Living Abroad, Entrepreneurship and Value Theory

In this article I want to discuss why living abroad for few years will help you think in more innovative and disruptive ways and make you a better entrepreneur.

We have heard that immigrants are disproportionately represented within U.S. startup-unicorn founders (either first or second generation).

Why is this the case?

As with any real-world phenomenon there is more than one driver for it.

One obvious answer is, that if one took the risk to leave one’s home country and immigrated to another country, one is more likely to be a risk taker, which is an important factor for entrepreneurship.

Also immigrants on average tend to work little harder, since they need to establish themselves and don’t have an existing network or safety net in a new country.

There are many factors that contribute to this overrepresentation in entrepreneurship. In this article I want to discuss one specific factor.

In my opinion, a very important reason for this over-representation is that an immigrant by default has deep exposure to two distinct value systems. The immigrant is part of the home country’s value system, as well as, the new country’s value system.

So why is being part of two value systems advantageous for an entrepreneur?

When one is part of two distinct value systems, one can easily recognize that value judgments have many subjective components to them. One realizes that a value system is just a single instance of values in space and time. This makes it easier for one to imagine an interaction outside of the currently accepted value system and create something disruptive.

One of my favorite areas of knowledge is value theory. Value theory is an interdisciplinary field between sociology, economics, psychology and philosophy. It is a field that tries to analyze and understand how a society values “things” and how the value system evolves. Value theory is concerned with how we value characteristics, ideas, behavior, physical objects, and it tries to understand where these value judgements originate.

In a sense, the value system is the operating system on which a society runs. This operating system guides all of our decisions, because it determines what’s good or bad, what’s cool or uncool, what’s desirable or undesirable, what’s acceptable or unacceptable. It guides our behavior and is therefore at the root of how a society functions.

The value system is a self-propagating, dynamic system and changes with time.

I don’t want to get into too much detail about how it evolves, since it is fairly complex and convoluted, but usually large changes occur generationally (as the operating system gets an update). Millennials today have different values than the GenXers or the Baby Boomers, but these value evolutions are still somewhat coherent and continuous within the same society.

Someone who has lived in just one country, and is part of only a single value system flow, is more likely to assume that certain factors of the current value system are absolute. The value system is so deeply ingrained in us that even if we try to view certain things from a different perspective, it seems unnatural. In entrepreneurship immigrants naturally have an advantage over those who have lived only in one country, because many immigrants have seen two drastically different value systems.

Sometime there are people, who without being immigrants, can imagine drastically different value interactions. Sometimes this is the case, if one is part of a distinct socio-cultural minority. Then one is exposed to the minority value system at home and the majority value system outside and is able to easier step out of any value system.

Let us view how value systems affect our thoughts when it comes to disruptive startups.

Airbnb imagined that people would be comfortable inviting strangers into their homes. This may seem obvious to us now, but in 2008 when Airbnb launched, for most of us it was outside of our value system. Although concepts like couch surfing existed, many investors did not believe that a large number of people would be comfortable doing that. Brian Chesky’s answer to it was: “What if there were no strangers?”.

I assume that throughout human history some societies existed, whose value system had no “strangers”. Of course this was not the most important factor for Airbnb’s success. There is a huge amount of execution behind Airbnb that is much more significant. But I just want to illustrate how the value system guides our ideas and thoughts in entrepreneurship.

Uber is another interesting example. Someone taking their own car and just starting to work as an on-demand taxi driver may seem normal to us now, but in 2009 when Uber launched, many of us in the U.S. would have found that concept unusual and unsafe. To mitigate the initial hesitation Uber started with black-car services first.

Two ride-sharing related stories illustrate how value systems influence our judgement.

Story 1:

In 2007 before Uber existed I was traveling in Germany. One day to visit a friend in Hamburg, I used an online service called “Mitfahrgelegenheit”, which was a long-distance ride sharing concept used by many German students (it was similar to today’s French startup BlaBlaCar). When I arrived back in California after that trip, I decided to imitate that website and registered the domain name TakeSeat.com.

Having attended universities in Los Angeles and the Bay Area, I remembered how often students used to make the Los Angeles - San Francisco journey by car and thought this would be valuable for them. But what dissuaded me, among other factors, was the opinion that Americans would not get in a car with a stranger (many of my friends had that view, when I told them about the idea). So I assumed it was something that only worked in Germany’s middle-class based society, where strangers were more comfortable interacting with each other.

Story 2:

In early 2009, around the same time when Uber launched in San Francisco, I was in Moscow for work. There were many private, unlicensed “taxi drivers” on the streets of Moscow, who would just randomly stop and try to give you a lift, if they saw you waiting for a cab. For the locals this was a normal occurrence and a way to make money. Yet I remember that my supervisors had warned me, for safety reasons, to only take licensed taxis.

On one occasion, when I decided to take one of these so call “people’s taxis” late at night, I almost panicked when the driver took a shortcut through a construction site. I was getting ready to defend myself against being robbed. Yet nothing happened. He just wanted to save some time of the trip.

So Uber’s interaction in a global sense was there. These types of interactions existed. Uber’s contribution was the on-demand technology and most importantly the continuous execution. Uber’s solution to avoiding problems with safety was a rating system that vetted people to make the interaction more comfortable.

These are just some illustrations that show how different value systems guide different types of interactions. Being part of two value systems helps one imagine more innovative and disruptive interactions.

In entrepreneurship it is important to continuously innovate and think in new ways.

Sometimes people ask me what I think of a specific startup idea. Usually, my answer is that it is not about “the idea”, but about a constant stream of ideas to continuously solve new problems. Most of the time the initial idea does not stay the same. We all have heard about the importance of the team, because a good team continuously generates new ideas and executes them well, to solve a stream of challenges a startup faces.

When we travel abroad we become more open minded, because we experience other ways of thinking and interacting. But traveling is not enough to understand a new value system. Usually when we travel we see new types of interactions and just ponder how odd or cool they are.

However, if one has lived few years in another country (2–3 years) and is surrounded by new values, they become normal and ordinary. Unfortunately, many people move to a new country as expats and mainly surround themselves with expats (or others similar to us) and just observer and enjoy the new place as a foreigner. This is not very conducive to understanding the value system. One should make an effort to integrate into the new society and build strong lasting relationships with locals.

If one becomes integrated into a new society, it is at that point that one starts fully understanding and appreciating a new value system. After appreciating a second value system, it becomes easier for one to step out of any value system and be creative.

So what is a practical takeaway for aspiring entrepreneurs?

Move to another country for few years. But don’t be an expat surrounded by other expats. Try to integrate yourself into that society by learning the language, building deep, lasting relationships with locals and really understanding the local viewpoints.

This will help you imagine many new interactions and help you think more disruptively. And if nothing else it will be a great growing experience.

As mentioned above there are several factors that contribute to immigrants overrepresentation in entrepreneurship. Another important factor is that when someone immigrates to a new country, one starts operating in an outsider mode and later could become a so-called “insider-outsider”.

Being an “insider-outsider” is valuable for an entrepreneur and is a topic that I discuss in another article titled Being an “Insider-Outsider” and its impact on innovation and creativity”.

Disclaimer:

Since I am a dyslexic, I am prone to spelling and grammar mistakes. Hopefully it does not distract from the substance of the article.

Thank you for reading this article