INTERNET START-UPS: A TRUANCY OF LIABILITY

OF FOREIGNNESS?

PRE-MSC. IB&M RESEARCH PAPER

E.K. van der Horn
University of Groningen
Faculty of Economics and Business
Duisenberg Building, Nettelbosje 2
Groningen, 9747AE, The Netherlands
Tel: +31 (0)50 363-3741
e-mail: e.k.van.der.horn@student.rug.nl

2
Abstract
Some internet companies grow surprisingly fast and already spread
internationally at a decidedly early stage of existence. Moreover, these kind of
companies become more and more often commonplace. This paper argues that
the current FDI models, including the Born Global model, is insufficient to
explain this phenomenon. It researches the observation through an exploratory
survey and pleas for the creation of a new model based upon a dimensional
change that distinctly differs from existing models. Several dominant dimensions
that characterise a stretch of FDI-models are investigated in several firms of our
concern and largely confirm our presentiment throughout the results. The article
concludes with an advise from a managerial perspective on how to deal and get
involved with the rise of internet business. Do you want to know more.
(Starship Troopers, 1997).
Keywords Internet, Start-ups, International, Expansion, Spontaneous

E. Klaas van der Horn is a bachelor of ICT graduate from the University of Twente,
the Netherlands, and a pre-master student of International Business and
Management at the University of Groningen, the Netherlands. He is a renowned
researcher in his fields of activity, amongst which most notably a study on
Machine Translation in 2006 at the University of Sohar, Oman, and an
accomplished software engineer in internet technologies.

4
Introduction
In 2003 the predecessor of Facebook
(Facemash) was written and launched
in just one night by 2nd year college
sophomore Zuckerberg, while drunk
(Schwartz, 2003; Rizzn, 2007). His
fabrication
immediately
gained
popularity well across the entire
Harvard
Campus
and
inspired
Zuckerberg
to the creation of
Facebook just two months later, which
became an instant hit far beyond the
original target audience (Tabak, 2004;
Dempsey, 2006) and is now the global
social network leader (Figure 1).
Facebook gained its remarkable
position with minimal marketing
efforts. Similar patterns were observed
at for example Twitter (Beaumont,
2010) and Instagram (Siegler, 2011).
This phenomenon, the sudden
and untargeted, or even unintentional,
inter-nationalisation of a firm, more
and more often witnessed in new
internet start-ups, cannot be explained
by the traditional theories of foreign
direct investment (FDI). Next to the
popular forms of FDI a virtually new
mode of foreign market entry seems
to have born with the rise of the
Internet: the instant and untargeted
global market penetration, bordering
to sheer market perforation. Whereas
the Born Global concept is defined as
the firms that view the world as their
marketplace from the outset and see
the domestic market as a support for
their
international
business
(McKinsey & Co., 1993) and business
organizations that, from inception,
seeks to derive significant competitive
advantage from the use of resources
and the sale of outputs in multiple
countries (Oviatt & McDougall, 1994:
p49),
many
internet
start-ups
nowadays often start expanding
internationally at perplexing pace even
before they actively intent to do so. To
state it more plainly: The present FDI
modes and models describe a choice
for internationalisation, where internetborne services contrast this by a lack
of
choice.
Their
growth,
and

international growth in particular, is

not so much driven by strategy, but

seems merely consequential to the
international reach of internet itself. In
essence, their global outburst appears
to be an exaggerated magnification of
the Born Global view.
However, despite the upswing
of
such
pre-eminent
business
incarnations, very little about this
trend can be found the current
literature.
Figure 1: Number
of
active
users in
millions
per
social network
(Statista, 2016)
To satiate this gap, this study tries to
inselberg the discussion to what
extent modern-day internet start-ups
still suffer from the liabilities of
foreignness (LOF), defined by Zaheer
as the costs of doing business
abroad that result in a competitive
disadvantage for an MNE subunit
(Zaheer, 1995: p344), in the way that
traditional brick-and-mortar firms do.
It does not intend to provide a clear,
univocal answer, yet instead intents
to underscore a selection from the
plethora of aspects that may be
concerned with the actuality. With
this exploratory research through
online questionnaires we hope to
acquire insights that may assist
future investigation on the topic at
hand.
Literature Review
In a route towards a contributory
study the involvement of opined
attention to antecedent literature

