Seven steps that assure success in entering the U.S. market

The U.S. is the biggest-spending IT country by a wide margin. In software alone, the U.S. accounted for 55% of the $540 billion market in 2013. It’s hard for a serious IT player not to have the U.S. in its sights.

Large, substantial – a huge open field big enough for all, right?

Yet, there’s another couple of sobering statistics that companies that evaluate U.S. market entry overlook: 110,000 software companies operated in America in 2013; only 37% of IT companies are still in operation after 4 years.

Menacingly competitive, the huge open field is teeming with hungry wildlife.

It takes more than a keen eye

We’ve dealt with dozens of firms wanting to enter the U.S. market. Though eyes widen at the opportunity, eyes are not always wide open when it comes to preparation.

But it should – and can – be different!

You can shift the odds in your favor

The good news: though entering the U.S. market is no guarantee of success, there are seven steps that any firm can take to substantially increase the odds of success. And, they work! But they require work to do – sometimes a lot.

There are no shortcuts.

Yet, be assured, the payoff is well worth the effort.

Seven “must do” steps for U.S. market entry

Do your homework in advance. A back-of-envelope analysis may be a good starting point, but it’s a wildly risky end point. While hopping on a plane and visiting people in key cities (like the pilgrimage to Silicon Valley, the spawning ground of billionaires) can be useful, it is no substitute for digging into the data. Hard and deep. Sizing markets and locating, assessing competitive concentrations, understanding industry practices, buying habits and preferences, etc. You can do much of this on your own and with knowledgeable in-market help. While it’s a lot of work (count on 3 – 4 months) you’ll know if now is the right time to enter the U.S., and build a well-informed 360-degree view of the landscape – both upsides and downsides.
Hire a great lawyer and accountant. When one can incorporate in Nevada online for $300, and fly under the radar, who needs a lawyer? With 50 States and almost 40,000 local governments, the U.S. has the most complex legal system a firm will ever encounter. You need experienced and knowledgeable professionals – taxation, legal structure, and day-to-day compliance on things like payroll – to get off on the right foot. Knowing your home country (and its tax treaties with the U.S.) and your aspirations (e.g. raising capital, or hiring employees) they can explain your options and set everything up the right way, the first time. This can be done for about the cost of a business trip or two – and for much less than what you’ll shell out if you have to fix something after the fact.
Bite off one chunk at a time. Just because the U.S. is comprised of 50 states doesn’t mean you should go after the whole enchilada. Depending on the nature of your product (a device, software, cloud app) you should focus your resources – and minimize spend – by concentrating on a city(s), a state, or a region. If you do exceedingly well, the rest of the U.S. will wait. There is much to be said for focus in the short term.
Adapt your value proposition and positioning. No matter your offering – or how well it has prospered at home – you will need to adapt the value delivery for the U.S. At least in some small ways. Value lies in more than the physical or operating nature of your offering – price, quality, availability, training, warranty, ease of understanding, image, credit terms, and thousands of other potential factors. What works at home may not work in the U.S., and what may not work at home may be ideal in the U.S.
Evaluate distribution options. It is difficult, costly and time-consuming to tackle a market this size entirely on your own. Especially if your product is a complex sell, or requires installation or support. Not even mighty Apple relies exclusively on its own website and stores to move its products from manufacture to final buyer. The very act of examining and learning about distribution will if nothing else provide valuable insights into U.S. ecosystem for products like yours.
Build compelling digital content. The U.S. is increasingly an online market. Buyers find products, compare and kick tires, and check prices and reputation online. Sales people have not disappeared, but their roles have changed. You need to build digital assets – product listings, comparisons, demos, pricing, use cases, success stories, white papers, and so on. If you are diligent and shrewd in approaching this, digital assets can become strategic selling assets.
Look and act American. This does not mean abandoning your heritage, nor does it mean wearing a New York Yankees jersey and feigning an American accent. What it does mean is conducting your business in culturally familiar and acceptable ways. American ways. As simple as “letter size” PDF formats on your website. As critical as sales contract governed under a recognizable American jurisdiction.

The bottom line

Is time and effort required? Yes. Is this rocket science? No.

The payoff? Significantly improved odds of a successful U.S. market entry, and a softer landing.

Written by Michael

Michael Douglas has held senior positions in sales, marketing and general management since 1980, and spent 20 years at Sun Microsystems, most recently as VP, Global Marketing. His experience includes start-ups, mid-market and enterprises. He's currently VP Enterprise Go-to-Market for NVIDIA.