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Are you a startup founder who has succeeded at raising venture capital funds? You have already wowed investors and secured funding for your business development which is one of the biggest challenges in a company's lifecycle. But did you know that managing a relationship with investors is also a crucial part of running your business successfully?
Unfortunately, most entrepreneurs fail at this point, underrating the importance of keeping investors informed as the company grows. Step into the shoes of your investors for a moment. They have deployed a significant amount of capital in a promising venture, where their success is attached to your company's success.
Therefore, regularly updating them is key to nurturing your investor's network and building trust and confidence. That way, you can also increase your chances of getting them on board on your next round, or perhaps they can refer you to other potential investors.
But with that said, another challenge arises. What should an investor's update include that helps them understand what's going on behind the scenes?
Before digging into the tips and tricks to write a compelling investor's update, let's see what it is all about and why they are a key strategy for your business development. Simply put, an investor's update is an important document, usually an email, with updates about your startup performance and how money is being spent.
That said, it's important to mention that the frequency preferences may vary from one investor to another. While some prefer daily or weekly updates, others may want one once every quarter. This is why it's so important to have effective communication with investors, so you can define a schedule and stick to it.
VC firms usually have a wide array of companies within their portfolios. It can be pretty cumbersome for them to know precisely at what point every venture they have poured capital into is. So keeping them informed with regular updates is a great way to keep them engaged and maybe get them back on your next round.
The goal is to build a solid relationship that goes beyond just asking for funds. It's also to strengthen your network and gain trust in your company. This is not only motivating but also a strategy to show you and your team are accountable and transparent.
What's more, numbers don't have to be impressive to keep them engaged. In the end, it is all about trust and building a sense of connection. Therefore, investors will be able to support your startup not only during good times but also during stormy periods.
You now know the importance of an investor's update for your business growth. So, how can you get the most out of this strategy? Here are some key aspects to consider when writing your next update avoiding the most common mistakes and highlighting what really matters to them. Remember that consistency and being brief is key to gaining their attention.
#Summarize. Provide a quick summary of the last period since the previous update, including milestones, sales goals you have reached, and any new hires. Show them where you are on your vision and mission journey and don't skip the goals you haven't achieved yet with a brief description of why you haven't accomplished them yet.
Facts and figures. Truth is, numbers may not be as impressive as you expect. And this is why so many founders choose to omit this information to investors, without knowing they are making a significant mistake. By not displaying the truth behind the scenes, you may be showing a lack of transparency or, worse, looking unprofessional.
Share your challenges. Bumps on the road are part of any startup journey. Unfortunately, nobody has everything figured out. Keep investors updated with your next goals and pending milestones. That way, you prove your business accountability and project trustworthiness by being honest about your wins and losses. What's more, investors may give you the resources to help your company overcome these challenges.
Talk about any changes in plans. Yes, pivoting can be a smart move when scaling up a startup. Whether you are planning on expanding operations locally or abroad, this means a substantial change in the initial plans when you pitch to those investors. Therefore, they should be informed about this new direction which also shows your business is constantly evolving.
The format. This is the most essential aspect for ease of readability. Keep a consistent format, greet investors, be concise and create bullet points with the above mentioned items. Also, include potential opportunities, and what's more important, don't forget to thank them for their trust in your venture. Remember, it's all about building a powerful relationship that can leverage your investor's network for future funding rounds.
Sharing updates with your investors will help you and your business seem more professional and accountable. Moreover, it's a great way to nurture your investor's network for future funding rounds. As your startup grows, decisions are made, and plans may change. Keeping VCs informed is key to showing you're still committed to your vision and mission despite the challenges.
And that's why at Base Miami, we work side by side with founders in the complex entrepreneurship journey. Through our wide array of initiatives and programs, we provide them the tools for a successful scaling-up process in the US market. Drop us a line and learn more about scaling up your business abroad.
One of the biggest challenges in a startup's lifecycle is funding. Because besides the lack of experience an entrepreneur may have, the venture capital market has its ups and downs, leaving barely any room for companies to overcome this situation.
Financial markets move at their own pace and are very volatile, and early-stage ventures are the most impacted by these downturns, as they are the riskiest ones. Not so long ago, the VC sector was pumping large amounts of money worldwide. It seemed the sky was not the limit at all for funding companies.
But things have slowed down, and with the current economic uncertainties globally, the venture capital sector seems to be under a deep freeze. With that said, many funders and business owners expect a market correction, given the current trends.
Moreover, investors see an excellent opportunity for startups to thrive. How can it be possible that an economic recession will help a company succeed? According to the experts, these downturns can improve the ecosystem by building better leaders.
Just like the old quote " a quiet sea never made a skilled sailor," an economic crisis can be the brave sea entrepreneurs need to grow stronger. That said, there's no secret sauce or easy road to success, but there's a way to tackle adversity while the financial markets reorganize and not die trying.
According to Crunchbase, the current economic recession is the third most significant tech downturn of the internet era, following the dot-com bubble and the Great Recession. This economic uncertainty is hitting everyone, but early-stage ventures are certainly experiencing the biggest venture capital retraction.
As a result, investors strive to minimize risks and be more cautious by choosing companies with a proven business model to pour capital into. Unfortunately, startups in earlier stages present a more uncertain scenario, and without this proven business model, they are based only on a good idea. Not enticing at all for venture capitalists during a global economic downturn.
But startups need funding to improve their businesses' technologies and products and get the right people on board. Therefore, founders can't afford to miss a funding opportunity. Though entrepreneurs know that challenges are part of any business journey, the fundraising slowdown is indeed critical. However, before this financial turbulence, deals hit record-breaking numbers in 2021 until, unfortunately, they drastically dropped in the first quarter of 2022 due to a combination of factors like the war in Ukraine, the rising economic recession, and high inflation rates. This made a dramatic shift in the startup ecosystem.
In such a volatile context, companies must be set in survival mode to use the crisis as an opportunity to be more profitable. There's still a lot of uncertainty, and though experts are forecasting an economic recovery, startups should buckle up and follow the advice of those who have already been there.
Related Read: How To Lead Your Startup During Uncertain Times
Despite the rough funding climate, startups across a wide range of industries pop up every day. But unfortunately, not all of them succeed, and most sink before the first five years, whether there's an economic debacle or not. Therefore, we have put together a list to survive not only the current capital freeze but also any financial crisis along a startup lifecycle.
As we said, there isn't a recipe for succeeding during rough financial times. However, founders can optimize their resources, increasing the chances of thriving during turbulent periods. Though no two companies are the same, these three key takeaways we have put together can help you minimize the consequences of this fundraising winter.
Among the numerous reasons why startups fail, it's overconfident founders. Everyone thinks they have a groundbreaking idea, but it's the market that will validate it or not. Unfortunately, sometimes startup execs stick to their idea and refuse to pivot and make a shift on their initial conception. By doing this, chances are the product doesn't find its market fit, and as a consequence, money runs out on holding on to an unprofitable idea.
Startups cannot afford a poor cash flow during a venture capital downturn and will certainly not survive. Determining when it's the right time to pivot and introducing changes to your product is key to increasing your chances of thriving in a challenging context.
If you are lucky enough to have already secured a funding round, it's vital to keep investors informed regularly. This is important to build a relationship based on trust that can open doors for future funding rounds when scaling your business.
Moreover, you should include not only the goods but also the rough patches. Yes, investors must have the whole picture regardless of how bad it is. The funders community is vast but pretty tight-knit. Therefore, you must always keep communication open with your investors, even if they are not investing in the next round.
Having the right people on board is key to survival during challenging times. So, yes, you must invest in hiring the best talent because it'll pay off in the long run, and mostly in contexts of uncertainty. A proficient team can help founders improve decision-making regarding product development and pivoting and also help determine the right path to follow when a financial crisis hits. Don't cut costs when assembling your initial team; you'll see the results while navigating turbulent waters.
Funding is vital for the scalability of any startup. Companies need this fuel to make decisions and introduce the necessary improvements to develop a successful product. Many investors and execs who have already been there and thrived in rough contexts are giving entrepreneurs their advice to help them make the right moves during uncertain times.
However, despite the global economic flows, Latin American startup founders watch the US market as a green field for their businesses to flourish. Programs like Base Miami's Market Fit give entrepreneurs the tools and resources to understand how the market behaves while getting valuable insights from those who have been where you are. Get in touch with us today and take your business to the next level!
Latin America is making headlines when it comes to the fintech scene. A study conducted by the Inter-American Development Bank (IDB) and Finnovista highlights there was a 112% growth in the fintech ecosystem in the region since the last report released in 2018. In just a three-year window, the number of platforms rose from 1.166 to 2.482, with Brazil boasting the largest fintech market in LatAm.
But what fuels this explosion of fintech activity? How do tech companies thrive in a fast-changing scenario with so many challenges like the one in Latin America? The truth is there isn't a predominant reason behind it, but a combination of factors instead.
Historically, the region offered poor financial services, leaving many people unbanked. And we can see it in a World Bank report that states that an estimated 135 million people in Brazil, Colombia, and Mexico were unbanked in 2017.
But that's not all. The massive mobile internet usage has proved to be the catalyst in this combination of factors to create the perfect environment for fintech to thrive. According to Statista, in 2019, there were 343 million mobile internet users in Latin America. Striking for sure. So, let's dig a bit deeper into one of the hottest fintech markets in the world and see what's ahead!
Before delving into the reasons why fintech companies thrive in such a complex environment, let us paint a picture of the tech ecosystem in Latin America. The pandemic during 2020 was a tipping point for the economy globally.
In LatAm, the region was already experiencing significant growth, and despite the economic bumps, the COVID-19 outbreak boosted fintech development. Let's see some facts and figures.
What makes LatAm so attractive for international venture capitalists? Here are some of the most relevant factors that combined created the perfect recipe for fintech to thrive in the challenging Latin American scenario.
Over the past years, Latin America has embraced a digital transformation creating a more competitive landscape for financial solutions. The rise of neobanks, also known as digital challenger banks that operate 100% online, forced traditional banks to digitize their services in order to stay competitive.
Until not so long ago, banks in Latin America didn't offer mobile apps, and if they did, they were poorly developed. With fintech emerging to cover this pain point, people shifted massively to online banking options.
The pandemic that occurred in 2020 hit the economy globally, leaving a trail of consequences that impacted people's consuming habits. Though there was a steady development of the fintech landscape in Latin America, COVID-19 accelerated this growth.
Innovation was forced out of necessity. Historically, cash was widely preferred in the region, but the lockdown and business shutdowns increased the need for digital payment options. As a consequence, large amounts of the population shifted to fintech fueling its growth.
Another consequence of the aforementioned point was the boom of e-commerce. There was a sudden shift from offline to online retail due to strict lockdowns in the region, generating a substantial demand for fintech solutions.
Though e-commerce is not new and was already on track before the pandemic, the situation spiked its use and showcased the need to streamline payment processes and logistics. The outcome: consumers boosted the adoption of digital payment methods.
One of the biggest game-changers in the fintech environment in Latin America was inclusion. Fintechs emerged to bridge the gap between a large sector unbanked population and the financial system, becoming a gateway for digital inclusion. According to the World Bank, only an average of 55% of Latin American adults have an account at a financial institution.
What's more, monopolistic practices of certain traditional banks over decades have also caused consumers to lose trust in these institutions, becoming more open to adopting alternative payment methods. Neobanks and digital wallets emerged as a more inclusive and streamlined solution for people in the region, enhancing their banking experience.
Certainly, Latin America has become a hot spot for fintech companies, and it keeps developing with venture capital pouring in. Of course, there's room for innovation and growth. Countries in the region are changing regulations to entice entrepreneurs and investors, with inclusion at the forefront of this digital revolution.
Today, Latin America has a plethora of possibilities for tech companies, and we are witnessing the growth of unicorns and projects with potential. The financial ecosystem is still taking shape, but the opportunities are real.
Companies like Base Miami and its programs aim to support LatAm entrepreneurs in expanding their businesses beyond the borders entering the US market. Discover what we can do together.
You think your business idea has potential, but do you know that even the most groundbreaking ideas have failed during the first year?
According to a CB Insights report about startup failure rates, the top three reasons these companies can't survive are running out of money, no market need for the product/service, and being outcompeted. Though all of them are closely related, the truth is that the first two have the same root cause: the idea validation (or the lack thereof).
Unfortunately, most entrepreneurs usually overlook well-conducted market research and don't test and iterate enough before being really sure the business idea will thrive. So, how to know which business idea is worth being pursued? We'll puzzle it out in this article.
Idea validation is a process of discovering whether a specific target market is interested in your products or services and involves a series of tests before fully investing in the concept. An idea must solve a real problem, fulfilling customer pain points. By doing this, entrepreneurs will be able to determine whether there's a real need for the product and if it'll be profitable.
A common mistake most founders make is to be overconfident about their business idea and skip the necessary steps to put it to the test. The result is pouring large amounts of capital into launching a product that doesn't address the market needs. And what's more, a golden ticket for the club of the startups that crash before their first year.
If you like your business idea to thrive, it's key to put it to the test. Therefore, let's drill down the reasons why ideas should be validated. But before we start, we would like to emphasize that validating a concept is not only for inexperienced entrepreneurs.
There are many times in a company's lifecycle when validating an idea is crucial for growth. One of these cases is when founders decide to scale their operations internationally. By entering a new market, new challenges appear. So this is why this article can be helpful both for early-stage startups and consolidated businesses that aim to expand internationally.
With that being said, we can now explain the importance of validating an idea. In a nutshell, this process will save you time and money. You will gain a better understanding of whether the concept has actual demand. This will minimize risks and boost product development efficiently.
On the other hand, market validation can also help founders raise the confidence of potential investors considering funding the startup. The earlier the stage where you validate the idea, the earlier you'll know whether the product is worth being developed or changing the course.
The validation process begins with setting goals and defining a hypothesis. First, write down your goals. The SMART goals are a constructive framework in this instance, as they will give you a comprehensive overview of the concept:
Specific
Measurable
Achievable
Relevant
Time-based
Your goals should be oriented to determine the most critical assumptions. That's why right after defining goals, you must develop a hypothesis. Start with the critical assumptions mentioned before, where it's more likely for the concept to fail.
For example, you can ask yourself whether your product is solving a real problem or how the key features of your product work.
The next step is to analyze and estimate the size of your target market and the share you could potentially get. This stage requires deep research and data collection to outline whether your product is a good fit and justify its launch. For example, you can analyze competitors, their number of sales, and what percentage of the market segment they hold.
To experiment, you need to develop a Minimum Viable Product. An MVP is a version of the final product with the basic features to be tested in the market, and it's a cost-efficient way to test assumptions. Also, you can conduct interviews, focus groups, and surveys with your target customers.
Gathering feedback is essential in this stage to get valuable insights. Maximize it!
External support can be vital to validate ideas in a new market. Accelerators, like Base Miami, offer a wide range of programs to help founders find the product-market fit when expanding the startup internationally.
With the guidance, support, and experience of those who have already been there right where you are now, you can save time and money in the market validation process.
The fifth stage is when you see whether the assumptions are valid or not. Keep in mind that though this is the last step in the validation process, you may need to restart the cycle with new hypotheses.
Don't be afraid to start over, change the course, and fine-tune your idea if it doesn't succeed right from the start. Iteration is the key to building a product that addresses your customers' needs.
Developing a groundbreaking idea from scratch is not easy. What's more, the process of launching a new venture is haunted by nasty failure rates. Therefore, the purpose of validating a business idea is to minimize risks while saving time and money in the process. By doing this, you get a cheaper and faster way to test assumptions and decide whether to continue with the product development or pivot.
Base Miami's Market Fit program helps founders test their hypotheses to gain a solid understanding of how things work in the bustling US Market. We support startups with a proven methodology and a powerful network in their international expansion journey. We know launching a business can feel like jumping from a cliff, but with the right tools, you can take your company to the next level.
Did your company survive the first turbulent years and has already ensured a steady revenue stream? You perhaps think it’s time to go bigger, but how can you be sure when it’s the right time for your startup to take the leap and scale?
With Miami becoming a new tech hub and a gateway for Latin American companies that strive to expand to the US market, the terms startup and scale-up became king. Every week, countless headlines announce successful funding rounds enabling founders to take their companies to the next level by scaling up.
However, while many believe that the concepts of startup and scale-up are interchangeable, the truth is both describe different phases of company growth. Therefore, with these companies being crucial for the tech ecosystem development, understanding their differences is key to a successful transition.
Why does the difference between these terms matter? Because founders need to be fully aware of where they are standing with their companies before taking the leap to a bigger structure. But what defines what's a startup and what's a scale-up? Is the team size? The revenue? Let's break down these terms.
Startup: It's a company in an early stage. Famous investor Eric Ries, author of "The Lean Startup," defines it as "a human institution designed to bring something new under conditions of extreme uncertainty."
In this stage, companies usually work with product/market fit development. They are embarked on the mission to find a repeatable business model, outlining the customer acquisition costs (CAC) and working on customer segmentation. As this is a temporary stage, how does a startup become a scale-up?