5
related to the topic at hand is an
indissolubly necessitated. Until now
the literature has mainly been
focussing on business models and
strategies
used
in
internationalisation. For example,
Spiegel et al. (2015) have researched
the business models of new internet
start-ups and examine how these
models relate to their astounding
successes. They find the presence of
social capital, in the form of the
social network of start-up founders,
to be a critical factor in these
successes. Yoffie and Cusumano
(1999) on the other hand consider
the remarkably dynamical strategies
that small start-ups implement to
turn the size of their opponents, the
established corporations, to their
own advantage.
They compare these strategies to the
Judo sports, where flexibility and the
agility
to
evade
head-on
confrontations with larger opponents
gives a small player an edge in
market combats. Then Carvalho de
Vasconcelos (2004) debates the
consequences of a constructivist
perspective,
concerning
the
knowledge
construction
through
human interaction and experience, to
business strategies used in internet
start-ups. This in contrast to the
objectivist approach that is generally
discoursed and considers knowledge
as an autonomously existing factor,
independent of human interpretation.
He then solidifies his views in a case
study on the start-ups from Brazil, his
home country. Finally, Gandy (2000)
observes that, in the financial sector
at least, success cannot be attained
without
the
support
of
stone
affiliates: both established firms and
fresh start-ups need to adopt a
clicks and mortar (Pottstruck,
1999) business model in order to
survive.
Whilst
these
previous
documentations around internet startups concern competitive strategies
and models used to achieve success

and perspectives thereon, this study

distinguishes itself by enquiring the
spontaneous expansion of recent
start-ups. It debates the expansion
that is characterized by the lack of a
well
thought
inter-nationalisation
scheme
and
seems
therefore
structurally different from some of
the currently popular FDI models. To
accentuate these differences we will
discuss three significantly distinct
models that we see used today and
compare them to the process
observed in the internationalisation
of some the internet start-ups. The
models that will be reviewed are first
the Uppsala model that Johanson and
Wiedersheim-Paul pioneered in 1975
Johanson then defined with Vahlne in
1977. The Uppsala model is an
outspoken form of a so called stage
model,
where
the
business
operations expand in a gradual
manner like a ripple in the water.
Second will be the Born Global
mentioned earlier as introduced by
Rennie in 1993 and conceptualized
by Oviatt and McDougall in 1994.
Lastly, Porters (2000) Cluster model
will be debated. The Cluster model is
one of the network models and it is
based on Michael Porters (1979)
framework of five competitive forces
that a firm interacts with in a market
network. This framework gained him
international fame in the field of
business economy (Adams, 2015).
We see ourselves bolstered in
this selection by previous academic
endeavours on the subject of FDI.
Madsen and Servais for example use
similar
selections
in
their
comparative studies between export
structures (Madsen & Servais, 1997;
Madsen, Rasmussen & Servais, 2000;
Moen & Servais, 2002; Knight,

6
Madsen & Servais, 2004). Moreover,
where Porter (1990) analysed the
Uppsala and Born Global (leapfrog,
1986: p3) concepts, thus indicating
their gravity, before proposing his
Cluster model, Oviatt and McDougall
examine the Uppsala model as well
around their formulations on the Born
Global vision (Oviatt & McDougall,
1994; Oviatt, McDougall & Shrader,
2003). Additionally, they improve their
explications in reference to Porters
sagacity. Finally Johanson and Vahlne
measure their views along the Born
Global
and
the
network-based
concepts (Johanson & Vahlne, 2009).
These
crosswise
allusions
help
indicate the significance of the
models chosen.

Uppsala Model
First of all there is the Uppsala Model,
that the world was introduced to by
Johanson and Vahlne when they
described their empirical findings
by[] Swedish firms often develop
their international operations in small
steps, rather than by making large
foreign production investments at
single points in time. (Johanson &
Vahlne, 1977: p24). They continue
then explaining a general roadmap to
follow:
Typically,
firms
start
exporting to a country via an agent,
later establishes a sales subsidiary
and eventually [] begin production
in the host country. (Johanson &
Vahlne, 1977: p24).
This model is a traditional
model in the sense that it expands
internationally in small incremental
steps
to
encounter
risk
in
manageable doses (Johanson &
Vahlne, 1977, 1990; Eriksson et al.,
1997; Autio, Sapienza & Almeida,

