The Decade of the Micro-Multinational : Entrepreneurship in 2010 – 2020

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The Decade of the Micro-Multinational : Entrepreneurship in 2010 – 2020 post image

This episode of This American Life is fascinating. It’s a story about the fundraising requirements for senators and congresspeople. What surprised me is that members are congress are hustling lobbyists for funding– not the other way around.

It was reported that congresspeople in the US spend up to 2-3 hours a day raising funds. As an example, Democratic House Leader Nancy Pelosi attended 400 fundraising events last year.

A few things seem, on the surface, to be obvious:

  1. This is a bad way for legislators to be spending any of their time, let alone 2-3 hours a day.
  2. If a company operated like this it would likely serve it’s customers poorly, create bad products, and go out of business.

At the end of the episode, there’s a moment when John McCain laments the fact that he had to attend a fundraiser rather than watch a basketball game. It was a moment of levity, but I was thinking here’s a guy that was almost the president of the US wasting his time.

Smarter, more focused, and better utilized people at companies like Facebook and Google aren’t having the same conflicts of interest.

Is it likely that many of the problems governments have failed to address effectively will probably never be solved by governments? Small business entrepreneurs stay away from these (potentially profitable) problems because they believe governments have providence over them. Hopefully, in the coming decades, we’ll see increasing numbers of small groups of focused, passionate entrepreneurial teams working on”schlepy” stuff like education and utilities.

What types of organizations are going to be effective in the future? What kind of roles are we going to play in them?

The rise of the micro-multinational.

One set of growing pains I’m seeing first hand is the rise of the micro-multinationals. Small, hyper-agile businesses doing business globally. Micro-multinationals seek out advantages in a range of jurisdictions with minimal investment.

Traditionally, there’s been wealthy trust-level individuals and larger corporations who have internationally diversified. You’ll hear the media go on about Mitt Romney’s overseas trusts, or large corporations who are getting tax breaks and special treatment by going offshores and seeking greener pastures. Doesn’t it make sense, though, that smaller, more agile organizations could achieve these types of benefits as well?

I can assure you they are seeking them out.

The legal implications of the rush of small business entrepreneurs diversifying globally is staggering. Questions are everywhere. Business services focused on this market is a great space to focus a business if you are looking for opportunities (and if you’ve got the cojones).

If your first response is “but I don’t know anything about that stuff” don’t sweat it. Neither does anybody else. Get in while the getting is good. :)

…one of the social inventions of savvy communities will be the simplification of what is required to form a multinational corporation… The 4th EconomyRon Davidson

See any opportunities here?

Cheers,

Dan

PS, here are some better articles that are related in some way:

Published on 04.05.12
  • http://twitter.com/dointernetstuff Trevor

    So what are the main pains you feel that micro-multinationals are having?

  • http://www.tropicalmba.com Dan

    Biggest pains I’m seeing are legal, taxes, incorporation, banking– traditional professional service firms won’t address this stuff. There’s also all kinds of related stuff like travel, staffing, education, etc. Probably something I should put some time into and post about. 

  • http://twitter.com/dointernetstuff Trevor

     Maybe I’m just more familiar with those areas, but to me, there are loads of firms already addressing all of those pain points, it’s just a matter of finding them. Potential investment opportunity? But what focus, is the question.

  • http://www.tropicalmba.com Dan

    Middle income entrepreneurs. A guy that makes 100 to 600K annually primarily from virtual stuff, has 3-5 companies around the world w/staff and who is constantly traveling is an exploding demographic (no data to support this claim, but it’s what I’m seeing). Especially firms that would be willing to focus on Americans. Although there are tons of firms here, I think this particular demo is exploding and it’s fairly opaque. Nobody is coming forward to talk about in detail how they do this stuff, in particular with taxes and legal. I think there’s a huge opportunity there. 

    Another place I see huge opportunities is with consulting around internet infrastructure for this demo. Payment processors, servers, privacy, email, etc. 

  • http://www.tropicalmba.com Dan

    I think one site that’s doing a good job monetizing this uncertainty is :

    http://www.sovereignman.com/

    I see a lot of unaddressed issues in this space.

  • http://stankavich.com Mike Stankavich

    Dan, exactly what you said. My biggest pain point right now is banking and foreign exchange. Do I use paypal & get raped on the fees? Do I somehow try to get a US bank account established for my Philippines business entity? At what scale does it make sense to switch to a HK or similar company?

