Successful U.S. Market Entry with David Rose from US Expansion Partners
August 4, 2023hi and welcome to the next episode of
belly to belly and today we’re here to
talk about U.S expansion and who better
to talk about U.S expansion with than
the head of U.S expansion Partners David
Rose welcome David hi Bill thanks for
having me on the podcast today oh it’s
it’s great to be with you and you know
where our audience are companies that
are expanding into the US that’s who
we’re really talking to here and so you
know I’d I’d love you know we’re going
to get into a conversation about sort of
best practices but before we do that if
you wouldn’t mind just taking a moment
to tell just talk a little bit about
your work and how you help companies and
that obviously gives your any comments
you make good context so if you would
mind telling us a little bit more yeah
so my background I’ve been in in Tech
here in the U.S my whole career I
started my career with an HR tech
company
um not an undergraduate and had a unique
opportunity to do a startup inside of
that company uh started a new business
line and we grew to 150 million in
Revenue in less than two years years
bought a 400 million dollar publicly
Trading Company and it’s grown into a
five billion dollar line of business so
that was my first start up inside a
Fortune 500 company and it’s kind of all
I’ve done ever since so I’ve done five
venture-backed startups I’m a three-time
CEO so I’ve been doing Tech startups in
the US for for many years now and I have
learned a lot about what to do and what
not to do and I just um more than
anything else like a lot of things that
are coincidental was contacted by a
company who was looking for help with
expanding to the US and I had just moved
from CEO to chairman of a company I had
some open cycles and I thought well I
sure like you guys I know how to do that
why don’t I just take that on as a
project to help not realizing it’s a
much bigger problem that seems unsolved
in the market than I had planned on so
here we go we’re going to start a
business to solve for this
that’s fantastic so you know we wanted
we want to talk about you know sort of
get to Best Practices but before we do
maybe talking a little bit about you
know as you look at companies coming
into the U.S what are the big things
that they get challenged by is there as
they’re looking to expand here
uh that’s a great question and that’s a
huge answer so I’ll try and make it as
as um because there’s a lot of pitfalls
and I think one of the big ones that has
to do with um with employees which are
going to be your biggest cost when you
come to the U.S and I think there’s a
couple so I always think about expanding
to the U.S in in three or three stages
so you have basically an entity
formation you have to create a company
you have to make it operationally ready
you don’t have accounting and Banking
and HR and those kind of things in
places and then you start thinking about
go to market so I think a lot of times
the first P First Step a companies make
is they’re just going to come in and
want to hire someone without really
thinking about how do you create an
entity how do you how do you have it
operationally ready so you can pay bills
and make payroll and those kind of
things and then what role usually go to
market strategies the first step a lot
of times people say is I’m ready to hire
and I think that’s a kind of step four
so a lot of times people get ahead of
themselves and kind of jump right to
that step and if you do the other three
kind of previous to that I think you’ll
find a lot more success and then the
other thing around people I see people
doing very quickly is they’re going to
want to hire a senior executive in the
U.S so they’re going to hire I want to
hire a U.S CEO I mean that was a
conversation I had with my first clients
we want to hire a U.S CEO
and it makes a lot of sense on paper but
what you realize is if you go after
someone in the U.S who has a really
great CV and great deep experience right
and so maybe they’ve worked and maybe
you’re a tech company and maybe this
company this person you’re looking at
for your CEO has worked at a great brand
like striper figma or Microsoft or
Google
what you don’t realize is just because
they’ve had a great career in the U.S
doesn’t mean they know anything about
starting a business in the U.S in fact
most people who are a senior executive
at Microsoft or Google probably have no
idea how payroll works or HR works or
Insurance works or even how go to market
works or how to look for product Market
fit signals because all that’s been done
for them before so they’re probably a
great scaling executive but probably not
so great at a startup executive
that makes sense so yeah really talking
about the the timing of uh personnel and
making sure that you have the right
people at the right stage of of the
process it sounds like a a really
massive uh challenge that a lot of
companies deal with for sure and I think
another really important step is a lot
of companies
um make the mistake of because they have
really good product Market fit signals
in their home country they assume that
they’re going to have really great
product Market fit signals in the US and
