The world is becoming more globalized each day, driven by increasing digitalization in almost every aspect. In turn, awareness about the necessity to diversify in investing is growing. While some associate low risk to familiarity and stay in their own bubble for the majority of their time, going global opens the door to numerous opportunities for attractive risk/reward characteristics regardless of where they are located.
Investing is often a struggle, especially when you’re basing your decision on tons of information that you have to consider before you pull the trigger on the deal. The general rule of thumb is that no two investments are the same, which makes a good system in place all the more important in achieving investment goals – especially when there’s a global approach to it. Here’s a brief overview of how we at M51 operate in such cases.
Putting in the work – research and study the data
Ignoring geographical borders is the first and arguably the easiest step in the process. In places where economic growth is fast and usually driven by demographic trends, it’s vital to take your time and study the hell out of everything. First and foremost, know how your entrepreneur does business. It’s your business to put money into growing their businesses so you can make money. Also, different countries have different regulatory environments, with some being very restrictive and others laxer. Cultural differences also play an important role if you want to avoid confusing geographic stereotypes with a unique corporate culture.
This is where investing turns more to the science side on that “art or science” scale. There was a quote from someone a while back (I think I caught it on my LinkedIn feed scrolling down) that said investing is “making decisions under stress and uncertainty with incomplete information” or something like that.
It’s all relative at some point.
For someone who spent three years in Thailand working and perfecting my craft, ‘uncertainty’ and ‘incomplete information’ sound like well-prepared excuses for potential failure. Sure, there’s little chance you can know ALL of the relevant information you need to know but without a solid plan and thorough research, you’re basically relying more on luck than data. You’ll need some luck but the odds are very much against you in that case. The point I’m trying to make is that investing on a global level takes time and you have to do your homework.
Make goals to meet goals
You need to know how to set goals. Without them, you likely won’t end up where you want to be. It’s much like the goal-based investing for individual investors where they are aiming to reach specific life goals, only you’re doing it on a company level. Depending on the size of a client, there are different sets of criteria for how they accomplish a certain goal. The trick is to use measurable and specific goals so that even if you fail (which is always a possibility), there are some insights to be gained.
Naturally, goals require strategy as a way to achieve them. You’d be surprised how seemingly little things matter a whole lot. M51 is primarily about the people and faces behind names on a screen. We place a lot of focus on the entrepreneur’s ability to talk the talk and walk the walk, perhaps even significantly disproportionate compared to the business plan and all the usual stuff. Yet, in global terms, there are some barriers that pop up routinely and that need to be overcome in order to reach success.
For instance, a simple matter of chatting can be a real pain in the behind. I’ll backtrack to my time in Thailand a bit. There’s a reason why I picked Bangkok, not just because the country (and obviously a significant part of Asia) is one of the world’s major emerging markets. People there know English pretty well, unlike South Korea or even China where there’s a certain language barrier even though those markets made more sense and provided more opportunities on paper. If you ask me – language barriers should never be underestimated, regardless of the globalization.
Thailand is perfect as a gateway for Asia also for the fact that it’s very well connected and close to other hubs. It’s a 2+ hour flight to Singapore or Hong Kong, for example, meaning you’re close enough to keep things personal. The truth is, for most of the time, you’ll need to be on the ground so that’s one more thing to take into account. As soon as you step out of your comfort zone (so to speak), things get challenging but hey – I never said it’s easy.
It’s all about value
Here’s the kicker as ultimately, it boils down to one thing:
trying to understand if we can bring value to the table.
For us, it’s vital to identify right fits, both in terms of people and ideas across different industry sectors and geographies, whether it’s adding value through our tech-based automation or resource-based automation or both. If not, then there’s not much sense in sticking around and it’s off to the next entrepreneur that has the spark that lights our fire.
Here at M51, we take a global approach to investing because we are willing to evolve and use our ability to scale by automating through technology, knowledge, and human resources. We firmly believe this approach has a far better chance of achieving success than being pigeon-holed by simple geography. Judging by our results, I guess it shows.