2000). This has proven a safe and

much used methodology. Anderson
and Gatignon listed the entry modes
that a firm can engage in, ordered
from high-control to low-control, and
interpreted their impact on the
firms performance.
Dunning (1998) then examines the
influence of the geographical location
of multinational enterprises on the
dynamics
of
their
value-added
activities. McDougall and Oviatt, who
defined the Born Global concept in
1994, together with Shrader (2003)
analysed the market behaviours
among business organisations and
write that companies that are
identified by swift international
growth
adopt
more
aggressive
strategies than those found in
traditional ventures. Barkema, Bell
and Pennings (1996) evaluate the
cultural barriers that may exist in the
FDI process and look at the effect of
subsequent
experience
based
learning. In the same fashion, Autio,
Sapienza and Almeida (2000) assess
the impact of a corporations age on
its
internal
culture
and,
consequently,
on
its
behaviour
towards FDI manoeuvrings. The
findings are that older firms often
have
strong-developed
routines
which
limits
their
learning
capabilities. However, this does not
mean that they lack the potential for
fast internationalisation: Given the
tangible and reputation liabilities
faced by young firms [it is] unlikely
that young firms are capable of
taking larger, bolder steps than are
older firms (Autio et al., 2000:
p919).

Born Global Model

7
Secondly there is the Born Global
Model. Already mentioned in the
introductory section, this concept
sketches an aim for world-wide sales
promptly from debut. Its concept was
launched by Rennie, when he
contrasted
firms
that
began
exporting, on average, only two
years after their foundation and
achieved 76 percent of their total
sales through exports (Rennie,
1993: p1) to traditional, domesticbased export companies. A year later
the theory was crystallised by Oviatt
and McDougall (1994).
This model is closest to the
situation that we mean to inspect in
this paper. It describes the activities
of
fast-moving,
young
entrepreneurial exploitations with a
global, or globalised, product. Such a
product can either be something that
exists according along world-wide
applicable standards (e.g. a core
hardware unit), or something that
can be fully customised to meet each
customers personal desires (e.g.
clothing).
Zahra, Ireland and Hitt (2000)
examined various factors playing a
role in international undertakings.
These factors include diversity, entry
mode choice and technological
learning and their influence on
international
performance.
Then
Knight and Cavusgil (2004) analysed
how international performance is
chiefly a function of, principally, both
an innovative and entrepreneurial
company
culture
and
dynamic
specifications
of
strategy
and
targeting.
Cluster Model
Thirdly, in closing, we recognise the
Cluster Model. This model is based
upon Porters attention to the
Although they definitely do not
reject the Cluster model altogether,
they do sense a need that the
cluster concept should carry a
public
policy
health
warning
(Martin & Sunley, 2003: p5). Morgan

existence of business clusters when

he
writes
about
geographic
concentrations of interconnected
companies (Porter, 2000: p15).
These
interconnected
companies
consist of competitors, suppliers,
support servicing firms and other
related players. The Cluster Model
expresses the ascertainment of
companies from such concentrations
to jointly internationalise, therewith
maintaining their network relations
and support. Furthermore, the model
is carried by the framework of five
forces which Porter postulated in
1979 and emerged to be most
influential (Adams, 2015).
The five forces that Porter
notions in his Diamond framework
are forces that determine the level of
competition within an industry at a
certain geographical market location
(1979). And even though one may
instinctively expect these forces to
drive competitors apart, for example
in
search
of
a
first-movers
advantage, or to avoid failure
because of the lack of such
advantage,
the
Cluster
model
predicts competing firms to clot
together and jointly conquer the
market. Such agglomerations have
the
benefits
of
spill-overs
in
experience and learning, as well as
customer attraction to a particular
location where the industry, with
each firm that joins the cluster, holds
presence (Porter, 1998). Martin and
Sunley delve into the literature about
the business clusters and dig up its
shortcomings in the theory, the
empirics and the concluded benefits
(2003).
They
verdict
that
the
definitions in the theory are most
foggy and that consequently the
empirics and their conclusions are to
be regarded with this given in mind.
(2004) argues that the death of the
importance of geographical locations,
due supposedly to globalisation and
digitalisation, is exaggerated. He
shows us that the massive amounts
of data in the information economy

