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>> I want you to
do something.

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I'd like you to
take a moment and

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visualize a successful

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00:00:11,670 --> 00:00:13,035
international business.

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00:00:13,035 --> 00:00:14,790
Picture of the
company that you

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00:00:14,790 --> 00:00:17,790
believe best epitomizes
global trade.

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Did you picture a global

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00:00:19,380 --> 00:00:20,840
multi-national
conglomerate?

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00:00:20,840 --> 00:00:23,390
One of the world's
largest corporations,

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00:00:23,390 --> 00:00:25,615
Global 100 or the like.

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How about one of the
companies actually has

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the word
international baked

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00:00:29,180 --> 00:00:30,290
right into their name,

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maybe IBM, AIG, or ING.

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Is it one of the global
brands that you see

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when you travel
overseas everywhere?

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Subway, KFC or
7-Eleven for example.

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Or maybe the Gap,

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which is now a
familiar sight

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all around the world.

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How many of you pictured

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a small business with

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fewer than 50 employees?

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One with only a
single location,

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a family-owned and
operated business.

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This isn't what
springs to mind for

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most people when they think

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about international trade.

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But the fact is that
over 98 percent of

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exporters are small

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and medium-size businesses.

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In the United States alone,

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that's over 269,000 local

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businesses that

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have successfully
gone global.

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For the past 25 years,

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I've been working with

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companies as they enter

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and expand into
foreign markets,

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and they really
aren't who you

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think they are.
What are they like?

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Who are they and
what do they sell?

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00:01:27,210 --> 00:01:29,090
More importantly,
what can all of

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the companies that
haven't yet gone global,

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learn from their example?

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Back in 1996, the
Millionaire Next Door

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was a surprise
hit on the New

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York Times bestseller list.

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It totally challenged
our perception about

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who the affluent
really are.

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We learned that the
wealthy weren't really

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much like Blake Carrington,

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the oil tycoon from the
1980s TV hit Dynasty.

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Or his 21st-century
equivalent,

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Lucius Lyon from Empire.

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Actual millionaires
turned out to be far

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more like modern
families, J. Pritchard,

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the people that we see in

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our neighborhoods
every day,

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00:02:04,265 --> 00:02:05,510
predominantly running their

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own small businesses,

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living very modestly, and

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disproportionately
driving pickup trucks.

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It turns out that
this is also

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very true of
international business,

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and a whole new
generation of

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millionaires next
door are being

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created by small businesses

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that're increasingly
going global.

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The fact is, in the
United States currently,

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over 90 percent of

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successful exporters are

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single location
small businesses,

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37 percent of which have

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fewer than 20 employees.

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Think about that
for a moment.

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Over a third of

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successful
exporters are about

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the same size as

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00:02:45,020 --> 00:02:46,715
your favorite local
clothing boutique.

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In fact, some of
them actually

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are your favorite local
clothing boutiques.

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The cliche would be
to call them mom and

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pop businesses, and
many of them are.

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But many more would
actually be better

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00:02:56,750 --> 00:02:58,880
described as
mother-daughter businesses.

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A growing percentage
of them are

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female-owned and operated.

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What do small
businesses export?

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Well, really anything
and everything.

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Here's some examples of

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small business shipments

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in just the last week.

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Custom made tops for
off-road vehicles,

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material for making
dental molds,

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00:03:17,780 --> 00:03:21,175
multi-level luxury
kitty houses,

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slobber proof
webcam, so you

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can skype with the
dog while you travel.

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00:03:26,345 --> 00:03:28,715
Tailored orthopedic
products,

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00:03:28,715 --> 00:03:31,505
woodworking equipment,
skateboards,

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stand up paddleboards, and

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my personal
favorite, steampunk

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costume jewelry.

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This one might require

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a little bit of
explanation.

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These aren't very
tiny steam engines.

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Steampunk is a huge trend

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among fans of science

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fiction and fantasy that

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re-envisions the genre with

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1800s era, Industrial
Revolution inspiration.

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00:03:52,865 --> 00:03:55,865
Think George Lucas
meets Jules Verne,

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Princess Leia
in a hoop skirt

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with a parasol and

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00:03:58,760 --> 00:04:00,620
the millennium falcons
now at dirigible

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with ornate gears
and tail fins.

