entering the us survey results_v4

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MODULE 3

Entering the United States (U.S.):

Challenges & Victories

Patrina Mack

Managing Partner

© 2015 Copyright Vision & Execution

Executive Summary• Companies who considered themselves successful entering the U.S. tended to

have more aggressive expectations about how quickly they would be successful.

Perhaps “dream big” plays a role. The more successful companies were also

the ones expecting the worst, presumably with contingency plans to address the

expected challenges. The successful companies also tended to use more

external expertise to ensure their success, being more open to local market

expertise across a number of functional areas.

• As companies expand to the U.S. and make local hires they generally expect it

to be relatively similar to their home country. Technical resources are expected

to be easier to find but more expensive to hire.

• Overwhelmingly companies said that you must eventually enter the U.S. market

because it is the largest market, and key to that was creating a U.S. presence. It

is much easier to adopt to U.S. business norms when you’re physically here as

well as be more responsive to customers. With hindsight the most successful

companies said that better planning, especially understanding customer needs,

and better funding/budgeting would have made their expansion easier.2/10/2015


Background• Q1: Please tell us a little about yourself. Please indicate which of the

following that best describes you

• Base: 68

The majority of respondents were part of the executive staff of companies

headquartered outside of the U.S. About one third of the respondents represented

agencies that support companies in their efforts to expand to the U.S.


Background• Q2: Which category best represents your citizenship?

• Base: 68

The vast majority of respondents were born outside of the U.S. Among the

segment that felt they had been somewhat or very successful, all of their

companies originated outside the U.S. and most were holders of business visas.


Background• Q3: Next, we'd like to know about your company. How many employees

work for your company worldwide?

• Base: 68

The majority of respondents were from small to medium sized businesses. The

majority of companies who considered themselves somewhat or very successful

were still under 50 employees.


Background• Q4: Did your company originate outside of the United States?

• Base: 68

Approximately 80% of the respondents worked for companies that originated

outside of the U.S. or were not U.S. citizens when starting their company in the

U.S.


Background• Q5: Where is your "home" country located?

• Base: 56

• Respondents were largely from the west; Asian companies were under-

represented in the sample. 50% of Asian companies felt they had been

somewhat or very successful compared to 33% of Russian/CIS companies,

27% of European companies and 23% of Scandinavian companies. No other

regions considered they had been successful.


Expansion Plans• Q6: Please tell us about your plans to expand to the U.S. Which of the

following best describes your presence in the United States?

• Base: 54

Over 40% have entered the U.S. market, one third of respondents have been

operating in the U.S. over one year, almost one third plan to establish a U.S.

presence in the next 1-2 years. Only 5% do not plan to enter the U.S. market.


Expansion Plans• Q7: Did you decide to expand or consider expanding to other regions beyond

your home country before you expanded or considered expanding to the U.S.?

• Base: 27

More than two-thirds of respondents did not choose the U.S. first when expanding

their business.


Expansion Plans• Q8: What regions did you expand to/plan to expand to before expanding to or

considering the U.S.? Check all that apply.

• Base: 27

Scandinavians were somewhat more likely to expand immediately to the U.S.

while Europeans are more likely to expand to other European countries before

coming to the U.S. Equally Asian companies were more likely to expand

regionally before coming to the U.S.


Financial Resources• Q9: To enter the US market, how are you obtaining or planning to obtain the

necessary financial resources?

• Base: 27

Less than 10% expect to get U.S. investment to fund their presence in the

U.S. The vast major of respondents expect to source their investment in

the U.S. through home country resources or self-funding.


Financial Resources

• Q10: If you are/were seeking investment funds from U.S. sources, how

quickly did you expect to secure funding?

• Base: 1

Only one of the respondents expected to secure U.S. investment to aid their

expansion to the U.S. There was, however, a very unrealistic expectation about

how quickly U.S. investment could be secured.


Financial Resources• Q11: How quickly did you expect to generate revenue from your U.S.

expansion?

• Base: 25

Nearly three-fourths of the respondents had realistic to fairly conservative

expectations about how quickly they would produce revenues in the U.S.

