We first spotted these micro multinational startups during the Fintech Global Tour. It used to be that you only had two types of ventures – small local and big global. The small local ventures adapted a new concept to a local market (derisively called “concept arbitrage”) and then exited to a global player (usually from America). Three things have changed:

– Concept arbitrage is not working so well. Companies such as Uber don’t buy their local competitors – they out compete them on the ground.

– The locus of growth has shifted from America to Asia and Africa.

– A few ventures outside America have proved that location of origin matters less (Skype, Adyen, Klarna, Saxo all come to mind within Europe). Investors have taken note and are going global.

We are now seeing ventures where it is hard to answer the question “where are you based?” That used to be a very simple question. Now to take just two examples

Ethereum is based in Switzerland for jurisdictional reasons, London is where people mostly meet, Vitalik is from Toronto, developers are in Berlin and Amsterdam.

Xapo is a Silicon Valley company, with Silicon Valley investors that has now made their HO in Switzerland.

It is now routine to start a venture with a head office close to the market and to investors with the developers in another country where costs are cheaper. This nearshore/offshore strategy used to be for big companies but is now being used by seed stage founding teams.

We see 4 common factors uniting these micro multinational stories:

1. Being the local hero is great for attracting engineering talent. If you are doing interesting globally relevant work in a place with few alternatives like that, you get to pick the best.

2. Treat America as your home market. Israeli ventures pioneered this. Think big and global from day one. A European base does not mean copycat local acquisition bait any more.

3. Get investors who align to this strategy. Avoid the “one tank of gas” VCs. VCs are having a hard time working out how to globalize, so the big funds may not be available but you also don’t want to be stuck in the rut of working with local risk averse investors who want you to think small and local.

4. It’s the culture stupid. Cyber tools AND air miles. Bring returnees back to your local engineering team who have worked in Silicon Valley but now want to come home. They will inject that Silicon Valley culture. Don’t rely on email and Skype. Use cheap flights and couchsurfing if needed to get globally dispersed teams to gel at a human level.