Tips on succeeding in the US market From the Silicon Valley Association of Startup Entrepreneurs. Part 3 of the "Accelerating Your Growth Bootcamp" session held at MaRS April 19, 2010.

1. Chris Gill
President & CEO
SVASE
Silicon Valley Association of Startup Entrepreneurs
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2. 2
Source: World Bank, www.DoingBusiness.org Spain Rank: 39

3. Starting a company
Employment
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Source: World Bank, www.DoingBusiness.org

4. Common approaches to entering the USA market….
We just need a Our techno-
partner logy sells
itself
We have no
competitors We will send our
best engineer
We can sell to
We will just most verticals
hire more
staff
We will manage
US customers
We only need Just put a sales
from home
5% of the person on the
market ground
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5. ….Resulting Track Record
• Most companies fail to gain traction
• Tactical sales instead of strategic business
• Wrong personnel
• Unfamiliar with local legal, business,
customer needs,culture
• Little/No planning – no market analysis, no
localization of products & purchasing
options, mismatched sales channels
• Insufficient funding
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6. Observed Factors for Success
• Strategic imperative for the business
• Development of Strategic Plan
• Commitment of resources & time
• Evaluation, recognition & understanding of
local market conditions
• Best people in most important market
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7. Understand the market and how to segment it
Scalable
Business Model
Want Competition Resources Required 7
Customers

8. Understanding where you fit in the value chain
Where You’d
like to be
LEVEL 4
LEVEL 3
LEVEL 2
Where you
start LEVEL 1
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9. Value chain example from Offshore Software Development
IT consulting, Strategy
Clients 2 - 4
years
from now Solution
Integration
Clients 9 - 12
months
from now Application development
Nondiscretionary programming/Application
Clients now maintenance
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10. Example from Wireless Games
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11. Sales Channels over Product Lifecycle
Late Majority
Early Majority
Early Conservatives
Innovators Adopters Pragmatists Laggards
Direct Sales
System Integrators
OEM/VAR
Electronic/Web
Retail
Distributors
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12. Lifecycle evolution and marketing mix
Introduction Growth Maturity Decline
Customer Type Lead Users/Early Early Majority Late Majority Laggards
Adopters
Target Market Early Majority: 20-35%; 3 –5 Falling numbers
Opportunit Lead Users: 3-5%; 15-30%; 2-4 years Price sensitive
y 1-3 years years Risk averse
Early Adopters:
5-12%; 2-4
years Niche
Competitors Minimal/NA Rising/many Shakeout/ ownership/
consolidate exit
Technology Strategic advantage Productivity strategy
Adoption motivation improvemen Price & ROI aware
Profile Hi-risk tolerance t Risk mitigation
Competitive Balanced risk Competitive Relationship-
Marketing advantage mandate driven
Strategy Reference accounts Reference (predomina
accounts Cut cost/max. ntly Sales)
Build awareness/ (in-industry) efficiencies
Communication Gain Penetration/Build Customer loyalty Minimum
s acceptance preference defend position/
Branding/ Cash cow
Credibility
Promotion Heavy Leadership Reinforcement of Minimum
Heavy brand
Profit Negligible or none Moderate Falling
(Investing in Highest (price High (volume-
new market) elasticity driven
Product and growth) economies) Workhorse
Technical Support- Improvement of Maximize model/line
intensive market differentiation extension/
“fit” (Stabiliz Price cuts
Supplier ed support) Prefer a “known” 12
Strategy Tolerates Don’t care
Open to “unknowns” “unknowns”

13. How long is your sales cycle?
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14. What we’ve seen fail
• “Shortcuts” – consultants, distributors,
commission only reps
• “Budget” approach – send over an
engineer for 6 months, expect sales
• Trying to sell existing product/service,
without local market analysis
• Recruitment of uncommitted local talent
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15. What we’ve seen work
• Committed local as part of founding/early
team
• Treat as Startup not sales expansion
• Detailed, hands on market evaluation
• Identification of key reference customers
• Localization of product & positioning
• Investment in time & resources to acquire
target reference customers
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16. Example - Transitive
• Transfer of Applications across Platforms
• Founded in 2000
• US market seen as Strategic Imperative
• Initial funding from Pond Ventures
• Creation of HQ in Silicon Valley 2001/2002
• Follow on funding from Crescendo & Accel
• Acquired Apple as first customer 2005
• Silicon Graphics & IBM now incorporating
Transit into their product offerings
• Wrike, Ephox, others, similar 16

17. What if looking for funding too?
• Need to establish US based HQ – no ifs,
ands, or buts……
• Lots of local competition – over 6,000
business plans at any one time
• Are you really fundable?
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