issued. (But it could also be said that it has been successful in branding in terms of public relations and marketing as a country.)
It's a Minority Language, So You Have a Chance to Get Used to English.
I would also like to mention language here. It may seem obvious, but English is essential for global communication and targeting North America, the largest market in the world today.
English is very commonly spoken in the aforementioned Finland and Estonia. Even in Sweden and Norway, which I visited after Estonia, I did not feel any particular inconvenience in communicating in English.
On the other hand, it was difficult for taxi drivers to communicate in English in areas with more than a certain number of languages such as Russia, France, and Spain (on the other hand, thanks to a kind of Uber app, even if I didn't speak the language, I could get to my destination without bargaining in an unknown place, so it's really convenient). I wondered, and when I asked why people in some countries can speak English that is not their native language, they said it is because their ears are accustomed to English from an early age. In languages where the mother tongue is not a major language, content such as movies, dramas, and cartoons are not translated into the mother tongue, but are watched with subtitles, and many people can speak under their influence. I heard the same story in Lisbon, Portugal, and Amsterdam, the Netherlands.
Being able to communicate in English leads to a variety of opportunities. In recent years, for example, Lisbon has seen a boom in startups. In addition to a relatively pleasant climate, good public safety, and lower prices compared to other European countries, it is possible to communicate in English at a minimum. The Netherlands, located in the center of Europe, is often chosen as a post-Brexit European base because of its English-speaking and preferential tax policies. Because they are minority languages, they have the opportunity to become familiar with English from a young age, and those countries are chosen.
Blockchain as a Survival Strategy
After traveling around Russia and Scandinavia, I also stopped in Switzerland when I traveled around Europe by train. When I confirmed that I could buy bitcoin at the ticket machine at Zurich's central station, "Really?" I said.
In the ticketing machine menu...
"Top up Bitcoin!!!"
There is a city near Zurich called Zug, which is called the Crypt Valley of Switzerland. There are a lot of blockchain-related events and blockchain startups are coming together.
Switzerland has historically chosen financial technology as a survival strategy. As an extension of this, it is clear that the country is also putting a lot of effort into blockchain, and at the local meetup, I was able to feel the excitement firsthand.
One of the participants started living in Switzerland this week. When asked why, he said, "Because I want to run a blockchain business! What country can buy bitcoin at a national railway ticket machine?" He replied excitedly. He is a specialist who originally studied cryptography and has Ph.D. This success in attracting the best and brightest people in the industry from neighboring countries is probably due to Switzerland's choice of blockchain as a survival strategy.
So, What About a Country Which Has a Large Market?
How should a country like Japan, which has a market in its own country, fight this? Are you sure you're not hot enough to begin with?
First of all, as it turns out, there is no such thing. Rather, it is an advantage to have a market in your country. One of the VCs I met in Stockholm said, "Japan has a big market, so it's good to succeed in Japan and then go abroad. I know Rakuten and Recruit who do that." He said. Rakuten's acquisition of Viber and investment in Lyft are just a few examples of making sales in Japan and going overseas, and Recruit's acquisition of Indeed is an offensive move in the global HR field and continues to invest overseas. It is a blessing that there is enough of a market only in Japan. (Treasure Data, which was successful at From US to Global, was also growing its sales in Japan at the same time.) On the other hand, I think it's a waste of time to stop thinking about the domestic market and not look at the overseas market, and more importantly, if there is an opportunity, we should seize it. According to a PwC survey, Japan's GDP forecast for 2050 would fall from its current third place to eighth. The big trend is definitely going to be that we have to look at overseas markets. (The term "country" or "overseas" may be getting thinner and thinner in the long run.)
The French philosopher Alain, one of the proponents of the world's three great theories of happiness, said, "Pessimism is a mood, and optimism is a will". It's easy to be critical or pessimistic about the GDP forecast. But I think that having the will and thinking positively (and optimistically) will produce better results in the end. For this reason, it is important that we move forward with a proper understanding of our current situation, learning from and applying various countries.
Organizing Your Travel Learning ~ Learning Share Time is Good ~
By the way, I'm digressing, but I've been doing a regular "learning and sharing time," which is pretty good. Since we are sharing learning, it is also helpful to learn from the other person, but I recommend that we put out words about what we have experienced, as it is genuinely organizing and gives us new awareness. Some elements of this post came out of those discussions, too. I am very grateful to my valuable discussion partner, Shun.
Appreciation
The reason why I'm able to continue these fulfilling visits is because I'm able to make friends with local people through referrals, and I really appreciate it. I would like to express my gratitude once again, and on the other hand, I would like to be able to help in any way I can.
Next
I was in Ukraine until the other day and was in Belarus until yesterday. The Eastern European countries that chose the IT industry as a survival strategy because of their historical background were very interesting and showed a lot of potentials. I'll leave this story for the next time, but I'm going to visit Africa and South America. I'd like to share the lessons that I didn't get to write this time together at another time.
I've been tweeting about what I've noticed in the countries I've visited, so I'd be happy if you tweeted about your impressions and feedback, as it would motivate me to write more.
So, like the Learning Animal, I'm learning in the next country!
