Planet Startup
In 10 nations on four continents, we've uncovered a dozen of the most promising new ventures for determined American entrepreneurs. The requirements: A bit of seed money, a little business savvy, and a great big appetite for adventure.
By Michael V. Copeland, Paul Kaihla and Paul Sloan

(Business 2.0 Magazine) -- International borders used to be the biggest barrier to entry for Americans interested in starting a business overseas. But today, as more nations ease trade regulations and restrictions on foreign investment, borders are more like invitations.

Take real estate, for instance: According to research firm Jones Lang LaSalle, Americans spent more than $12 billion on foreign commercial real estate ventures last year, almost double the amount they invested in 2004. Meanwhile, American investment in overseas businesses has nearly doubled, too, since 2002.

So we enlisted a team of top reporters to find out what, and where, the most intriguing new business opportunities are today. They returned with a dozen stories that describe lucrative ventures in unlikely places - from starting a coffee business in Rwanda to discovering the next great cabernet in Greece.

They also found opportunities in Brazil (delivering Wi-Fi to coastal resorts), China (remodeling homes), and Russia (creating a social network for millionaires).

Our goal isn't just to show where the latest business trends are converging, but to coax more of you armchair entrepreneurs out of your Aerons. We've supplied the ideas, the rationales, and even some how-to guidelines from local experts. The rest is up to you.

Beaming Broadband to the Beach

The Opportunity: Build cheap Wi-Fi networks for Brazilian resorts.

Investment Level: < $100K

Risk Level: Medium

Barely 14 percent of Brazil's 188 million residents enjoy an Internet connection. But for those who do, the Web is as beloved as Ronaldo and Ronaldinho. For starters, Brazilians are among the most active foreign users of Google's Orkut social network, the photo-sharing service Fotolog, and MSN Messenger. Yet outside major cities like So Paulo and Rio de Janeiro, most Brazilians are stuck with poky dial-up service or nothing at all. And for major carriers, rolling out fixed broadband to those low-population areas wouldn't drum up enough revenue to justify the costs.

But what if you could set up wireless networks to deliver broadband to narrowly targeted groups of customers - tourists and well-to-do Brazilians at beach resorts, for instance? "You have this tremendous pent-up demand for broadband access," says Charles Brown, president of California-based Wireless Networks, which sets up high-speed Wi-Fi for rural locales and founded a Brazilian company that handles wireless payments for retail merchants. "There just isn't anything there."

That scenario could change quickly - with the right team of telecom-savvy investors. The simplest method to bridge the gap would be to create a point-to-point network that can transmit a signal as far as 25 miles. (Most of Brazil's top beach resorts are within 15 miles of the nearest broadband connection.) For each location, that would require spending less than $10,000 for transmission equipment, applying for a government license to tap into a carrier's data line, and Wi-Fi routers and other gear to start bathing hotels in signal. According to Brown, vacationers would pay $10 a day for basic service. At a 500-guest resort where half pay for Wi-Fi, the service would generate $75,000 in gross sales per month.

Consider Augusto Cardoso, a Brazilian director of product development for Pioneer Electronics already sold on the idea. Cardoso was on vacation recently with his family on the coast near So Paulo. "The place was beautiful," Cardoso says. "But I had work to do, and all I could get in this high-end hotel was dial-up. What a pain in the ass." -- M.V.C.

Wireless-broadband hardware sales in Brazil (in millions)

Source: Maravedis

2. Soybeans That Give You Gas

The Opportunity: Become a biodiesel producer in Argentina.

Investment Level: $100K-500K

Risk Level: High

Argentina has three key resources that make a certain niche of investors lunge for their calculators: inexpensive land, cheap labor, and bumper crops of soybeans.

No, we're not talking about ideal conditions for a soy-milk venture. We're thinking bigger: a next-generation biodiesel plant. For starters, the timing is ideal. The $15 billion global biofuel market is expected to triple by 2015, and one of the most promising niches to step into, experts say, will be refining and selling biodiesel fuel for trucks, buses, and other commercial vehicles in Argentina. Following Brazil's lead, the nation just passed a law mandating that biofuels account for 5 percent of all fuel sold by 2010.

