Cracking the US market – A guide for Kiwi tech companies: Part 1
Idealog went looking for some sensible advice on the subject and found Patrick McVeigh, general manager of economic growth at Auckland Tourism Events & Economic Development (ATEED)—a group that provides ambitious Kiwi businesses with states-based connections. We talked to Patrick about just what it takes to get a foot in the door in the land of the free and the home of the brave.
Idealog: Hi Patrick. First things first. Loads of Kiwi businesses have got great ideas, a little bit of capital and think they just might have what it takes to make it in the US market. But what’s the next logical step?
Patrick McVeigh: I think the very first thing you’ve got to do is start building your relationships and networks and talking to other kiwi businesses in the US market as soon as possible. You need to find out who your potential customers and funders are, find out how your product relates to their pain points and how it meets their needs, and the best way to do that is by actually being there.
I: Are there key differences in the way Kiwis and Americans do business?
PM: My experience is that a lot of contacts you meet [in the US] are happy to introduce you to their contacts—potential staff, investors—they’re happy to open up their networks. There is a requirement though, that when those networks are made available, you’re prepared.
They want to get into the discussion quickly and they want to follow up quickly. If you say you’ll provide someone with your offer for example, you need to turn that around quickly and really deliver on it. There’s less small talk in US culture.
Be really clear about what you’re looking for out of every interaction, and be ready to follow up and move on the outcomes of those meetings. The speed of things in the US market is pretty immediate.
Image: Patrick McVeigh, general manager of economic growth at Auckland Tourism Events & Economic Development
I: What’s the experience of Kiwis when they first step into the US market? Are there cultural differences Kiwi businesspeople should be aware of?
PM: We’ve had a number of people who’ve been over and listened to pitches from Auckland companies, and one bit of general feedback that we see quite often is this: you’ve got great products, but you’ve got to tighten your pitch.
There’s an expectation that that confidence will be there and you’ll believe in your potential, and that you’re ambitious and that you’ll deliver the returns that investors are looking for. New Zealanders can be a little self-effacing perhaps but you just need to adapt to the business climate you’re in. If you’re going to take on the world you really have to believe that it’s true.
Because the US experience of entrepreneurship is that failure isn’t socially unacceptable. Quite to the contrary in fact. You can carry those scars in the US market, learning from your failures, just as well as your successes.
I: What about red tape? Does the federal and local government make it easy?
The issues around actually doing business—setting up bank accounts for example—is different of course and can take longer. Social security numbers can take a while. And then there’s the work Visa issue—that can be a challenge, especially if you’re intending on spending a good amount of time in the market.
The costs associated with moving into a foreign market too can be quite high, especially if you’ll be living somewhere like San Francisco. There’s a lot of good business accommodation, but the cost of living in some of those marketplaces is something to think about. You may have capital to invest in your team, but you also need somewhere to live.
Talk to other kiwi businesses that have done it and find out the challenges they’ve faced. Then find good business and immigration lawyers—Kiwi Landing Pad can provide referrals to get the best advice.
I: So when’s a good time to start thinking about taking the plunge? Is there some particular indicator that says ‘now is the time to do it’ or is it something we should be thinking about from the very beginning?
PM: Increasingly, business need to be born global. I think you need to be thinking about engaging with those markets from day one. It’s never too soon. Personally, I think we should always be thinking globally.
In Part 2, we’ll be talking to Kiwi businesses that have made the leap across the pond, overcome the obstacles and met with success.