Entering the US survey results_V4

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www.visionandexecution.com
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.

• 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.

• 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.

• 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.

• 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.

• 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.

• 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: info@visionandexecution.com
• Twitter: @visionexecution
• Blog: www.visionandexecution.com/blog
2/10/2015

Entering the US survey results_V4

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