Biodiesel is a renewable fuel because it's made by refining oil derived from plants like soybeans, palm trees, and rapeseed. Thinner than vegetable oil, biodiesel can power diesel engines without further conversion. That gives it a big advantage over ethanol, which burns in standard gasoline engines only when it's blended with petroleum.

The first significant player in this market just emerged: Imperium Renewables, a Seattle startup, will soon begin building a biodiesel refinery in Argentina that CEO Martin Tobias says will produce 100 million gallons of fuel per year. That, for comparison's sake, is more than the entire U.S. output in 2005. While the VC-backed plant will cost about $50 million to build and takes 50 people to operate, clean-tech experts consider the Argentine biodiesel market wide open to smaller players. In fact, newer off-the-shelf technology that's currently being commercialized will lower plant construction costs to about $3 million, a far more digestible sum for angel investors.

It's possible to go even smaller. Tobias's Argentine refinery - to be situated near a major city, which he declines to name - makes sense because the number of customers within a small radius means minimal shipping costs. But Argentina's farmers account for about 75 percent of the country's diesel consumption; entrepreneurs can apply the same sell-local principle by building micro-refineries in rural areas. Last year Edmundo Defferrari, an industrial engineer, built a prototype of such a plant 145 miles west of Buenos Aires for just $150,000. It already produces 130,000 gallons of biodiesel a year and requires human labor only to load the plant with soybeans and turn it on. Defferrari sells fuel to local farmers for 95 cents a gallon, about two-thirds the cost of regular diesel. It's a virtuous circle: His customers grow the soybean feedstock that he puts into his machinery. -- P.K.

Biodiesel 101 By treating oil from soybeans or other plants with chemicals, you can refine it into a lighter-grade fuel that burns in diesel engines.

1 Heat oil, then add methanol and a catalyst such as lye. 2 Separate out glycerin, methanol, and other by-products. 3 Add water to "wash" the biodiesel. After the biodiesel and water separate, filter out the water. 4 Let the remaining water evaporate.


Source: Imperium Renewable

IDEA NO. 18 Attack local markets that big companies can't reach.

3. A Smart Play for the Small Screen

The Opportunity: Create an ad network for India's mobile content developers.

Investment Level: $100K-500K

Risk Level: Medium

Ashu Mathura's three-person startup in Amsterdam is just a few months old, but it already has some big customers. His business: software that allocates space on cell-phone screens on which companies can advertise. Look up a stock quote on a cell phone in Belgium, for instance, and an ad for Postkrediet, a Dutch financial company, pops up. Postkrediet pays a fee, and Mathura gets a slice. The early returns have been so promising that Mathura wants to roll out the service next in India, where a booming but nascent mobile market lacks the means to monetize content - and has room for dozens of ventures like Mathura's that could operate in different regions.

Mathura launched his company, called Mads, with a little over $100,000. His two developers wrote software that collects ads and serves them on mobile webpages. Mads buys ad space from content publishers - ringtone catalog sites, mobile game companies, other mobile Internet sites - and sells that space to advertisers. The same model, Mathura says, holds even more potential in India, where the number of cellular customers is expected to jump 71 percent this year to 130 million. Hundreds of content creators are popping up, but the market is highly fragmented and separated by regional dialects, making it unattractive to a major digital-media player like Razorfish. "These are mom-and-pop developers creating content for a huge number of local markets," says Taha Rangwala, an analyst with Pyramid Research. These shops don't have the money or time to hawk ad space, Mathura says, and they're eager for the revenue. -- SAHELI S.R. DATTA

Cell-phone and PC usage in India (in millions)

Projected Mobile subscribers PC's in use

Source: Pyramid Research

4. Tapping the New Nouveau Riche

The Opportunity: Launch an exclusive social network for Russian millionaires.

