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Success in the USA


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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.

Published in: Business
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Success in the USA

  1. 1. Chris Gill President & CEO SVASE Silicon Valley Association of Startup Entrepreneurs 1
  2. 2. 2 Source: World Bank, Spain Rank: 39
  3. 3. Starting a company Employment 3 Source: World Bank,
  4. 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 4
  5. 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 5
  6. 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 6
  7. 7. Understand the market and how to segment it Scalable Business Model Want Competition Resources Required 7 Customers
  8. 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 8
  9. 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 9
  10. 10. Example from Wireless Games 10
  11. 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 11
  12. 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. 13. How long is your sales cycle? 13
  14. 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 14
  15. 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 15
  16. 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. 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? 17