Redefining Our Collective Understanding of the Nascent International Venture

Many new ventures are often born global out of necessity. For some companies, it makes financial sense to contract software developers from abroad rather than build an in-house team domestically. Perhaps an early conversation with an international advisor leads to funding or introductions to global manufacturing connections. The global source of supplies, labor, customers, and capital is now available to anyone online, and large-scale operations are no longer required to take advantage of them.

New businesses don’t need to be driven by a desire for world domination to be considered global. This is the point my colleagues and I make in a recent publication in the Journal of Business Venturing Insights, concluding that establishing an international business doesn’t typically start and end with generating revenue streams from overseas. There are, in fact, many unique ways an entrepreneur can establish their business as a global venture from its inception.

If we were to reimagine what it means to be an emerging global business, how might we identify their existence as they begin to take shape? What do these new international businesses look like in the modern world? And ultimately, why does it matter?

Let’s look at an example. Utrecht-based startup 2DAYSMOOD, an employee happiness platform, offers its product in over 10 languages. This decision is what has enabled them to start, as of 2019, expanding into North American markets. Additionally, they hired a US-based customer happiness expert to internationalize even further. All of these decisions, and potentially many more not known to us, could have been mapped on the journey to becoming a global business. 

Using the BRIE model to analyze International New Ventures (INVs), we looked at four elements that take place at the onset of a business: Boundary, Resource, Intention, and Exchange. For a company to be considered “real” or “emerging,” all of these elements must be in place. However, we argue that for an emerging venture to be considered global, it is enough for only one of the four BRIE elements to be characterized as international. As more BRIE elements display global properties, the firm’s degree of internationalization increases as it moves along in its early days.  

This is an important shift in our collective definition of what it means for a new company to internationalize. By examining each unique dimension of an emerging international business — Boundary, Resource, Intention, and Exchange — entrepreneurs and those who study them can more clearly understand and explain the trajectory of their venture.

To understand the BRIE model in a global context, we created an initial list of potential BRIE properties specific to international emergence. This list is by no means comprehensive, as there are many ways an entrepreneur can create a global venture. However, pulling on any one of those international levers can help differentiate a business and gain future competitive advantages. 

Boundary

Boundary typically refers to creating space for a business, whether physical, digital, or symbolic, such as in the minds of potential customers. Establishing bank accounts in other countries/currencies, buying URLs in country domains, and creating an online presence on an international platform (Amazon, Apple Store, etc.) are all ways a new firm may set itself up for global success. 

Resource

“Resource” is what it sounds like: it’s the financial, physical, human, and informational assets a firm must have in its possession. A great example of a new venture that relies on international resources is Catan Pisco, a US-based pisco company that sources their Pedro Ximenez grape from the Andes Mountains of Ovalle, Chile. In fact, only two countries in the world can legally distill pisco by way of the Denominations of Origin in Chile and Peru. Even if this spirit company may never sell and ship its product outside of the US, it is already an international venture based on its primary resource.

Intention

Simply having the intent to be global is, in our view, enough to be considered an international new venture. The strength and the timing of the intent are relevant, but if a firm is thinking global, then they are global. Exploring international franchising/licensing opportunities, contacting international trade organizations, or even creating a name or trademark with an eye toward international use signifies a global mindset.

Exchange

Perhaps the most familiar signifier of global activity, exchange is the practice of selling abroad. International exchange may materialize as direct exporting/importing, contracting manufacturing in a foreign country, and having international customers.

—————

This new internationalized BRIE model is a more dynamic and precise method for identifying emerging global organizations than what the current approaches allow. Those who study entrepreneurship can use this method to swiftly and accurately assess a firm's degree of globalization. Using this approach, we hope to help those who study entrepreneurship identify aspiring, in-process, and even failed attempts at going global.