Is Your Startup Operating in the Right Environment?

What enables entrepreneurship and business venturing is the economy that hosts you and allows you to incorporate within it. Is the economy you’re operating in truly enabling your business venture? And if not, which economy is?

Entrepreneurs need to understand that business incorporation means integrating their business practice within an economy. This is not a procedural or legalistic notion alone — it’s a holistic and strategic integration.

Integration requires that a business maintain consistency with the factors that constitute that economy — including its social culture, laws and regulations, the goals and objectives of its policymakers and its infrastructure, both physical (such as transportation) and non-physical (such as diplomacy).

Understanding infrastructure

To succeed, a venture must resonate with these factors. If your product or service contradicts the prevailing culture or bypasses the regulatory framework, you will face resistance. If your logistics depend on infrastructure that is weak or misaligned with your operational needs, your business will suffer. If your growth trajectory is out of sync with national economic goals, you’re unlikely to receive state-level support — or worse, you might face bureaucratic friction.

And here, an unconventional but critical insight comes into play. I intentionally mentioned diplomacy as infrastructure, rather than, for example, monetary systems, because in today’s globally connected world, diplomacy is one of the most important supportive factors enabling international business.

This perspective redefines how we view infrastructure in the context of entrepreneurship. While many business leaders think of roads, ports, internet connectivity and supply chains, the diplomatic architecture of a country can be equally — if not more — significant in a globalized economy. Consider how trade agreements, international treaties, bilateral partnerships and diplomatic ties shape market access, investment flows and legal protections for foreign entities.

A startup trying to scale cross-border cannot afford to ignore this layer of infrastructure. It shapes taxation, dispute resolution, data governance and many other crucial dimensions of doing business globally.

How the relevance map can help

To navigate all of this, I am going to coin the term “Relevance Map.” One may say that the relevance map is an evolution of economic geography. Where traditional economic geography deals with the spatial distribution of industries, labor and capital, the relevance map is about strategic alignment between a business and the economy it operates in — and this alignment is dynamic.

A relevance map helps entrepreneurs determine which economy is most relevant to their business practice. Entrepreneurs need to understand the relevance map when they choose an economy for business venturing.

It allows entrepreneurs to ask: Where is the ideal ecosystem for what I am building? Which economy has the right combination of support, openness, alignment, infrastructure and policy? Where can I plug into value chains, access global markets and find talent, partners and capital?

Crucially, the relevance map depends on spacetime, meaning that relevance is not a permanent measure. An economy may be relevant today to a specific business practice, but it may lose its position as a relevant economy and be replaced by another. This is a dynamic and continuous trend.

Many startups fail not because the idea was poor, but because the economic context shifted and they failed to adapt. An economy that once supported tech innovation may tighten regulations or lose its talent base. A country that once provided access to low-cost manufacturing may become geopolitically risky or less competitive. Conversely, new economies rise and present better alignment.

In the world we are experiencing now, it is not relevant where you are or what your nationality is. We live in a borderless innovation economy. Startups are being founded in one country, funded from another, hiring talent across continents and selling globally from day one.

Notwithstanding where you live, as an entrepreneur, you are a global citizen who needs to have a thorough understanding of the relevance map to figure out which economy serves as an enabling factor for your respective business practice.

The capacity-capability test

This is where another analytical tool becomes vital. This is the matter of fitting capabilities with capacities. A relevant economy is one that should have the capacity to enable your business practice, and your business practice is one that should have the capabilities to utilize the economy’s capacities.

Capacity-capability test is another term I introduce here, which helps entrepreneurs to figure out if an economy is relevant. Capacity refers to the economy’s ability to support: legal protections, logistics, funding, workforce skills, market access and policy frameworks. Capability refers to your business’s ability to utilize those elements: to operate within regulatory bounds, to attract talent, to scale operations, to innovate under constraints and to navigate cross-cultural dynamics.

If an economy has great capacity but your business cannot harness it, the match fails. If your business has strong capabilities but the economy lacks the necessary infrastructure or openness, the match fails again. The capacity-capability test must return a positive match for an economy to be considered “relevant.”

The global value chain

A founding principle I specified for the relevance map is: In today’s world, a business is not truly a business if it doesn’t see itself in the global value chain of its respective industry. What makes an economy relevant to your business practice is whether it places your business within the global value chain.

If you are manufacturing locally but can’t plug into regional or global supply chains, your growth will stall. If you are building a SaaS product but can’t integrate with dominant platforms or serve global clients, you’re boxed in.

In a world where startups compete globally from day one, understanding where and how you operate is as important as what you do. The relevance map and the capacity-capability test are strategic tools that can guide entrepreneurs through an increasingly complex and fluid global economy.

Success is no longer about finding a home for your business — it’s about finding the right home at the right time.

What enables entrepreneurship and business venturing is the economy that hosts you and allows you to incorporate within it. Is the economy you’re operating in truly enabling your business venture? And if not, which economy is?

Entrepreneurs need to understand that business incorporation means integrating their business practice within an economy. This is not a procedural or legalistic notion alone — it’s a holistic and strategic integration.