Scale-up: A scale-up is a company that has already validated its products in the market and proven its business model. Startups that have reached a certain level of maturity by proving their viability and sustainability are ready to move to the next level and scale. One of the key parameters to qualify as a scale-up is an annual 20% growth over three years.
#For Startups
Related Read: Top 5 Challenges Faced By Startups
#For Scale-ups
Turning into a successful scale-up doesn't happen overnight. There are many aspects every founder should have in place to determine startup scalability. Therefore, if you think you're ready to take your company to the next level, then read the key takeaways we have laid down below for a successful transition.
According to startup coach and investor Marc Andreessen, finding the product/market fit means "being in a good market with a product that can satisfy that market." Therefore, founders achieve product/market fit when they finally meet their customer's needs and make them better than their competitors.
Once you have mastered this crucial aspect and finished experimenting with the strategies, including the value proposition, you are ready to move on to the scale-up phase.
If your startup has already secured an early funding round (seed or series A) and it doesn't strictly depend on outside funding, the company has entered a steady revenue stream with a solid cash flow.
When you reach this point where you know exactly your ROI jointly with an established product/market fit, you'll be ready to shift to a scale-up and proceed to later funding rounds (series B or over).
It's widely known that everyone does everything in the startup phase as these companies can't afford a specialized staff. However, when shifting to a bigger structure and scaling the business, roles need to be defined, and new management levels must be created. It would be best to have a focused and productive team, with each person committed to a job and one job only.
While the company structure becomes more complex, founders need to automate processes to avoid bottlenecks and optimize resources. In addition, automation allows companies to improve data management for better decision-making while also being cost and time-efficient. So, don't hesitate to invest in improving the IT systems and provide your team with the necessary training to be aligned with these tools before scaling-up.
Do you think your startup is ready to transition to a scale-up? We hope you have a clearer picture now and understand the key differences between these two types of companies.
Though challenges are around the corner, shifting to a more complex business structure should be smoother if you have these aspects in place. Moreover, if you plan to expand your company internationally and explore new markets, you'll need to start from scratch with the product/market fit.
Base Miami supports founders on their international expansion journey with a series of programs and bootcamps to understand the US market and how your business can make it there. Are you ready to take your startup to the next level? Get in touch with us today!
Miami's tech ecosystem is burgeoning, and at this point, it's clear that it's not just hype. The region is experiencing significant growth, building an engaging community of entrepreneurs, investors, and organizations. With such a dynamic scenario, the need to create a more supportive and innovative tech culture becomes evident.
That's why two key players in South Florida’s tech scene have teamed up in a game-changing merger that promises to revolutionize the region, turning Miami into a tech hub for Latin American and Caribbean companies. Base Miami and Moishe Mana's Mana Tech are merging. And our founder, Charly Esnal, is leading the initiative as the Managing Director for the technology platform.
No wonder, this is a significant milestone toward innovation that entails numerous benefits for entrepreneurs and the region’s development. However, such a move didn’t happen overnight. So, how did we get here?
By the end of 2020, after a rough year for the economy globally due to the COVID-19 pandemic, a few characters on Twitter put Miami in the spotlight. High profile investor Delian Asparouhov posted, "ok guys, hear me out, what if we move Silicon Valley to Miami." The tweet soon got countless replies and impressions, but indeed, the most relevant one came from Miami Mayor Francis Suarez with its now-famous "How can I help?".
Related Read: Miami Tech Boom Beyond The Hype: A Recap Of 2021 Top Startup Ecosystem Moments
This social media interaction ignited a movement that, at first glance, it seemed just hype. However, South Florida's Magic City was already working on building a tech gateway for LATAM companies long before December 2020. Key actors like Moishe Mana's division Mana Tech and Base Miami as a leading startup accelerator were already contributing to the growing tech scene.
On the one hand, Mana Tech was created as a division of Mana Common. The company had been investing more than $600 million in revitalizing the business Flager District since 2001. According to Moishe Mana, "Miami's innovative culture, robust investment, venture communities, highly skilled workforce, and impressive infrastructure create a fertile environment for continued growth." Therefore, that's when the Mana Tech initiative came to life, helping develop a culture of innovation within the tech community.
On the other hand, with such a fertile environment to build a tech hub, Base Miami became a key partner for founders as a leading startup accelerator. The company, led by Charly Esnal and Fernando Cariello, embarked on the mission to support Latin American companies to expand into the bustling US market.
That way, through a wide array of programs, webinars, events, and bootcamps, Base Miami has been helping LATAM tech companies successfully scale their operation in South Florida. In fact, it’s not the first time that Base Miami and Mana Tech team-up. In the past years, these two companies had partnered to host many programs and events like Base Miami’s Market Entry Bootcamp.
Therefore, now after years of hard work, these two companies have taken the leap by joining forces to keep building the next tech hub of The Americas.
So, what does this merger brings to the Miami tech community? First and foremost, it combines Base Miami's team expertise working in the US, Asia, South America, Africa, and Europe with Mana Tech's digital platform and thriving tech community.
The merger comes at a strategic time, with both companies well positioned in Miami's tech scene. The coalition aims to develop more programs and the necessary infrastructure to lead to more investment opportunities.
Some of the programs that entrepreneurs will be able to access are the Market Entry Bootcamp, Market Fit one-on-one program, and the Miami Immersion Week. All of them are expertly designed to support LATAM founders in their expansion process into the US market while saving time and money. That way, incoming companies from Latin America and the Caribbean will learn to avoid the most common pitfalls and succeed when scaling up in the US market.
Base Miami and Mana Tech merger, certainly it's a significant leap for Miami's tech scene development. Though there's still so much work to do to build the next tech gateway for Latin American companies, this alignment creates more investment and growth opportunities for entrepreneurs. So are you ready to revolutionize Florida's Magic City and turn it into the next tech hub? We are!
Launching a new venture is an exciting journey but full of unknowns and risks. Moreover, the famous formula of outlining a business plan, pitching it to investors, releasing a product or service, and starting selling may seem a bit outdated. Though countless companies have implemented this scheme for decades, the truth is that it's inefficient. By the time you accomplish each step of the formula, there might not be a need for the product anymore, and consumer demands might have shifted.
What's more, this old-fashioned scheme moves around assumptions of what entrepreneurs think about the needs that the product addresses without enough market validation. In fact, the entire product development is based on assumptions. Certainly, it's a recipe for disaster.
It's a well-known fact that most startups begin with a lack of certainty. Here is when the Lean Startup methodology takes the stage providing a framework to develop a business idea in a cost-effective way.
Consumer behavior has evolved, creating a dynamic and ever-changing market, presenting a challenging panorama for entrepreneurs. Consequently, a customer-centered approach and data-based feedback are key ingredients for a startup to succeed. So, if you want your startup to thrive while saving time and money in the process, keep reading to learn the key takeaways of this widely-used methodology.
The lean startup methodology is an innovative approach that enables founders to arrive at the final version of the product as efficiently as possible. That way, the path to developing a product that fills a gap in the market becomes less challenging. Inside this tested methodology, we can find a set of tools and processes that aim to align entrepreneurs' business efforts with the market needs.
It was first presented by famous investor and entrepreneur Eric Ries in 2008 in his book "The Lean Startup." Though it was developed to give founders a cost-effective solution to build their businesses, its use has transcended and become widely used even for design projects.
Ries noticed how much time and money was spent developing a product without even being sure it would address the target customer's needs. And this is a major pitfall for startups as they don't have too many resources and strive to minimize risks when launching operations. In a nutshell, the lean startup approach is based on a build/measure/learn loop. Everything you learn at each step of the cycle will help you improve the product/service you're building.
Over the last two decades since the release of the Lean Startup methodology, numerous companies have prevailed experimentation and iteration over the traditional, costly, and elaborated planning. Therefore, whether you are looking to develop a new business idea or expand your company internationally, this strategic approach entails numerous benefits besides just developing better products.
Developing a new business and its products or services is the first challenge in the founder's pathway. There's full of unknowns and just an idea. Thanks to the lean startup framework, you can turn chaos into order and put certainties in the development process, outlining goals and hypotheses.
This is possible thanks to the Minimum Viable Product (MVP). The MVP is a preliminary version of your final product with the essential features to test its functionality and validate it in the market. Thanks to the MVP, you'll introduce the necessary changes to develop a final product that addresses customers' needs.
The MVP works to measure the product's success (or not), and it's a great resource to pivot. It's key for founders to learn from customers' feedback and make a course correction if necessary before moving on with product development.
Yeah! The most important benefit of implementing the lean startup methodology is the potential to build a successful business. By adding efficiency and saving costs to the development process, there are increased chances of surviving the wretched startup failure rates. According to Investopedia, startup failure rates are around 90% being running out of money the main cause of the disaster.
The lean startup approach can be used for many purposes besides launching a new venture. Whenever business owners look to expand internationally and explore new markets, finding the product/market fit becomes essential. What works at home may not work the same abroad, and that's why this methodology is crucial throughout the internationalization process.
Therefore, below we have drilled down the three steps to make it possible: build, measure, and learn, and they work to boost business growth saving time and money.
Related Read: Product Market Fit: The Key For Expanding Your Business Internationally
The first phase of the cycle focused on developing a product that fills a gap in the market and meets customers' demands. Here's when MVP comes to life as a prototype to get feedback to be used in the final product development.
With the MVP on the market, it's time for measuring feedback collected. This stage is crucial to improve the product, test errors and functionality, and pivot if necessary. Defining clear parameters is key to getting useful and reliable insights for product development.
In this stage, initial hypotheses are validated or not with the data collected, helping the company determine which way to go and how to proceed. This means that the product development may continue introducing improvements, or it can be necessary to pivot and start from scratch.
It's clear now that the lean startup methodology and its iterative approach are not only targeted at founding new ventures. Any founder in the internationalization journey can implement this strategy to find the product-market fit more efficiently while maximizing resources.
However, if you are looking for a soft landing in the US market, Base Miami is the key partner your business needs. We combine experience and knowledge to create a strategic plan through our programs, to help founders in their expansion journey. Get in touch to learn more!
Navigating turbulent waters is an inevitable part of the founders' journey. But, dealing with uncertainty can affect crucial decisions that may negatively impact a business. However, what if we tell you that you can use uncertain times in your favor to pursue new opportunities like, for example, expanding the company internationally?.
Today, entrepreneurs face the challenge of thriving in a fast-paced world of constant change full of unknowns. For example, the COVID-19 outbreak caused a significant shift in customer behavior, and unfortunately, not all companies could handle such a transformation.
However, many could tackle the uncertain context and steer their businesses in the right direction. Therefore, what's the secret sauce of business leaders who have thrived during adversity?
Each stage of a business lifecycle entails unique challenges. They are not static. They evolve and change as long the startup also grows. So, it's important for founders to know how to overcome these unavoidable hurdles.
Even though the pandemic is the most recent event that has substantially impacted the economy worldwide, uncertainty comes in many shapes. Every region presents its own economic and social challenges, so having a unique recipe for success is almost impossible. But on the other hand, there are a few tips and tricks that can help founders successfully manage business uncertainty.
Simply put, business uncertainty is a situation or event where a company faces a risk that cannot be predicted or foreseen. Usually, these are changes in the economic or political landscape, like, for example, the COVID-19 outbreak and its impact on the economy worldwide.
However, startups had to deal with uncertainty long before the pandemic. These businesses operate with certain financial uncertainties despite a favorable economic context, as they are still shaping and solidifying their business model. So, founders must always be prepared to embrace the unknown.
That said, it's still possible to thrive! There are plenty of success stories out there of startups that tackled business uncertainty with the right strategies and resources. So, let’s get down to the nuts and bolts to take your company to the next level.
A solid business plan is one of the cornerstones of every company. It's a road map that helps founders determine where's the company heading. Moreover, it can also help you understand the potential risks and give you a financial forecast for smarter decision-making.
In fact, one of the main reasons startups fail in normal contexts is running out of money or failing to raise capital. But, with a well-defined but also flexible business plan, founders can overcome this challenge by defining the best strategies to have enough funds to last during uncertainty.
In the process of navigating the startup during uncertainty, flexibility is key to spot new marketing opportunities and coming up with innovative products/services. Therefore, focus on gathering feedback from collaborators and clients and be open to pivoting to a different business model if you find a viable market.
Moreover, this is key when expanding your business abroad as you'll bump into a whole new different market. Uncertain maximize, as founders will have to validate their product/services in the new scenario. And without a flexible mindset, even the slightest breeze will sink the ship.
Don't let uncertainty make you hesitant to communicate with partners and collaborators. In fact, you should do just the opposite, over-communicate. Clear and fluid communication helps the organization work aligned, steering the ship in the right direction.
Share the startup plans with your teams and also with customers and stakeholders. Lead your team with transparency, and promote sharing ideas. Open communication is the key to overcoming most obstacles, giving space for innovation during uncertain times.
A strategic partner is key during business uncertainty, primarily for startups that strive to grow and expand. Here's when a startup accelerator enters the stage. They provide comprehensive support, giving you access to investors, tools, and the most valuable asset: their knowledge and experience.
That's what we do at Base Miami. But we are not a traditional accelerator. We are a market entry accelerator because we transform the companies' culture to the US market. We help businesses navigate the uncertainty and the unverified guesses that an expansion process presents through our different programs.
What’s more, we understand the risk of failure is round the corner in the internationalization process. And we can help founders identify and minimize them to kick the company off the ground, saving time and money in the process.
While navigating uncertainty, founders may come across tipping points that will force them to revise the entire business plan. But, by being prepared to embrace the unknown, knowing that challenges are unavoidable, you'll make room to spot innovation opportunities.
We live in a fast-changing world that requires entrepreneurs to make smart decisions. With the right tools and support, you can take your business to the next level and succeed in the expansion journey. Ready to take off? Get in touch with us!
The Miami tech ecosystem is booming, building a movement that seems unstoppable, attracting founders and investors as well. News about startups based in the area succeeding at funding rounds shows up every week, encouraging other entrepreneurs to take this significant leap.
However, even though seed funding is crucial on the lifecycle of any early-stage company, the truth is that it also entails multiple challenges. The biggest one, perhaps, is convincing investors to pump money into a new venture. But behind this major concern, there are other relevant aspects that you should consider before raising capital.
Therefore, if you are in the quest to raise seed funding for your startup but don't know where to start, keep reading to learn the hints to skip uncertainty and scale your project.
Ideas need more than potential to flourish. They require a kick-start to put in motion the business. And unless you are a high roller that can grow its company by bootstrapping, you'll need a capital boost from investors. Seed capital is an investment focused on helping early-stage startups grow, giving founders an influx of capital to validate their ideas in the market.
This is what makes seed funding so challenging, as it entails a combination of high risk and uncertainty. Long story short, capital is used to start the engines of the company that hasn't validated itself within the market.
So, where can founders get these funds? While a small fraction of entrepreneurs may look for bank loans, Angel Investors are usually the most preferred option, but that's not the only one. There's a wide array of seed funding options such as crowdfunding, accelerators and incubators, and even friends or family.
And even though VC funding is occupying most headlines in the news lately, the truth is that these firms typically don't invest in early-stage companies. In fact, they are more focused on Series A+ funding rounds rather than seed stages.
Choosing the right timing to raise seed capital can be puzzling. There are a series of aspects that you must have in place before raising funds for your early-stage startup. Having a solid business plan is the cornerstone of every company, so this must be the first item on your to-do list before seed funding.
Then, you also need to have figured out what's the gap you plan to fill in the market and develop a Minimum Viable Product (MVP). This is a basic version of your product with enough features to validate it (or not) in the market by early adopters and get the feedback you need for further development.
Therefore, you must have some traction in the market before a seed funding round. So, once you are sure you have these aspects in place and your business has what it takes to guarantee a good ROI for investors, you are all set for fundraising.
Deciding the amount of capital to raise depends on each company. However, as a general principle, founders should raise enough money to reach profitability, and this is why having a business plan is essential to start the fundraising process. You must outline financial projections, and also variables such as the cost of customer acquisition, retention, etc, to determine how much money you need to raise.
As we mentioned, there are multiple funding sources for early-stage companies. Friends and family are usually the first options as it entails more flexible terms, which makes it a common source of capital. Next, there's also crowdfunding with many popular platforms like Kickstarter and Start Engine.
This system offers reward and equity-based crowdfunding, which means that investors can opt for discounts and merchandise or a share of equity for their investment.
And finally, Angel Investors, which are by far the most preferred option for founders, are individuals that provide financing in return for a share of the startup's equity. They can provide significant amounts of money for the early stage. But as investments in these stages encompass high risks, they will also ask for an important equity share. Therefore, you'll have to drill down the funding options and analyze the pros and cons of each according to your business needs.
The key to a compelling pitch deck in your demo day is clarity and concision. Investors see a parade of founders with good ideas every week, and what's more, the average attention span is relatively narrow. Therefore, the intricate part is to make investors see the full potential of your product.