Investment Level: $500K-$1 million

Risk Level: High

Russia's economy may be slowing, but not for its upper class. With oil money having flooded the nation during the 1990s, Moscow now boasts the highest concentration of billionaires of any capital city in the world. The nation's population of millionaires grew 17 percent last year and now tops 103,000, according to a recent study by Merrill Lynch.

These increasingly flush Russians, who enjoy subsidized housing and low taxes, have disposable incomes that dwarf those of Westerners. That's made the nouveau riche a fat target for Web investors - but in an economy rife with corruption, how best to reach them? "We're spending a lot of time trying to figure that out," says Danny Rimer, a venture capitalist at Index Ventures in London and an early investor in Skype and MySQL, among other successes.

With low credit card penetration and an unreliable postal service, Russia isn't friendly to e-commerce. And programmers have already cloned popular Web-based services like Flickr and LinkedIn. Few Web services, however, cater to the Russian elite, which is why several VCs and other tech players in Russia believe the time is right to create a social network through which members could buy and sell everything from Ferraris to art and network with their fellow ultrarich. "Russians are incredibly status-oriented," says Max Skibinsky, a Moscow native and CEO of Hive7, a Web-based startup in Moscow. "A social network would be an easy way to let them show it off."

Finding talent is easy: Good developers in Moscow cost less than $40,000 a year. The key is to hire a handful of wealthy socialites to spread the word. "Russia is ripe," Rimer says. "There's more opportunity here than in most places, but it's like the Wild West. Be ready for that." -- M.V.C.

Russian broadband subscribers (in millions)

Source: Point-Topic

5. East Meets - and Eats - West

The Opportunity: Open an American-style restaurant in one of China's fast-growing cities.

Investment Level: $100K

Risk Level: High

The spaghetti tasted like soggy cardboard. The supposedly fresh bread was rock-hard. And the ice cream: Forget it. Josh Pollock, 31, had experienced so many culinary disappointments in the southwest region of China where he and his wife were living that he decided to do what any aspiring entrepreneur might: open his own restaurant.

To him, the market opportunity was obvious: Not only was the available Western food dreadful, but people were eating it up. "I couldn't believe they would actually pay for this stuff," says Pollock, a native of Connecticut. "I finally thought, 'Huh, I'm sure they wouldn't mind a better-tasting alternative.'" Less than two years later, Salvador's Coffee House is a bustling establishment in Kunming, a city of more than 4 million in the Yunnan province, with plans to expand to other cities around China.

Opening a restaurant anywhere is notoriously difficult, and China is no exception. But Pollock and his partners picked a location that they figured upped the odds - a quickly growing city that has a university population and isn't nearly as built up as Beijing or Shanghai. Pollock also chose to specialize in a menu of hard-to-get offerings: fresh coffee, bagels, and homemade ice cream. Curiously, the bulk of the restaurant's clientele is Chinese. The ingredients come from across the country. The restaurant trains, and even houses, chefs and waitresses from remote villages, offering them English lessons. The only relevant experience Pollock had was that he grew up eating American food. Still, that hasn't prevented him from running a profitable restaurant. He's even begun selling his ice cream to a local five-star hotel.

Getting started in any Chinese city is tricky, so it's important to hire a local person experienced in navigating government agencies. To avoid visa issues, Pollock went through the steps with local government agencies to create what's known as a wholly foreign-owned enterprise. Different investment levels allow different types of businesses. With $13,000, for instance, Pollock says you can register as a consultancy. Restaurants require more because of the number of licenses needed from health and environmental agencies.

Pollock's partners - two American friends and his Japanese wife, Naoko Okano - drummed up $40,000, the minimum amount required for the initial investment, and then found some cheap space ($500 per month after paying $13,000 to take over the lease), which they fixed up by hiring local laborers. "Along the way, you often hear 'Bu ke neng,' which means 'It cannot be done,'" says Pollock, who's now been living in China off and on for eight years. "But with determination and patience, it can." -- P.S.

IDEA NO. 19 Sell services that piggyback on a booming retail trend.

6. This Old House, In Chengdu

The Opportunity: Remodel homes for China's burgeoning middle class.