Surprisingly business executives were more conservative in their expectations than

the support organizations (VCs, Trade Agencies, Incubators) were. The

companies who felt they were somewhat or very successful were somewhat more

inclined to expect that they would generate revenue in less than a year.


Organizational Resources & Challenges• Q12: What were your expectations about how easy it would be to hire U.S.

resources?

• Base: 25

Nearly two-thirds expected

U.S. salaries would be

higher than their home

country with 40% thinking

U.S. Human Resource

policies would be more

generous. It was almost

evenly split between

expectations that finding

the right talent would be

easier vs. harder than the

home country. Support

organizations expected

hiring would be easier and

less expensive than the

executives.


Organizational Resources & Challenges• Q13: What were your expectations about how hard or expensive it might be to

set up your U.S. office or subsidiary?

• Base: 25

The most challenging

activities for companies

expanding to the U.S.

compared to their home

country is securing visas

(72%), followed by finding

appropriate insurance

(56%), banking/credit

resources (52%) and

distribution channels

(40%). Finding office

space (44%) and legal

services (32%) was

considered easier than the

home country.


Organizational Resources & Challenges• Q14: What were your expectations about how hard it might be to find the right

service providers to help you with your U.S. market expansion?

• Base: 25

Nearly half felt finding the right service provider to help enter the U.S. market was

about the same level of difficulty as in their home country. Less than one third of

the respondents found it harder; a small percentage felt they didn’t need service

providers. Interestingly executives expected finding service providers would be

easier while support organizations expected it would be harder.


Organizational Resources & Challenges• Q15: What types of service providers were you looking for? Check all that

apply.

• Base: 24

Sales/business development and legal were the most commonly sought service

providers followed by marketing. Companies who felt they were somewhat or

very successful made broader use of service providers whereas the companies who

didn’t feel successful were focused almost exclusively on sales support.


Organizational Resources & Challenges• Q16: In terms of company resources, how challenging did you expect

supporting your expansion to the U.S. to be?

• Base: 23

Most companies expected to experience some degree of challenge associated with

spreading resources over multiple geographic regions. Surprisingly the companies

who were least successful expected the fewest challenges. Keeping a strategic focus

was the least concerning overall while managing staff resources proved to be the

most challenging.


Organizational Resources & Challenges• Q17: From a functional area of expertise please rate which of these functions were

the hardest functions to replicate in the U.S. or you expect to be the hardest to

replicate?

• Base: 23

There was virtually no difference between the functions in terms of difficulty

replicating in the U.S. By the slightest margin customer service (2.65) was considered

the hardest to replicate compared to sales (2.25) being the easiest. U.S. financial

resources were not very high either relative to other functions so perhaps most

companies were relying on their home country resources for this function.


Organizational Resources & Challenges• Q18: Which of these functions did you think would be the most expensive

functions to replicate in the U.S.?

• Base: 21

By comparison engineering and technical positions were expected to be the most expensive

to replicate followed by professional services and sales. It appears that cost is the driver to

what made replicating engineering and professional services difficult. Technical support

while considered one of the hardest to replicate, was not due to salaries as it was considered

4th in terms of expense to replicate. Equally while customer service was considered hardest

to replicate it was considered the least expensive to replicate.


Level of Success• Q19: Based on what you expected to achieve by now, how successful have

you been in your attempt to enter the U.S. market?

• Base: 21

While no company felt they had been completely unsuccessful only about 20%

claimed they had been very successful; most respondents indicated they had been

somewhat successful.


Level of Success• Q20: What do you think was the most effective thing you did or will do in

planning to enter the U.S. market?

• Base: 21

One third of respondents felt that having a physical presence was critical to their

success in the U.S. Nearly 25% felt the most important thing was conducting a

market opportunity assessment. The most successful companies felt that having a

U.S. presence and a conducting market opportunity assessment were key to their

success.


Level of Success• Q21. Based on your experience, would you still have tried to enter the U.S.?

• Q23. Based on what you know now, what would you do differently?

