In Part 1 of this series, we spoke about the three MUST-HAVES before a Founder should even consider an expansion to the US. In this follow up article we will outline some of the big questions you need to ask yourself before committing to this monumental move.
When you consider the US it is easy to assume that the Total Addressable Market (TAM) is the ultimate prize for any business. This in fact this is not always the case. In certain technology & SaaS fields — for example, FinTech, PropTech etc — the scale of the opportunity will of course mean the US has an irresistible pull but, in other instances, the best source of long-term growth might be closer to home.
Where you draw the line is a judgment call but our rule of thumb is that if over 40% of the TAM sits in the US then it should be considered as a critical growth market.
A great indicator that there is a market for your product or service in the US is that it is finding its way there without you. We urge founders to track whether they are getting website traffic or demo requests from potential US customers. It might be that a critical mass of interest is already building. Also, engage with your current customers in Asia to find out if they have been recommending your solution to their US team & what the reception was. Your most supportive customers here in Asia would make great first customers in the early days of your US expansion.
Take a step back & consider whether there are any aspects of your offering that simply render a US expansion too challenging, at least in the immediate term. We have seen founders struggle because their UI was simply not up to the mark & didn’t provide the positive experience that is so important in attracting & satisfying your first 5 to 10 US customers. Business culture & language might also be hurdles. Current management & customer success teams might be perfectly suited to growing in Asia but not yet a great fit for engaging with, persuading & servicing US customers in the way they expect.
When making the move to the US, especially in those early days, management prowess will be stretched to breaking point. The Operational strain of having critical leadership personnel at home focusing on the expansion challenges can be damaging to an early stage business. Remember that time differences will be great & it might well be necessary for key people to actually move stateside for a few months. In all the excitement don’t forget the value & growth potential of your homegrown customers & the need to keep the Asian business at the leading edge of the industry.
Once in the US you will be eager to enjoy not just the capital offered by the US VCs but also their network. Both will be critical growth accelerators in an unfamiliar market.
Study whether your sector is currently attracting VC support & if there is room in the market for an Asian disruptor. Knowing that there is the opportunity to leverage local capital & contracts should give you a lot of confidence that the time is right to test the US market.
These are all big questions but you cannot shy away from asking them. You are about to take a big strategic risk so you should be able to answer at least 4 of these positively before deciding to take the plunge. At Jungle we love founders with ambition but always encourage them to look before they leap.
We hope this has been useful & remember to catch the final part of our US cheat sheet when we will discuss the key early decisions you need to make in order to land & expand.
Good luck!