Investment Level: $100K-500K

Risk Level: High

Ten years ago a young family in Shanghai or Beijing looking to buy a first home did well to land a new two-bedroom condo for about $40,000. Of course, back then, "new" in Shanghai equated to "the projects" in most U.S. cities. To tamp down costs, Chinese builders would slap "For Sale" signs on homes that were little more than concrete boxes with windows. And families happily moved in without changing much at all.

Not anymore. Today cranes fill the skylines of most Chinese cities, where tens of thousands of comparatively chic new homes are going up for an exploding population of middle-class consumers. With more cash in their pockets, these buyers are discovering their inner Martha Stewarts and won't stand for the prison-block interiors that most developers still supply. "People are moving into higher-quality homes, and they want everything inside to reflect that," says Claude Leglise, a venture capitalist with W.I. Harper, a San Francisco-based firm that specializes in Chinese startup investments and recently backed Chinese home improvement website HomeE. "They are decorating and remodeling like crazy."

Problem is, Chinese builders have little expertise with either type of contracting, leaving homeowners to hunt down their own designers, architects, carpenters, and so on. And that, Leglise says, leaves a big hole in the market to be filled by small, regional contracting firms that can deliver it all. In fast-growing cities like Chengdu or Wuhan, "an American builder with a sense of adventure and some business savvy could make a fortune," Leglise says.

Recent market data supports the idea. Annual sales of home improvement products and services in China hit $92 billion in 2004 - nearly double the 2000 figure - and are projected to climb to $122 billion by 2009, according to a study by the Boston Consulting Group. That's opened the door to a flood of home improvement retailers, including Britain-based B&Q, Ikea, and Wal-Mart, which have all set up in the major cities. And Home Depot has reportedly been courting Chinese home improvement chain Orient Home for a joint venture.

Despite the retail stampede, Chinese homeowners don't yet share the same do-it-yourself gene of their American counterparts, making the need for small finishing contractors even more alluring. "Among white-collar workers in China, there isn't the same culture you find in the United States," says Anna Kalifa, head of research in the Beijing office of global real estate firm Jones Lang LaSalle. "They don't like to do any manual labor, and they're willing to pay extra for someone to come and do it all for them."

So how does an entrepreneur with construction industry savvy reach all those customers? The easiest way, Leglise says, is to become an approved home designer or contractor for Orient Home or another big-box home improvement chain. At a minimum, you'll need a designer or architect with Western expertise and a Chinese foreman who can source local labor and deal with the bureaucracy of building codes. "It certainly helps if you speak Chinese," Leglise says. "But the great thing about China is, if you are providing people with something they want and can't get anywhere else, they'll do business with you." -- M.V.C.

Home improvement spending in China (in billions) Source: Boston Consulting Group

IDEA NO. 20 Find yet-to-be-exploited niches in the global commodities boom.

7. The Next Gold Rush

The Opportunity: Flip mining claims in Bolivia.

Investment Level: $100K-500K

Risk Level: High

Big mining companies and the banks that finance them have made a fortune from the global commodities boom in recent years. And as prices of gold, nickel, copper, and other metals have soared to record highs, mining properties around the world that were once deemed marginal are swinging back into production.

So is there still a place on the globe where small players can get into this game? John Kelly thinks so, and his money is riding on Bolivia and its untapped mountains of gold. "Bolivia is just starting to take off, and it reminds me of where western Australia was 25 years ago," says Kelly, managing director of Australia-based Republic Gold, which purchased stakes in two small gold mines south of La Paz last year and is currently prospecting for others.

It's no secret, of course: Bolivia holds known gold reserves estimated to be at least 3 million troy ounces, worth roughly $2 billion. But the government has never done a comprehensive geologic survey, and mining engineers have recently estimated that the actual amount could be several multiples higher. More important, the newly elected government of president Evo Morales has promised to modernize the $400 million mining industry and invite in foreign know-how and investment. "The reason we came here," Kelly says, "is because the reward hugely outweighs the risk and dicky politics."