That's why you need to cover your business essentials with a powerful pitch deck, dazzle investors and get the capital injection your startup needs. Ditch presentations with endless slides full of irrelevant information. Focus on the problem, the solution, and your business model. Learn more tips and tricks to wow your audience with an effective pitch in the article below.
Related Read: How To Dazzle Us Investors With A Wow! Statement
Support for incubators and accelerators is key for any early-stage startup. Their goal is to guide entrepreneurs in the company's development process and provide them with the necessary resources and tools to scale the business. Both can give small seed investments, but it's not their primary purpose.
On the one hand, incubators can help founders in the early stages shape their market-fit plan. On the other hand, accelerators work in scaling startups that are already in motion. Moreover, accelerators are a great source for founders who look to expand their companies to international markets. They offer great networking opportunities, mentoring sessions, can get you in touch with investors, and also can provide legal and financial advice.
Do you think your startup has what it takes to take the next step in its lifecycle? Raising seed capital is a cornerstone for every company, and outlining a strategy following the steps above can give you a clearer panorama to get the money inflow you need. A solid network and support from those who have already paved the road are essential to succeed at fundraising.
That's why at Base Miami, we support founders on the international expansion journey of their companies through different programs, helping them save time and money on the process. Get in touch with us today, and let's work together!
It all started with a tweet. Well, almost. A year ago, young investor and principal at Peter Thiel's venture capital firm Founders Fund, Delian Asparouhov, posted a tweet, "ok guys hear me out, what if we move Silicon Valley to Miami." With an extensive list of replies and more than 2.3M impressions, most from tech influencers and founders, Miami Mayor Francis Suarez soon picked up the gauntlet and shot, "how can I help?".
Those sharp four words became viral and sparked a tech boom that, by now, it's clear that's not just hype. Soon after, Miami Mayor launched a solid social media campaign to attract talent and investments to the region to build the next tech hub of the Americas.
But, even though Asparouhov's tweet may have been the spark to ignite the Miami tech fire, the truth is the region had been steadily working on building a tech ecosystem for a few years.
And that work was a fundamental pillar to support this tech wave. A movement like this wouldn't be possible without having some elements already in place, and that's when founders, organizations, VCs, and other ecosystem players saw the fruits of their long-term efforts.
However, it's undeniable that these tweets placed Miami in the spotlight as a tech gateway for Latin America, and 2021 has been a buzzing year for the region's development.
Earlier this year, Miami Mayor stated that the tech and finance wave is a movement, not a moment. That way, Francis Suarez showed once again his commitment and support to the region's growth as a new tech hub and that this is beyond the hype.
But how realistic is it to move Silicon Valley to South Florida? We believe that the point here is not about replacing the giant tech hub in the Bay Area, but building a new one that also serves as a tech gateway for Latin American ventures. Certainly, 2021 has been a flourishing year for the Miami tech ecosystem.
Among the many actors involved in building this movement, high-profile investors and tech execs such as Keith Rabois and Peter Thiel are solid promoters of the region's development as a tech hub. Also, it seems that Twitter has become a hot spot for both founders and VCs.
Actually, a tweet by Delian Asparouhov in May kicked off an impromptu tech week out of nothing. "Ladies and Gentlemen, welcome to the unofficial start of the inaugural Miami Tech Week, I know of at least 100 founders, VCs, etc., all flying in. Reply here if you're gonna be in town this week so folks can know!"
This totally unplanned event gathered founders and VCs in a series of events that led the Miami Mayor to announce an official tech week in April 2022 alongside Founders Funds and eMerge Americas. But, what's beyond social media hype? Let’s see!
In their path to support Latam tech startups in their expansion journey to the US, Base Miami has also made significant contributions to ecosystem development this year.
In July, we released the Market Entry Bootcamp co-hosted with Mana Tech and ASELA USA, coaching 12 innovative startups to land in the US market successfully. Also, we lead a series of webinars and talks with CEOs of diverse Latam companies, buzzing pitch sessions, and virtual and in-person events for founders partnering with key actors such as The LAB Miami, ProChile, ProColombia, and Miami-Dade Beacon Council, to name a few.
We keep working towards our mission to support forward-thinking Latin American companies land and expand in the US while helping build this buzz-worthy tech gateway for America and The Caribbean.
It's been a busy year for the Miami tech scene. What seemed to be just a moment became a solid movement with venture capital pouring in, tech companies relocating their offices, and LatAm startups expanding their operations in the area.
Still, there's a lot of work to do to be one of the leading tech hubs globally, and the focus should not be replacing Silicon Valley. The region has plenty of potential to generate its own identity, and at Base Miami, we are fully committed to supporting this growth through our diverse programs, events, and partners. Follow us and join the tech movement!
As a startup founder, you probably have a groundbreaking idea, ambition and are passion-driven. However, building a successful business takes more than that. As a matter of fact, the startup failure rate globally shows that 30% of new ventures fail during their first two to five years.
This is the core reason why founders need external resources, and startup accelerator programs become the key to unlocking the business potential. Therefore, whether your business is in its early stages or you have decided to expand your company abroad, then is when accelerators come into play, helping startups avoid costly pitfalls.
The terms "incubator" and "accelerator" have gained a higher profile across the startup scene over the last few years. However, they are often assumed to represent the same concept, which is utterly wrong.
Moreover, without a clear distinction of their roles, founders would not know which one suits the business needs best. And even though both offer startups opportunities to grow, they have different frameworks and goals.
While incubators are usually focused on developing innovative ideas to build solid business pillars, accelerator programs are more oriented toward scaling the company and rapid growth. Besides, accelerators select batches of companies in similar stages of their lifecycle when opening a new program.
Plus, accelerators emphasize mentorship led by industry experts, to guide entrepreneurs through the process avoiding setbacks. These programs typically have a 3-4 months time frame, unlike incubators that are most likely to have an open-ended timeline.
So, wrapping up incubators supports startups in their early stages to build the company, while on the flip side, accelerators catapult the growth of companies that have already consolidated their business plan.
When a startup joins an accelerator program, they have the opportunity to access a wide network of investors and venture capital firms. Moreover, they can also learn how VCs pick the startups they decide to invest in.
Some of these programs usually end with demo days when startups pitch to potential investors. Hence, it's a great advantage to know beforehand how to present and a gateway for future funding deals.
Founding teams typically lack the experience and the essential skills to run a company. That's why accelerator programs give founders guidance and a roadmap on the best approaches for the different business areas such as finance, marketing, legal, or even technical skills.
Furthermore, they can also help founders identify gaps in the team's skill set and that way outline hiring strategies. Finally, accelerator programs are a fast-paced educational environment for startup owners, as they are able to learn in a few months what otherwise would take years.
It's a well-known fact that operating a startup is challenging, and it's a journey replete of uncertainties, regardless of all the resources a founder may have. However, accelerators come up to provide support through mentors and industry experts who have already paved the way.
Founders will be able to get a share of their valuable experience and knowledge as they can provide broader perspectives. As a result, entrepreneurs can focus on more realistic expectations about startup development and growth with a bigger picture, avoiding potential pitfalls and wrong decisions. Not to mention that mentors are an exceptional motivation boost!
When joining an accelerator program, founders have the opportunity to connect with other entrepreneurs and key players of the startup ecosystem hosting events and activities. This is especially helpful when companies seek to expand abroad, as accelerators can connect founding teams with industry experts who strive to work with startups.
Accelerator programs like Base Miami's Market Entry Bootcamp help entrepreneurs build an initial tribe while learning how the Miami startup ecosystem works and how to get support from the community.
This aspect is essential for sustainable growth for the company. Accelerators have plenty of knowledge of the market flows, helping founders validate their product/service in a lean way. As startups usually have fixed budgets, it's crucial to save costs without compromising the business vision.
Moreover, if the company is on an international expansion process, support from an accelerator program is key to validating the hypothesis of this unexplored market.
Related Read: How To Successfully Land In The US In 90 Days
Even though getting into an accelerator program is not a guarantee of success is a stepping stone towards developing a successful company. As we have seen, these programs will fast-track startup growth to scale up quickly with the support of mentors and industry experts who can outline the right strategies for your business.
However, with the proliferation of startup accelerators, startup founders need to be aware that not all of them are worth participating in. The key here is research. Aim for those programs with a proven track record of successful startups. After all, success is based on the choices you make, not just relying on the resources provided by accelerators.
Base Miami's Market Entry Bootcamp is an enriching experience for founders like no other, with a core mission of giving participants the tools for a successful landing in the US market. If your startup is ready for the international expansion journey, contact us today! LET'S CHAT!
You have already validated your business model in your country, conquering the local market, and now you're thinking about taking the leap by expanding internationally. It's a fact that almost every entrepreneur dreams of establishing a company abroad.
However, challenges are around the corner when trying to reach foreign markets. In fact, even industry giants have failed in their international journey by thinking they could replicate their entire business model to another location.
So then, what lies behind the unfruitful process of positioning a business abroad? The answer is a lack of product/market fit. This is one of the leading causes why companies, regardless of their size, fail when targeting new territories.
A common mistake for founders is to be overly confident as they have mastered the local market and mistakenly decide to expand based on that presumption. Therefore, if you plan to get onboard an international journey with your startup, you must first figure out some aspects and define the product/market fit for the targeted location.
Product/Market Fit is a concept mainly used by startups, but as we mentioned, large companies can benefit from implementing it when targeting foreign markets. Simply put, it is when your product fits the market and your target customers recognize the product's value.
According to the famous entrepreneur and investor Marc Andreessen, "Product/market fit means being in a good market with a product that can satisfy that market."Another popular definition of the concept is brought by the author of The Lean Startup, Eric Ries,"The moment when a startup finally finds a widespread set of customers that resonate with its product."
As you see, there isn't one standardized definition for PMF, and you'll find that several other thought leaders have explained this concept from different angles. So, if customers are ripping out the products off your hands, and you've turned them into promoters of your brand, you've achieved PMF.
However, this doesn't necessarily imply that the same will occur abroad. In a nutshell, you can't expand internationally without a clear value proposition for that new location and without insights about how your product serves the customer's needs in that market. For that reason, you'll have to outline new hypotheses from scratch to validate or introduce adjustments to your business model and make it work abroad.
You have made it in the local market, and now you think it's time for international expansion. But first, you need to consider the following variables to avoid the common pitfalls of the process and make a successful landing in the targeted location.
You have already validated, or not, the hypotheses of your business model in the local market. However, when taking your company abroad, you'll have to perform market research and outline new ones. Even if you choose a location that uses the same language as your home country, you'll have to understand the cultural differences and use that as a starting point for new hypotheses.
It's crucial to define or make adjustments to your existing ideal customer profile, as customers' habits and behaviors are not the same everywhere. You'll have to implement market segmentation to refine the hypotheses, which is essential when you target large markets like in the US. That way, teams will work aligned with the goals of that new target customer.
Unfortunately, this is one of the biggest mistakes in the international journey of many companies. Avoid falling into the trap of translating the same value proposition to a new market. Bear in mind that what works well locally may not work abroad.
First, you'll have to identify your potential customers' goals, pain points, and desires in the new market to fine-tune your value proposition. Then, you need to ask yourself a question and come up with an honest answer. How well does your current value proposition really fit your new targeting customers?
If you plan to land in the vast US market, narrowing the focus is vital. Trying to sell for everyone ends up being nothing for anyone. So, start with a narrow focus and dig deep to become an industry expert in the field. Research your main competitors and their go-to-market strategies to find your ideal fit in the new location.
Related Read: Deadly Sin #1: Something For Everyone Is Nothing For Anyone
Finding the right partners is key for a successful international expansion. Partner with accelerators and incubators, as they will lead you through the process, providing their expertise and knowledge of the market.
Their programs usually include legal and tax consultancy and also work with governmental associations. Furthermore, they can also help you build a supportive network with other founders and industry experts.
Taking your business abroad is a challenging journey where efficient use of resources is essential to succeed. By defining a product/market fit between your ideal international customer and your product/service, your company will be on the right track to expand internationally, avoiding costly pitfalls.
However, if you're still unsure who your target client in the new market is, you find yourself struggling with the initial pricing, or you can't figure out how to translate your value proposition, you need a strategic partner.
Base Miami's Market Fit program has a proven methodology that helps accomplish in 3 months what usually takes companies 18-24 months while building the initial ecosystem relationships. Partner with us today and start answering those unverified guesses before taking the leap to the US market. LET'S CHAT!
Hundreds of tech startups are launched yearly. However, failure rates are sky-high around the globe. Many companies can't make it after 5 years, demonstrating that good ideas for products or services are not enough to succeed.
Therefore, if you don't want to see your business sink and strive to become an industry leader, you must utilize all the available resources. And this includes the secret sauce of many successful startups, professional mentorship.
In the entrepreneurial world these days, mentoring is becoming an essential resource in the planning process. It helps founders take their first steps with more confidence to position the business, among several other benefits that we'll discuss later.
However, before digging into that rabbit hole, we would like to shed some light on the difference between mentors and coaches. People usually mistake these terms, which may lead to hiring the wrong person.
Both roles are prevalent nowadays, and even though they may resemble similar, mentors are focused on providing knowledge and support from their experience. On the flip side, coaches are usually oriented to change mindset, habits, and behaviors.
That being said, if you want to minimize the initial struggle when launching a new venture, you need an experienced professional. A mentor will give you valuable insights to make the right decisions and help you build a solid network.
We know that startups have tight budgets, though. But it is in the initial stages when companies make most mistakes. So, consider these trusted consultants a long-term investment.
Many think that seeking a mentor is a sign of weakness. Well, it's time to ditch that disbelief. The right consultant will help you lead the company in the right direction, avoiding the most common pitfalls of the process. Their goal is to help founders with the frequent interrogations in the startup funding path, through the knowledge and experience they have acquired over the years.
Mentors can be divided into two categories. On the one hand, we have professionals who have succeeded with their own companies. And now they're dedicated to supporting founders with the experience they have earned. On the other hand, we have mentors with a business school formation. They provide a more technical approach focusing on marketing, finances, international expansion, and others).
A mentorship can be divided into three stages: initial, acceleration, and growth. They act as incubators of the idea during the initial phase and focus on how the product or service will be launched.
This is followed by the acceleration stage, where mentors work on specific subjects, such as how the income will be generated and how results will be measured. Finally, in the third phase, the startup formalizes its operations, and mentors focus on management.
Now we have given a picture of the role of mentors, and we’ll now discuss the benefits of startup mentoring.
Famous businessman and investor Richard Branson once said, "No matter how incredibly smart you think you are, or how brilliant, disruptive or plain off-the-wall your new concept might be, every startup team needs at least one good mentor. (...) No matter who you are, where you’ve come from, or what you have achieved, a good mentor is an invaluable asset in business. Building a new business takes more than technical skills and creative genius.”
There are several aspects where mentors can make significant contributions to the company. Some of the most relevant contributions are:
Mentors have already been where you are now. They have already answered the same questions you are making now, sharing insights on how their journey was. Launching a startup entails some challenges that sometimes can be paralyzing and end up in mistakes. A good advisor will help you navigate those rough waters, avoiding common missteps.
Think about how much time and money you would spend if you had to learn from your own mistakes? These two are pillar assets during the entire business life. And yes, there'll be trial and error, but mentors can minimize the number of failures and the impact on the initial stages. Consequently, founders can save time and money that they can spend on improving the startup development.
Experience is not the only benefit of having a mentor working by your side. They can help you enlarge your network, which is essential for business growth. Moreover, they can share the networks they have built during their years of work. Therefore, startup mentoring can help you find investors, make new connections, and know other founders.
Starting a new business comes with a lot of enthusiasm, which is good, but can blur your vision regarding expectations. A good mentor can give honest and realistic perspectives on the vision and goals of the company. Mentorship is key when it comes to decision-making and taking or not the next step towards growth. A professional consultant will be the first to tell you honestly that you're not ready yet.
Difficult times are part of the scaling process of every company, and sometimes they are unavoidable. Motivation during those moments is crucial to avoid making desperate moves and remain calm. By providing support, mentors allow founders to have a clearer vision of how to proceed.
Mentorship is a vital resource for founders. Having a product idea that fills a gap in the market is great, but not enough. A professional mentor will help you outline the strategy to fit that product in the market with their experience based on their own triumphs and pitfalls. Trust those who have already paved the way and gain new perspectives for your business.
If you wish to provide your experience as a mentor to Latin American founders in our programs at Base Miami, reach out to us today! LET'S CHAT!
Have you ever heard the phrase, "a smooth sea never made a skilled sailor?" When it comes to business, and in this case, to startups, there's a long path full of unknowns during the launching and scaling process that can't be avoided.
You perhaps thought that just a groundbreaking idea or product would be enough to succeed, but unfortunately, it's not. According to several studies, so many startups fail due to a lack of market-product fit and not having the right people in the team.
However, these two are only the tip of the iceberg, and companies struggle with several other challenges. In order to overcome those hurdles and use them as an experience to learn and grow, you must identify what to expect. Even though bumps on the road are unavoidable, there's a way to overcome them successfully.