8
require ample tacit knowledge in
order to effectively exploit the
organisations
capabilities.
This
implicit
knowledge
is
often
embodied by individual managers or
cultures, hence re-establishing the
importance of geography. Finally,
Menzel and Fornahl compare the
life-cycle of a cluster with the lifecycle of an industry (2010) and
illustrate the evolution of a cluster
through those life-cycles.
Dimensions
All these models delineate the
progression of a conscious approach
to international development, while
this study inspects the occurrence
of unconscious, sudden and global
international proliferation which are
to be found in non-physical business
operations and thusly, in this case,
internet start-ups. This leads us to
the dimensions of consciousness,
which, contradictory to present FDI
models, is absent in the start-ups
we are treating here, and speed of
the internationalisation process, as
well as the degree of it.
Following the consciousness,
McDougall,
Oviatt
and
Shrader
indicate
a
more
aggressive
strategy in Born Globals, while
staged
strategies
ensure
manageable doses of risk (2003). In
the Cluster model, a company
merely follows the herd. With
these strategies, entry modes based
on
ownership
(mergers,
acquisitions, joint ventures and
greenfields) go with the more
strategically aggressive firms, while
the
Uppsala-compliant
firms
primarily choose for a contractbased (exports and licences) entry
mode. Internet companies do not
have a specific entry mode as the
(digital) world they operate in is
already global by default. While
global
dominance
and
risk
management
obviously
are
important
factors
for
cluster
adherent firms as well, they do not

strongly base their modes of entry

on either one of them. These firms
seek to join clusters in foreign
markets and as such there is a wide
variety their initial mode of entry.
Anderson and Gatignon couple
these entry mode choices to the
level of product customisation
(1986).They argue that entry modes
which allow for high levels of control
enable then to offer their clients
highly customised products. In
contrast, Low control entry modes
require firms to standardise their
products. For internet companies,
especially in social media, the
provided
service
is
decidedly
standard, as it is with low control
entry mode choosing firms, but with
a
mere
username
label
and
according database backing these
standard
services
look
highly
customised. One could argue that
this is just a very efficient form of
customisation, but in this study we
will document it as profiling. Amidst
these
two
extremes
are
the
products that are adaptable to
user groups (Anderson & Gatignon,
1986: p9), we will link these with
the cluster-based firms, as we
assume these firms utilise a variety
of entry modes and therefore
cannot fully customise but do have
more capabilities thereto than
stage-based-firms in their initial
phase.
Aforementioned
dimensions
are obviously linked with the
domestic market position a firm
holds. The traditional model tries to
minimise uncertainty and so will
most be used by firms that focus on
risk minimisation. This focus goes
hand-in-hand with gaining a strong
domestic position before starting to
internationalise. A Born Global on
the
other
hand
focusses
on
internationalisation and therefore
often does not have, at least not
necessarily, a particularly strong
domestic position at entry-time. The
Cluster model neither emphasises
Uppsalas liability-minimisation, nor

9
Born
Globals
opportunityoptimisation. However, cluster firms
do follow a strategy that in its own
way seeks to temper external
hazards and so we assign a strong

domestic position to this model as

well. On the following page (Tabel 1)
we
have
summarised
the
dimensions uncovered here.

Tabel 1: Comparison of FDI models on some key characteristics

Uppsala
Conscious
Internationalisation
Speed
of
Internationalisation
Degree
of
Internationalisation
Internationalisation
Strategy
Initial Market Entry
Product Customisation
Domestic Position

Cluster

Yes

Born
Global
Yes

Yes

Internet Sup
No

Slow

Fast

Moderate

Sudden

Weak

Strong

Mixed

Strong

Gradual
Steps
Contracting
Standardise
d
Strong

Aggressiv
e
Ownership
Customise
d
Moderate

Tracing

Passive

Mixed
Adaptable

Innate
Profiled

Strong

Weak

Methodology
The facets of gravity regarding the
construction of a survey effectively
probing the issue of our research, we
deduce from prior literature that we
debated in the previous chapter,
which
already
facilitated
the
dimensions of significance. From
Dunning (1998) we understand the
importance of location so we reflect
the location of the companys centre
of operations in our questions.
Besides Dunning, the Cluster model
and the scientists around it stress the
importance of location of both
headquarters and markets, not in the
least in relation to opportunities for
innovation (Morgan, 2004; Porter &
Stern, 2001). Even though were not
so much interested in innovation in
this study, it does reveal the
prominence of
market location.
Therefore we would also like to know
in how far the company has (or had) a
target market, either in location as
well as demographically, and to which
extend customers came from outside
this
target
to
provide
an

understanding of both speed and

degree of (international) expansion.
To determine the consciousness in
growth strategy we will enquire the
presence of payed-marketing tactics.
We are aware that an organisation
may consciously employ word-ofmouth marketing, whether or not
stimulated with free awareness
creation online (e.g. on social media
platforms), but we still consider this to
be the best proxy for growth intent.
Barkema, Bell and Pennings
(1996) indicate the importance of
(external) cultural barriers, while
Autio, Sapienza and Almeida (2000)
examined the (internal) corporate
culture.
Since
we
expect
the
corporate culture in most internet
start-ups to be organic with short
communication lines internally, we
expect the corporate cultures to be
more or less identical among these
start-ups. Therefore, we will not ask
about internal company culture in our
survey. The external
cultural
differences and the barriers that
are created by these difference

