(They killed him in the end, but that’s another story).
Applying just a bit of his technique to your preconceptions, hopes and plans for US expansion could save you months of work and possibly even your business.
The US is a massive market and requires a commensurate amount of dedication, resources and time. In some cases, the cost will be too high, or the timing won’t be right; in others, the rational choice will be to accelerate the US expansion. Ultimately, we’d like to help you arrive at the strategy that is right for your business.
If you’re looking for simple encouragement, this won’t be the guide for you. International expansion adds a significant amount of complexity and risk to any business, and there are no single right answers. We’ve seen companies succeed (and fail) by being fast or slow, first or late, big or small.
That’s not to say there are no patterns to success. While we’re not offering you silver bullets, there is a lot you can do. Successful US expansion cases were extensively planned; failures succumbed to a sense of “inevitability” and rushed to market entry without robust validation.
The framework of this document is not intended to be exhaustive; rather it is a starting point to drive and focus your discussion and help you interrogate your US ambition: Could the land of the free cost you the Earth? If the risk is too high, slow down and focus at home. If the strategy is sound and the time is right, we’ll help you take the US by storm.
Joy + hustle from New York,
Disclaimer: We consider this work a living document. As technology, cultures and market dynamics shift, we are ready and eager to evolve with them. After reading this guide, let us know: Did we miss something here? We welcome your experiences, counterexamples, additional learnings and input – let’s make version 3.0 together.
“ The secret of change is to focus all of your energy not on fighting the old but building the new.” – Socrates
What makes the US so attractive?
While its dominance in global VC funding is being curtailed, the US is still a leader in innovation investments. In 2017, 53% of the $160 billion venture capital invested globally was invested in the US.
Globally, the sum of capital invested into the venture asset class continues to accelerate.
And while the US is still a critical player, its dominant position is falling relative to, with investments growing in other world geographies.
Nonetheless, the US still leads in total capital investment into early stage venture deals.
When you combine the proven expertise and availability of capital in the US with a population of 324m (1), internet penetration at 89% (2), mobile phone penetration at 81% (2) and smartphone penetration at 67% (2), the US is a prime market for new technologies. As of 2017 the US GDP stands at $19.39T (2) (versus the UK at £1.98T (2), or $2.5T (3). According to Gartner’s 2018 assessment, annual IT spend of Fortune 2000 companies tops $3.7T (4).
US Corporations are acquisitive: 55% of the 1,570 acquisitions of VC-backed companies in 2017 were made by US companies.
These headline fundamentals, combined with a robust business infrastructure and openness to innovation, make the US seem like a logical next step. That said, succeeding in the US means overcoming substantial risks. Launching and scaling in the US market is hard, and even when it is the right answer for your business’ expansion, winning here is far from certain.
1. World Bank
2. Statista – Internet usage in the US
3. Converted from £ to $ using the December 31, 2017 conversion rate of 1.289 from OFX
5. A special thank you to the UK Department of International Trade (DIT) for their contributions. Aside from developing, coordinating and delivering new trade policy for the UK, the DIT helps UK businesses export and grow into global markets as well as expand in the UK.