Not having the right people on board is one of the leading reasons why startups fail. There's no doubt that the team influences your company’s success (or not), and most entrepreneurs don't know how to handle a hiring process.
At this point is when the dilemma comes up. Assembling the best possible startup team takes time, but you can't afford to spend your valuable time in business development. However, the consequences of not having the proper people on board can be critical for the company.
Therefore, what's the best possible way to face this challenge? While outlining a business plan, consider talent-hiring as a part of it. Once you have determined your mission and goals, you'll know what skills and expertise your teamwork needs. If you still don't know how to shape a business plan, check this related article.
Related Read: Entrepreneurs and Innovators Need Lean Canvas Models for Their Businesses: Learn Why
This point is quite complex because it's all about merging the gap between your product idea and what your target audience needs. Most entrepreneurs get stuck in their initial idea of the product and skip to develop a unique Product Value Proposition.
This step is essential to show what makes your company and its offer unique. At this point, you should be able to answer: why should people choose your product and not your competitors?
By performing dedicated research of your ideal customer, you'll detect the pain points of your competitor's products for the same segment. Outlining an Ideal Customer Profile is the best way to identify the audience you need to reach.
Financial mismanagement may drive a thriving project into a total failure or restrain business development and the product launch. Moreover, let us tell you that venture-backed startups also fail.
This usually happens because entrepreneurs underestimate the initial expenses of releasing the startup. Furthermore, those companies launched in foreign countries that look forward to expanding in the US will find that the operating costs may not be the same. For that reason, if you plan to scale your business and land in a new territory, proper financial management is key, and you should ask for external consultancy services.
Also, a smart move is to structure a financial plan that considers unanticipated costs and contingencies. Being financially prepared for the unexpected will minimize the impact on the startup growth.
Brand awareness is essential to attract your target audience and make them trust you and your company. Simply put, if your customers don't know you, they won't buy your products. This point is the last on our list, but it's as relevant as the others. In fact, this is the spot where some items mentioned above tie together.
To outline a branding strategy, you need to have a skilled team of professionals, a peerless value proposition, and know your ideal customer. By combining these three elements, you can create a branding strategy that takes your business to the front row while building trust at the same time.
This point may sound quite obvious for every entrepreneur. Of course, we know that every business that strives to grow and build a serious reputation will comply with local regulations. However, what happens when you decide to take your company to a foreign location? You'll find that tax regulation and legal implications are different, and if you want to expand your business successfully, you should be aware of all of them.
Consequently, you should review all the startup financial structure as it may experience significant changes due to the new legal and tax regulations. Therefore, perform complete research of the location where you plan to land and don't hesitate to request legal consultancy services.
Challenges when launching a startup are inevitable. The point is, how do you plan to overcome them without making a misstep that may lead to a major failure? Founders need clear information besides just a good idea when starting a new business. As we mentioned above, the reasons why startups fail are a combination of circumstances led by the lack of product-market fit.
Entrepreneurs need a partner with a deep understanding of the US market and all the factors involved in scaling a business abroad. For that reason, Base Miami has developed a Market Fit program to help startups find their spot in the US and learn how things work in this new scenario.
Want to discover what are the benefits of being partners? Get in touch with us today and learn more about our 90 days proven methodology to accomplish in three months what usually takes 18-24. LET'S CHAT!
Three years ago, I moved from Silicon Valley to the burgeoning Miami startup ecosystem. When I left San Francisco, I wrote an article called "Will the last person leaving Silicon Valley, please turn out the lights."
It was about whether startups should still be settled in the Bay Area. My conclusion was that once upon a time, it was absolutely necessary. However, the world and the way businesses scale and grow have been experiencing a significant transformation since then.
As a consequence of my decision to move to South Florida, a wide array of reactions popped up. I've been asked questions like "Are you retiring?" to "Going to live the party life?" throughout these three years. But indeed, those inquiries weren't a bit close to my goal.
I then continued as a consultant, working jointly with international startups entering the broad US market. In line with this, I also became co-founder emeritus at Base Miami, a market entry accelerator, continuing with my labor mentoring local companies.
Nevertheless, much water has gone under the bridge since I moved in 2018. Miami has become "a thing." What many people thought was a moment became a full-scale movement. Shortly after, Silicon Valley people started to look at South Florida with keen eyes.
High-profile investors like Keith Rabois, General Partner of Founders Fund, Blumberg Capital founder, David Blumberg, Jon Oringer, and also NYC private equity firms, settled in Miami. In fact, earlier this year, Keith Rabois tweeted, "I have met more new interesting people in Miami in 3 weeks than all of 2020 in the Bay Area." An influential statement from someone who built his career based in California.
Moreover, there were many tech startups, especially in Fintech like NovoPayment, establishing in the area. In this context, Miami became incredibly welcoming to new investors and companies who wanted to be part of this booming tech scene.
And to show that the commitment to the tech ecosystem growth is real, local authorities got involved in supporting VCs and startup founders. By the end of 2020, the movement burst with a tweet by famous venture capitalist Delian Asparouhov stating, "ok guys hear me out, what if we move Silicon Valley to Miami?". Immediately, Miami mayor Francis Suarez picked up the gauntlet and replied, "How can I help?". Since then, the tweet has had more than 2.3 million impressions and put the city in the spotlight.
But, in this scenario, Covid-19 has been an additional catalyst. Unlike other central locations like New York, Florida stayed open during the pandemic. As a result, the state maintained solid profitability numbers that compared well with most lockdown states.
To give you a holistic view of the tech ecosystem development, I would like to share the thought process of a LatAm entrepreneur. Base Miami recently hosted a panel where Matias Rivera Larrain, Co-Founder & CEO at Fz Sports, shared his own experience and thoughts with us.
During the talk, Matias made a recap of the key variables he analyzed to land and expand his company in South Florida. He prioritized access to capital as seed funding is a crucial stage for startup growth, time zone alignment, the quality and cost of living, connectivity with Latin America and the rest of the US, and the networking opportunities in the area.
The resulting discussion was yet illuminating and inspiring. His explanation was compelling as he emphasizes that friends and colleagues are moving from SF to Miami. As an engineer, every step in Larrain‘s process of moving was thoughtful and analytical.
Today, the question I raised three years ago is more relevant than ever: "If you are an international startup coming to the US, does your startup NEED to be in Silicon Valley, and does it still make sense to land there? Are the PREMIUM costs worth the move to the San Francisco Bay Area?". Miami may not replace Silicon Valley, but it's growing towards being the next tech hub for LatAm startups, and Latin founders are already joining the movement.
Starting a business usually comes with several challenges attached. However, those concerns become more relevant when trying to take the company abroad. The US market is vast, and the competition for people's attention is fierce. New companies, business ideas, and concepts come up every day.
Breaking through the clutter to engage the audience is not easy. Therefore, entrepreneurs who look to scale their businesses internationally will land in a crowded marketplace regardless of the industry.
In this context, how do you face the crowds and set yourself apart to get the attention of your target market? Well, there are ways to become the go-to option in the market, positioning your business a step ahead of the competition.
Positioning your product in a new market is not only about being different, but also about being better. Why is this so important? Because most entrepreneurs mistakenly think that the best way to succeed is to mimic what other established and successful businesses do. But, they end up having the opposite effect on their company.
So, how do you position your startup in a market with so many competitors within your industry?
This should be the first step on your list before taking your business abroad. You have to outline a competitive landscape map to get valuable insights into your competitors’ and consumer needs.
In fact, this is an excellent strategy for detecting the aspects where they fall short and determining what your target audience is not getting from them. Moreover, by conducting a market audit, you'll evaluate whether there's an actual need for your product or service.
Results will help you make the necessary adjustments to successfully position in the market, saving you time and money. If you want to learn more about conducting market research, don't miss Base Miami's article below.
Related Read: How to Do Market Research for Your Startup?
In a crowded market like the one in the US, you have to provide value from the very first day. You have to dare to be different and better to gain traction over your competitors. In fact, you should be able to answer a fundamental question, why should the audience choose your products?
With a Value Proposition, you should explain how your product fills a need and what makes it better than your competitors' products. Grab the consumers' attention with a Point of Difference (POD), create a unique spin to convince them that you are the brand they are looking for. To develop your value proposition, you can start asking yourself some basic questions like:
People these days value simplicity more than anything else when interacting with brands. As a result, they don't want to deal with companies that make the processes difficult. So, the challenge here is to make things simpler for your customers.
If you have conducted proper market research and know who your competitors are, you can understand how customers interact with those brands. Then, you can analyze in which processes you can differentiate and offer a more convenient experience to your customers.
Customer retention is key to position in the market. Unfortunately, most companies put their efforts only on getting new customers, which is necessary for startups. Still, it doesn't have to end there. Your business needs happy clients that buy from you again. In fact, studies show that it's easier to sell to existing customers than to sell to a new one.
For that reason, you should use metrics to track customer retention rates. Therefore, show your customers you care about them, allowing feedback and rewarding loyalty. Go above and beyond with customer service in your company. You'll strengthen the client's experience, creating a loyal customer database.
Word of mouth and referral marketing are powerful tools to help your business stand out from the crowd. Encourage people to talk about your products online. This is a smart move to sell your products because, in fact, you're not selling them; your customers are!
On the other hand, recommendations also make your business more trustworthy. People these days trust recommendations from friends or family over any other type of advertising.
Moreover, they research the internet for reviews and details about the product before making a purchase. So, encourage user-generated content, share customer testimonials, ask for reviews and ratings, generate a buzz about your brand. Then, let your customers do the selling for you.
You can't avoid landing in a crowded market. But you can use these tips to cut through the noise in the extensive and competitive US market. Positioning will make you set apart from competitors and also be worthy of recommendation. However, scaling a startup internationally requires exploring these points in depth.
That's why, at Base Miami, we provide advice and support for companies that look to take their companies into the US. With our Market Fit program, we help you build your initial ecosystem and understand how your business will develop in the US, where your product fits, and how to sell it.
Get in touch with us today and plan a smooth landing in a new market full of opportunities. LET'S CHAT!
One of the most important decisions entrepreneurs face when settling a new business in the US is what type of business structure works best. This aspect related to taxes and paperwork is a crucial factor that will determine the company’s success.
Therefore, if you are in the process of assembling a business plan, you have to learn more about the four main types of organizational structures. This step will determine the benefits and liability implications for the company.
We'll point out all you need to know about business types to understand their differences and help you choose the right one for your startup.
According to the Internal Revenue Service (IRS), there are four main business entities to establish a company: Limited Liability Company (LLC), sole proprietorship, corporation, and partnership. Each one has its own legal and tax return implications.
Moreover, a great advantage for business owners is that the legal structure may be changed as the startup scales. But, what determines what structure is the perfect fit for a company? There are several elements involved like the business size, scalability, growth goals, liability, and the need for capital investment. Let's have a look at the most common types of business.
This business structure is very popular among entrepreneurs because it's a hybrid entity that combines partnership and corporation features. One of the main advantages of this scheme is that personal assets are legally separated from business assets. This serves as a shield for any eventual lawsuit providing liability protection for business owners.
Moreover, unlike other structures, an LLC has no limitations regarding the number of shareholders. And on the other hand, taxation is more flexible than other business entities, but it's attached to the company size.
This is the simplest type of business structure, and it's ideal for those who want to handle an enterprise alone. Here, there's a single business owner who manages all the operations and is liable for the company. This means that the owner gets the profits but also its debts (not so good, is it?).
On the flip side, a remarkable tax advantage is that the business profits can be included in Form 1040 for personal tax returns. Moreover, even though the registration procedure is quite simple, it places your assets at risk in the eventual case of debts or legal claims.
And last but not least, raising capital under this scheme can be difficult as many financial entities don't feel comfortable partnering with a sole proprietorship.
This is the most complex business structure by far and encompasses different types like C, B, and S corporations, among others. However, it's not only about the complexity, but also it's more expensive than other legal schemes.
Simply put, a corporation is a separate entity from the owners and members. Therefore, shareholders are not liable for any legal claims against the company, but of course, they will be responsible for their investments.
What makes this option more advantageous than others is that raising capital from numerous investors is way much easier.
A partnership is an organization owned by two or more persons and it’s one of the most utilized business structures. This scheme is split into two variants: general and limited partnerships. The first option is the easiest and less expensive one. Thus the responsibilities are shared in equal parts by all members.
On the other hand, the limited partnership has one unique partner in charge of running the business while the other individuals get a fraction of the profits. This gives partners limited liability in the company.
Due to its complexities, the limited partnership scheme is not the best option when starting a new business. In that case, a general partnership is a less intricate process and companies are more likely to get funded when there is more than one owner.
The aim of picking the right entity type when entrepreneurs launch a startup is to choose an option that flows organically with the business goals. When you outline a business plan, it's essential to determine which of these four legal schemes suits your company's vision.
To achieve that, you first need to know your business purpose and the expected growth. Without clear-cut projections, you won't be able to make the right choice and skyrocket your company. Yes, it may feel like the weight of the world on your shoulders making such a decision.
But the counterpart is that you can change the business structure at any time, and you won't be stuck forever in the initial choice. So, hands-on, it's time to analyze the options we outlined in this guide and put your startup and ideas in motion.
Understanding how the vast US market flows and its legal implications can be complex. Thus regulations may vary according to your business size, among other factors. For that reason, our Market Entry Bootcamp at Base Miami may be the perfect fit for your company's development and expansion in the US.
We not only introduce you to the Miami business environment but also provide key legal resources for a successful launch in South Florida. Don’t know where to start? Contact us today and learn how we can help! LET'S CHAT!
Every startup is born with a groundbreaking idea. However, the path to developing a business from scratch can be challenging, and it will definitely be paved with speed bumps and errors. Yes, mistakes are also part of the process, but they have to be powerless to minimize their impact.
Thus, entrepreneurs should be able to use those slips to learn and grow their projects. Furthermore, the main reason why startups usually fail is a combination of missteps and not just one.
Challenges are around the corner when launching a new business. Of course, there isn't a startup handbook that can guarantee that an idea will strike it big, but there are significant mistakes that every entrepreneur should avoid.
As we mentioned, mistakes are part of the startup development process, and they mainly occur in the early stages, usually critically harming the entire business project. The following are the most common missteps that entrepreneurs make when trying to lift off.
Many startups fail at this essential point. Outlining a clear-cut business model is key to set the project pillars and where you are heading to. Even though business plans can pivot during the growth process, and mainly as the company scales, it's mandatory to have a plan from the start.
Remember that many of the factors that contribute to success rely on the startup business model. A clear example that asserts this is the funding rounds. To convince investors, entrepreneurs must present a defined business model that supports their innovative ideas.
With a detailed plan, you'll be able to answer all the pertaining inquiries of venture capitalists. Remember the famous Benjamin Franklin's quote, "if you fail to plan, you're planning to fail.".
Related Read: Entrepreneurs And Innovators Need Lean Canvas Models For Their Businesses: Learn Why
Yes, competitors matter and they can be a great source of inspiration for your startup. Most entrepreneurs focus on just putting their business in motion with only a unique idea. And they skip the part of researching not only their competitors but also their target audience and market.
You may think you have a great product, but if you don't properly research, you won't be able to find your product's value proposition. Use your competitors as a source of fresh ideas by seeing where they fall short.
Nevertheless, don't narrow your focus just on the competition. You need to find a balance between analyzing your competitors and your customer's mindset and how the market flows to offer an unrivaled product.
This aspect can wipe off the map of any succeeding startup, and it's a typical bump on the road to growth. This usually occurs when companies seek to land in new markets to expand their business. Therefore, professional guidance is critical when launching a new business.
Moreover, each country has its laws and regulations that every entrepreneur should be aware of before making a new market entry. From tax guidelines, registration, founders, and employees agreements to compliance terms. Hiring qualified professionals will help you handle all the legal concerns and make a successful approach to new horizons.
Even though researching the market and the audience is key, you can't do it forever. One of the best ways to understand how the market flows and what your target customers want is to release the business and the product.
Feedback will show you the path to follow. If you search for the right moment to launch and have figured it all out, you'll never find it. The market is very dynamic these days, and if you lose time developing the perfect creation, you may bring to light something your customers don't seek anymore. Let your target clients help you shape your product.
Handling the company's finances can be overwhelming and challenging. Mismanagement can throw any business to the ground. Startups have limited financial resources, and it needs to be cleverly managed to avoid overspending.
Hiring too many employees or investing all the money only on marketing without having a value proposition or any deep market research will certainly drain your cash flow. Hire financial advisors that can properly outline a plan and handle any budget setback while you focus on growing your business.
No one can guarantee that a startup will skyrocket, but avoiding some of the most typical failures in the development process can be crucial. Follow the advice of mentors and industry experts that have paved the way and get inspirational insights for your own business growth.
Keep in mind that occasional mistakes can't be avoided, so be prepared to face them and learn from those experiences. By partnering with the right people, you can lean on them and also introduce the necessary changes to your business model confidently.
If you want to work jointly with key industry players, reach our team at Base Miami. We'll be glad to assist you across the startup pathway. LET'S CHAT!