Bolivia could be the find of the decade, not just because of its vast mineral potential but because of its shockingly low barriers to entry. Only 3 percent of Bolivian territory has gold-mining claims, and 85 percent of those are owned by small co-ops of individual miners. The co-ops have more than 60,000 members in all, most of them peasant landowners who literally scratch out a living working their claims with picks and shovels.

According to Kelly, prospectors can pursue two basic strategies. The first is to partner with or hire a local geologist (the going rate is $2,500 to $3,000 a month), use his expertise to find a promising plot of land, and apply for a claim with the Bolivian Ministry of Mines. (Foreigners can now own claims outright.) "If your application is the first one in, it'll be approved," Kelly says. The government charges a nominal application fee and a tax of $1 per hectare if you win the claim. Once you complete a survey - and show proven reserves - you've picked up for nothing a piece of real estate worth millions of dollars to a gold producer.

Plan B: With $300,000 or so in seed funding, you won't be buying gold surveys but rather purchasing existing mining claims directly from the peasants who own them - and then flipping the property later to a mining company. Here's how it might work: The claim holders don't actually own the land, just the mineral rights. Many earn a subsistence living by mining with their own tools. Buying them out requires a local ally (your geologist, most likely) to negotiate terms. "They're open to dealing," Kelly says.

And with a geologist at your side, you have a prime advantage. Most claims lack detailed surveys or core samples, but a geologist will spot telltale signs of rich deposits that a layperson can't, and can compare a property's geographic features with others that have already struck gold. Whether you stake a claim or buy one, the easiest exit strategy is to flip a property to a medium-size mining company - like Kelly's. -- P.K.

La Paz Source: U.S. Geological Survey

8. Shipping Cabernet from Peloponnese

The Opportunity: Export the planet's next great wines - from Greece.

Investment Level: <$100K

Risk Level: Medium

When new wines poured out of Argentina, Australia, Chile, and New Zealand 20 years ago, most weren't fit to strip old paint from your siding. But as winemakers refined their methods, savvy marketers who tasted the improvements quickly signed on to export the brands to global markets - and made a killing. Wines from these four countries now account for nearly a third of the $3.7 billion imported-wine market in the United States.

So where is the new crop of hidden vines that will turn hundreds of prescient exporters into millionaires? The answer whispered these days among sommeliers is Greece. Long dismissed as a producer of turgid retsina table wine, Greece has a new generation of winemakers, with pedigrees from France and Napa Valley, who are turning out award-winning wines from exotic grapes like moschofilero (akin to a pinot grigio) and agiorgitiko (more like a cab). Exports to the United States jumped by almost a third in 2005, and industry pros say they will double again by 2008.

The heart of the market is Peloponnese, the peninsula making up southern Greece. Its 150-plus boutique wineries produce 2 million cases a year, well over the 500,000 cases industry pros say an appellation needs to sustain an export market. They sell everything from table wines that retail for less than $10 to luxury reds that go for upwards of $40. "They have the volume, the variety, and the quality," says Rajat Parr, wine director for celebrity chef Michael Mina's six restaurants. "If someone can market them, it'll be huge." One star winemaker, George Skouras, has a Chicago-based representative but says his peers lack representation. "We want to go beyond the ethnic market and get into mainstream restaurants," he says.

The first step to breaking into the business is obvious: Travel through Peloponnese, tasting wines to find ones likely to earn high scores from wine magazines. Then ask to be a winemaker's exclusive U.S. rep. Set-up costs for exporting one or two labels will run between $25,000 and $100,000. About $10,000 goes toward legal fees to get a U.S. import license. Then, plan on buying a few thousand cases at $5 or so per bottle. Another $6,000 gets them on a containership. American exporters charge a markup of as much as 50 percent to distributors, who can get up to another 50 percent from stores and restaurants. After paying import duties and warehouse rental, you can raise a glass to double-digit profit margins. -- P.K.

9. Bringing Chardonnay to Chennai

The Opportunity: Import fine wines to upscale restaurants - in India.

