I’ve just returned from South By Southwest (SXSW) in Austin Texas, where I was fortunate to be part of the UK Department of Trade & Industry (DTI) delegation. SXSW is one of the most important events for startups and tech innovation in the US, and the place where many tech firms seek to launch new products, new digital services or form new partnerships.
One of the main reasons that I was at SXSW is to forge new relationships in the US for my own company Ormsby Street, and I’m certainly not alone. There are many companies from the UK, Europe and further afield all seeking to break into the US market in some way. I’ve been having many discussions at SXSW with US firms as to the best way to go about this, and this is what I’ve learned.
Understand the market
Given the shared language between the US and UK, it’s tempting to think that we can do a great deal of desk research, market interviews and test advertising campaigns from our desks. This background work is both useful and essential, but it’ll give at best a partial understanding of how things really work in the US. There’s no substitute for getting on a plane and visiting trade shows, product launches or arranging your own schedule of meetings with potential customers or partners.
The culture isn’t what we take away from US TV shows either. It varies hugely from state to state and coast to coast, and that means that getting immersed in the culture is the only way to really understand how business works in the US. SXSW is a great place for this because of the sheer breadth and depth of companies and people here, all of whom are very happy to talk at length about their company to give you the understanding you need.
Network in the market
We think of the old boy network as an outdated British business concept, but the value of introductions within any new market remains high. In the US, talking about your business and learning about those of the people you meet is a gateway to great conversations with others. Don’t expect that you can just ask anyone for an introduction to someone that you can see they’re Linked-in to, but if you can demonstrate that you’re interested, interesting and relevant to the folks you meet, they will identify others for you to talk to which will deepen your understanding.
Plan distribution in the market
No-one would think it feasible to come up with a marketing plan for ‘Europe’ which would be successful across the many different cultures and economies, and the US requires more – rather than less – planning to tackle effectively.
Often, the whole of the challenge of breaking into the US is one of distribution. So to make that work, you need to understand how products and services similar to your own are transferred and look at how you can use those successful mechanisms to your own advantage. It’s difficult enough to break into the US in itself, without trying to reinvent a regional or national distribution at the same time!
Pitch to the market
Finally, prepare your pitch. Practice and practice again, and focus on the value that you’re bringing to the US. Often breaking into the US will mean doing something that isn’t already done there or bringing an unique proposition to a US company which makes it worthwhile for them to overcome the additional friction that dealing with you – a small company in a small market – will entail. So when you visit, you must get an understanding of how your market is perceived by US customers. Your pitch has got to focus on things that aren’t being done well by the US options you’re competing against. In general terms, Britain is seen as quirky, interesting, historic, creative, lively – so can you make those unique aspects of your product which will make it a success here? Can your European design ethic overcome the ‘made in America’ patriotism that’s very important in the US?
The opportunity is huge, but so is the competition. Any UK firm wanting to break the US should understand it’s not a quick process. Do your research well and keep on trying, it’s a big country so you’ll need a lot of patience, but the reward for success in the US will make that hard work pay off.
Martin Campbell is MD at Ormsby Street, the company behind the CreditHQ financial health check tool.