Is your startup ready to go global and expand to the North American territory? It’s a tough decision to make because it can either accelerate your growth or hinder it. It is vital for growing companies to find new customers & business opportunities, and there’s a lot at stake when coming to America. Looking at the big picture, although foreign expansion can be tough, if executed properly it will pay off. Going global not only allows you to reach new customers but it also gives you an opportunity to hire new talents and fine tune your product to international prerequisites.
A CEO should be able to understand if it’s the right time to expand in the U.S. or not. Even if some entrepreneurs use their business instinct to make this decision, it’s wiser if your decision is based on rational factors. Here’s a list of 9 signs that your startup is ready to expand on the North American market. You can still successfully launch in the U.S. without all the below criteria, but we advise you to avoid expanding too early. Patience is an acquired virtue.
1/ You have a product
You have a product and you are already distributing it? Awesome! But you need to be aware that the U.S. is one of the most competitive tech ecosystems in the world, meaning that there’s still a chance that your product doesn’t have its market fit just yet. Nonetheless it’s important to have validated your core hypothesis about the problem you are solving before launching here.
2/ You have traction
Before launching in the U.S., it’s better to have a good traction in the country you’re currently operating in. If you get double-digit monthly growth rate, chances are, you’re ready to expand to the U.S. Such growth shows that your product has some virality & a unique value proposition that you can use as a sale argument to acquire new customers. Moreover, strong references give your product legitimacy when entering a foreign market.
3/ You have enough cash
Your initial traction is vital because it provides your company with a regular stream of cash. No doubt about it, expanding to the U.S. is expensive and provision a significant amount of cash is crucial to avoid going broke after only a few months. Another common way to finance your U.S. expansion is to raise funds. For example, ubi i/o alumni Giroptic announced on December 15th, a $4.5M Seed Funding round led by Partech Ventures to initiate their American expansion. It’s a good way to finance your growth and to prove to your competitors you are a serious contender. During ubi i/o, our companies pitched in front of more than 8000 people, this allowed Concord to connect with the right American VCs & raise money shortly after the program.
4/ You have a plan
Planning your U.S. expansion is key if you want to enter the market quickly and efficiently. How do you plan to launch your product here? What are your KPI goals (key performance indicators)? How does your marketing strategy & your positioning compare to your competitors? What are your financial projections? All these questions matter. Throughout ubi i/o, we help you find the right contacts & define the right steps to achieve your goals. If things go wrong, you can adapt your timeline depending on the obstacles you encounter and figure out other ways to increase your sales.
5/ You have the ability to scale
The American market represents more than 320 million potential users for B2C startups and thousands of potential clients for B2B companies. Unfortunately, some entrepreneurs aren’t realistic about what their company can handle. If your IT infrastructure is too weak or your team is not ready to grow quickly in the U.S., you should wait until you’re able to scale.
Growing in the U.S. also means new burdens. For example, if you want to raise money from VCs, you will have to walk through the rigorous path of due diligences. If you are not transparent about your business, talking to investors will soon lead to a dead end. Although raising funds in the U.S. is a quicker process than in France, It doesn’t mean that it’s any easier, far from it. Besides, it is mandatory to have the executives of the company in the U.S.
Moreover, be prepared to adapt the way you work because the market’s rhythm is a lot faster. Here, the technology and needs of customers evolve really quickly and entrepreneurs need to adapt their product fast to meet the market’s needs. Being customer centric will allow you to not lose track of the demand while providing great customer service. In the U.S. adapting your product to fit the market is inevitable as the march of relentless innovation is constant. Using agile methodologies is important to avoid losing market shares, it will allow you to quickly iterate and adapt your product, pricing or business model to your customers’ needs.
6/ The American market is relevant for your business
If the American market is huge, that doesn’t mean it’s easy to tap into it. If you’re not trying to waste your time & money, strategic thinking alongside a strong product with a unique value proposition will be needed to gain market share within your ecosystem. But first things first, you need to evaluate the barriers to entry; it may happen that the U.S. market isn’t the best fit for your product whereas another country could be a better bet. Beyond your product, your approach to the American market should be tailored. While doing business development in the U.S., it is crucial for your team to adapt its approach & messaging to American prospects. Most potential business clients won’t care to know everything about your technology or your solution. Ultimately, they care about their problems and want to know how your solution is the best fit to resolve these. Be aware that when presenting your product, your prospects will be thinking: “what’s in it for me? “. Your pitch should solely be focused on your interlocutor’s problems and how you will help resolve them.
7/ You know your American competitors, their strengths and their weaknesses
It’s time to go back to the drawing board and analyze carefully your American competitors. If you want to stay ahead of the curve, you need to know their strengths and weaknesses. As previously mentioned in another article, “In the process of expanding your operations to the U.S. market, it is important to identify and understand vertical market segments. The larger, the better. Doing so, you can target a particular customer base where you have experience, expertise and references in France. Specializing in a vertical allows you to know the market, its issues and the products that fulfill the needs created by those issues, and fully adapt your approach.” A vertical approach will allow you to easily spot your competitors and better approach the market in order to gain shares on a specific vertical. Competition is harsh in the U.S. and you need to find a way to differentiate yourself from your competitors. If you have a first-mover advantage and your competitors are yet to be established, you should grab the opportunity to quickly take control of the market. Having strong intellectual property rights & patents may also be key to establishing a monopoly within a given vertical.
8/ You and your team speak English fluently
Nicolas Colin perfectly described the problem of French entrepreneurs: “Yes, many people read English. But only some of those also understand spoken English. Few people speak English to the point of being able to inspire an audience” Mastering English is crucial to deal with potential clients or VCs. Throughout ubi i/o’s acceleration program we train our entrepreneurs to pitch in front of a large audience. Taking the bull by the horns is the only solution to make progress and finally be able to convince your interlocutors. Networking is also crucial for your business as you can easily meet several key partners in startup events. Being able to talk to them fluently is a prerequisite if you want to make the right connections.
9/ You’re ready to get your hands dirty
Usually, only a few executive members take on the journey to the U.S. Launching a product is no easy task so be ready to get your hands dirty with business meetings, recruiting interviews, networking , sales pitch, constant travels etc. Expanding to the U.S. is exciting but it’s like running a marathon every day. Remember the 5 P’s. Proper Preparation Prevents Poor Performance. During ubi i/o, our startups accomplish in 10 weeks what would normally take 10 months to achieve. During the program, entrepreneurs pitch every week, go to business meetings with potential partners or clients, work on their product with the feedback gathered from their leads, and attend workshops to quickly adapt their roadmap.
In conclusion, expanding to the U.S. is not as easy as it may seem if you’re not prepared for it. If your product & team comply with all the points mentioned up above, the odds are you’re in good shape to start thinking about a strategic plan. Just remember, nothing matters without proper execution.