Going Global, Part 13: Political Risk

In this blog, we've been talking a lot about the best places in the world for entrepreneurs. These countries are typically characterized by strong economic growth, peace, and stability—but opportunities often present themselves in places that are less than idyllic. How, for instance, should entrepreneurs weigh the potential of a lucrative sale against the possibility of a terrorist attack like the one that struck Algeria earlier today? (23 people were killed in two separate bombings, one targeting the prime minister's office.)

Following such tragic events, its tempting to write off a place like Algeria. But less stability generally means less competition. Howard Dahl's story of selling farm equipment in Russia, Ukraine, and Kazakhstan, is a good example of the phenomenon.

As part of this month's cover story on global business, we asked Ian Bremmer how entrepreneurs can calculate political risk. In the piece, Bremmer, a consultant who recently wrote a book on the topic, says that entrepreneurs should consider "shocks" (like a terrorist attack or an earthquake) and "stability" (a government's ability to contain a crisis). Shocks are tough to predict, but, if you do business in a country with a stable government, they probably won't be catastrophic. Bremmer suggests hedging against risk by doing business in multiple countries or in different regions of the same country.

I wonder what people who have spent time in tumultuous places think about this strategy. How does your business cope with the threats of war, unrest, and terrorism?

Senior contributing writer Max Chafkin has profiled companies such as Yelp, Zappos, Twitter, Threadless, and Tesla for the magazine. He lives in Brooklyn, New York. @chafkin