What's making Miami emerge as the next tech hub? Florida's Magic City is pushing to become a startup hub for LatAm entrepreneurs. Recent events like mayor Francis Suarez's famous tweet "how can I help?" are placing the city in the tech spotlight.
Moreover, high-profile investors like Keith Rabois and Peter Thiel moved to Miami, leading the relocation path to this emerging tech ecosystem. However, this is just the tip of the iceberg, as every day we see companies that are relocating or basing their headquarters in Miami.
Historically, the South Florida city had a close link to Latin America. Now, with the ambitious goal of becoming the next tech hub centered in LatAm companies, the ties are stronger.
For decades, Miami has been considered an attractive place for vacations. No one would have imagined that the city could be a niche for VCs and tech startups. However, since 2017, South Florida's Magic City has been increasing the tech companies' ecosystem.
One of the results of last year’s pandemic events was an entrepreneur's exodus from cities like San Francisco and New York, due to the high cost of living and heavy taxation in those States. This made Florida rank high for startup activities and also generated a general development of the Miami real estate market.
Tech startups are shaping the Miami tech ecosystem and VCs are coming to stay. SoftBank is one of the most relevant additions to the scene. They have created a $100 million Fund that is targeted exclusively for companies based in or willing to relocate to Miami.
However, there are several tech startups making waves in Miami’s Tech scene. With Angel Investor’s money pouring in, the sky is definitely not the limit for LatAm entrepreneurs looking forward to expanding in the US.
Miami's tech ecosystem is booming, mainly after the recent pandemic that encouraged several entrepreneurs to move from other major cities looking for more pleasant weather conditions amongst other reasons.
There's no doubt that high-profile VCs and also eager entrepreneurs are heading towards Florida's Magic City to raise their companies. We wanted to share some takeaways that make the city so attractive for business.
Every business expansion in a new location brings new building developments. Miami's real estate industry is growing rapidly with the arrival of new companies upholding the city’s economy.
It's not just about office space. The market is experiencing a rise. This can be concluded from the fact that despite the economic lowdowns of the COVID-19 crisis, the property demand has grown and is very assorted, from apartments to family condos, and the city is striving to cover those needs.
Experts on the real estate business say that the demand for properties will remain strong as the tech ecosystem keeps scaling. This represents unparalleled economic growth for the city of Miami.
Attractive tax benefits are one of the major assets of Florida's Magic City, making it the perfect spot for business growth.
Some of the most special perks for startups and entrepreneurs are no local corporate income taxes, no state personal income taxes, no franchise tax on capital stock, and also no corporate tax on limited partnerships.
These are maybe one of the main reasons people moved from high-tax cities like New York and settled in Miami.
In December last year, mayor Francis Suarez tossed a short but powerful tweet that quickly put him in the tech ecosystem spotlight. Venture capitalist Delian Asparouhov tweeted: “Ok guys hear me out, what if we move silicon valley to Miami”?, and suddenly Suarez's answer, "How can I help?", went viral.
Since then, Miami's mayor has been openly supporting the startup growth in the city, striving to establish a tech hub and a gateway of new opportunities for LatAm companies. He knows the city is strategically tied to Latin America and offers a green field for business expansion.
Miami has always had a multicultural population, where many languages coexist like Spanish, Portuguese, and even Haitian, contributing to the cultural spike of the community. This also entices LatAm entrepreneurs to move to the city, which has a great Hispanic influence.
Making newcomers feel the vibrant city of Miami like home is certainly a magnet for business growth. In addition, the multicultural population also contributes to developing a unique infrastructure that represents its core identity, with a new innovation twist.
The vibrant and growing Miami tech startup ecosystem awaits fresh ideas, and VCs are ready to boost entrepreneurship. Maybe, South Florida's city is not replacing Silicon Valley at all, but it's striving towards being the perfect touchdown point for LatAm tech companies.
At Base Miami, we support companies with their Market Entry and expansion in the US. We deliver bespoke solutions developing a strategic plan that meets every business needs.
Are you ready to land in the US? Contact us today to learn more about the extent of our services for forward-thinking companies. LET'S CHAT!
Getting a business funded is maybe one of the most challenging stages within the startup process. Entrepreneurs need to showcase their value to potential investors that are accustomed to hearing 'revolutionary' ideas.
In this context, delivering a compelling story to sell the startup goes beyond creating a fancy slideshow displaying numbers and charts. Capital investors want to discover real deals, and they don't like to waste time.
At this point, you must be wondering how to engage VCs and Angel Investors and get the key for business growth? A killer pitch deck can lead your startup to a successful round of financing.
First things first, what's a pitch deck? It's a brief presentation to display potential investors an overview of your business to raise capital. Therefore, as the first touchpoint with your company, it will help those investors determine whether they're open or not to evaluate your startup business.
The main goal when outlining your business plan to VCs is to be concise and focused. Sounds like a piece of cake, doesn't it? However, even though being short and precise is essential, there are a few more aspects to consider to make your mark on your next funding round.
These are the five essential principles to create your next investor's pitch deck and succeed in the process.
Guy Kawasaki, known as a famous venture capitalist and author of 'The Art Of The Start,' developed the 10/20/30 rule when creating a slideshow pitch deck. The method consists of developing a presentation of 10 slides that last no longer than 20 minutes, using fonts no smaller than 30 points.
The shrinking attention span requires entrepreneurs to display their business features in just ten slides to avoid losing VCs' interest. Thus, they fit perfectly in a 20-minute presentation, allowing spare time for discussion and some Q&A. Nevertheless, Kawasaki's rule is not meant to be strictly followed but as a guideline to enhance your pitch deck instead.
This section should have a significant impact and yet be short and witty. Showcase your business’ value proposition and its vision in a few powerful statements. In this slide, you are supposed to outline the peerless benefits of your products over the competition.
However, don't make an endless list. Just pick the most relevant ones (one or two) that you consider that describe your products the most. In a nutshell, you have to show VCs the gap your business fills in the market and why they should choose you and not your competitors.
If you are struggling to find your value proposition, create a list of your target audience's pain points, and clear-cut insights will pop up. Remember, the vision and your unique value are pillars of your company. Don't throw yourself into an investor's financing round if you don't have this essential aspect covered first.
Knowing your target audience is key to developing the right strategies. Show investors who your ideal customers are and focus on the market size. Angel Investors' primary concern is how you intend to position your startup on the market. Therefore, aim to have a solid strategy to answer that question with reliable data.
Nevertheless, don't create a bunch of slides full of numbers and charts. Try to be specific when explaining your market scope to show VCs you are realistic and focused. Implement a streamlined chart showing how the market grew in the past and the potential growth with your business entry.
You have already described what makes your business unique, so now it's time to speak about how you plan to make money. You have to be straightforward, display concrete facts like the revenue model, the cost structure, budgets, traction, partners, and customer segmentation.
To avoid feeling overwhelmed by the amount of data to display, you may use a lean canvas model. This is a handy tool that will help you design and organize your business model.
Related Read: Entrepreneurs And Innovators Need Lean Canvas Models For Their Businesses: Learn Why
Show venture capitalists why you have the right team to grow your business. Focus on highlighting the expertise of essential members and how they work aligned with the company's vision. Investors want to know you have a solid and experienced team behind. However, don't display the whole team and lengthy bios on this slide. Instead, focus on the most relevant members and their key points to answer the founder's question, why you?
A successful investment round can be a giant leap for your startup. By taking these key principles and pulling them all together, your pitch will hardly be passed over.
Don't know where to start? At Base Miami, we partner with entrepreneurs to help them plan their Market Entry, avoiding undesired pitfalls. Start outlining today the strategy for tomorrow's success, and share your story with us on LinkedIn.
It all starts with good research. Whether you’re deciding to launch a new startup idea or mulling over international business expansion, you need to test the waters first. Without proper research, the only thing you have is an assumption. And you don’t want to leave your startup up to chance, do you?
So, how do you conduct proper market research? At Base Miami, we do our own by analyzing what’s happening in our target market, and we do the same for our clients. Staying up-to-date with the current marketing trends will always give you the freshest news and the power to know whether you’re on the right track or you need to pivot.
But what else is there? So much more. Knowing what’s happening in your niche is not enough for market research. You need to get out there and network, too. And you also need to use the power of online tools.
If you want to know how to combine all this into an in-depth market research formula for your startup, keep reading!
You would not believe how many startup owners think they know their target audience, only to find out that they were dead wrong. We see it constantly happen, which is why we always start our Market Fit programs with a Lean Canvas exercise.
The Lean Canvas Model is Ash Maurya’s adaptation to the original Business Model Canvas, first introduced by Alex Osterwalder. According to him, it’s “a one-page business planning tool that gets read.”
Doing this exercise is great to shed some light on some tricky areas that you may overlook, like your value proposition and why your client should choose you instead of a competitor.
If you do the Lean Canvas exercise, you should be able to have a fair grasp of who your customers and market share are. If you’re still unclear on that, go back to the exercise and have a closer look at it again. You must know who you’re speaking and selling to.
There are two ways to define your customer profile, and ideally, you should have both mapped out. One is with an ICP exercise (Ideal Customer Profile) and the other is a Buyer Persona exercise.
A buyer persona is a semi-fictional representation of your target customers. Buyer personas are built out of demographic data, pain points, goals, and real market research about your customers. Depending on your organization, you should have between 2 and 5 buyer persona profiles.
An ICP is a description of a fictional account that gets significant value from your product or service and provides considerable value to your company in return.
The difference between the two is that ICPs are more sales-oriented, and having it defined will help your sales team determine which leads are worth pursuing. Buyer Personas, on the other hand, are built to understand how to communicate with your customers.
Necessity is the mother of invention. This applies to every new business, whether it’s product or service-based. Great ideas can quickly go down the drain if they’re not supported by an actual - tested - market need for them. So, is there a genuine need for yours?
Conducting a marketing audit is perfect to define this, as it will help you navigate the 5 Ps of marketing efficiently (People, Place, Position, Promotion, and Price).
If you realize it was all a pipe dream at the end of your marketing audit, it was still worth doing it. You’ll be discarding a tempting idea that was meant to fail, saving you time and money in the process. So, be glad! On the other hand, you will have gathered enough evidence that your product/service has a competitive edge to position it smoothly in the market.
It is imperative that startup owners have a clear understanding of who their competitors are. A fair dose of competition is always healthy, but if you’re going up against behemoths, you might wanna abort the mission or change to something more doable.
At Base Miami, we look at competitors from three different angles: market overlap, thought-leadership, and validation (we call this process sanity checks).
In order to establish market overlap and positioning, we use the petal diagram tool, which you can find online for free. Like our fellow, Becky Bausman, Senior Vice President of Communication Strategy at Duarte, Inc says “The diagram places your unique company or product in a center circle, and then surrounds it with petals, each one containing competitors in a distinct category adjacent to the company. It forces the person using it to look at the problem of competitive differentiation from each of several distinct perspectives.”.
Once you have identified your top 3 to 5 competitors, what you want to do is look at how they’re positioning themselves in the market. Here’s where we look at their SEO and content marketing. Are they thought-leaders? What are they talking about? Are they ranking on SERPs? For this analysis, you can use online tools like Moz, Screaming Frog, SemRush, and Buzzsumo.
Lastly, the sanity checks. This step is vital because it allows you to validate all your data. We recommend getting at least ten sanity checks with industry experts.
With all the information you gathered, you will be able to read into what you need to do to position yourself in the market and overthrow your competitors. Keep in mind that consumers’ needs and market trends change. So, stay on top of the news. Keep yourself updated, and never stop networking. This is what will constantly validate your business model
If you need help to conduct your US entry market research, we can help you! Contact us and we will give you a free assessment of your business. LET'S CHAT!
We have seen it all too many times over the years. Going straight into execution sales mode is one of the commonest ways companies waste time and money entering the US market.
Faced with the challenge of market entry companies often consider one of two strategies:
Unfortunately, neither of these approaches work in the early stages of market entry. Worse, it usually takes a lot of time and money for entrepreneurs to learn that lesson. The US is an expensive place, time is money and companies often burn hundreds of thousands of dollars over many months pursuing a “dead-end” strategy.
There is another approach that actually works. Companies need to re-test their value hypothesis and product-market fit, in the US, before they proceed to one or both of the steps of “hire a sales guy” or “find a partner”.
Why? Because validating the market enables companies to test and adapt their assumptions about the business model and adjust their plan accordingly.
Instead of just “jumping in”, the first step is to reduce risk, so companies and investors don’t commit time and money to a strategy that doesn’t work. The goal is to ensure that your company is “flight ready” before it “takes off”.
So where do you start? This ebook will go through the five steps you need to make to ensure your startup is ready for expanding your business internationally.
Suggested: Want To Scale Your Business For International Expansion?
You’re interested in taking the giant leap, and we get you. For a business owner and entrepreneur, there could be nothing better than taking your company overseas. On top of conquering a new market and its clientele, expanding internationally comes with other many advantages. Let’s take a look at some:
New markets mean a new customer base, and with new customers come more revenue streams. Going global allows your business to cater to a different customer base with other wants and needs. So, if your international market analysis is correct, you should be filling a demand not yet too exploited.
Expanding to a new territory opens the door to accessing local, high-quality talent that your company may not count on thus far. Embedding your business in a new culture means hiring local talent to help you navigate the challenges more smoothly.
Few things are so important nowadays as establishing a substantial presence for your brand. Credibility is a crucial factor here, and going global helps you achieve that goal. Customers see that you really mean business and that you’re thriving, thus increasing your brand’s credibility.
When you establish your business in a country, you need to find a way to gain a competitive advantage. Going international helps you do just that. Although you will most likely find some sort of competition abroad (direct or indirect), you are still gaining a competitive edge over your local competition.
Based on our experience with hundreds of companies, we have identified several distinct stage gates that companies must complete to progress through a successful “land and expand” journey. At each stage in the journey, fundamental questions are answered and major risks are eliminated.
In this phase, companies get initial exposure to the market, build out their network, gain insight and prepare their market entry strategy. They engage with potential customers, partners, and other industry insiders to learn about the market and how and where they fit in.
Done right, this effort takes in the order of magnitude less time and money than putting people on the ground to just go out and try to sell for a year or two. At the end of this phase, the company has:
A repeatable sales model is one where you have figured out how to create happy customers through a consistent, repeatable, profitable, and scalable sales process. Most companies never get there.
When it comes to sales channels, most entrepreneurs think that “more is more”. The reality is the opposite. Less is more. Most successful companies get more sales from a single channel than the sum of all other channels. Sadly, most companies never find that one successful channel. Instead, they continue to invest in multiple channels in parallel until their cash runs dry. This is a “throw stuff at the wall” strategy. It burns your cash and wears you down.
In our experience, the fastest way to get to a sales model that works is through systematic, methodical trial and error applied to a highly targeted sales model.
Once companies have achieved a repeatable sales model with consistent growth and retention metrics over a period of time, US growth capital is within reach. Companies can expect it to take one and a half to two years in the US before they are able to raise US venture capital.
The step-by-step journey above works because it systematically de-risks each step of the journey before increasing the level of investment of time or money. The first phase for instance requires no people permanently on the ground here, no immigration lawyers, recruiters, etc. The second phase requires a founder or executive on the ground but no sales team, PR firm, etc.
In this model, companies don’t move from one phase to the next unless they have hard evidence that shows they made it successfully through the stage-gate. Instead of scaling pre-maturely, they scale when they have proven the model on a smaller, less expensive scale.
It all starts with reviewing what you already have and there’s no better way to understand your company’s business model than with a Lean Canvas Model. The Lean Canvas Model is Ash Maurya’s adaptation to the original Business Model Canvas, first introduced by Alex Osterwalder. According to him, it’s “a one-page business planning tool that gets read.”
Maurya’s Lean Canvas solution is to break down your startups’ fundamental whys into a one-page template that can be used for any business type and be read in under 20 minutes. It packs everything you need - and possibly more - in a template that’s easy to read, fill, and update.
The Lean Canvas Model is ideal for startups, and, as a startup founder, it is crucial that you understand its importance and how to build one for your business. There are nine categories or blocks in the Lean Canvas Model Framework. Each needs to be filled out following this particular order:
Approach this block with your customer’s problem in mind (which is the following block to fill). These two are intrinsically connected. So keep that in mind when completing this part of the template.
Start by asking yourself questions about your business like:
If you have a multi-sided platform, you will need to create separate Lean Canvas Models for each case: supply and demand.
Suggested: How to develop an ideal customer profile ICP?
What are your customers’ top three pain points? Describe their needs as simple as possible so that anyone can understand them. Avoid technical jargon at all costs.
When thinking about your customers’ problems, think about their existing solutions too. Who is already out there doing something similar to what you offer? How are they solving their customers’ needs? The key here is to conduct market research on your competitors so that you may identify your unique value proposition.
To write a great value proposition statement in under 200 characters, think about the benefits that your customers will have received from using your products. So, this step involves going back to the first few steps:
Your high-level concept is like your elevator pitch. You’ll need to break down what you do into the shortest, most clear sentence possible so that it can be used for VC pitches, press releases, and all sorts of communications. If your sentence is too long, it means you still don’t have a clear grasp of what you do and what you offer.