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This export is my favorite

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00:04:04,895 --> 00:04:06,320
because they're
very illustrative

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of how many
businesses first get

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involved in
international trade.

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This is one of

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those mother-daughter
companies

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that we're talking
about a minute ago.

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In a couple of years back,

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they weren't planning
to export at all.

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In fact, they
went to import.

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Their plan was to import

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really cool retro

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00:04:22,160 --> 00:04:24,080
Victorian and
gothic jewelry

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00:04:24,080 --> 00:04:25,850
to sell the steampunk
fans who dress

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up in costumes and
go to conventions.

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What they'd hoped to do was

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to import these items from

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the coolest Victorian and

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Gothic places that
they could think of.

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But they couldn't find
a supplier in London,

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or Hong Kong, or Prague,

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00:04:40,055 --> 00:04:41,510
or anywhere else
they thought that

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things like this
might be found.

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They had their own

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pieces custom manufactured,

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and they put them up on

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00:04:46,820 --> 00:04:48,140
their website
hoping to sell to

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00:04:48,140 --> 00:04:49,250
the locals who
were working on

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00:04:49,250 --> 00:04:51,035
their costumes
for Dragon Con,

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00:04:51,035 --> 00:04:54,050
aka nerdy grow,
an annual event

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00:04:54,050 --> 00:04:57,815
drawing 52,000 genre fans.

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00:04:57,815 --> 00:05:01,415
But what they got, were
orders from London,

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00:05:01,415 --> 00:05:04,820
and Hong Kong,
and even Prague.

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That's when they did what

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many companies do when

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first presented with

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00:05:08,870 --> 00:05:10,745
international growth
opportunities.

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They fought those
orders off hard.

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They walked away from

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sales and left money
on the virtual table.

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They told customers that

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they were only
set up to sell

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00:05:20,240 --> 00:05:21,770
domestically and
they even put

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00:05:21,770 --> 00:05:23,795
terms to that effect
on their website.

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00:05:23,795 --> 00:05:24,800
But they also had

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00:05:24,800 --> 00:05:26,335
their phone number
on their website.

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One persistent

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potential international
customer,

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00:05:29,825 --> 00:05:31,700
absolutely
insistent that they

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were going to
take her money,

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00:05:33,530 --> 00:05:36,230
called and patiently
walked them through,

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00:05:36,230 --> 00:05:37,430
what would be
required to ship

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00:05:37,430 --> 00:05:38,995
her order internationally.

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It turned out to
be a lot less

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difficult than explaining
what steampunk is.

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When they got to the
part about payment,

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the customer
courageously asked them,

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you do have credit
cards in your country?

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00:05:51,295 --> 00:05:53,540
Now today this business has

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very different terms on

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00:05:54,650 --> 00:05:56,060
their website, and
more importantly,

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they've got over 280,000

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00:05:57,780 --> 00:05:59,570
in international
top-line sales,

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00:05:59,570 --> 00:06:00,800
which have grown
to account for

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about a third of
their revenue.

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There are thousands of
examples like this.

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Small business
owners becoming

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00:06:07,415 --> 00:06:09,170
unlikely millionaires
by opening

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00:06:09,170 --> 00:06:11,330
their shops to
international trade.

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00:06:11,330 --> 00:06:12,905
But here's the crazy part.

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In the United States,

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fewer than one percent

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00:06:15,770 --> 00:06:17,585
of companies
currently export.

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This is the lowest level of

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00:06:19,550 --> 00:06:22,340
active exporters in the
industrialized world.

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The vast majority
of US business,

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00:06:24,629 --> 00:06:25,875
stops at the border.

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We talk about leaving
money on the table,

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00:06:27,965 --> 00:06:31,370
Yikes, why is
this the case?

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00:06:31,370 --> 00:06:33,560
International borders
have never been

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00:06:33,560 --> 00:06:36,445
more permeable to trade
than they are today.

