5 Tips for Foreign Entrepreneurs Trying to Enter The U.S. Market

Tapping into the U.S. market and working with large corporations is a major goal and milestone for many entrepreneurs. But sometimes founders don’t consider the cultural and business differences that go hand in hand with breaking into the American market.

My name is Ron Kimhi, and I’m helping startups to enter the US market. “Helping” is a big word, so if I could be more specific — I help foreign startups to understand what they are up against, and how to prepare better for this grueling journey.

During the past few years, I met with hundreds of startup companies, evaluating their business models and Go-To-Market strategies. Reviewing so many companies in various fields gave me a few insights that I would like to share with you today.

Many foreign entrepreneurs (non-Americans) are precepting the US business culture in the wrong way. Operating with a messaging that does not fully align with the American culture, and expectations might cause unnecessary waste of time— which is an early-stage startup’s most important asset.

This is why I came up with the five tips for foreign entrepreneurs who try to enter the U.S. market.

**I’m going to make here some huge generalizations — all in order to provide guidelines that should be manipulated to one's specific use case.**

Tip #1: Don’t forget to emphasis your economic value — NUMBERS

Articulating a clear value proposition is important, explaining why your technology is superior to the competition, and how your customers will benefit from it is crucial. But in the U.S. market, your economic value should take a significant portion of your pitch. You need to emphasize how your value proposition is being weaved into a very clear picture of economic value. Come prepared with numbers that support your statements, and use cases that back your numbers elegantly. You want to be able to show not only that your product works flawlessly, but also share numbers that will make sense of how you are going to make a difference within your customers’ next quarter numbers.

Tip #2: Choose your penetration point wisely

The U.S. is home to some of the biggest cities for innovation, like New York, Boston, and San Francisco. But don’t make the mistake of overlooking other markets that may be a better fit for you.

Keep in mind that in many cases, this move is relevant prior to an A funding round. The seed funding should be utilized mainly to prove your concept, and show some traction in your target market. Therefore, although the openness to innovation in New York and Silicon Valley is enormous compared to other states, they are not necessarily the best option to start your operations. If you chose one of these cities as your first US office, no matter what corporations you will be approaching, you’re one of the hundreds of startups that have approached the same organization in the past couple of weeks.

Therefore, the biggest local market, the city or state with the most potential customers, is not necessarily where you want to focus most of your efforts — at the seed stage.

Trying to enter the major cities can be a costly mistake for startups that aren’t prepared to deal with the competitiveness of the landscape there. Smaller cities and markets may even give tax breaks and incentives to startups entering their market, so it’s important to do your research to determine which market is right for you.

Large corporations are looking for technologies that will accommodate their roadmap’s milestones, the specific technology that will get them there is not the focus in many cases. So it doesn’t really matter if your technology is absolutely amazing, you still need to penetrate through the noise, and that’s extremely difficult in the major cities.

Tip #3: Find an American mentor to help you make the transition

Having a great mentor can be a significant boost to any entrepreneur, especially when you’re attending your first set of business meetings in the U.S. Mentors can help you navigate the landscape, make introductions to other entrepreneurs, and can be an overall point of contact for any questions you have.

One of the most common strategies I've seen at foreign founders is to come to the U.S. for six to ten months, try many things, and learn from a huge amount of mistakes. Although doing many mistakes is part of the life of entrepreneurs, this journey might be shortened if you would have an American mentor that could join your first steps.

To be specific, in North America the language is not English, its “American”. In every business interaction, there is a significant portion of sub-text that non-native Americans will find very hard to translate. You might miss interpreting certain situations and reactions to your messaging, which can be a major hold-back when you’re trying to figure out the most compelling narrative. An American mentor that will attend your meetings can help you to translate your core-technology competencies. In addition, debriefing that mentor afterward regarding the sub-text can increase your learning curve dramatically.

Tip #4: Get to the U.S. market as soon as possible

It’s very difficult to build a product for the American market if you’re not there. You have to understand the power of capital, consumerism, and the scale you will be facing. In many cases, the way your target audience works in the US is different than in your country. “Feeling your market” in person is crucial, speaking to customers, understand how your targeted decision-makers think and witnessing your competition actions will make a difference. In short — Market development should be done from within your target market.

A few things to take into consideration — that are not trivial to many entrepreneurs:

• Different states; different regulation, culture, and opportunities
• The importance of a services package to accommodate the deal
• Privacy, security, and servers location
• The amount of capital needed in order to establish the initial sales infrastructure
• The difficulties in creating an efficient and reliable ad-hock sales solution

Tip #5: They don’t care about your major local partners

You built an amazing company in your country. You’ve acquired 300 customers, and now you are ready to go to your “true” market, the US market. However, there is an issue — No buddy cares about your foreign traction. The most prominent example happens in Israel;

Fortunately, we have a great health system, one of the two main HMOs that is located in Israel is the second-largest in the world- and the one with the largest digital records database. Although you'd expect that if a digital-health startup succeded to get this HMO as a customer, get its product touch millions of people in thousands of locations, it will have in impact in the US market— unfortunately, it's not.

Let’s take a step back from the statement above — of course, it means something, and it is great validation evidence. However, the impact of foreign traction to promote US sales is disproportional small. There is no replacement for pilots/customers in the US, and you should take it into consideration before working for 3 years for traction in your home market.

There are many methodologies on how to prepare to enter the US market. Each industry has it’s own best practices. However, the main point from this article is to make the necessary research in terms of culture, product, industry, locations, and opportunities before making a full-scale move.