Investment Level: <$100K

Risk Level: Low

India's rapidly expanding middle class isn't just interested in motor scooters, Levi's, and the coolest new cell phones. They'd also like to see a decent chardonnay on the dinner menu.

With wine consumption in India projected to grow 10-fold over the next decade, the nation has emerged as the world's fastest-growing market. More important, it's become a prime destination to start importing U.S., Australian, and other labels to satisfy Indians' increasingly cosmopolitan tastes. For one thing, the wine boom will largely bypass domestic brands; the country is too hot for serious viticulture. And the Indian government has been slashing duties and excise taxes on imported wine during the past two years. An American importer who gets in early and establishes a foothold will reap the benefits of even lower duties down the road.

Setting up shop requires first owning the distribution rights to the right selection of wines. At the top of that list, experts say, should be fruity whites from California and Australia - -products that did well in the United States when wine took off in the 1980s. You don't need an import license; anyone can bring wine from abroad into a warehouse bonded by the nation's customs office.

Wine consumption in India (in thousands of gallons)

Source: Euromonitor

IDEA NO. 21 Utilize the incentives that reform-minded governments offer to foreign investors.

10. From Crop to Cup

The Opportunity: Export gourmet coffee from Rwanda.

Investment Level: <$100K

Risk Level: High

When Starbucks chairman Howard Schultz wanted to celebrate the success of his company's first offering of Rwandan coffee this spring, he invited a group to Seattle to raise a cup. President Paul Kagame of Rwanda came, as did entrepreneur Arthur Karuletwa. Schultz wanted to learn more about Rwandan coffees, and Karuletwa, a refugee who two and a half years ago ditched his job as a coffee distributor for Procter & Gamble to help his homeland, was now a key link between the Western world and Rwanda's thousands of coffee farmers. "He was very enthusiastic," Karuletwa recalls of Schultz.

It was a proud moment for Rwanda, a nation devastated by the genocide of 800,000 people in 1994. The African country of 8 million is undergoing a dramatic rebirth. Its government has battled corruption and has lured back skilled people. And Rwanda has suddenly become an inviting destination for foreign entrepreneurs, especially those interested in coffee.

Rwanda had long produced commodity-grade beans but never developed a gourmet coffee industry. Its farmers barely made enough to survive. Karuletwa, who had left for the United States in 1995, felt driven to help. He and his wife, Amy, stored their belongings and set off; she, too, was an industry pro who had worked for Starbucks. Karuletwa won the backing of the Rwandan Ministry of Agriculture and began to modernize the market. He set up programs to teach fertilizing methods and created co-ops of farmers. Eventually, he sliced the number of middlemen from four or five to one or two, raising the pay farmers get for a pound of beans from about 60 cents to $1.50.

Today, Rwanda's coffee industry can't keep up with demand - and the doors have swung open to outsiders wanting to set up businesses that will stoke supply. There's a need for exporters, but Karuletwa argues that a far more lucrative strategy involves controlling most of the coffee production chain, from crop to cup. The chain works like this: Farmers pick the cherrylike fruit to get the beans. The beans are brought or sold to washing stations that clean, peel, and bag them. They're then trucked to the government-run coffee board in Kigali, the capital, where they're approved for export - tax-free. In the United States, beans go to a roaster, which processes, packages, and ships the coffee to a retailer.

Smaller players can make money by owning as many parts of that process as they desire. The Rwandan government will even guide aspiring entrepreneurs through the process and help them obtain land. Rwanda wants to triple its number of washing stations to 140 by 2008, and as a result, "you can almost get land for free," Karuletwa says.

Coffee is known as a "relationship business," and whom you partner with both in Rwanda and in America is crucial. You can set up a co-op, paying small farmers to bring you their beans. Shipping a container of coffee, 40,000 pounds' worth, costs $6,000. You then pay a warehouse to store the beans in the States, or you have them sent directly to a roaster. Toss in the design and production of labels, and your total outlay is $4 to $5 for a pound of coffee that will sell on the shelf for $15. Paying back your initial investment should take less than a year. "If you start this fall," Karuletwa says, "you can be processing coffee next year." -- P.S.