Go back to your customers’ problem and think about how you’re going to solve it. Exactly write your solution so that anyone may understand it.
You have established that your business solves a real customers’ need, and you know exactly how you’re going to solve that need. Now, you need to select the channels you will sell your product and acquire new customers. Up to 3 channels are right; more can be counterproductive.
How are you planning to charge for your services? This block aims to clarify that. Choose your revenue streams of preference.
Once you finish your business idea validation process, you will have a clear picture of your fixed costs. But if you want to jump ahead, you can start by writing down the expenses you know you have and leaving the minutiae for later.
Having clear metrics will help you analyze what’s working and what needs adjusting. So, define which metrics you will be tracking. A good example can be measuring the number of purchases, abandoned carts, the number of signups, etcetera.
Last but definitely not least is your unfair advantage. This is the most critical step of the process because it’s what will differentiate you from your competitors. Defining into simple and a few words what makes your business unique and better than your competition is tricky and requires some serious thought. However, once you do, that’s when the good stuff starts happening.
To understand the new market, it’s important to deep dive into it. And the best way to do it is by looking at those in your same competitive niche. What are they doing? What’s working for them? What’s not?
The goal here is to map the existing ecosystem landscape to identify the relevant players for your niche. You want to base this decision off on their product/service and positioning. Take a look at the graphic to give you a quick idea of how to do this exercise:
The Petal Diagram is a new way to look at your competitors and assess them when you’re trying to create new markets or resegment existing ones.
Like our fellow, Becky Bausman, Senior Vice President of Communication Strategy at Duarte, Inc says “The diagram places your unique company or product in a center circle, and then surrounds it with petals, each one containing competitors in a distinct category adjacent to the company. It forces the person using it to look at the problem of competitive differentiation from each of several distinct perspectives.”.
An empty Petal Diagram may look something like this:
And after completing it, it could look like this:
Now that you have your business model, market research and competitive landscape you’re ready to define your positioning and create your offer: That is your value proposition and pricing model.
A Unique Value Proposition (UVP) is what makes your company different, find the best way to describe yours with a WOW! Statement that creates interest in you and your company.
Pricing is about knowing your customer, knowing your product, knowing your market, and keeping an eye on the competition. Be ready to calibrate and re-calibrate!
As an entrepreneur looking to "sell" your startup to potential investors, you want to wow them with your pitch. And how do you do that, you may be wondering? The answer is not with an Elevator Pitch; the answer is with a WOW! Statement.
The WOW! Statement concept was first introduced by the venture capitalist Bill Reichert in his viral article Getting to WOW!. Bill came up with this new solution to pitch a startup after witnessing countless CEOs bore potential VCs with the classic elevator pitch. So, we can say that WOW! Statements are "the elevator pitch 2.0".
The three keys to coming up with a dazzling WOW! statement is to keep it simple, clear, and compelling.
By simple, we mean simple language (everybody should understand what you do, even if they don't know the niche or jargon) and straightforward explanations. By Clarity, we mean to avoid technicalities and any specific jargon that may throw the listener off.
And to be compelling means to generate curiosity. You need to provide a solution to a problem that clearly stands out. What makes your business different and revolutionary? Being original with your proposal will give you the best shot to instill curiosity in your audience.
Sanity Check
At this stage, we are ready to see if everything we gathered and created resonates clearly with the market. We call this process a “sanity check”, and it ́s one of the toughest things so far as you need a network to support you. The goal here is to reach out to ten ecosystem players to validate your assumptions.
First, prepare the questions you need to confirm. Then you need to engage with these ecosystem players, which can be other entrepreneurs, chambers, associations, trade show organizers, et cetera. Based on the feedback you receive, go back to your Lean Canvas Model and offer sections to adjust them accordingly.
Now it’s the time to get all fancy and ready to show off. The US market is very picky, so you need to “look” your best. This is why you need to revise your branding as it will drive all your communication and how you present yourself as a Company. Look at your company name, does it resonate with the US Audience? What is the story you want to tell? How do you want the US Audience to know you?.
Next, is to look at your US landing page. This is especially important because if an American goes to your website and sees all the content in Spanish and that your headquarters are in Medellin, you could be losing prospects.
If you want to go to the US market, you need to show a US office, speak like an American, and act LOCAL.
You will need contacts in the US, partners, employees, people that can lend you a hand. So, it is advisable that you do some outreach campaigns. Where you do them is optional, but some of the most common channels are E-mail, Linkedin, Phone.
Look for connections in common on LinkedIn, nothing beats a personal connection. When you reach out to people always be human, personalize the messages. If you’re not on LinkedIn yet, what are you waiting for?
Build your lists for outreach heavy on the prospect and partners side, but also include time for you to prep your trip to the US. Define a date and start building your agenda to meet your initial network in person ideally. Nothing beats in-person networking.
Cold Outreach is working less and less each time so the more you can leverage connections the best, but don’t drop the Outreach as it’s still a tool to add value to your initial efforts
Base Miami has over 20 years of experience in the US tech landscape. Founded by Latins that have scaled their businesses in the US, we have the know-how and network within the thriving Miami business Community to support Latam tech Startups with their US business launch to avoid costly mistakes and achieve in 3 months what would take them 18.
Charly Esnal: [00:00:00] Hello, friends, Charlie here from Base Miami wanting to welcome you to our video series where we'll be discussing all things related to expansion into the US market. And today we'll be having a chat with Lizbeth Flores. She's one of the partners at PAG law. Liz holds a Juris Doctorate from Harvard law school and a bachelor's degree in government, Magna cum Lauder from Harvard University.
And she has over 16 years of experience advising clients and complex cross-border transactions. Her firm PAG law has advised, hundreds of tech companies across Latin America and including market leaders like Mercado Libre, Opening English, Mural. Compare online, 99, and many others. And many other lawyers who were previously entrepreneurs as well, of founded companies such as Idear, the LAB Miami, Miami angels.
So, well, thanks Liz for being with us here today.
Lizbeth Flores: [00:00:57] Thank you for having me.
Charly Esnal: [00:01:00] Great. So, Liz, let me start by asking you this. We work with a lot of different entrepreneurs from Latam and many of these companies are looking for that initial NPT set up and support. So what is the approach that you take with entrepreneurs when they are saying: “Hey, I want to open my company in the US”.
Lizbeth Flores: [00:01:18] We try to keep it as simple as possible. And it's obviously much easier if the structure of the company in Latin America is very simple. So when we have a potential client who comes with a Latin American company already formed and they want to form a US holding company, and the Latin American company has various classes of stock with various rights, et cetera, it becomes much more complex.
So what I would advise to any entrepreneurs in Latin America who see a future establishing a holding company in the United States is to keep things as simple as possible. If possible, all common equity, no special rights outside of the ordinary, special voting rights, et cetera.
Of course, in some cases, it's unavoidable because you might have an investor who insists upon special rights. But any level of complexity really makes the transfer into the United States more complex and, as lawyers, you'd think we would like things to be more complex because we are fees, but it makes sense happy when we can do something, very quickly, efficiently and inexpensively for our clients.
Our clients are entrepreneurs and we would rather that they spend that money on growing their business rather than on legal fees. So that's why I always, I always advise keeping it simple. But at the same time, don't try to do it yourself. Definitely get legal help from folks who have done this before and who will steer you down the path of keeping things as simple as possible.
Charly Esnal: [00:02:47] Hmm. Yeah. That's cool that you had entrepreneurs also in the firms, so they know the grind that it takes and the money and that time is limited. So, that you can guide them on making it easier for them. And you just said something interesting, like, what are some of the pitfalls that companies make in this stage when they are setting up the company? What are the mistakes that you have seen?
Lizbeth Flores: [00:03:13] Well, I always say we make a little bit of money when we form companies from scratch. We make a lot more money when our clients have tried to do it themselves. It is very important to have good legal and accounting advice from the very beginning.
I'm just amazed. I have clients who do rounds in the millions of dollars, but yet they don't want to hire a US accountant. And then something comes up in a future round. One of the VC funds does diligence and finds there's a tax issue that could have been easily avoided if they had spent a couple of thousand dollars on an accountant.
Same goes for lawyers. I always say your legal structure is the house where your company lives. So unless you are a professional architect or a builder, you probably don’t want to build your own house because it's going to fall on top of your family. Well, it's the same for a legal structure. We have a lot of clients who tried to cut costs by doing things themselves from forms they found online and it gets very messy, costly, and time-consuming to try to unwind anything that was done improperly.
But at the same time, there are some things that clients can do themselves. And we will always point our clients towards those things that we feel that they can handle by themselves. For example, oftentimes forming a single-member LLC is really not complex at all, and it can be done through online sources, such as Clerky or a rocket lawyer, and things like NDAs tend to be very formulaic.
So we like our clients to save money. We want them to feel like when they are using us, we're adding value. So if the client wants to save, we can always point them towards things that are very easy and cookie-cutter, but there are certain things for which you do need lawyers’ help.
Charly Esnal: [00:04:59] Hmm. Awesome. That's good to know then that you're not going to just charge them for doing things that they can do themselves if there's some of them. But that you can overview that and say, okay, you know what? Yeah, maybe you can do this on your own time. But, but then this no, this, you need us for that.
So let's see. What is some of the legal support that they will need on an ongoing basis? In terms of compliance or, HR that kind of thing for the day-to-day.
Lizbeth Flores: [00:05:30] Well, we always advise, focusing on the things that venture capital funds are going to focus on when they do their diligence because that might seem very far off in the future, but certain things if done right from the beginning can save a lot of headaches and a lot of needless explanations that you're going to need to make to a potential investor. So the protection of intellectual property is very important. It's very important that from the beginning all the founders, employees, anyone who touches the intellectual property science sign what's called a confidentiality and inventions assignment agreement. We put them together for our clients that frankly, there are forms online that are great.
Anyone who comes into the company needs to sign one of those from the get-go because a venture capital fund will come along and they’ll be very concerned to make sure that they are investing in a company that has protected its rights to its intellectual property. And sometimes it's just too late to go back.
For example, if you have a founder who leaves the company and hasn't signed one of these documents, which again is very cheap and easy, and can be found online and take about five minutes to sign and review. Then, oftentimes, it's hard to find that founder or they don't cooperate and they won't sign it. And that will raise a red flag for the venture capital funds. So you want to save those headaches.
Charly Esnal: [00:06:49] Awesome. And, in that sense, when they're getting ready for either an angel investment seed investment or actually a VC round, how would you help prepare them for that?
Lizbeth Flores: [00:07:03] Yeah. Well, the number one thing is to have all the legal documents in order and well-organized so we can do that as lawyers.
We have a lot of founders who just don't want to touch the legal documents. And it's very important for the founders to know what they have, what their legal documents say. Take the time for the lawyer to answer any questions that you might have and have them very well organized. Sometimes, our clients to save money will want to collect their own signatures. And that's fine, but send a copy of the signed document to your lawyer and definitely keep everything in an organized file. It will just save so many headaches when you have investors down the line doing diligence.
Charly Esnal: [00:07:46] Awesome. I wanted to ask you... maybe this is a tough question. I don't know if you can answer it, but it's in terms of rough numbers of investments that an entrepreneur should plan. For legal fees in their initial 6 to 12 months in the US, it can be rough. But it's like, do I need $10,000 a year or $100.000 dollars a year in legal fees to survive those initial months?
Lizbeth Flores: [00:08:08] So, assuming the company has kept things simple in the home country as far as not having, a lot of crazy rights given to their investors and different classes of stock, et cetera, we can easily keep legal fees between, I'd say $4.000 and $5,000 for the first six months to a year of entry into the United States and that includes a formation of the US company. The flip of the Latin American shareholders into the US company and basic documents you need to get started. The confidentiality and inventions assignment agreements, some basic vesting agreements for the founders, et cetera.
So it doesn't need to be a lot. And again, if the founders don't do it right from the start, it could cost a lot more to go and fix that situation later on.
Charly Esnal: [00:08:57] That's much less than what I thought, so good. And, now more on a personal level, I'm dealing with entrepreneurs from Latin America all the time, and you've helped a lot of very large companies to also smaller guys.
So, if you had to give one piece of advice for entrepreneurs that are considering moving to the US and, and bring their business to the US, what would that be? Just one kind of big advice.
Lizbeth Flores: [00:09:21] It would be, I think humility is very important. And, as entrepreneurs, I'm a small business owner myself. So, if we don't come in with humility, certainly being an entrepreneur teaches us humility. The market is always changing. There are always people to learn from and people who will, willingly, give of their time. There are so many resources out there. So I would say an openness and a willingness to learn and understand that the way things work in the home market isn't always the way things work in the US or other markets. So just, being willing to constantly learn, adapt and take advantage of the resources that are out there. I think to me, this is the beauty of having a small business and being an entrepreneur, and growing a business. It's an opportunity to constantly learn, to constantly get exposure to very smart people in the market, and learn what people are doing with their companies.
So I would say, looking at it as a learning experience and being able to grow from those who have come before.
Charly Esnal: [00:10:23] Awesome. It's funny because we do have a presentation that we do. A webinar that it's the “7 deadly sins of US market entry”. And one of them, when we talk about the team, is the importance of being coachable and having that beginner's mentality. Especially with entrepreneurs is tough sometimes because they've done so much in their own market and they had such success that sometimes they get a little bit hard-headed like I know everything and I know my market.
And when you get to the US it's like, no, you don't know anything. You have to leave anything that you thought that you knew in your country and start from scratch in the US so, I agree completely with that beginner's mentality to keep it when you come to the US. Yeah.
Lizbeth Flores: [00:11:05] So I think the pandemic has really taught us the importance of that beginner's mentality. When the pandemic started, I think the assumption for a lot of people was that everything was just going to go away and the investment would stop and things would come to a halt, but what's resulted in has actually been a great opportunity for many tech companies. But in my opinion, the companies that have been able to thrive are those that have been able to rapidly adapt to the changes, rapidly see what's going on in the market, and pivot.
Charly Esnal: [00:11:38] Yeah. And it's funny because COVID is a lot like, I would say, one of those things that startups kind of have to face all the time, that it's constant change. Things can change so rapidly that you need to have that mentality, as you said, to be constantly adapting to the changing environment.
So it's cool how it all worked out. Well then, that was that for the questions that we had thank you so much for everything that you shared with us today. I hope our entrepreneurs learned more on how to start their US entry the right way also what to take into account and not to make those mistakes that you mentioned.
And, and now they know also that they can contact you and your firm for any kind of support in those initial steps in the US it would be our pleasure. Okay. Thanks, Liz.
Lizbeth Flores: [00:12:33] Thank you.
The issue of expanding your business internationally, especially to the USA, is that a lot of it is guesswork. Validating your hypothesis takes a lot of time and money too. The good news is that expanding your business to the US is possible, even if you take the long and winding road to get there.
But what if there was a way in which you could cut times significantly and save a lot of money? Is soft-landing in 90 actually doable? The answer is hell yeah!
At Base Miami, we have created a unique proven methodology called Market Fit, which allows companies to accomplish in 3 months what usually takes 18 to 24. Today, we would like to share our methodology with you because we believe in the power of helping the community. So, get your favorite note-taking system ready because we are about to shed some light on some pretty juicy information!
Entering the US market can be daunting. We know that from experience. After all, at Base Miami, we are Latin entrepreneurs that have soft-landed in the US and grew exponentially from there. So, everything we say, we say out of first-hand knowledge.
Let’s cut to the chase here by saying that your US expansion planning and launching ultimately comes down to five simple steps: discovering the market, validating it, story creation, engaging the market, and process adaptation. Yup, by following those five steps you could be looking at a whole new market and the chance to skyrocket your business model.
Ready to learn how we do it? Let’s get to it then!
The first step is kind of like brainstorming. It’s about forming assumptions about your business model and figuring out HOW to go market in the US with your product or services.
Here you’ll need all hands on deck. You want your team to de-construct everything they know about your current market and start thinking fresh. The US is a behemoth of a market and it’s entirely different from that of Latin America. So, everything you think you know, erase it from your mind.
Once you’re in the zone, you want to start your research. This is the step-by-step process we follow with our clients:
1. Review your current business collateral e.g. pitch deck, product demonstration, marketing materials.
2. Lean Canvas Business Model: Lean Canvas is the tool we use to model key business and go-to-market assumptions.
3. Petal Diagram: This is a method to determine company positioning in the competitive landscape of adjacent, overlapping, or alternative solutions.
4. Provide a market research piece into the US ecosystem for your industry e.g. Trade Shows, Industry Associations, etc.
5. Provide access to US research reports into your market, industry, and competition.
Related: Entrepreneurs and Innovators Need Lean Canvas Models for Their Business: Learn Why
Now that you’ve got your assumptions and your initial research into the US market, it’s time to validate everything. This step is crucial to reduce potential risk, avoiding investing money and time into a strategy that won’t ultimately work out.
