Exploring the US and UK markets

Many new businesses are now “born global”.  They start life from day 1 with a focus on the global opportunity, and move quickly to form  relationships with overseas suppliers, customers, and channel partners.  This is particularly true of software-as-a-service startups, who use the internet to market and deliver their offering to customers all over the world.

My own startup was born global. In addition to tackling a global target market, we have made creative use of overseas options to lower our costs, access better services, and tap into the right talent. Our logo was done in Melbourne, website mockups in Canada, website development in India, ecommerce via  a Scottish bank, and our first paying customer was from the US.

However, in my view, distribution is what often makes or breaks a new business. There’s a big difference between dabbling in a country versus building a serious channel to market. And the reality is that it can be very difficult to tackle a new market when you are located somewhere else.

A couple of services we have come across may be of interest if you want to target the US and UK markets.

  • ANZA Technology Network is a private organisation that helps Australian and NZ companies “explore, build or strengthen business roots in the US”. They run a variety of programs and leverage their networks to help innovative companies investigate the US market and prepare an effective entry strategy. (Note:  my business is participating in the Gateway to the US program in October)
  • UK Trade and Investment runs a Global Entrepreneur Programme (GEP) which aims to encourage innovative companies to move their headquarters to the UK. They can help smooth the process, open doors, and connect you with potential investors, grant providers, customers and suppliers. It operates via a network of “dealmakers” in key markets globally, who are themselves entrepreneurs.

Certain uncertainties…

Uncertainty is a given when it comes to startups. So, the way you design and implement your strategy should be focused on actively managing this uncertainty.

But chances are that it isn’t. Why? Because it’s not the traditional way of doing things … and your advisors, investors, peers, and other contacts will probably encourage (with good intentions) that you follow the well-worn path. Many of them are probably unaware there is a better way.

Traditional strategic planning is based on the assumption that you already have a strong understanding of your business and environment. It assumes that previous experience is a decent guide to the future, and that the underlying “game” you are playing hasn’t changed. The classic example is a detailed set of financial projections that simply increments the previous month or year’s number by some assumed percentage growth rate.

The assumptions of traditional strategic planning fail in startup-land.

In a new venture, you typically have a bunch of theories about what customers value and how you can profitably serve them… but as one expert puts it, the “ratio of assumptions to knowledge is high”. In fact, you will almost certainly be wrong! The key questions are when do you find out, how much does it cost you, and how well can you adapt?

The best startups focus on learning quickly and at low cost, by investing small amounts into activities that test their key assumptions. The worst put all their resources behind the initial plan … and only discover when it is too late that they are on the wrong track.