10
however, we will consider in the
inspection (Appendix A: Survey).
Interview Candidates
For our selection of interview
candidates we closely watched startup and business news for young and
growing internet start-ups. Next to
that we observed the general media
platforms, looking at which start-ups
actively engaged in payed marketing
channels. Thusly we picked start-ups
that did not commercialise through
monetary means in the initial phase
of the firm. Furthermore, in the
survey itself we questioned the
marketing
endeavours
to
investigate
in
how
far
our
respondents may have financed their
commercialisation outside of our
detection. We contacted the firms
that met our requirements and
assured
survey
completion
by
founders and CEOs as much as
possible. For each firm we provided
no more than one survey entry, so
restraining a bias from optional
survey floodings by managers that
might distribute their survey link to
colleagues and subordinates. This way
we ended up with about a dozen
survey invitations, of which four were
accepted and resulted in a survey
entry.
Results and Conclusion
To the survey request, four founders
completed the questionnaire. This is a
little less than the minimum of five we
hoped for, but nevertheless we
present the results with confidence.
The responses were obtained from
three young, no more than two years
of existence, Dutch internet start-ups
and one older, former start-up from
which we requested answers in
relation to their first two years of
actuality. The four firms operate in a
variety of industry branches, yet
despite their industry differences the
firms
overall
showed
some
interesting similarities in the factors

that we investigated. In general the

firms did not engage in any payed
advertising. Only one embarked in
payed social media ads, but even
then in a limited fashion and in
combination with free branding by
way of earning likes, broadcasting
tweets and other forms of activity on
social platforms. The older firm
started before the online social era
and
relied
prominently
on
promotional value of word-of-mouth.
The other firms actuated free forms
of social marketing, both in online
media and orally, only. These forms
of free marketing convey the
passive
character
of
the
development strategies within our
model. All respondents expressed a
growth expectation of at least twice
the current market, some even three
or four times the current business
base, both on the counted total
customer base as well as the
percentual international customer
base. This, in coalition with the
existence span of no more than two
years, underscores the prompt
international growth of the firms
we selected. Furthermore two of the
survey entrants display a global
reach in their customer base while a
third shows a European reach. This
showcases only an arguably strong
degree of internationalisation at
start, but apart from that it exhibits a
distinctively strong potential for
global reach in the near future of
the internet start-up, even before a
strong local market position is
secured. Additionally, the founders
are relatively young, mostly between
25 and 35 and although not all startups are initially set up in English,
none of them set hard boundaries to
international clientele and English is
provided whenever suitable. This last
coda is much likely to add to the
speed of international expansion.
Also the fact that one software
structure suffices for serving the
global clientele will contribute to
From the intensive use of
social media for creating product

11
awareness we remark the possibility
of a snowball-effect, explaining the
momentum-gaining rise of internetborne start-ups. The social platforms
themselves are a great part of the
phenomenon that we investigated
here and in combination with the
openness of start-ups to the world as
their market, spined by the global
reach of the internet itself, the
internet-rooted
entrepreneurships
become the wind that guides their
own sails and so exceedingly drives
growth to unparalleled speeds unto
international markets. For managers
this means that unrolling an online
social,
or
semi-social
firm
implementation will be of eminent
importance
for
boosting
performances. A successful stance
should ideally encompass a firmspecific platform, which is something
considerably dissimilar to a mere
web-site, in amalgamation with a
strong social presence on the leading
platforms. This manifestation on key
platforms can primarily be expressed
gratis and, if so desired, be launched
through
payed
online
advertisements.
Contribution and Limitations
The
consideration
hitherto
contributed to the text-based jigsaw
puzzle known as collective human
knowledge, anchoring a linchpin to
the suggestion for the need of a new
FDI model particularised to the case
of the burgeoning internet start-ups
that are gaining momentum with the
evolution of technological innovation.
This study does not yet articulate
such a new model, but instead offers
a fundament for future research and
explored the field of rocketing
internet businesses, instancing a
frame of properties in which these
start-ups distance themselves from
existing models. For this purpose a
structure has been followed in which
first an overview of several literary
articles on the relatively novel topic
of internet businesses was given,