    An incubator that caters to micro multinationals would be killer awesome, especially if you could put together something with a low cost of entry that lets you pay as you go.  I know I have the Philippines and US sides of my business well covered but if I step outside that box I’m starting from scratch again, in a country where I’m not familiar with local customs and don’t have local contacts.

    Maybe Dynamite Circle or something similar could extend into that space.  I think that many of these businesses follow a similar growth trajectory.  Perhaps a few standard recipes would be helpful.

  • http://www.tropicalmba.com Dan

    Mike, absolutely the plan! Our October meet-up will be 100% focused on this and I’m working with Elisa on a monthly publication as well. 

  • http://www.tropicalmba.com Dan

    BTW Trevor, if you’ve got any trusted contacts in these industries, would love to get in touch with them. Dan@TropicalMBA.com. CHeers.

  • http://stankavich.com Mike Stankavich

    Yes, there are plenty of service providers. But there’s no way to evaluate whether their pricing is reasonable or whether they are trustworthy.  Maybe a ranking system and/or a marketplace for service providers?  

  • http://twitter.com/dointernetstuff Trevor

     I’ve met both Matt and Simon, great guys who both know their stuff better than almost anyone else I’ve met.

  • http://twitter.com/dointernetstuff Trevor

     you’ve got mail

  • http://www.tropicalmba.com Dan

    SWEET! See @anythingian:twitter , blogging works! :D Trevor, give me a day on it! I’ll get back to ya.

  • http://twitter.com/dointernetstuff Trevor

     take your time. cheers

  • http://100mustreads.com/ Kevin

    Really cool stuff. I’ve always hesitated to do anything in this arena because…it’s complicated and full of annoying bureaucratic red tape! The question I have always wondered is, IS there a way to dumb it down and create a “Complete Idiot’s Guide to Keeping the Money You Earn For Micro-Multinational Entrepreneurs”?

  • http://www.thrillingheroics.com/ Cody McKibben

    Very good points Dan. It’s awesome that even 10 years ago, it was nearly impossible for an individual to incorporate in Hong Kong and take advantage of the same benefits and trends that corporations have been leveraging for decades… Now it can be done for less than a thousand bucks. I think we will see a transformation, or at least a transition of power (not sure how that will pan out and if I will *love* it), but because we’re all working on the interwebs now, and boundaries can’t contain human beings anymore (not for a long time), governments are desperately trying to cling on and control things the only ways they know how… the old ways. Eventually I think, and I hope, that those sorts of borders will dissolve and we’ll all interact in a new way… Nation-states are on their way out in my opinion.

  • http://www.thrillingheroics.com/ Cody McKibben

    If I may ride on your coattails here, I’d certainly be interested to connect with similar folks as well Trevor… feel free to get in touch anytime cody at thrillingheroics.com

  • http://twitter.com/dointernetstuff Trevor

     I’ve sent some stuff to Dan, maybe we can put something together with our shared knowledge and come up with a solution.

  • http://www.CloudVenturesGroup.com Steve Wyman CloudVenturesGroup

    Hi Dan

    Great thoughts.

    Given that this is all about Legal and Tax Avoidance (yes avoidance im all in favour of that) is it not wise to use a legal rep in a country with a solid banking system

    for example as i understand it a US citizen living in Thailand earning an income which is in part derived from a USA client has to declare this to the IRS even if no tax is due.

    However that could be hog wash (I was old this my a USA guy making around $500K a year living in northern Thailand on the Web.

    My point is. I’d want solid legal advise before i took actions. Thats tricky to run a business on?

    Or am i missing something

  • http://triathlonsprinttraining.net/ Kevin

     Cody, I totally agree about nation-states on their way out. Have you read the book The Sovereign Individual? It’s a great read. Even though it was written in 1997, it predicts a lot of things that are happening now (and will happen). Also, Doug Casey has a great newsletter where he analyzes exactly what you are talking about. Cheers.

  • Patrick

    Hi all,
    what about getting all the “inside of our head” knowledge on a spreadsheet. I guess with the number of nations available on the DC, you can easily prepare a 30+ nation “how to incorporate in XX  country” report, with adv./disadvantages of each national system. Sounds like a plan?
    Cheers
    Patrick

  • http://www.tropicalmba.com Dan

    Haha Steve, exactly. Solid answers are tough to come by, and it might even be illegal to take a stab at answering your questions here in the comments. Its cowboy country! I smell opportunity .

  • http://www.tropicalmba.com Dan

    Would be cool, but probably overkill. For internet based expats there are only a handful of countries leading the pack in terms of services. 

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