>> I want you to do something.
I'd like you to take a moment and
visualize a successful
international business.
Picture of the company that you
believe best epitomizes global trade.
Did you picture a global
multi-national conglomerate?
One of the world's largest corporations,
Global 100 or the like.
How about one of the companies actually has
the word international baked
right into their name,
maybe IBM, AIG, or ING.
Is it one of the global brands that you see
when you travel overseas everywhere?
Subway, KFC or 7-Eleven for example.
Or maybe the Gap,
which is now a familiar sight
all around the world.
How many of you pictured
a small business with
fewer than 50 employees?
One with only a single location,
a family-owned and operated business.
This isn't what springs to mind for
most people when they think
about international trade.
But the fact is that over 98 percent of
exporters are small
and medium-size businesses.
In the United States alone,
that's over 269,000 local
businesses that
have successfully gone global.
For the past 25 years,
I've been working with
companies as they enter
and expand into foreign markets,
and they really aren't who you
think they are. What are they like?
Who are they and what do they sell?
More importantly, what can all of
the companies that haven't yet gone global,
learn from their example?
Back in 1996, the Millionaire Next Door
was a surprise hit on the New
York Times bestseller list.
It totally challenged our perception about
who the affluent really are.
We learned that the wealthy weren't really
much like Blake Carrington,
the oil tycoon from the 1980s TV hit Dynasty.
Or his 21st-century equivalent,
Lucius Lyon from Empire.
Actual millionaires turned out to be far
more like modern families, J. Pritchard,
the people that we see in
our neighborhoods every day,
predominantly running their
own small businesses,
living very modestly, and
disproportionately driving pickup trucks.
It turns out that this is also
very true of international business,
and a whole new generation of
millionaires next door are being
created by small businesses
that're increasingly going global.
The fact is, in the United States currently,
over 90 percent of
successful exporters are
single location small businesses,
37 percent of which have
fewer than 20 employees.
Think about that for a moment.
Over a third of
successful exporters are about
the same size as
your favorite local clothing boutique.
In fact, some of them actually
are your favorite local clothing boutiques.
The cliche would be to call them mom and
pop businesses, and many of them are.
But many more would actually be better
described as mother-daughter businesses.
A growing percentage of them are
female-owned and operated.
What do small businesses export?
Well, really anything and everything.
Here's some examples of
small business shipments
in just the last week.
Custom made tops for off-road vehicles,
material for making dental molds,
multi-level luxury kitty houses,
slobber proof webcam, so you
can skype with the dog while you travel.
Tailored orthopedic products,
woodworking equipment, skateboards,
stand up paddleboards, and
my personal favorite, steampunk
costume jewelry.
This one might require
a little bit of explanation.
These aren't very tiny steam engines.
Steampunk is a huge trend
among fans of science
fiction and fantasy that
re-envisions the genre with
1800s era, Industrial Revolution inspiration.
Think George Lucas meets Jules Verne,
Princess Leia in a hoop skirt
with a parasol and
the millennium falcons now at dirigible
with ornate gears and tail fins.
This export is my favorite
because they're very illustrative
of how many businesses first get
involved in international trade.
This is one of
those mother-daughter companies
that we're talking about a minute ago.
In a couple of years back,
they weren't planning to export at all.
In fact, they went to import.
Their plan was to import
really cool retro
Victorian and gothic jewelry
to sell the steampunk fans who dress
up in costumes and go to conventions.
What they'd hoped to do was
to import these items from
the coolest Victorian and
Gothic places that they could think of.
But they couldn't find a supplier in London,
or Hong Kong, or Prague,
or anywhere else they thought that
things like this might be found.
They had their own
pieces custom manufactured,
and they put them up on
their website hoping to sell to
the locals who were working on
their costumes for Dragon Con,
aka nerdy grow, an annual event
drawing 52,000 genre fans.
But what they got, were orders from London,
and Hong Kong, and even Prague.