Most companies felt that they had no choice, they ultimately needed to enter the

U.S. market for their global success. Representative responses for what they

would do differently include:

• We would pour much more marketing efforts to boost our sales in the US.

• Not giving up and adjusting periodically to meet the demands of customers is

necessary

• Be less optimistic in the planning and visa challenge

• Seek investment specifically for US expansion

• Not coming so early

• Have a longer runway of funds

• Do it faster

• Only work with professionals 2/10/2015


Level of Success• Q21: Based on your experience, would you still have tried to enter the U.S.?

• Base: 21

Even among those who felt that they had been somewhat unsuccessful no one felt

that they should not have tried to enter the U.S. market.


Resources Desired• Q24: Vision & Execution is developing new services to help companies enter the U.S. smarter with less risk and

financial overhead. The following questions capture your feedback on these services so we can refine them to better

meet the needs of companies entering the U.S. Our initial service validates your company’s U.S. business model

before you make deep investments. We conduct customer research and identify key competitive features for success.

Our experts recommend a launch strategy based on the market opportunity and produce a three year financial model

to determine if (or when) it’s financially worthwhile to enter the U.S. market. How likely are you to use this service?

• Base: 39

Nearly half of respondents were somewhat or very likely to use a service to

conduct market validation prior to entering the U.S.


Resources Desired• Q26: In addition to the market validation service, we can serve as your interim U.S. subsidiary. This service is available only if

your U.S. business model validation analysis indicates the U.S. market is a good opportunity for your company and a U.S.

subsidiary could be profitable within three years. With this service, we staff all of the functional areas needed to support your

business through our team of proven partners (for example: telesales, outsourced customer service, HR services). Our primary

team is directly responsible for sales, marketing and order processing (fulfillment). You buy only the services you require from

our seasoned team of experts rather than needing to hire full-time staff. Fees for this service would include a combination of

time and materials plus commissions once sales are initiated. We can also make introductions to our hand-picked service

providers for your business needs such as corporate or immigration attorneys, insurance agents, accountants, and relocation

specialists. How likely are you to consider this service?

• Base: 35

40% of respondents were somewhat or very likely to use an outsourced U.S. subsidiary.


Resources Desired• Q28: Are there other services you would want from a U.S. market expert to

make it easier to enter the U.S. market?

• Base: 35

The other services that companies were seeking from a U.S. market expert were:

Networking/Sales/Biz Dev – 2 responses

Legal – IP Protection/Visas – 2 responses

Accounting – Payroll/Taxes – 2 responses

Fundraising - 1 response

Localization/Language Support – 1 responses


Ensure Success in the U.S.

• Understand what business need your product/service

fulfills in the U.S.

• Make appropriate adjustments to localize your

product/service for the U.S.

• Ensure adequate lead time for visas and market planning

• Establish some form of U.S. presence to build credibility

with customers

• Make greater use of U.S. experts across a broad range of

functional areas to gain local market knowledge faster


Methodology

• The survey “Entering the U.S.: Challenges & Victories” was fielded in

Q4 2014. A total of 68 respondents participated in the survey.

Respondents included a cross section of employees from international

companies and support organizations such as trade agencies,

incubators and venture capitalists.

2/10/2015


About Vision & Execution

• Vision & Execution, Inc. helps companies turn innovative

ideas into global success. We specialize in identifying the

most cost effective route to building a global business. We

bring our breadth of business expertise – business creation,

strategic marketing, innovation sourcing, product

development, and sales and operations program

development – to help companies realize their vision.

• Our services include:

– Advisor on Call

– U.S. Market Launches

– Contract Business Development for Early Customer Wins

– Outsourced Sales & Marketing for Year One Revenues

2/10/2015


How to reach Vision & Execution

• Phone: +1 650 233 0256

• eMail: [email protected]

• Twitter: @visionexecution

• Blog: www.visionandexecution.com/blog

2/10/2015

mailto:[email protected]

http://www.visionandexecution.com/blog

entering the us survey results_v4

Documents

successful companies

majority of companies

european companies

russiancis companies

scandinavian companies

west asian companies

executive staff of companies

vast majority of respondents