8 Tips for Succeeding in Your US Expansion — What every person with the “American Dream” needs to kn
Here are 8 critical things to consider if you plan on expanding your business to the US market:
1. New Market, New Playbook
Many companies believe they can enter new markets by following the same playbook that brought them domestic success. While brand consistency is important, different markets favor different sales and marketing approaches, as well a your pricing and acquisition channels. You will need to run new tests to adapt your product’s value proposition. The Business Canvas exercise can save you a lot of time and allow you to ask yourself the right questions even if it’s an exercise you have done before, it’s valuable to redo it with the U.S. in mind.
Do your research! You are about to enter a brand new market, with its own local laws, cultural norms, competitive landscape, forms of currency and payment, and unique business practices. Research into local markets has to be aimed at understanding the market size, the challenges customers face, the solutions they currently have, and where your product can fit in.
Next, get targeted. While there is a good chance the US market will be more crowded than others, try to find markets that are not yet saturated by your competitors: Can you pick an industry vertical? Start with a particular customer’s segment? A regional market? Think where you can introduce your product and gain rapid traction. Again, your business canvas is your best friend.
2. Don’t consider the US market as a “last resort”
It can be tempting to think that if your company didn’t take off in your home market, you will capture the hearts of the masses in the US. Unfortunately, this approach is not likely to achieve that desired effect. American businesses and investors will need to see a solid proof of concept and established traction in the US market before taking a company seriously. If your business hasn’t taken off in a small pond (your home market), chances are it won’t take off in an ocean. Expand to the US for the right reasons:
Your clients are already there (New York is the state with the most Fortune 500 companies)
You have fully reached capacity in your local market,
Need access to more liberal VC funding to sustain a competitive advantage,
There is intrinsic benefit in expanding to other geographic locations,
While you might be a leader in your domestic market, that doesn’t ensure that you will attract interest from US stakeholders. You will need to show some traction and POC in the US before hitting it off with investors.
If you don’t have any traction yet, look for early signals. An easy example is to set up a U.S. page where customers can sign up to be on a waiting list and run a basic online marketing campaign to promote it. If you see interest in your product or service from the U.S. market, you know there’s an opportunity to push further into the market.
3. Have an international vision from the get-go
Start your business with the vision of international expansion already in mind. Dream big, and take small steps from the start to help support those goals:
Make sure all your content is available in English. And not just translated: your communication needs to be relevant and consistent for a US target.
Communicate globally via social networks and work to become a thought leader in your industry: articles, quora, social networks…
Develop an understanding of your legal/regulatory burden and how you may need to adapt within larger ecosystems.
Perform market tests and do your research.
4. Be prepared for high operating costs
Don’t underestimate how expensive it is to expand your business internationally, especially in a city such as New York or Silicon Valley. In addition to higher salaries, you will have to shell out more for rent, lawyers, taxes, etc. Active US-Corporations also have other costs that you might not be familiar with. If you plan on incorporating in the US, for whatever purpose, you should prepared for these costs that will impact your finances.
We recommend having the funds to cover your efforts for at least 8 months, giving you enough time to test your product in the US and to build towards investment. When planning to expand to the US, be confident that the financial weight of expansion will not harm your business in domestic markets.
5. Be on-location
We have seen a lot of companies hiring a business developer locally to develop the sales, but it usually falls flat and at very high-cost for the parent company. Only a co-founder will be able to adequately communicate the vision of your company. Move there. Hire there. Surround yourself with the right people there. Many founders have fallen into this trap and have failed because they lacked committed founding team member on the ground.
6. Learn the Business Culture
Don’t underestimate the impact of cultural differences in the US, particularly when thinking about effective communication. Business in the US is direct, informal and highly focused on efficiency. The US motto is frequently summed up as being “time is money,” which is in striking contrast to many other cultures where business may be focused solely on relationship building. Before landing, read up on the culture and ask for help from others who’ve made a similar move. It will make your introduction into the new market a much smoother transition.
As someone who has also made the jump into the U.S. ecosystem in New York, here are some of the cultural differences surrounding business I first noticed and observed:
In the U.S. there is a strong emphasis on rigid time schedules and timing is not often flexible. When you enter the meeting, expect to see an agenda and if you are leading the meeting, do your best to stick to the agenda.
Colleagues will often engage you in small talk for the first few minutes of the meeting before “getting down to business.” This is absolutely necessary for your success at work regarding your relationship with colleagues and your supervisors so don’t ignore it!
Finally, research shows that in the United States, one’s status and the hierarchy within the company matters less than other countries when it comes to speaking up at meetings or challenging other people’s ideas.
7. Learn to sell (yourself)
In the US, it doesn’t matter from what country you’re from, your funny accent or what your odd food habit. If you have an idea — a good one — and can clearly communicate it, that’s what really matters. Americans will give you a chance so long as you can catch and hold their attention. Be confident. Be assertive. Learn to sell your idea and yourself. And remember, you have a limited amount of time to do so, so cut to the chase.
Ask for introductions from your existing clients. Some of your customers may already operate in the U.S. and have industry contacts that could also benefit from your product or service. Leverage it!
Associating your company with a larger U.S. brand builds credibility for the larger sales. Customer references, quotes and case studies can all do this, but getting your large customers to speak can be difficult. B creative.
8. Community Matters — Seek our support!
The New York ecosystem is tight knit but loves to help members of its community. Know that the right introductions and mentorship can make your product a huge success, and cut down on the time it takes to build these relationships on your own.
We are only slightly biased when we point to the importance of participating in the NUMA Startup Program. In truth, NUMA has seen many startups attempt to make the leap across “the pond” (or the trek north or south) and fall flat because they could not get in front of the right people quickly enough or did not take full advantage of their time in front of key decision makers. Startups that have received the excellent mentorship provided by the NUMA New York Startup Program saved time, a tremendous amount of money and greatly increased their chances of success. Set yourself up the right way from the start so your expansion produces tangible success and benefit.
Are you a non-US founder that has a US expansion story? Feel free to share yours thoughts or other valuable lessons you might have learned.