So, validating the market consists of 3 steps:
1. Top Ten Questions: It’s a document articulating the biggest anticipated risks and unknowns around the market entry.
2. Creating a target list of industry experts within your network.
3. Hosting 2-5 Feedback Sessions with Industry Experts.
This will give you the necessary information to discard wrong assumptions and fine-tune the right ones.
Now it’s time to build your brand in a way that meets US standards. Because you’re entering an English speaking country, every branding and marketing piece needs to be specifically tailored to accommodate English-speaking customers.
In order to build a strong, cohesive, US branded presence online, we guide our clients through these steps:
1. Wow! Statement: A short yet powerful articulation of your target customer, value proposition & positioning.
2. Slide Deck - to present the company to customers, partners, and investors in a US-centric way.
3. Company One Pager: a one-page summary to introduce the company and help it get meetings.
4. Ideal Customer Profile: a precise demographic of who we are targeting in the US Market.
5. Target List: list of potential customers & partners we want to reach to test go-to-market assumptions.
6. Outreach Script & Plan.
7. Website adaptation advisory: you may need to make changes or have a US-specific website.
8. Review of Revenue and Pricing Model.
Related: How to Dazzle US Investors with a WOW! Statement
Once the target list and outreach scripts have been created, you can begin to reach out to your network. The goal here is to get warm introductions to those companies and individuals and schedule meetings with them. These “customer discovery” meetings will help you turn business assumptions into “hard” facts and adapt the go-to-market approach as needed.
*(This part of the process, we typically do with our team at Base Miami. But you can do it yourself alongside your team and there shouldn’t be any hiccups.).
Last but certainly not least is modifying your sales collaterals. The goal here is to reflect your “latest and greatest” understanding of the customer and the market.
After adapting the approach and all the collateral, you should have a pretty solid idea of your new target market and the strategy you need to follow to penetrate it. At Base Miami, we have followed this Market Fit program with many clients and we are always stunned with the before-and-after results.
It’s pretty common for business owners to believe that, because they have massive accounts as clients and a fair understanding of the market they navigate, that it should be the same for the US. When in all honesty, it can’t be further from the truth. The US market is one of the most highly coveted markets in the world, and it’s not without reason. The US has its own rules and standards. The approach to penetrate the market should be a carefully-thought-out process, rather than pure guesswork.
With this guide, however, we wanted to share with you the proven-track methodology that we have successfully implemented with companies like Digibee, GEGO, and Ionosys. If you follow it to the letter, you will be at the least, with one foot inside the US market. The rest it’s taking the plunge, setting up shop, hiring the right people, and getting those clients to start generating some pipeline.
If you’re interested in this process and would like to benefit from our expertise and industry players’ network, you can contact us for more information on the Market Fit program. We can conduct a quick assessment of your business to see if you would be a right fit for it!
There’s probably nothing more frustrating or even fearsome than having to ask others for their money to make your dream startup come to life. Isn’t it? At one point or another, money-raising will be required, and the key to getting those funds may lie in three simple tips.
But before we tackle those, let’s start with a fundamental question: how do startups get funding?. There is a right place and a right time to do this, and we don’t want you to miss your shot by ignoring the answers to these questions. So, let’s get started.
Funding can come from many different sources, including your family and friends. But, when we typically talk about funding rounds, we look at bigger players, like Super Angels and VCs. Knowing which one to aim for depends solely on the stage your startup is in, but let’s get a closer look at the types of funding that you may receive along your entrepreneurial journey.
There are many rounds of fundraising, and each of them has its particularities and strategies. Having seen many startups on their US expansion journey, we know the importance of first-hand understanding of your startup stage. So, let’s take a look at the different types of rounds and the best practices for each:
*There is another round, called the Pre-Seed rounds, which are typically meant to help founders hit one or more milestones before they are ready for the “real” investment rounds. Founders can expect to receive a small investment from friends and family, early-stage angels, or startup accelerators, often below $1 million.
Before investing in any startups, investors do in-depth research about your business and your team to understand if they are making a smart choice in investing in your startup. You should do the same.
Understanding how investors tick, what they like to see in a startup, and what not will give you a clear advantage to get funding. However, you should go even deeper than that.
When profiling your investors, it is worth noting the following things:
If you only had one chance to convince a potential investor to invest in your company, then you need to make sure that you nail your pitch.
Pitch deck templates can be found all over the internet. However, our suggestion as a go-to-market consulting Agency is that you make yours following the 3S rule: short, simple, and sweet.
There’s no need to write a bible about why your startup deserves funding and how great it is, and you should avoid tech jargon at all costs. The easier your pitch deck is to understand, the better. Keep the length of your deck to a maximum of ten slides.
Make sure you pack a punch in the first three slides (put your best content first) and repeat this strategy with your pitch. Your initial 30 seconds should be the most powerful ones. If you grab your investors’ attention right off the bat, you have higher chances of keeping that attention until you’re done. Otherwise, you might lose their interest halfway through your presentation.
Related Read: How to Dazzle US Investors with a WOW! Statement
Any cold outreach sale is more challenging than a hot lead. This is true in marketing and sales, and it’s equally as accurate when fundraising. It’s not enough to do your research and come in with a plan. If you manage to get a referral, you will enter that investment meeting through the Golden gate.
So, time to dust off some connections and cashback on past favors. Think about your network and who can introduce you to the kind of investors you are looking for.
Another great tip is to ask for introductions to the founders of portfolio companies. Since they already are inside the investor’s “trusted circle,” you will have a higher chance of connecting with them with the right foot forward.
So, there you have it. Our top 3 tips and best practices secrets to increasing your chances of getting funded by a US investor. Time to put the theory into practice!
If you’re thinking about going global with your company, first you need to know if you’re actually ready to expand. It will be worth checking out the advantages and disadvantages of international expansion to see if it’s a step worth taking, as well as some tips to help you along the process of internationalization!
Related: 6 steps to take before expanding your business internationally.
By now you know that we are big advocates of internationalization for Latin startups and especially of expanding to Miami. Why this particular city you may be wondering? Well, Miami is establishing itself as a new tech hub and many VCs are currently abandoning the Silicon Valley ship and exploring the warmer waters of the Caribbean sea.
Related: Why you should expand your startup to Miami?
Miami offers new opportunities for those adventurous enough to take a chance. However, in this article, we will focus on international expansion per se instead of concentrating on just Miami. So, if you’re thinking about expanding, we will cover the main things that you should consider before you do.
You’re interested in taking the giant leap, and we get you. Expanding internationally has many advantages. Let’s take a look at some:
New markets mean a new customer base, and with new customers come more revenue streams. Going global allows your business to cater to a different customer base with other wants and needs. So, if your international market analysis is correct, you should be filling a demand not yet too exploited.
Expanding to a new territory opens the door to accessing local, high-quality talent that your company may not count on thus far. Embedding your business in a new culture means hiring local talent to help you navigate the challenges more smoothly.
Few things are so important nowadays as establishing a substantial presence for your brand. Credibility is a crucial factor here, and going global helps you achieve that goal. Customers see that you really mean business and that you’re thriving, thus increasing your brand’s credibility.
When you establish your business in a country, you need to find a way to gain a competitive advantage. Going international helps you do just that. Although you will most likely find some sort of competition abroad (direct or indirect), you are still gaining a competitive edge over your local competition.
Sadly, not all that glitters is gold, and the same principle applies to global expansion. There are a few key considerations to take into account before deciding to take the big leap. Interested in knowing which they are? Take a look!
Setting up camp (and shutting it down) in another country is expensive. You’re looking at establishing your business entity, building your office or workspace, and paying salaries. Then, there’s the legal side of going global, including hiring local lawyers, tax accountants, and human resource experts.
And this is in the case that your business thrives in the new market. If you decide to shut down operations, it can be expensive and time-consuming, too (you could be looking at a 2-year-long process).
Each country has its regulations, so you need to assess and evaluate before moving. Tax regulations, global privacy rules, liability risks, are all potential regulation conflicts to take into account well before expanding.
Suppose you are expanding to a country with a different culture to your own. In that case, it is recommended that you try to delve deep into the new cultural practices. Especially in regards to how they do business and social practices. Bear in mind that language may also be a barrier, so consider taking some classes!
Exporting, importing, and developing products in a new market can be challenging due to local standards and procedures. There may be demanding local requirements to sort out and unfamiliar paperwork to fill out. So, definitely try to get some advice on this matter!
If after reading the pros and cons of international expansion, you are still decided to take the big plunge, congratulations! At Base Miami, we would like to offer some piece of advice that may be helpful on your new journey. Here are our top three tips for a successful international expansion.
You know exactly who your customers are in the country you are in right now. You even have a clue that you may know your foreign country’s customers too. The truth is, you most likely do not.
So, take the time to study the market, learn about the cultural differences, the stage of the market they are in (the US is a much more demanding country in terms of customer satisfaction than Latin American countries, for example).
If you are unsure of how to validate your ICP (ideal customer profile), you can hire a company to help you with this challenge.
Related: How to Develop an Ideal Customer Profile (ICP) for your Organization
Learn about the new country you will be soft landing into. Take the time to study their culture, language, business opportunities. Assess market readiness, understand how your new customer prospects behave, what their pain points are.
Get advice on local regulations and governmental restrictions that might affect your operations. All in all, the more you know about the country and its people, the smoother the transition will be.
Nobody makes it on their own. You will need local allies to help you establish and consolidate your business. Consider hiring your employees locally, as this will give you an extra advantage.
Network as much as you can, get out there so you get to know the people and the people get to know you. Try to partner with organizations that already know the local ecosystem too. Creating meaningful connections can be a defining factor in whether your business makes it or not. So, don’t take this tip lightly.
At Base Miami, we support forward-thinking Latin American startups to expand into the US. We aim to help you avoid international expansion’s common pitfalls and prepare you to soft-land into the US through the main door. Check out our 7-deadly sins guide to learn more about this.
Are you wondering what exactly we can do for you? Here’s how we can help you!
And if you are ready to start on your journey of international expansion, contact us! We would be delighted to assist you in this process.
A Lean Canvas Model or a Business Model Canvas? Many entrepreneurs are met with this crusade before they start deconstructing their startup into one of these two templates.
Whereas a Business Model Canvas could be great for your growth or investment stage, it also takes much time to complete (can be up to a couple of months), and it requires many assets and work to conduct it properly. So, Business Model Canvas or Lean Canvas Models?
The answer is simple: If you’re a startup founder, go with the Lean Canvas Model, and here’s why: the BMC (Business Model Canvas) is too extensive, and like many other things in the startup world - think WOW! Statements, for example - explaining what you do needs to be short and straight to the chase. One sentence more than necessary, and the consequence could be your reader’s loss of interest.
The Lean Canvas Model is Ash Maurya’s adaptation to the original Business Model Canvas, first introduced by Alex Osterwalder. According to him, it’s “a one-page business planning tool that gets read.”
Maurya’s Lean Canvas solution is to break down your startups’ fundamental whys into a one-page template that can be used for any business type and be read in under 20 minutes. It packs everything you need - and possibly more - in a template that’s easy to read, fill, and update.
It also features a sort of Easter Egg category (the Unfair Advantage), that can be tricky to find, but will give you a competitive edge when explaining why your business is so great to potential investors.
The Lean Canvas Model is ideal for startups, and, as a startup founder, it is crucial that you understand its importance and how to build one for your business. Let’s start by looking at a Lean Canvas Model Template and defining how to fill each category.
There are nine categories or blocks in the Lean Canvas Model Framework. Each needs to be filled out following this particular order:
According to Ash Maurya, arranging the information in this fashion allows you to test each category of your business model, starting from the highest to lowest risk. Also, note that by starting with the Problem category, the Lean Canvas Model gives your business model a customer problem-focus approach, which allows you to build more effective solutions for your customers’ pain points.
In order to fill your Lean Canvas Model, Maurya proposes to start by defining your customer segments. Approach this block with your customer’s problem in mind (which is the following block to fill). These two are intrinsically connected. So keep that in mind when completing this part of the template.
Start by asking yourself questions about your business like:
If you have a multi-sided platform, you will need to create separate Lean Canvas Models for each case: supply and demand.
Identifying your early adopters is crucial because, as the word suggests, they will be your first customers. If you don’t know how to pinpoint your potential early adopters, check out this article.
What are your customers’ top three pain points? Describe their needs as simple as possible so that anyone can understand them. Avoid technical jargon at all costs.
When thinking about your customers’ problems, think about their existing solutions too. Who is already out there doing something similar to what you offer? How are they solving their customers’ needs? The key here is to conduct market research on your competitors so that you may identify your unique value proposition.
Defining your unique value proposition is the core of the Lean Canvas Model, and it’s also possibly the most challenging step to complete.
To write a great value proposition statement in under 200 characters, think about the benefits that your customers will have received from using your products. So, this step involves going back to the first few steps:
Your high-level concept is like your elevator pitch. You’ll need to break down what you do into the shortest, most clear sentence possible so that it can be used for VC pitches, press releases, and all sorts of communications. If your sentence is too long, it means you still don’t have a clear grasp of what you do and what you offer.
Go back to your customers’ problem and think about how you’re going to solve it. Exactly write your solution so that anyone may understand it.
You have established that your business solves a real customers’ need, and you know exactly how you’re going to solve that need. Now, you need to select the channels you will sell your product and acquire new customers. Up to 3 channels are right; more can be counterproductive.
How are you planning to charge for your services? This block aims to clarify that. Choose your revenue streams of preference.
Once you finish your business idea validation process, you will have a clear picture of your fixed costs. But if you want to jump ahead, you can start by writing down the expenses you know you have and leaving the minutiae for later.
Having clear metrics will help you analyze what’s working and what needs adjusting. So, define which metrics you will be tracking. A good example can be measuring the number of purchases, abandoned carts, the number of signups, etcetera.
Last but definitely not least is your unfair advantage. This is the most critical step of the process because it’s what will differentiate you from your competitors. Defining into simple and a few words what makes your business unique and better than your competition is tricky and requires some serious thought. However, once you do, that’s when the good stuff starts happening.
If you are an entrepreneur or startup founder, then you need to go down this rabbit hole. A Lean Canvas will clarify your business model and help you in many stages along the journey - from getting those first customers to investor funding.
However, filling out a Lean Canvas is not enough. It’s actually the first step that will set the way for what comes next: implementation. That’s when it gets hard. Putting everything you researched and know about your business into practice will give you the real insight you need.
So, do you have your Lean Canvas Model ready? If not, it’s time to get started!
As an entrepreneur looking to "sell" your startup to potential investors, you want to wow them with your pitch. And how do you do that, you may be wondering? The answer is not with an Elevator Pitch; the answer is with a WOW! Statement.
The WOW! Statement concept was first introduced by the venture capitalist Bill Reichert in his viral article Getting to WOW!. Bill came up with this new solution to pitch a startup after witnessing countless CEOs bore potential VCs with the classic elevator pitch. So, we can say that WOW! Statements are "the elevator pitch 2.0".
In the classic elevator pitch, an entrepreneur or sales professional was supposed to have a 60-second max speech (or monologue - really) at the ready. This ensured that if he were at a networking event (or an elevator ride), he would be prepared to splurt out the over-rehearsed words to a probably less than receptive audience.
The result? One too many venture capitalists running for the nearest exit door and funding opportunities lost too soon.
A WOW! Statement might seem like a daunting task to achieve at first, but it's nothing if simple, really - definitely easier than learning a 60-second speech word by word. The concept lies in creating interest in your audience. So, let's say you're an entrepreneur at a networking event who has just come across a willing audience.
The first thing you will need to forget is trying to show everybody how amazing your startup is and how it has the power to solve worldwide famine. Instead, the goal here is to create a natural, free-flowing conversation in which the audience ends up wanting to hear more of what you do. If you end up with a "Please, tell me more about it.", then you have WOWed them.
To get a clearer idea of what a WOW! Statement is, let's quote its progenitor, Bill Reichert:
"What are the three or four sentences that can be spoken by a normal human, and can be understood by a normal human, that really capture the essence of what makes your company so interesting?"
The three keys to coming up with a dazzling WOW! statement is to keep it simple, clear, and compelling.
#1 Simplicity
You already know that the traditional Elevator Pitch approach doesn't work anymore. Robotic monologues that showcase your business like the next Superman will do more harm than good for your case. One of the keys here is to keep it simple.
By simple, we mean simple language (everybody should understand what you do, even if they don't know the niche or jargon) and straightforward explanations. There's no need to launch a full-on presentation. Sometimes, like in this case, less is more. So, the fewer words you use to describe your business, the more chances you'll have of retaining your audience's attention.
Would you like to know what Bill Reichert's WOW! statement was?
"I help startups start up".
#2 Clarity
What is it that you do? Think about answering this question as if you were talking to a random person in the grocery store. If you go too technical on them, they will not understand and probably walk away. So, whenever you're asked to reply to this simple question, try to be as straightforward as possible. Avoid technicalities and any specific jargon that may throw the listener off.
#3 Compellingness
The end goal with a WOW! Statement is to sell. Keep that in mind when you are explaining what you do. You want to instill curiosity in the listener, but avoid going too mysterious with your explanation.
