Globalisation in Retreat
The chart below is stunning reminder of a stark reality - Globalisation is in retreat.
Let’s unpack. Geopolitics is forcing countries to move against globalisation. World is increasingly becoming multi-polar, dominated by two or three trading blocs. This leads to a number of outcomes which startups and corporations alike have to take care about. From value-chains being near-shored to short disruptions in supply-chains - all are going to last for few more years.
I read another great article on the topic from Economist. Couple of snippets caught my eye.
Better-educated workers in the west can take advantage of global mobility, as their skills are more sought after, so they tend to be pro-globalisation—hence the electoral split.
Within the developed economy, bringing companies home will mean that costs (and prices) are higher, eating into the living standards of ordinary workers. No matter, you might argue, well-paying jobs will be back. But here is the problem. Unless global trade dries up completely (devastating the economy for everyone, as in the 1930s), companies will still face foreign competition. So they may replace foreign workers, not with domestic ones, but with robots.
A chart from the article.
Startups need to be agile to capture the opportunity. Since, there will be development of new manufacturing capabilities in different countries, it will bring along new opportunities for putting digitalisation in the mix.
If you don’t know PMF, you SHOULD! There is no escaping this term in the startup world. These days PMF check is a virtual signal for a stellar fundraising at certain stages.
In 2021, I came across this brilliant article explaining the nuts-n-bolts of PMF. I loved few snippets below.
Products with product-market fit should bring real value to users. At the end of the day, products that don’t bring value are not sustainable. Value can take many guises — money, time-saving, enjoyment, etc. But it has to produce real value for users in order for product-market fit to be genuine.
Founders are often misled by good acquisition numbers into thinking they’ve found product-market fit (PMF). But just because people are signing up for your product or downloading your app at a low acquisition price doesn’t mean you’ve found PMF.
Engagement and retention numbers will tell the real story. If your product doesn’t have real value for customers, you’re going to see horrible engagement numbers and even worse retention metrics. Real PMF shows up both in user acquisition and in user retention. Top-of-funnel growth means nothing if the users all churn.