Given the fantastic opportunity the US presents, it’s no surprise that our businesses are keen to understand how best they can establish a foothold in North America. At Frog we are extremely fortunate to have decades of US experience across our teams. We also have several current portfolio businesses with locally led US based outfits.
Through a series of interviews, we have tapped into this insight and created a series of checklists within the Scale-Up Methodology framework. This is now an essential toolkit for the CEO considering launching their business in the New World.
The first task for Management (and the Board) is to fully analyse their current position in their home market. For many businesses it’s likely that they could ‘do their number’ 10 times over just from their own capital city. So, by being honest with ourselves about how well (or not) we’ve capitalised on easier-access markets before embarking on an expensive and distracting enterprise is advised.
If you’re clear that the domestic market situation is optimal and its limitations unavoidable, the attached toolkit includes some key questions to ask yourself.If your answers to these questions leave you in no doubt that international expansion in the US is critical to your success and will create significant value, then the next step is to start your planning.
Just because a product is appealing on one side of the Atlantic doesn’t necessarily mean it will get traction on the other. Start your research by looking at whether the problems your proposition solves in one region are the same in the US. If that problem does exist, what is the state of any competition and would you need to reengineer your offer to meet US needs and still be differentiated?
A realistic budget with high levels of prudency built in (including what-if scenarios) is an absolute must, as is a recognition that everything will likely take longer than you expect.
Unsurprisingly legalities are different in the US and your understanding of them can be further complicated by a mix of federal and state rulings. You will find that some things will work in your favour and some not. The critical piece of advice here is to get some decent legal counsel early in the process.
Perhaps the biggest risk of all is money, or more specifically cash. US expansion can become a huge drain on cash reserves, especially for the first few years.
When I was Chair at a European visual effects company with an LA office and 47% of its revenue stateside, we had to be highly aware of our position with the US Patent and Trademarks Office. With cutting edge tech, it was vital to stay ahead of the competition. A small but significant line item in our budget was kept aside for refreshing our IP protections every year.
Having settled on the obligations of the Senior team, you need to turn your attention to the other functions in your business. What would you want to lift and shift from the base and what can stay as it is?
The below attached toolkit goes into further detail on each of these points, including case studies and checklists for each to help you on your journey of scaling to the US.