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00:06:36,445 --> 00:06:38,600
The fact is, the barriers

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00:06:38,600 --> 00:06:39,800
that most companies face

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00:06:39,800 --> 00:06:41,300
in going international just

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00:06:41,300 --> 00:06:43,130
aren't the borders
on the map.

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00:06:43,130 --> 00:06:44,810
The borders they
have a hard time

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00:06:44,810 --> 00:06:46,280
crossing are the ones
that they establish

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00:06:46,280 --> 00:06:51,875
for themselves, doubt,
uncertainty, fear.

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00:06:51,875 --> 00:06:53,990
Doubt that there's
international

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00:06:53,990 --> 00:06:55,885
opportunity
available for them.

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Uncertainty about
how to reach

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00:06:58,010 --> 00:07:00,110
customers in
foreign markets.

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00:07:00,110 --> 00:07:01,955
Fear, fear that

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00:07:01,955 --> 00:07:04,620
international business
is inherently risky.

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00:07:04,620 --> 00:07:07,185
Now, this first
self-imposed border,

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00:07:07,185 --> 00:07:08,980
doubt that there's
international opportunity

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00:07:08,980 --> 00:07:10,270
available for
most businesses,

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00:07:10,270 --> 00:07:13,315
it simply couldn't be
further from the truth.

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00:07:13,315 --> 00:07:14,920
The International
Trade Administration

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00:07:14,920 --> 00:07:16,840
reports that over
70 percent of

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00:07:16,840 --> 00:07:18,490
the world's purchasing
power is now

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00:07:18,490 --> 00:07:20,875
located outside
the United States,

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00:07:20,875 --> 00:07:23,105
along with 95 percent

220
00:07:23,105 --> 00:07:24,520
of the world's consumers.

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00:07:24,520 --> 00:07:26,260
International
opportunity isn't just

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00:07:26,260 --> 00:07:27,325
knocking at your door.

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00:07:27,325 --> 00:07:28,900
It's already eaten
your porridge,

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00:07:28,900 --> 00:07:29,710
sat in all three of

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00:07:29,710 --> 00:07:30,670
your chairs and
it's heading

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00:07:30,670 --> 00:07:31,750
upstairs to figure
out which one

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00:07:31,750 --> 00:07:33,830
of your beds it wants.

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00:07:33,870 --> 00:07:36,130
The second self-imposed

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00:07:36,130 --> 00:07:37,750
border is uncertainty.

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00:07:37,750 --> 00:07:38,980
Uncertainty about
how to reach

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00:07:38,980 --> 00:07:40,570
customers in
foreign markets.

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00:07:40,570 --> 00:07:42,280
This is what causes
most companies

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00:07:42,280 --> 00:07:43,810
to pull the virtual
welcome mat

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00:07:43,810 --> 00:07:45,070
off their websites and

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00:07:45,070 --> 00:07:47,460
confine themselves
to domestic sales.

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00:07:47,460 --> 00:07:50,540
What if we do something
wrong? They ask.

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00:07:50,540 --> 00:07:53,780
What if we sell things
we aren't supposed to,

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00:07:53,780 --> 00:07:56,935
to people or places we
aren't supposed to?

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00:07:56,935 --> 00:08:00,229
That's not actually
international business,

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00:08:00,229 --> 00:08:01,580
that's called smuggling.

241
00:08:01,580 --> 00:08:03,590
That's something
completely different.

242
00:08:03,590 --> 00:08:05,330
If you're border
shifts that

243
00:08:05,330 --> 00:08:07,555
quickly from we don't
know how to export,

244
00:08:07,555 --> 00:08:08,960
to what if we accidentally

245
00:08:08,960 --> 00:08:10,955
become international
crime lords,

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00:08:10,955 --> 00:08:12,350
it probably wasn't a very

247
00:08:12,350 --> 00:08:14,015
firm board to begin with.

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00:08:14,015 --> 00:08:16,235
Either way, there literally

249
00:08:16,235 --> 00:08:18,080
is an app for
that and it'll

250
00:08:18,080 --> 00:08:19,760
keep you out of trouble
and it's available to

251
00:08:19,760 --> 00:08:21,080
your business
for the low cost

252
00:08:21,080 --> 00:08:22,805
of absolutely free.

