Spring Break
Creating the "Born Global" Company
Panelists Weigh in on Entrepreneurship in a Global Setting
Brian Dutt (OE), Viewpoints Editor
Issue date: 10/20/08 Section: News
In a panel on Entrepreneurship in a Global Setting moderated by TEM Professor Toby Stuart, three panelists discussed the types of businesses that are best suited to be born into a global economy. The panelists were: Donna Dubinksy (MBA '91) - Founder and CEO of Numenta, Inc. and former CEO of Palm Inc.; Hiroshi Mikitani (MBA '93) - President and CEO of Rakuten Group, Inc. , and Robert Higgins - General Partner at Highland Capital Partners and HBS Professor.
Many of us will become entrepreneurs. Some of us will succeed. Some may fail. But at some point, we will all have to ask ourselves, "what types of businesses are right for born global companies?" Professor Toby Stuart posed this question to the panel, and you might be surprised to find that globalization isn't always the answer.
In 1997, Hiroshi Mikitani founded the Internet shopping mall, Rakuten, which has grown to become Japan's largest e-commerce business and one of the country's most visited websites. Mr. Mikitani, who as Professor Stuart mentioned is seen as the "Mick Jagger of Japan," is one successful entrepreneur who sees disadvantages for the global company. As he explained, "There is always a conflict between creating extremely strong local focus and diluting your focus as a global company." Mr. Mikitani chose to keep his business in Japan, and create a more complex company than would be possible if he tried to expand globally. Rakuten now has operations in E-Commerce, credit services, portals and media, travel booking, online brokerage, and professional sports (he owns a baseball team).
Mr. Mikitani believes that the decision on whether or not to go global should not be based on the type of business that you are in, but in how you execute your global strategy. He mentioned eBay, which he said did a "bad job in Japan" by offering the same exact product in Japan as in the U.S. Successful global companies in his view often need to be able to give up authority, either by finding local partners or going it alone but allowing the local management to control the decisions. He views Yahoo! Japan as a success story of a global business model, particularly because it is not majority owned by Yahoo! in the U.S. As a result, local management was able to use proven U.S. Yahoo! technology to tailor its business to Japanese culture. Today, Yahoo! Japan is the biggest website in Japan.
Many of us will become entrepreneurs. Some of us will succeed. Some may fail. But at some point, we will all have to ask ourselves, "what types of businesses are right for born global companies?" Professor Toby Stuart posed this question to the panel, and you might be surprised to find that globalization isn't always the answer.
In 1997, Hiroshi Mikitani founded the Internet shopping mall, Rakuten, which has grown to become Japan's largest e-commerce business and one of the country's most visited websites. Mr. Mikitani, who as Professor Stuart mentioned is seen as the "Mick Jagger of Japan," is one successful entrepreneur who sees disadvantages for the global company. As he explained, "There is always a conflict between creating extremely strong local focus and diluting your focus as a global company." Mr. Mikitani chose to keep his business in Japan, and create a more complex company than would be possible if he tried to expand globally. Rakuten now has operations in E-Commerce, credit services, portals and media, travel booking, online brokerage, and professional sports (he owns a baseball team).
Mr. Mikitani believes that the decision on whether or not to go global should not be based on the type of business that you are in, but in how you execute your global strategy. He mentioned eBay, which he said did a "bad job in Japan" by offering the same exact product in Japan as in the U.S. Successful global companies in his view often need to be able to give up authority, either by finding local partners or going it alone but allowing the local management to control the decisions. He views Yahoo! Japan as a success story of a global business model, particularly because it is not majority owned by Yahoo! in the U.S. As a result, local management was able to use proven U.S. Yahoo! technology to tailor its business to Japanese culture. Today, Yahoo! Japan is the biggest website in Japan.
Be the first to comment on this story