Startup Innovation Strategies - Local Adaption

This is part three, in a four part series.

In this blog post, I want to examine a startup trend that is found mostly outside Silicon Valley, in places like China, South Korea, India and others. To summarize it, it is the trend of offering a local variety of a service that originated from outside, often from the US. It is said that the success of GroupOn spawned a hundred different imitators in China. Baidu, a search engine similar to Google, is a service that is available only in China. South Korea, Taiwan, Japan and some other countries have very active local social networks, that far surpasses facebook and twitter by number of users in those countries. These are a few examples of this trend. I want to examine, how this works, when this works, and benefits of adapting and contextualizing a service to a locality.

Since I used “Local” in the heading, it might seem that we are examining “local” from the “mobile, social, local” trio. These services are termed “local” because they use the GPS functionality of a phone to provide contextual information about a place. I’m using “local” in a different sense - that of contextualizing a service to fit local tastes, customs and practices. I contend that, the diversity of human culture makes it impossible to offer just one service that could fit in to cultures across the world. For example, iBay in the Maldives actually works better than eBay, as a marketplace for local merchants and buyers, simply because it’s functionality is customized to overcome challenges in the local environment (like most people not possessing credit cards, etc).

Perhaps, because of the logic of globalization, we have come to see all cultures as flexible enough to accommodate, any single idea of a business. This is a blind spot, predominantly of entrepreneurs from Silicon Valley. Time and time again, we encounter the persistence of local textures and practices, even as cultures adopt the veneer of “western” culture - ties, jeans, coats, english language and MBAs. Beyond this “thin veneer” lies an unfathomable gulf of rich cultures, that can only be understood with lived experience. This is a gulf, that entrepreneurs based in those local cultures can benefit from.

Hence, for startups around the world, it is a profitable innovation strategy, of trying to adapt services found in other parts of the world, or global services (like eBay), and finding a product/market fit that would work best in their culture. Understandably, this is a frowned upon in the Silicon Valley, and often labeled as “copy cats” by tech blogs such as TechCrunch. I beg to differ, and suggest that, while some services are mere “copy cats”, others actually understand the problems that arise from trying to adapt culture to service, and are instead adapting service to culture.

Understandably, this strategy will work only when market conditions favour such adaption. Like, having a huge population with a shared culture is beneficial, so is the level of development (education, income, etc) in that country.

Photo credit - dhelling01 from Flickr