How much do you like flying?
Before you open your doors to customers in the US, you should research the market in person. There is no substitute for physical presence.
Spend time on the ground
Your competition in the US is highly likely to include American startups and established American companies, groups who live and breathe the US market and culture. The reality is that many European companies tend to prepare less for US entry than their American counterparts, placing themselves at a disadvantage.
Europeans who had the most success with US entry typically planned an entry phase of at least six months. During that time, the CEO would travel to the US frequently to meet potential customers, suppliers, business partners, and other people crucial to the early success of the business.
This engagement phase allowed companies to strengthen their US strategy and business case before committing to hiring and building out a physical presence. You should set up processes in your company so that you are able to work remotely during the time that you’re on the ground in the US: How does the team at home perform under those circumstances?
Contractors are useful because they’re quick to hire and require minimal paperwork to employ. You can use contractors for these months of tests while you spend time hiring the right people and building out your permanent staff.
• Have you exhausted the extent of necessary adaptations your business will need to undergo to have a compelling offer for American customers?
• Do you have product-market fit?
• Do you have two to five reference customers?
• Do you have a replicable sales strategy?
“ My view is that founders should move to the US for a while, live here six months and then assess how to proceed. Familiarity with the market is one of the most predictive factors of success when going abroad.” Ari Salonen, Midaxo
Have you built a local network?
Your local network in Europe was likely instrumental to your success there. The same is true in the US – connections and trust will accelerate your expansion in the new market.
Setting up business in a country where you don’t have a soft network of ties, experience and trust is a daunting task.
Elvie had a small but growing proportion of sales from the US, without a US-based team. The team had a limited network in the US and was unsure about how to resource this market. After 30+ conversations, Elvie had a soft network of entrepreneurs who had scaled businesses with similar products in the US, experts and consultants in US retail, leading hospitals which could partner with or purchase from Elvie and senior decision makers at target retailers. With these local connections, Elvie uncovered additional go-to-market risks, commercial opportunities and data that helped it refine its US strategy.
Being part of a US incubator or accelerator can also help with the transition, since you’d likely be provided space, advisors, coaches and a network of fellow companies and prospective customers.
“ This can be a reality for the newly-arrived outsider. A lot of contract business gets done via informal networks built on local knowledge into which you have little insight. If you’re a local, you know how much a good lawyer should cost, who to contact, and what to avoid. As a newcomer it can be difficult to assess a situation no matter how long you look at it, even though all the information is ‘knowable’ in a concrete way. It just takes a bit of time.” – Will Grogan, VanMoof
“ Preparation is key. We had senior staff travel to the US to scope out offices, interview potential candidates for roles, and we ran, and continue to run, certain group operations in the UK – marketing, CRM, customer service, finance, product and tech. It makes no sense to replicate central functions for what should be a trading hub. Centralize as much as possible, but for us, human relationships with hotel partners meant we had to double down on building a supply team entirely based in the US. We wouldn’t scale without being able to face-to-face.” Rob Day, Secret Escapes