with an emphasis on start-ups, to

illustrate the gap in contemporary
research that this study sought to
bridge. Second, a number
of
idiosyncratic FDI expansion models
have been listed against which the
case
of
the
internet
internationalisations
were
to
be
compared. Alongside this listing, the
models selected have been reviewed
in order to generate a set of survey
questions for data collection as well
as
to
distil
some
leading
characteristics to be employed in
mapping out the contrast between
the FDI models. The survey questions
are provided in a final form in
Appendix A.
A possible criticism to the research
conducted in this paper can be that
the
interviewed
founders
and
managers may have a coloured
perspective on their firm, especially
since the firms debated here are all
very
young
and
outstandingly
flourishing. This may not unlikely
lead to a certain level of pride
among the interviewees, which can
result in a relatively strong bias.
Several researchers have suggested
to conflate interview results with
firm
internal
documents
and
archival data to provide a holistic
analysis in order to restrain this bias
(Yin, 1989; Paul, 1996; Gabrielsson
et al., 2008). In this study howbeit
there
was
neither
time,
nor
accessibility for the advocated
triangulation.

Notwithstanding this frailty, the

survey presented for examination
has evidently been set up in a
manner to curb any bias to a feasible
extent.
Another criticism may be that
we picked the survey candidates in
sync with the expectation outcome of
our results, thus creating a self-fulfilling
research. This criticism is however only
partially true. We indeed chose fast
growing start-ups and we indeed

12
refined the selection on initially nonsubstantial marketing tactics. However,
this is the type of online business that
we remarked from the start and thusly,
this is exactly the topic we wished to
explore. Moreover, as we have seen

from our results, the fact that an

organisation does not prominate itself
through monetary ways does not
induce a compulsory lack of marketing
awareness.

13
References
Adams, S. 2015, November 9. The world's most influential business thinkers
2015. Forbes,
http://www.forbes.com/sites/susanadams/2015/11/09/theworlds-most-influential- business-thinkers-2015/#4e9a69b56a77
Anderson, E. & Gatignon, H. 1986. Modes of foreign entry: A transaction cost
analysis and
propositions. Journal of International Business Studies,
17(3): p1-26
Autio, E., Sapienza, H. J. & Almeida, J. G. 2000. Effects of age at entry, knowledge
intensity and
imitability
on
international
growth.
Academy
of
Management Journal, 43(5): p909-924
Barkema, H. G., Bell, J. H. J. & Pennings, J. M. 1996. Foreign entry, cultural barriers
and learning.
Strategic Management Journal, 17(2): p151-166
Beaumont, C. 2010, February 23. Twitter users send 50 million tweets per day.
The
Daily
Telegraph,
http://www.telegraph.co.uk/technology/twitter/7297541/Twitter-users-send50-million- tweets-per-day.html
Carvalho de Vasconcelos, F. 2004. A institucionalizao das estratgias de
negcios: O caso das startups na internet Brasileira em uma perspectiva
construtivista. Revista de Administracao Contemporanea, 8(2): p159-179
Dempsey, L. 2006, August 3. Facebook is the go-to web site for students looking
to hook up.
Dayton Daily News
Dunning, J. H. 1998. Location and the multinational enterprise: A neglected
factor? Journal of International Business Studies, 29(1): p45-66
Eriksson, K., Johanson, J., Majgrd, A., & Sharma, D. 1997. Experiential knowledge
and cost in the
internationalization process. Journal of International
Business Studies, 28: p337-360
Gandy, T. 2000. Clicks Supersede Bricks. The Banker, 6: p4
Gabrielsson, M., Kirpalani, V. H. M., Dimitratos, P., Solberg, C. A. & Zucchella, A.
2008. Born globals:
Propositions to help advance the theory. International
Business Review, 17(4): p385-401
Johanson, J. & Wiedersheim-Paul, F. 1975. The internationalization of the firm
Four Swedish cases.
The Journal of Management Studies, 12(3): p305323
Johanson, J. & Vahlne, J. E. 1977. The internationalization process of the firm A
model of
knowledge
development
and
increasing
foreign
market
commitments. Journal of
International
Business Studies, 8(1): p2332