253
00:08:22,805 --> 00:08:26,160
The final self-imposed
border is fear.

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00:08:26,160 --> 00:08:28,880
Many companies truly
believe that engaging in

255
00:08:28,880 --> 00:08:30,455
international growth
opportunities

256
00:08:30,455 --> 00:08:31,340
opens you up to

257
00:08:31,340 --> 00:08:34,265
everything bad that
can possibly happen.

258
00:08:34,265 --> 00:08:39,230
Loss, damage, theft,
delay, diversion,

259
00:08:39,230 --> 00:08:42,930
regulatory penalty,
the high seas piracy,

260
00:08:42,930 --> 00:08:44,210
some of them have seen

261
00:08:44,210 --> 00:08:45,290
the movie Captain Phillips,

262
00:08:45,290 --> 00:08:47,495
maybe one too many times.

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00:08:47,495 --> 00:08:49,460
Numerous studies
have shown that it's

264
00:08:49,460 --> 00:08:51,440
actually far more risky to

265
00:08:51,440 --> 00:08:52,160
remain confined to

266
00:08:52,160 --> 00:08:53,300
the domestic market than it

267
00:08:53,300 --> 00:08:54,170
is to engage in

268
00:08:54,170 --> 00:08:55,860
international growth
opportunities.

269
00:08:55,860 --> 00:08:58,460
Companies that export
have exponentially

270
00:08:58,460 --> 00:08:59,780
more growth
opportunity available

271
00:08:59,780 --> 00:09:01,120
to them and those
that don't,

272
00:09:01,120 --> 00:09:02,760
and they are
nearly eight and

273
00:09:02,760 --> 00:09:04,280
a half percent less

274
00:09:04,280 --> 00:09:06,110
likely to go out of
business than those are

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00:09:06,110 --> 00:09:08,030
confined to the
domestic market.

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00:09:08,030 --> 00:09:09,380
Knowing those numbers,

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00:09:09,380 --> 00:09:11,240
why wouldn't you export?

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00:09:11,240 --> 00:09:13,250
That one percent of
American companies

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00:09:13,250 --> 00:09:14,825
that do currently export,

280
00:09:14,825 --> 00:09:18,700
they have phenomenal
growth opportunities.

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00:09:18,700 --> 00:09:20,704
Those are the businesses
that are creating

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00:09:20,704 --> 00:09:22,085
the next generation

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00:09:22,085 --> 00:09:23,615
of millionaires next door,

284
00:09:23,615 --> 00:09:25,535
and even some billionaires.

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00:09:25,535 --> 00:09:26,570
A moment ago we talked

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00:09:26,570 --> 00:09:27,530
about the Gap when we were

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00:09:27,530 --> 00:09:28,610
talking about visualizing

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00:09:28,610 --> 00:09:29,690
successful business.

289
00:09:29,690 --> 00:09:31,325
Do you know how
they got started?

290
00:09:31,325 --> 00:09:33,200
A husband and a wife having

291
00:09:33,200 --> 00:09:36,185
a very hard time finding
pants that fit him,

292
00:09:36,185 --> 00:09:38,285
opened a single small store

293
00:09:38,285 --> 00:09:40,700
to sell blue jeans
and vinyl records.

294
00:09:40,700 --> 00:09:42,050
Today they shipped to over

295
00:09:42,050 --> 00:09:44,180
90 countries around
the world and they

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00:09:44,180 --> 00:09:45,860
open up more stores
internationally

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00:09:45,860 --> 00:09:48,035
every year than they
do domestic ones.

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00:09:48,035 --> 00:09:50,570
For today's
neighborhood business,

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00:09:50,570 --> 00:09:53,435
the neighborhood is now
a whole lot bigger.

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00:09:53,435 --> 00:09:55,295
The world is your neighbor,

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00:09:55,295 --> 00:09:57,710
and it's waving,
and it's smiling,

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00:09:57,710 --> 00:09:59,630
and it's trying to
get your attention

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00:09:59,630 --> 00:10:02,170
because it wants to
do business with you,

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00:10:02,170 --> 00:10:07,420
and it's time to wave
back. Thank you.