That's when they did what
many companies do when
first presented with
international growth opportunities.
They fought those orders off hard.
They walked away from
sales and left money on the virtual table.
They told customers that
they were only set up to sell
domestically and they even put
terms to that effect on their website.
But they also had
their phone number on their website.
One persistent
potential international customer,
absolutely insistent that they
were going to take her money,
called and patiently walked them through,
what would be required to ship
her order internationally.
It turned out to be a lot less
difficult than explaining what steampunk is.
When they got to the part about payment,
the customer courageously asked them,
you do have credit cards in your country?
Now today this business has
very different terms on
their website, and more importantly,
they've got over 280,000
in international top-line sales,
which have grown to account for
about a third of their revenue.
There are thousands of examples like this.
Small business owners becoming
unlikely millionaires by opening
their shops to international trade.
But here's the crazy part.
In the United States,
fewer than one percent
of companies currently export.
This is the lowest level of
active exporters in the industrialized world.
The vast majority of US business,
stops at the border.
We talk about leaving money on the table,
Yikes, why is this the case?
International borders have never been
more permeable to trade than they are today.
The fact is, the barriers
that most companies face
in going international just
aren't the borders on the map.
The borders they have a hard time
crossing are the ones that they establish
for themselves, doubt, uncertainty, fear.
Doubt that there's international
opportunity available for them.
Uncertainty about how to reach
customers in foreign markets.
Fear, fear that
international business is inherently risky.
Now, this first self-imposed border,
doubt that there's international opportunity
available for most businesses,
it simply couldn't be further from the truth.
The International Trade Administration
reports that over 70 percent of
the world's purchasing power is now
located outside the United States,
along with 95 percent
of the world's consumers.
International opportunity isn't just
knocking at your door.
It's already eaten your porridge,
sat in all three of
your chairs and it's heading
upstairs to figure out which one
of your beds it wants.
The second self-imposed
border is uncertainty.
Uncertainty about how to reach
customers in foreign markets.
This is what causes most companies
to pull the virtual welcome mat
off their websites and
confine themselves to domestic sales.
What if we do something wrong? They ask.
What if we sell things we aren't supposed to,
to people or places we aren't supposed to?
That's not actually international business,
that's called smuggling.
That's something completely different.
If you're border shifts that
quickly from we don't know how to export,
to what if we accidentally
become international crime lords,
it probably wasn't a very
firm board to begin with.
Either way, there literally
is an app for that and it'll
keep you out of trouble and it's available to
your business for the low cost
of absolutely free.
The final self-imposed border is fear.
Many companies truly believe that engaging in
international growth opportunities
opens you up to
everything bad that can possibly happen.
Loss, damage, theft, delay, diversion,
regulatory penalty, the high seas piracy,
some of them have seen
the movie Captain Phillips,
maybe one too many times.
Numerous studies have shown that it's
actually far more risky to
remain confined to
the domestic market than it
is to engage in
international growth opportunities.
Companies that export have exponentially
more growth opportunity available
to them and those that don't,
and they are nearly eight and
a half percent less
likely to go out of business than those are
confined to the domestic market.
Knowing those numbers,
why wouldn't you export?
That one percent of American companies
that do currently export,
they have phenomenal growth opportunities.
Those are the businesses that are creating
the next generation
of millionaires next door,
and even some billionaires.
A moment ago we talked
about the Gap when we were
talking about visualizing
successful business.
Do you know how they got started?
A husband and a wife having
a very hard time finding pants that fit him,
opened a single small store
to sell blue jeans and vinyl records.
Today they shipped to over
90 countries around the world and they
open up more stores internationally
every year than they do domestic ones.
For today's neighborhood business,
the neighborhood is now a whole lot bigger.
The world is your neighbor,
and it's waving, and it's smiling,
and it's trying to get your attention
because it wants to do business with you,
and it's time to wave back. Thank you.