they over hire too quickly and so I
would also recommend hey let’s start out
let’s kind of do those those you know
entity formation operations go to market
hiring in that step but let’s not go
hire 10 people right you might you might
think you have product Market signal but
let’s let’s hire one or two and let’s
test our theories let’s look at our
pricing let’s say customers Partners see
what kind of traction we’re getting look
for signals that we are getting right
before we really scale hiring otherwise
you hire a bunch of really expensive
people you can’t really optimize for
performance early on
yeah we we actually uh have our our
clients bring out the back out the
business model canvas and and it’s sort
of like all right you remember the nine
quadrants or the nine uh rectangles yeah
let’s just focus back on the customer
segment and the value proposition make
sure as you said we have product Market
fit before we go and try to solve the
other seven uh rectangles let’s let’s
make sure the first two are are
appropriate and those sort of answer the
other questions anyway yeah exactly
that’s right exactly it saves you a lot
of money because you you know people you
know professional sales people
specifically are very expensive and if
you’re not ready to utilize them to
their their full capacity you’re
spending a lot of money that you don’t
need to spend early on well and and
probably also they’re going to turn over
fairly quick because they’re they’re not
going to find success and obviously
they’re somewhat success based and
compensation the most important thing
they want is to be able to be successful
right and and hit their quotas and make
commissions and if they’re not doing
that you’re right the U.S they aren’t
going to stick around Long yeah yeah no
really interesting so okay so now we’ve
got a couple of things that that kind of
are real landmines for uh companies
coming in so when you when you see
um you know uh companies that are
successful and or leaders that are
successful in in U.S market entry what
are the common attributes what are the
what are the things that are sort of you
know consistent
um with the the top performers well I
think asking a lot of questions and
listening is really important right so I
think there’s people who come in and
just assume they know how things work in
the U.S and they’re just going to go
forward but the ones I find that we’re
really curious how things work and what
the differences are between the markets
and the countries and the territories
and how the cultures are different and
how business is different ask a lot of
questions and really want to understand
it I find are much more successful in
the long run versus those who are just
super aggressive and hit the ground
running as fast as hard as they can
yeah so asking questions it’s funny as
you were saying that I’m going it’s
through ego ego is sort of I mean not to
say it’s ego’s a bad thing because if we
didn’t have ego we we wouldn’t say Let’s
cross an ocean and and you know and sort
of we need we need that that’s really
important but there’s a I suppose if
we’re not listening to whether it’s our
partners and and you know uh any any
folks that are advising us but also if
we’re not listening to our customers
then they’re I from what you’re saying
really significant problems yeah for
sure for sure and again if you just come
and you really want to learn you’re
going to be more successful if you just
want to run hard you have to run hard in
the U.S it’s super competitive uh in
every category in every industry but um
learning along the way will yield much
better results
yeah no that’s that’s really interesting
so
um and and then uh you know looking at
um
you know if there’s kind of one thing
that you said would say a company should
focus on and and uh you know I I I I it
seems like there are many but it it if
there were kind of one big tip uh that
you you know 100 if you don’t get this
right it’s it’s challenging what what
would what would be the kind of core of
that
well I’ll tell you one mistake I see or
miss one misperception I talk to people
about a lot especially in the technology
business there’s I’ll hear
um when I talk to them about hey here’s
kind of the the steps to create a US
entity and they’re like no I don’t want
to do anything I just want to hire a
contract sales rep on commission only to
go sell my products and one of the
things that I talk to people about and
again I’m not sure it works differently
in different regions and different
territories and countries but in the US
especially in technology if someone has
the skill set to sell expensive B2B
complex software to Fortune 500
companies they can command a pretty high
salary
and if that’s this business space you’re
in you have to stop and think if anyone
would be willing to come work for your
company
to work for commission only the only
reason they would do this because they
can’t get a job anywhere else and they
ultimately don’t have those skills and
they wouldn’t be talking to you right
and so I think one that’s a common
mistake of people like oh I don’t want
to start a company I just want to hire a
seller at the working commission and
drive sales for us and then I’ve never
seen that one never seen that one