11. Doughing the Right Thing

The Opportunity: Become a social entrepreneur in South Africa.

Investment Level: <$100K

Risk Level: High

As a Wall Street investment banker, Alicia Polak was launching multimillion-dollar funds. But she couldn't stop thinking about South Africa, where she'd studied as an MBA student. She was struck by the poor townships around Cape Town, and she saw a huge opportunity to help.

The business she runs now, the Khayelitsha Cookie Co., employs 10 women from the township of the same name. The women bake cookies and brownies and sell them to cafes, hotels, and a domestic airline. Only two years old, the company is on the verge of breaking into the U.S. market.

"You might say, 'They're just cookies,'" says James Thompson, associate director of entrepreneurial programs at the Wharton School, who assists startups in developing regions. "But she's teaching people skills in a very poor area. And there's no reason this brand can't be big in America and Europe."

There's also no reason why more like-minded "social entrepreneurs" coming out of business schools today can't have it both ways: Create social change and a real business at the same time. For one thing, there's no lack of impoverished regions in the world, each with abundant supplies of idle but trainable talent. Figure out a way to put the talent to work on a simple product to sell or export, and you're on the right track. "You don't go in with a liberal, 'I'm going to save the world' attitude," Polak says. "You say, 'I'm going to run a business.'"

In Polak's case, she'd heard that a local food company had set up a nonprofit arm to teach township women how to bake, using donated ovens in a community center. Polak spent about $10,000 of her own money in the first six months. She persuaded an executive at another food company to sell her special chocolate chips, and talked a five-star pastry chef in Cape Town into giving her free recipes. She then crashed hotel events with samples, eventually landing big clients.

"Every entrepreneur writes a business plan and lays everything out on paper," she says. "My advice is, throw all of that out. The opportunities are huge in areas like this, but you need to think on your feet and not be intimidated by your surroundings." -- P.S.

12. Now Open for Business

The Opportunity: Be among the first to invest in the new Libya.

Investment Level: Any

Risk Level: High

Improbable as it may sound, Libya - the North African nation with which the U.S. government restored diplomatic relations only this May - is now welcoming American entrepreneurs with open arms. "Libya is a virgin market," begins a recent State Department report about doing business there. "Opportunities exist in almost every sector."

Libya is rich in oil, and top energy companies are expanding there. But other possibilities are emerging, starting with tourism. The country has dozens of archaeological sites and 1,100 miles of undeveloped beachfront - attractions that will lure visitors and investors alike.

By 2010, Libya expects to have 1 million tourists a year, more than triple the current number. Hotels are expanding in the capital city of Tripoli. Bus services are popping up. Several Italian firms are building resorts, and France's Club Med is reportedly prospecting. "We are essentially a brand-new country," says Naser Edeeb, who runs Safari Tourism Services, a Tripoli-based tour company.

People like Edeeb have become key conduits to outside investors. He launched his business in 1996, taking Europeans to ruins and on trips through the desert. Lately, he says, he's been fielding calls from Americans looking for help with Libya's various regulatory agencies.

Even with a reputable local partner clearing the way, plenty of obstacles loom to trip up Western investors. Banks began installing ATMs only last year. Credit cards are just starting to appear. Strict rules govern advertising. And the country is dry (not arid, but completely booze-free). "Talk about a disadvantage," says Geoff Porter, an analyst with Eurasia Group. -- P.S.

Caution Flags

U.S. State Department tips on entrepreneurship in Libya.

PAYMENT: "While Libyan firms are becoming more reliable, one should not take it as a given that payment will be made."

ETIQUETTE: "Respect for hierarchy is important, as expressed through the use of appropriate titles."

BUREAUCRACY: "Most processes that require official sanction or approval have a lengthy gestation (2-24 months)."

Additional reporting by Saheli S.R. Datta; Emily Huo and Hillary Woolley contributed to this article. Top of page

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