The United States is the strongest player in the global technology landscape with Silicon Valley being the center of the action. A casual observer might find that our technology companies are the true pioneers, while companies in Europe, Asia and elsewhere are usually followers. While this has historically been true more often than not, these days the trend is starting to reverse. More and more we are finding innovators in other regions with US companies doing the copy-catting. Let's examine a few key categories where this seems to be true.
Foreign companies have been leaders in the US gaming space since the late 80s. Japan's Nintendo and Sega almost single handedly brought gaming consoles into the mainstream. Nintendo then continued its reign for years in addition to Sony, another Japanese company. Microsoft did eventually entered the fray but they were followers.
Fast-forward to the mobile gaming era and this trend has continued. Asian countries were the pioneers behind freemium games and the virtual goods model which the West quickly adopted. China's Tencent has built a massive $200B valuation business on the back of freemium games, digital goods, and various other internet value added services. There are also extremely innovative European gaming companies such as Rovio, Supercell, and King, all innovators in their own right, as well as Mojang, the maker of Minecraft which Microsoft ended up purchasing for $2.5B.
Sure, we have some big game publishers in the US, namely EA, Activision and Zynga, but the list of public comps is actually quite short. On the other hand, the list of Asian gaming comparables is quite long with 20+ valuable companies such as Naver, NetEase, Nexon, DeNA, Gree and many others.
Subscription meal kits have become a huge trend in the US over the past few years. Blue Apron, Plated and others have been growing like crazy by offering consumers a convenient, cost-effective alternative to traditional meal prep and grocery shopping. However, what most don't know is that these companies mimicked a Swedish company called Linas Matkasse. Linas Matkasse pioneered the meal kit model in the late 2000s and is a $100M+ revenue business in a country of just 9M people. Others soon saw how effective the business model was and quickly adopted it. Blue Apron and Plated took it to the US and HelloFresh took it to the rest of Europe.
Beyond meal kits, Europe has been fairly innovative in other areas of food as well. In online grocery, Ocado (founded in 2000) has built a multi-billion dollar business in the UK and continues to prosper. UK's online grocery market is far more mature and has higher internet penetration than the US market. The story is similar in takeout food as well. UK-based Just-Eat started before GrubHub and is now worth quite a bit more in the public markets ($3.6B vs Grub's $2.2B).
This is an easy one. Frank Wang Tao founded Dajiang Innovation Technology (DJI) in 2006 and kicked off the entire drone industry. When the drone space just started making waves in the US, DJI was already on it's way to building a massive $10B drone company. They have about 70% market share for consumer drones and sold 400,000 drones last year which equates to something like $1B of revenue. Now, tons of US companies are jumping into the space. GoPro is using drones for action cameras, Amazon wants to use them to deliver packages, and Facebook will be using them to provide wireless Internet in rural Africa.
As I detailed in my previous post on global online classifieds, there are two types of online classifieds businesses - horizontal and vertical. In the US, the dominant horizontal platform is Craigslist, though because the business is essentially run as a philanthropic entity rather than a business, they have not been terribly innovative. The classifieds scene in Europe and Asia is actually more sophisticated and has been undergoing rapid consolidation by the likes of Naspers, Schibsted, etc. Vertical classifieds businesses are fairly strong in the US (Zillow, AutoTrader, Yelp), but there are many comparable businesses internationally. For instance, there are real estate portals in the UK and Australia (Rightmove and REA Group, respectively) that started before and are currently worth more than Zillow.
The US often leads the way in technology but there are also many examples of the reverse occurring. We often view Silicon Valley as the ONLY place for tech innovation, but it is simply the LARGEST. Let us recognize our hubris and make sure we are keeping an eye on what is going on beyond our borders.