Dateline: Wroclaw, Poland
Just walk around Wroclaw, a Polish city of barely half a million and you’ll see the entrance of a large player. There’s no doubt Wroclaw has a certain European charm to it, which makes it a very livable city. The place feels removed from the “Americanization” that is more in force in Polish cities like Krakow.
However, “Americanization” could easily describe Wroclaw’s newest large employer. And in a country with two million unemployed, this employer can’t ramp up hiring fast enough.
The employer: Amazon.
The American retail giant has set its sights on Poland and the Czech Republic, and is opening five warehouses between the two countries. Two of those warehouses are here in Wroclaw, and the company is hiring the best of the best. One middle manager position requires applicants to speak Polish, English, and Czech to even apply.
With plenty of available labor supply, Amazon can write its own ticket with a large pool of eager candidates.
I can imagine, however, that the biggest surprise to many in all of this is “what took Amazon so long to open in Poland?” After all, Poland is a quite well-developed central European nation, not some uncivilized backwater.
But that fact is precisely what reminded me of one of my favorite lessons today.
The lesson is quite simple: even in some of the most developed markets – the ones everyone has heard of – basic business concepts that are intimately familiar to you don’t exist. The market has literally been wide open for all these years.
I was reminded of this in another way this week while reviewing this website’s statistics.
Webmasters will be familiar with the traffic tool Alexa, which issues an Alexa rank to almost every website on the internet. The lower a website’s Alexa rank, the better their traffic. For instance, Google is ranked #1.
While our site has grown very rapidly over the past fifteen months we’ve been in existence, it’s interesting to see how our Alexa rank differs in different countries.
While a plurality of our visitors come from The Land of the Free, our rank in the United States is actually lower than a number of other countries. The reason is the same one we discuss here frequently: competition.
There are millions of websites competing for the average Americans’ attention. Of course, being on the internet, these websites are available to everyone in the world, but Americans rely far more on the internet to search for houses, manage their finances, or shop than many other cultures.
For instance, there is barely any knowledge of what e-commerce is in a place like Cambodia or Laos. Heck, when I was in Laos last year, a real estate agent told me that her friends pay four times the price they would in Bangkok for cosmetics, just because there was practically zero competition among retailers in the capital city of Vientiane.
And that’s exactly how our Alexa ranking works.
For example, this site is the 2,936th most popular website in Croatia right now. A few months ago, when my article on the most valuable passports ranked Finland in the top spot, the thing went viral. That article got over 20,000 likes and shares on Facebook and Twitter alone, and vaulted us among the top 1,000 websites in all of Finland for that month.
Imagine if I would have determined that a United States passport was the most valuable on earth, and put that in an article. It would have barely moved the needle. Americans – 78% of whom don’t even have a passport – would have said, “yeah, we know that” with a Paris Hilton-esque arrogance. I doubt anyone would have shared it.
But claim that Finland, whose passport offers visa-free travel to 173 countries, is the most valuable, and people in Finland will trip over themselves to tell their friends.
When you consider how many of the world’s top websites have little use for non-Americans, you can understand why this is the case.
What this has to do with starting a business overseas
The lesson with our Alexa rank is the precursor to the lesson about Amazon setting up shop in Poland. Go to Croatia or Finland and you can get a lot more traction with the EXACT same idea as you do in the larger, more established countries.
Heck, even comparing the investment pitches on Canada’s “Dragons Den” TV show versus those on “Shark Tank” in the US and you’ll see that Canada is even more forgiving than the hyper-competitive United States.
If you’re an entrepreneur seeking to get the most mileage out of your business idea, you won’t find it in the United States. The further down the developed world totem pole you go, the more traction you’ll get for less effort.
If you’re willing to start a business in an emerging market, you can do even better. Go to a frontier market and, provided people have enough money to purchase your goods or services, you can probably do even better.
When starting a business, I maintain the simple philosophy that your goal is to get as much distribution as fast as possible. If your business brings you joy or changes the world in some small way, great. But that isn’t your goal for starting the business. So you might as well go where your business will be treated best.
In developed countries teeming with entrepreneurs, like the United States, consumers have a wide variety of choice. How many times have you driven down a street with ten different fast food chains on the same block or two? Nothing special.
However, when I was in Seoul earlier this year, I spoke to young people who were practically begging for someone and open a slightly better version of Taco Bell. To take it one step further, friends I made in Vietnam are now filling their Facebook walls with photos of food… from McDonald’s. The hamburger chain waited so long to enter the market, and now that they finally did, people are going crazy for it.
Would anyone in the United States post a photo of a Big Mac to Instagram?
This site’s Alexa rank shows in a different way how entrepreneurs who want the most bang for their buck – and their effort – will find it in countries where the free market has greater needs to fill. It’s an obvious concept when you think about it, but one most start-ups in California never think about when they’re racing around trying to fend off their 19 competitors.
My business successes weren’t revolutionary, life changing ideas. My most successful businesses involved simply doing something other businesses were doing a little better. In a business I sold for 25x barely a year after buying it, I was just about the only company that actually answered the phone when customers called.
But in a foreign market, the opportunities would have been even better. And you can practically take your pick of what business you want to be in in many countries.
Think of what business you can start in Croatia to make yourself the 2,936th largest company in the whole country. It wouldn’t take a lot of hard work – in fact, I’ll bet you could do much better if you put some real effort in.
On the other hand, try making it onto the Fortune 1000 list. Big difference. And while Croatia might not make you a billionaire, you could still become quite wealthy living life in a more enjoyable place.