well it it is it I I we always look at
that that first six to 12 months that
first phase of Entry as sort of yeah you
certainly want to get you know early
customers and and some Pilots going and
all that kind of stuff but but parallel
to that you’re building a sales system
and you know sort of a ideally a
repeatable process
um and the and it always to to your
point exactly is when people hire sort
of the Lone Wolf sales person whether
it’s a you know commission only or just
that single sales person it’s it feels
to me like you’re sort of hiring you
know somebody to drive your car but
asking them to build the car which is
really too quite different for sure in
the same in the same in that same vein
Bill a lot of companies think about
um as you get into other Industries
outside of Technology looking for a
distributor or a resell or a partner to
take their product or market and those
are legitimate go to market strategies
but only as if only if there is demand
in the marketplace for your product
right and so if you don’t have any
marketing support if you don’t have any
cell support if you don’t have anything
that’s going to help drive that demand
for your product you can find all the
resellers and Distributors you’ll want
but they’re not going to go take it to
Market unless there’s customers asking
for it and there’s demand for the
product so it’s not just as simple as
I’m going to assign a distributor you
really have to be thoughtful about how
you’re going to drive demand for the
product in the U.S to you know Drive
business to that distributor in that
resource so they can be successful how
much they’re successful they’ll put more
into it as well right yeah it’s always
great to see the companies that you know
have the sort of the partner page and
it’s just any you know it’s a solid
logos and then you go and you know talk
to the CEO about you know can you tell
me about the productivity of of the
partners how you know what what do you
get out of that and it ends up sounding
a lot like the Pareto rule where you
know 20 are creating 80 percent of the
results and and right and it but yeah
the activation of that of those Partners
probably sort of the less better is
better uh philosophy might be helpful
there but yeah overall you know not only
can I go to market but all those demand
strategies right so events are important
part of that as well obviously all right
so you have to get your product in front
of customers and you have to build
relationships and so that’s just the
overall go to market is is much more
important than just basically I’m going
to hire a sales rep or a distributor you
know in the US and and expect uh you
know fantastic sales growth well and and
probably a challenge too to sort of
Outsource sales in that in that you know
you’ll be you’ll be in arm’s length then
from hearing the customers challenges
hearing you know getting the
testimonials all those all those types
of things so you’re you’re good the
evolution of growth will be if it works
would be even slower because you don’t
have the
um the intimacy with the
customer too I would guess right right
and of course all the other other things
that we’re kind of talking a lot about
the employee side which is kind of
more complex but there’s all kinds of
administrative and compliance issues a
lot of people don’t realize if you’re
coming from a country in Europe there
might be one government jurisdiction and
you’re not used to dealing in the U.S
you have the federal government and you
have 50 states right yeah we just had a
call recently with the company a client
of mine who has sales tax sells sells
happening over 10 states in the U.S and
all of a sudden you have to figure out
how to do sales tax in 10 different
states and so there’s a lot of
complexities people don’t realize
they’re used to dealing with one tax
jurisdiction or one governmental agency
not realizing you’re going to be dealing
with dozens of them in the U.S and by
the way the rules are often different on
a state-by-state basis on all kinds of
fronts yeah well it’s not it’s not
simple and that’s why uh folks like you
exist to help companies navigate those
uh those challenging waters for sure and
uh so this has been really great David I
appreciate you so much spending the time
and what we’ll do is we’ll put you know
your contact info in the description
below and all that but uh okay if
people reach out if they have questions
yeah absolutely we’d love to talk I’m
always happy to talk with companies
looking to come to the US and answer any
questions
um I love business and love companies
coming here so I’m always happy to talk
anytime I get the chance
oh that’s wonderful well thank
you again for taking the time today
and we’ll look forward to our next
conversation thanks Bill great to see
you thanks for having me on the podcast
appreciate it take care
About
MEET (meetroi.com) helps international B2B companies gain traction and scale in the U.S. through trade shows, events, and strategic connections. MEET’s processes help its clients ramp-up sales quickly and maintain a steady stream of high-quality prospects going forward. Contact Bill Kenney for a no-obligation conversation: bill@meetroi.com or +1 (860) 573-4821.