Rise of the Roaming Empires

CNBC Business Magazine, March 2012 Issue (Cover Story)

In the micro-multinational age, the agile are poised to inherit the earth

When Jevgenijs Kazanins walked into a hackathon in Riga last March, he just wanted to solve a problem that was bugging him at work. Two days later, he walked out a proto-entrepreneur.

The 29-year-old Latvian media planner had been looking for a software tool that would help him assess the effectiveness of campaigns on social media. He and others attending the Garage48 workshop made a prototype and in the process formed the nucleus of an analytics software company. A year on, Campalyst is based in Estonia, the UK and the US, and is working with several big media and creative agencies in Finland and the UK.

Campalyst is one of the ‘micro-multinationals’ that have emerged over the past few years. With global aspirations from the get-go, enabled by communication technologies, they can set up shop anywhere. “Small is an asset,” says Anne Mettler, executive director of the Lisbon Council think tank, who recently co-authored a policy paper on them. “It means you’re able to respond to consumer needs very quickly. You can be agile without the bureaucracy.” Today’s start-ups will never grow into conglomerates with a staff of 100,000, she adds. “That traditional path is over. It’s ineffective.”

Campalyst has only nine members of staff, split evenly between Latvians, Lithuanians and Estonians. Having triumphed at the Start-up Sauna initiative in Helsinki, where the team honed their product and met potential clients, it opened a sales office in London. Then, after canapés with the Silicon Valley set at New York’s Mini Seedcamp last June – not to mention a cash injection – Kazanins, as CEO, moved to the Big Apple.

Motivating staff who are not in the same country or time zone is a challenge that many such outfits face. Kazanins says that maintaining constant communications between the teams, for example via Skype, is essential. But for all the challenges, he has no qualms about expanding. “For us, opening an office in another country would mean one of us flying there, finding a co-working space and setting up a desk, or just hiring another person there. This is totally our decision,” he says. “We’re really fast, so if we see that there is, for example, a huge market for us in Brazil, we’ll be there in a week.”

At heart, says Mettler, these new entrepreneurs are experimental. “It’s supposed to be fun. Essentially it’s a way to tap into your own creative dynamism, to live your dreams.”

Another small start-up with a sense of fun is Gidsy, an online event marketplace based in Berlin and New York that allows ‘experience hosts’ to offer anything from a piano lesson to a photography workshop, a walking tour or a concert. “Professionals use it but there are also people who have some kind of knowledge that they want to share or they can transfer to others,” explains CEO Edial Dekker. “The idea is to provide an alternative way to explore particular cities for locals and visitors alike.” Gidsy’s business model is based on charging a 10% surcharge on the event fees in exchange for handling the posting, bookings and customer service.

Read more: http://www.cnbcmagazine.com/story/rise-of-the-roaming-empires/1558/1/

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