Global startup success doesn't require Silicon Valley: oDesk, Etsy

Although oDesk and Etsy may be successful startups that have come from Silicon Valley, both say that they would have been just as successful if they had started in Australia, because they took a global approach.
Written by Michael Lee, Contributor

Australian entrepreneurs have been shown to seek smaller markets than their counterparts in Silicon Valley, possibly as a method of compensating for the smaller scale of local tech activity. But according to two startups that have "made it", if startups aim for a global market, it doesn't matter where they start; they can be just as successful.

ODesk CEO Gary Swart has built a business around the belief that more and more markets are seeing past geographical boundaries by using technology as a bridge. ODesk's business model relies on it — it connects employers with employees, provides methods for verifying that work is done, and ensures prompt payment — even if the parties involved are in different countries.

"I don't think it matters where we are — we're a global business — and I actually think more businesses are going global earlier in their lifecycle," he told ZDNet.

In fact, when asked whether oDesk would have been successful had founders Odysseas Tsatalos and Stratis Karamanlakis not created the company from sunny California, Swart said it wouldn't have made a difference.

"I actually don't think Australian businesses have to go to the US to be successful."

Etsy Australian community manager Angela D'Alton agrees with Swart, highlighting that Australians can do it just as well from home.

"If Etsy hadn't been created in the US and had been created here, it would definitely have taken over the world in the same way that it has because of the concept," she told ZDNet. Her company similarly connects buyers with sellers of crafted goods.

And even then, it's not like oDesk or Etsy would have had much trouble building an empire from Australian shores. Australia is within the top five countries that buying and selling occurs for Etsy, and it represents the second-largest market of users for oDesk.

"A lot of the reasons that startups feel like they have to go to the Valley is for talent and for capital. But capital is willing to come into Australia, and now with the internet, talent can come in as well. They should definitely [be] looking to go global," Swart said.

Swart and D'Alton joined Uber Sydney general manager David Rohrsheim and Startmate founder Niki Scevak as they fielded questions from entrepreneurs at an industry event in Sydney last Thursday.

Undoubtedly, placing a startup in the global market means forfeiting the advantage of being a big fish in a small, niche pond. But according to Swart, entrepreneurs shouldn't be concentrating on the competition, anyway.

"There's enough pie for everyone," he said. "What we tend to do is we focus on the customer and not on the competition. It helps that we're large and we're fast growing and we've got pretty good liquidity, but we think that if you focus on the customer and do the right thing there, that's the best way to compete."

ODesk already competes against several similar businesses, including Elance, Freelancer, and vWorker.

Rohrsheim highlighted that Uber has a particularly unique challenge in that its market of providing hire cars to passengers tends to be restricted more locally — to cities, even, rather than nationally — because it's not a service that can be delivered from another country.

"Local scale matters, and we respond to that ... [by] launching everywhere to ensure that no one gets ahead of us," Rohrsheim said.

Entrepreneurs should also be aware that aiming for a global market also means responding to threats from more actors. In oDesk's case, it had to build its own global banking platform to process the sheer volume of transactions from around the world, attracting hackers of all backgrounds.

"You have to stay a half a step ahead, which is incredibly hard, because there are people that don't consider it wrong or bad, it's their job to get money out of your system. In their culture, it's actually respected if you can get money out. You go to work every day, and the job is to figure out how to get money out of the system," Swart said.

"Once you've got a popular product, you'll have fraud," Rohrsheim added, explaining that even though people have to be physically present to conduct fraud in an Uber car, they still try to do it.

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