14
Johanson, J. & Vahlne, J. E. 2009. The Uppsala internationalization process model
revisited: From
liability of foreignness to liability of outsidership. Journal of
International Business Studies,
40: p1411-1431
Knight, G. A. & Cavusgil, S. T. 2004. Innovation, organizational capabilities, and
the born-global firm.
Journal of International Business Studies, 35:
p124-141
Knight, G., Madsen, T. K. & Servais, P. 2004. An inquiry into born-global firms in
Europe and the USA.
International Marketing Review, 21(6): p645-665
Madsen, T. K., Rasmussen, E. & Servais, P. 2000. Differences and similarities
between born globals
and other types of exporters. Advances in
international marketing, 10(2): p247-265
Madsen, T. K. & Servais, P. 1997. The internationalization of born globals: an
evolutionary process?
International Business Review, 6(6): p561-583
Martin, R. & Sunley, P. 2003. Deconstructing clusters: chaotic concept or policy
panacea? Journal of
Economic Geography, 3(1): p5-35
McDougall, P. P., Oviatt, B. M. & Shrader, R. C. 2003. A comparison of international
and domestic
new ventures. Journal of International Entrepreneurship,
1(1): p59-82
McKinsey & Co. 1993. Emerging Exporters: Australias High Value-Added
Manufacturing Exporters.
Melbourne:
McKinsey
&
Co.,
Australian
Manufacturing Council
Menzel, M. P. & Fornahl, D. 2010. Cluster life cyclesdimensions and rationales of
cluster evolution. Industrial and Corporate Change, 19(1):p1-34
Moen, . & Servais, P. 2002. Born global or gradual global? Examining the export
behavior of small and medium-sized enterprises. Journal of international
marketing, 10(3): p49-72
Morgan, K. 2004. The exaggerated death of geography: learning, proximity and
territorial innovation
systems. Journal of Economic Geography, 4(1): p321
Oviatt, B. M. & McDougall, P. P.. 1994. Toward a theory of international new
ventures. Journal of
International Business Studies, 25(1): p45-64
Paul, J. 1996. Between-method triangulation in organizational diagnosis. The
International Journal of Organizational Analysis, 4(2): p135-153
Porter, M. E. 1979. How competitive forces shape strategy. Harvard Business
Review, March-April:
p21-26
Porter, M. E. 1986. Competition in global industries. Boston: Harvard
Business Press
Porter, M. E. 1990. The competitive advantage of notions. Harvard Business
Review, 68(2): p73-93

15

Porter, M. E. 1998. Clusters and the new economics of competitiveness.

Harvard Business Review,
December: p77-90
Porter, M. E. 2000. Location, competition and economic development: Local
clusters in a global
economy. Economic Development Quarterly, 14(1):
p15-34
Porter, M. E. & Stern, S. 2001. Innovation: location matters. MIT Sloan
Management Review, 42(4): p28-36
Pottstruck, D. 1999, September 9. Online Banking and Investing. Munich:
Internet Content Summit
Rennie, M. W. 1993. Born Global. The McKinsey Quarterly, 4 (Autumn)
Rizzn. 2007, November 30. Mark Zuckerberg's Online Diary. Scribd:
http://www.scribd.com/doc/538697/Mark-Zuckerberg-s-Online-Diary
Schonfeld, E. 2008, May 13. Facemash returns as (what else?) a Facebook app called
ULiken. Techcrunch:
http://techcrunch.com/2008/05/13/facemash-returns-as-what-else-afacebook-app-uliken/
Schwartz, B. M. 2003, November 4. Hot or Not? Website briefly judges looks. The
Harvard Crimson:
http://www.thecrimson.com/article/2003/11/4/hot-or-not-website-brieflyjudges/
Spiegel, O., Abbassi, P., Zylka, M. P., Schlagwein, D., Fischbach, K. & Schoder, D.
2015. Business model
development, founders social capital and the success
of early stage internet start-ups: a
mixed-method
study.
Information
Systems Journal, 25: http://doi.org/10.1111/isj.12073
Siegler, M. S. 2011, February 2. Instagram filters through suitors to capture $7
million in funding led
by
benchmark.
Techcrunch:
http://techcrunch.com/2011/02/02/instagram-funding/
Statista. 2016, March 17. Leading social networks worldwide as of January 2016,
ranked by number of active users (in millions), Statista:
http://www.statista.com/statistics/272014/global-social-networks-ranked-bynumber-of-users/
Tabak, A. J. 2004, February 9. Hundreds register for new Facebook website, The
Harvard Crimson:
http://www.thecrimson.com/article/2004/2/9/hundreds-register-for-newfacebook-website/
Yin, R. K. 1989. Case study research-design and methods. Newbury Park, CA:
Sage
Yoffie, D. B.& Cusumano, M. A. 1999. Judo strategy The competitive dynamics of
internet time.
Harvard Business Review, 77(1): p70-81

16
Zaheer, S. 1995. Overcoming the liability
Management Journal, 38(2): p341-363

of

foreignness.

