After more than 25 years of my working in a US multinational, exporting to that market as a tech entrepreneur, building business partnerships and living and working in the US with Austrade here are a few tips I have for doing business in the US for early stage or scale up companies.
“G'Die Mate” - Aussies Making in America….
A recent US Studies Centre Report and the continuing promotion of the Australian US business relationship by ex Ambassador Kim Beazley are just two recent examples of the depth of genuine respect, admiration and mutual business opportunities that exist between our two societies and economies.
The US continues to be one of the most favoured destinations for first time Australian exporters and innovators in particular.
And why not.
It remains the world's largest domestic economies, is home to the world's top multinational corporations and as we all know until the recent China economic march forward the US has dominated the world in innovation and disruptive technology research and development.
So the theory goes - especially when Australia has a domestic market less than the size of Southern California - if you want to “make it big” you need to go State side. Its obvious that even a tiny share of a massive market will be superior to a major share of a tiny Australian market.
And besides we know and understand Americans. We watch their TV, wear their fashions, love their music and they speak English ( sort of) and moreover they love us Aussies and getting their head around ( with the odd giggle) saying ‘G’Die mate’ and ‘no worries..’. So how easy will this be you say!
Well not exactly.
All of the above is true in that the US is a great market to go to it you want a ‘straightforward’ critical mass environment that enables you to grow and scale your company - and its capital value - to the levels that can barely be dreamt about anywhere else.
And Americans are great people that Australians can relate to and admire as a society. We have for decades and will for several more decades.
After more than 25 years of my working in a US multinational, exporting to that market as a tech entrepreneur, building business partnerships and living and working in the US with Austrade here are a few tips I have for doing business in the US for early stage or scale up companies.
These revolve around culture, business practice and business expectations.
So let's start with culture. America was built on the American dream. You are expected to have big ambitions and think big. You are expected to be confident in your ability and to demonstrate your passion and commitment. Being reserved or ‘Aussie polite’ is nice but when you are socializing but not when you are pitching to investors or in a meeting. Americans buy into the individual - there is a pretty good example of that right now in Washington! So shake off the shyness and push yourself forward - again and again. Because your other international and domestic competitors are doing exactly this.
Interestingly many American business people and investors take great pride in being a part of a startup in the hope that they can help spark and be a part of a great success. They also know that most businesses that they may get involved in at an early stage are likely to stumble or fail. But business failure is the US is just another word for business experience! So embrace the experience.
Secondly business practice. The USA does apply the rule of law and they are very serious about the terms and conditions of any contractual relationship. They reinforce that by being a litigious society. “It's not personal it's just business” is a well known expression.
Know and understand very clearly what agreements you are entering into , what you are obligated to do and what the penalties are if you don't.
And getting to the market is just step one. Once you start to get traction then you will experience competitive pressure. And Americans companies play hard ball when they decide they need to stop you or take your margin share. Taking out your business competitors to grow market share is Business 101. This is not fun for you though and they are not nice guys when they are executing this strategy. In customer forums when you are both presenting they may not be exactly ‘accurate’ about their own capability versus your own if they believe they you have something better than them. But they do it too each other as well so just be prepared for it.
We also need to remember that the US isn't one market. Most of the States have their own regulations and legal requirements - so check as you enter each State market - and the differences between regions for a newcomer can be striking. If you are in a specific sector then know where the home of that capability is. It may be San Francisco but it also may actually be Seattle, Minnesota or Tampa so make sure you get that right from the outset.
Also don't turn up to any meeting poorly prepared. American business people value their time. If you get 30 minutes of their attention then get your message across quickly. Get straight to the point - why are you here, why they should know this, what do you have and what do you want from them. You will get feedback very quickly but that can also be a no so if it is be polite and move on.
Finally business expectations.
Business in America is about being both big and then the biggest. Two common questions that you will be asked will about about who owns the IP and how can you scale the business. If the answer to either question is in the negative then you will experience a very quick meeting. If you don't understand how you deal with either of these issues then don't position you are at that stage and be honest about where you are at. You could be surprised that there is more interest in you being at an earlier stage than at a later stage!
Secondly the internet brings us all closer together but you will still have to find a way to create a sense of local engagement.
Finally never say “...I don't have any competitors”. That can only be an accurate statement in the sense that you don't know who they are or where they are but in the US you WILL have competition so use it to good effect by helping define what market and sector you are in and why you are superior to those guys.
If you win your contract and you have a requirement to deliver then you better do so. There can be no greater crime in American manufacturing in particular - but also in services - than being the part of the supply chain that fails to perform. In US business terms this is an unforgivable act and you will be punished for it. So if you can't produce the requested “40,000 widgets in 30 days required to be delivered to Austin Texas” then don't say you can. This is a showstopper.
And whilst Americans love doing business with us “Aussies”don't get confused with like-ability versus business execution. Any good American business people would just as easily do a deal with the Taliban( assuming it's legal) over you if it's a better deal! Likability is for when you are socializing so don't mix up the two.
Wrapping up the US is an amazing place to do business and there is no reason that Aussie companies wont be highly successful in whichever sector they choose.
Just remember that although we think we are the same we don't actually - exactly - think or act the same.
So just like you would in any other foreign market understand the culture and business customers and you will succeed!
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