Academy

of

Zahra, S. A., Ireland, R. D. & Hitt, M. A. 2000. International expansion by new

venture firms:
International diversity, mode of market entry, technological
learning, and performance.
Academy of Management Journal, 43(5): p925950

17
Appendix A: Survey

This is a list of questions aimed to research the speed of internationalisation at

internet start-ups, especially the speed in (initially) untargeted geographical
markets. All answers will be treated strictly anonymously, unless the
interviewee consents otherwise specifically in writing at the end of this survey.
For any questions, comments, remarks, or other, please contact the researcher
directly at his email address e.k.van.der.horn@student.rug.nl, or on his phone
number +31610409202.
Company Background
1.
2.
3.
4.
5.

When was the firm founded?

Why was the firm founded?
Where was the firm founded?
Where is the firms HQ located?
What is the firms product or service?

Marketing activities
6. Did the firm initially actively market itself or its products? If so, how and
where?
7. Does the firm actively market itself or its products? If so, how and where?
8. If the firm initially didnt market its products through payed
advertisements, but currently does, when did the firm start to do so?
Expansion
9. How many clients does the firm currently serve on a daily/weekly/monthly
basis?
10.How many do you expect this to be next year?
11.What percentage of these clients are from foreign countries?
12.What percentage do you expect these to be next year?
Target Market
13.Was the initial target market demographically aimed to a certain audience?
14.Was the initial target market geographically aimed to certain locations?
15.Did/Does the firm exclude customers from certain countries or regions? If
so, why?
Internationalisation
16.What are some of the farthest regions where the firm has customers?
17.How does the firm handle differences with customers from other cultures?
18.Has the firm ever met clients from regions outside the geographical target
market? If so, from which/what regions?
19.If so, how did the firm react to this situation?
Internationalisation Problems
20.What problems does the firm meet when dealing with international clients?
21.How does/did the firm manage these problems?
22.Are there any typical problems that the firm loses or has lost international
clients to?
Interviewee Demographics (Optional)
23.What is your age?
< 25 | 25 34 | 35 45 | > 45
24.what is your gender?

25.Comments
Contact (Optional)
26.Yes, I allow the researcher to contact me for further questioning and
provide my name here to evidence my consent:
[__________________________________________________]
Appendix B: Results
Some answers have been (partially) omitted or slightly generalised to ensure the
respondents anonymity
01
02
03
04
05
06
07
08
09
10
11
12
13
14
15
16
17

Firm 1
2015
To modernize
an industry

Firm 2
2014
Ambition for a
start-up

Firm 3
2015
To simplify an
industry

Randstad
Randstad
Artist
Some paid
social media
ads
Some paid
social media
ads
Confidential
Confidential
< 1%
5% - 10%
No
The
Netherlands
Currently only
the
Netherlands
Dutch
peripheral
provinces
Not relevant
yet

Periphery
Randstad
Travel
Free social media

Randstad
Randstad
Video
Free social media

Firm 4*
< 2005
To provide the
Dutch people
with this service
Randstad
Randstad
Other
Word-of-mouth

Free social media

Free social media

Word-of-mouth

1000/month
2000/month
1% - 4%
11% - 24%
Dutch people
No

150/day
1500/day
1% - 4%
11% - 24%
No
No

200.000/year
1.500.000/year
1% - 4%
11% - 24%
No
No

No

No

No

Sweden

USA, Saudi
Arabia

USA, Australia,
Indonesia , China

Simplicity and
English language

Provide English
besides Dutch

No
None

No
-

> 45
Male

Provide English
besides Dutch
25 - 34
Male

18
19
20

No
-

21

Openness &
honesty and
listen to
customers
No
Language,
reliable mailing
our product
Use English

22
23
24

25 -34
Female

35 - 45
Male

25

Good luck
with your
research!

*) The respondent from Firm 4 was asked base their answers on the first 2 years of
the firms existence