To generate curiosity, you need to provide a solution to a problem that clearly stands out. What makes your business different and revolutionary? Being original with your proposal will give you the best shot to instill curiosity in your audience.
If you're wondering how all this theory comes together, here's our own WOW! Statement to give you an idea of what yours should look like. Remember that every business is different, and you should customize your WOW! Statement to fit your business' description. Without further ado, here's Base Miami's WOW! Statement:
"The big idea with Base Miami is to help companies from Latin America land and expand into the US through Miami. Our team of hands-on entrepreneur executives has the know-how, network, and experience to get companies launched here in less than half the time and half the cost. Unlike most consulting firms that 'talk the talk', we have walked the walk. We have started and exited multiple companies, raised tens of millions in venture capital, and have decades of experience from Miami, Latam, and Silicon Valley."
And as Peter Cummings AKA “The Pitchman” says:
“A great pitch is always evolving. It must be pliable to the moment and audience-specific. Not just a memorized, canned speech. It is a verbal, listening, and visual interaction. No one is born a great public speaker/storyseller/pitcher. It takes dedication, practice, self-reflection, a sense of humor, and a great coach.”
So, if you are still using the traditional Elevator Pitch, now is the time to switch to the WOW! Statement strategy. Follow the guidelines and example we have provided above to create your own, and once you do, hit us up on LinkedIn to share the result! We would love to share our thoughts with you about it.
Starting a marketing campaign or a sales strategy without knowing who your customer is is a waste of your time and effort. It is like shooting in the dark, wandering aimlessly through a dark corridor, hoping you'll hit something along the way.
As with everything in Marketing, there needs to be an end goal guiding your actions and an executable strategy to accompany that goal. Knowing your ideal customer profile (or ICP) is the first step to getting your marketing strategy right.
So, what is an ideal customer profile or ICP? The concept is pretty straightforward. An ICP is a description of a fictional account that gets significant value from your product or service and provides considerable value to your company in return.
To put it bluntly, an ICP is a profile of the customer that's on the back of your mind whenever the question "who's your target audience?" comes up.
Having an ideal customer profile is extremely important because it will help your business maximize its marketing efforts, save time and money, and build more meaningful connections with your audience.
If you do not have your ICP built out yet, we would like to give you the template we use at Base Miami to create the ideal customer profile of the clients we work with.
An ideal customer profile (ICP) is a fictitious client (or company) that perfectly gathers all the qualities and pain points your company solves.
Knowing your ICP gives your company a clear idea of your target audience's problem and what it needs to solve. This will help you align your marketing efforts towards solving those needs while maximizing your resources' potential.
*To build your ICP you will need to conduct thorough research on your clients and competition.
The more detailed you build your ICP profile, the better you will be able to target them. If your organization uses account-based marketing (ABM), having your ICPs clearly identified will help your sales reps' target qualified leads better. That way, their efforts will be more focused on the customers that are more likely to convert.
Let's see the full scope of the benefits that your organization will profit from by creating an ideal customer profile:
A buyer persona is a semi-fictional representation of your target customers. Buyer personas are built out of demographic data, pain points, goals, and real market research about your customers. Every organization has between 2 and 5 buyer persona profiles.
Even though ICPs and Buyer Personas may seem like the same thing at first, they are not, and it's important to understand the difference between them to avoid making mistakes.
ICPs are more sales-oriented, and having them mapped out will help your sales team determine which leads are worth targeting. Buyer Personas, on the other hand, are built to understand how to communicate with the individuals and the type of content that works best for them.
Now that you have a better idea of what an ICP is and why your organization must have one let's take a look at a step-by-step guide on how to create one.
Analyze your current and former customers in accordance with the following criteria:
This will help you form a list of your best customers.
Look at the customers of your competitors and analyze them by industries, size, and geography. Obviously, you won't get a full scope of their clientele. However, a simple look at the client section of their websites might get you a valuable hint at where to look for clients.
In order to pick a client sample, here are some questions that you can ask yourself about them.
Below are some sample questions you can ask your current client base. You could do this via video conference, face to face, or simply use a survey tool and send it out to your database.
DOWNLOAD OUR SAMPLE QUESTIONNAIRE
When you're done, you will take this information and create a profile that follows the outline in this ideal client profile template:
Now, it's all hands on deck in order to build your ICP. The guidelines we have provided you with will steer you in the right direction to get you started and, what is more, we would like to give you the template we use at Base Miami to define our ICPs and those of our own clients.
ProChile and CORFO’s GoGlobal’s 2020 edition launches this week and we are very proud to announce that we have been selected as the entity to manage and execute a full program for 9 of the GoGlobal finalists and provide them with the tools and network they require for successfully entering the US market.
“We are very excited to support the ProChile and CORFO’s GoGlobal companies in this program. We know Miami has all the tools to make these companies successful, our job is to show them the tools and introduce them to the Ecosystem so they can have a strong foothold since the beginning of their US Market Entry Journey" Said Base Miami Co-Founder, Charly Esnal
ProChile and CORFO’s GoGlobal’s program will be broken down into two stages, called Pre-Internationalization and Immersion, respectively. During the first stage of the process (Pre-Internationalization), we will be holding weekly Workshops for the companies, where they will be provided with an overview of the entrepreneurial ecosystem in South Florida and will be given education on the local industry and consumer trends.
We will also teach them about the Acceleration Methodology and give them guidance on how to set up their United States Corporation and bank accounts, as well as provide information on lifestyle and cultural practices, so they can quickly adjust to living in the United States.
In the second stage of the online program (6-weeks Immersion in the market), we will host networking events and strategy sessions to help the startups validate their product-market fit, develop their strategy for SoftLanding and begin to understand how the Miami ecosystem works.
The challenge is real for these 9 finalists, and we are prepared to coach them through each stage of the process to ensure each company’s success. The process will be intense, but by the end of it and with our continuous support, these 9 companies will be ready to transition into the USA with a clear understanding of how the market works and how to make it work for them.
ProChile and CORFO’s GoGlobal's 2020 program features 39 local startups and 4 international markets: Mexico (Ciudad de Mexico), USA (Miami), Colombia (Bogotá), and Perú (Lima). Out of those 39 startups, 9 will be involved in our companies.
The companies we will be working with are
For more information about the program and Base Miami’s involvement please contact Charly Esnal at chary@base.miami.
International expansion is a lucrative market for entrepreneurs to consider - with the potential to significantly improve revenue and fundraising opportunities. However, as we have explored previously in our 7 Deadly Sins of US Market Entry, succeeding internationally is not an easy venture and takes careful planning and consideration
It is important for any entrepreneur to understand what the impact is going to be on daily operations and if the rewards actually outweigh the risks.
Faced with the challenge of market entry companies often consider one of two strategies:
Unfortunately, neither of these approaches work in the early stages of market entry. Worse, it usually takes a lot of time and money for entrepreneurs to learn that lesson. Expansion is expensive, time is money and companies often burn hundreds of thousands of dollars over many months pursuing a “dead-end” strategy.
So where do you start? This article will go through the six steps you need to make to ensure your startup is ready for expanding your business internationally.
The first thing you need to do is ask yourself: Is my company ready for such a move? Expanding a company comes with its own risks, which is why you need to conduct an analysis of your team and resources:
Your team will be the backbone of your expansion; this is why it’s fundamental that they agree with the idea and share the same vision as the founders and stakeholders.
For the expansion to be successful, you need to set up a “beachhead” with the essential personnel to lead this adventure. For this to happen, everyone on your team, and that includes your family, has to be on board with the idea as well as comply with all the legal requirements to move to the destination.
It is critical to understand everything about the new market you are about to enter. Each industry has its own characteristics, which is why you might want to focus on one ICP whilst you get a glimpse of the impact that your product will have and how you’ll benefit. This include:
To sell and market your product properly, you need to have a clear and comprehensive strategy to determine how you will differentiate yourself. Whilst it is important to think like a local, you must also stay aligned to your home country's corporate goals and objectives to retain brand identity.
The most basic aspects you should address in your strategy:
Look for influencers in the markets you’re interested in and develop a relationship with them well before you begin expansion. These “customer discovery” meetings are great to help turn assumptions into “hard” facts and adapt the go-to-market approach as needed.
These are not sales meetings. The primary goal of these meetings is learning: to test the key assumptions around your business and gain insights about how best to internationalize your company.
Who you know is all part of the game and these “Sanity Checks” may even develop into a partnership or you may even gain a mentor to help guide you through the industry and new market.
Testing concepts is always a good idea, especially before undertaking a massive action such as international expansion. With the ease of global connectedness due to technology, it is a lot easier to begin to test the waters in your home country and build your initial offer to your ICP.
And last but not least, don’t be afraid to change and adapt your strategies. Trial and error are standard practices and an ideal way to know something works in a particular market. Remember, what worked for you in your country, may not do so in other latitudes because of different cultures, habits, or a changing ecosystem. Adapting your efforts to the new market will allow you to maintain your expansion until you reach your goal.
If you're able to implement all these steps, your business expansion will be easier to handle and will lead you to more and unique growth opportunities at a steady pace.
We are pleased to announce that Jeff Snider has transitioned into a Partner and Advisor position within Base Miami. Jeff has helped innovative companies from around the world land and expand into the US and brings 20 years of Silicon Valley experience to the Miami/ Fort Lauderdale area. His role will be to advise on early stage tech startups with their market entry and business model validation.
“I am so grateful to be able to continue to work with Jeff as a partner. He has been instrumental in setting up Base Miami to where it is today. He is an entrepreneur, mentor and has developed a fantastic reputation for guiding international companies as they enter the US market, said Charly Esnal, Co-Founder of Base Miami.
“His deep knowledge and dynamic vision are exactly what our clients need when testing new waters in the US.”
Jeff is a seasoned international entrepreneur, he founded and exited 2 startups and has raised more than $50MM VC for his own and client’s companies. Prior to that, Jeff setup 3rd party distribution channels for Apple and its partners in Europe. He designed and built the 3rd party developers program in Nordic, which later became the model for Apple Europe.
“I spent more than 20 years of my life in Silicon Valley working in startups and on startups. I learned some things about startups, a lot of them the hard way. Real-life learnings, lessons from the trenches, as I like to call them, said Jeff Snider.”
“I have been in Miami since late 2018 and love the young booming startup scene here. I am excited to work with the Base Miami team to further grow the community and work with exciting startups from around the world.”
Jeff will focus on advising on product market fit, adapting and applying lean startup and customer development methodologies as well as developing repeatable sales models. Jeff also is a regular contributor for Base Miami and will continue to write for us on a regular basis.
Miami is an ever-changing landscape, but the fact that it’s becoming a destination for business expansion, growth, and investment, can’t be denied. Just in 2016, the city attracted $1.3 billion in venture capital.
The “Magic City” is now a major player in the business landscape. How big? Well, the city made it into the top 20 finalists of Amazon HQ2. Other companies like Google, Facebook, Twitter, Uber, Lyft, and Spotify have built their Latin American Headquarters in Miami. This serves as a reminder that the city has the culture, growth, and technological strength to gain the interest of these tech giants.
All of this boom that Miami is experiencing has made several organizations such as the Cambridge Innovation Center (CIC) to direct efforts to promote the city’s strengths and guide business people and entrepreneurs when navigating all of this fascinating, yet complex landscape.
Born out this goal lead to the creation of Why Miami, a CIC based initiative to gather information, content, and resources, from local people, organizations, and public and private institutions that have a direct impact in Miami and to present the city for what it is: one of the most promising tech hubs in the US.
There are plenty of reasons, just like we have discussed before in our piece on the “5 Reasons Why Miami is the Best City for Latin American Startups.” However, we want to guide all of the entrepreneurs interested in exploring this city to get to know the Miami startup ecosystem.
Events can be the spark that fuels the idea behind your company, but not only that. It also serves as a way to bring together different communities with one goal: to innovate.
Miami has a wide range of events, going from hack-a-thons to gatherings for new entrepreneurs. It has something for every person. Some of the most relevant events are being held by Venture Cafe, which hosts the largest weekly convening of entrepreneurial, engaged, and creative innovators in South Florida. On the other hand, Tech Beach provides you with the ability to network, project your company, and learn more about the goings-on within the community.
eMerge America, one of the biggest events of the year, is used for a plethora of activities, all with the purpose of building, launching, and scaling the ideas of the attendees. In 2019, it hosted more than 15,000 people from over 400 companies and 40 countries.
Startup Grind Miami organizes different events that can help you connect with the South Florida startup ecosystem, whether you’re an early-stage entrepreneur, a professional at leading corporations, or an investor.
All of these organizations and activities have the same goal: to transform Miami into the Tech Hub of America.
Your startup might start with a few people, but you’ll need human talent to sustain your business expansion when experiencing fast-paced growth. For this, the importance of training courses to develop and improve skills is of utmost relevance. Academic institutions and companies are devoting considerable efforts to provide the resources that the growth of Miami startups are demanding.
There are plenty of choices of institutions and companies that can help you with this matter. Wyncode, a renowned coding academy based in Miami, graduates individuals with highly placed skills in startups and high growth companies. They believe and promote a disruptive education model that is constantly changing and improving.
The iLab Startup Foundation is another example of institutions taking talent to new heights. Through a challenging and rigorous curriculum, they provide early-stage and aspiring entrepreneurs with the structure, training, mentoring, and global network needed to start a company. It has been supporting entrepreneurs by offering education, mentorship, networking, and funding opportunities. It dedicates itself to wealth creation and giving back to the community.
The talent pool of the city contains a vast potential. The mixture of cultures (40% of Miami’s residents are foreign-born) provides a wide range of perspectives. There’s a steady flow of talent for companies to choose from, you just have to pick those who match your needs.
“Miami is home to the most coworking spaces in America,” according to research made by the group Yardi Matrix, back in 2018. Why is co-working such a hit in Miami? The study calls out a large number of entrepreneurs and startup businesses in the telecommunications and medical sectors. But there’s also the fast-paced growth that the city is having, which demands that teams find a co-working space that meets their requirements.
Companies have stepped up to find solutions and meet the needs of the fast-growing startups based in Miami. WeWork is one of those institutions that can help you solve your office space requirements, whether you’re an established enterprise or a growing startup. They are committed to supporting their member companies using their insight, experience, and real estate portfolio to provide the solutions you’re looking for. Almost 40% of the Global Fortune 500 use WeWork to enhance workplace strategy.
CIC is another excellent option when looking for coworking spaces. It’s a global leader in building and innovation communities that has supported over 6,000 startups and technology companies (with over $8 billion invested in companies that began within CIC spaces) and has a strong presence in Miami. It offers resourceful and flexible office spaces and coworking options that adapt innovators, business people, and entrepreneurs.
One of Miami’s government’s strengths is that it is aware of the potential that one day could transform the city into a world-class Tech Hub. Because of this, they offer free-tax incentives and one of the lowest corporate taxes across the US (5.5%).
“Miami has gone from being simply a gateway city to now a global city. This is not only because of our wealth of diversity and multiculturalism but also because of a unique entrepreneurial spirit that resonates deeply through our neighborhoods.”, said Francis X. Suarez, Mayor of Miami.
Besides, there are several organizations like the Beacon Council that provide guidance and assistance about tax-related information. CIC, and Endeavor Miami, also help entrepreneurs connect with all of the different programs available for them.
Funding is a critical part of any company because it increases your visibility and adds value to your business. However, it can be particularly game-changing at the early stages of any startup.
The Venture City is an excellent example of committed seed funding. They have over 50 Tech Partnerships, and more than 25 companies benefit from their growth programs every year, thanks to the skillset and mindset they provided, which tops those of Silicon Valley.
There are plenty of other choices in Miami for your startup. Endeavor ScaleUp Program, 500 Startups, Startup FIU, Venture Hive, and The South Florida Accelerator, are just a few who excel at mentoring new startups.
Remember, without resources and someone to guide you, even the most dedicated and passionate team will have difficulties to develop its projects and generate interest from investors.
Navigating through a booming city like Miami, looking for funds for your business, can be incredibly complex since not everyone has the connections to investors. But there are good and reliable options for those new startups.
Miami Angels is a group of angel investors based in South Florida that funds companies during its early stages. It has invested over $14 million since 2014 and accredited over 100 investors. The best thing is that you can contact them directly through their website. Just send them a brief email explaining your company’s goal and why they should back your business. Their collaboration goes beyond providing capital since they will ensure you have the talent and resources you need.
The Knight Foundation is another strong institution that are funding ideas that support and grow Miami’s tech ecosystem. It has invested more than $30 million in spaces, accelerators, and events as big as eMerge Americas. Miami is the center of their entrepreneur program, which is a testimony of how the city can attract well-renowned institutions to back up companies and their tech.
Many companies have already taken advantage of all the benefits that Miami offers. Wyncode is one of them. In 2014, their founders, Johanna and Juha Mikkola, moved to the city with just one mission: to transform the way education works. They did so without knowing a single person. Today, Wyncode has graduated over 800 people, and more than 400 companies, ranging from startups to behemoths like Amazon, have hired their coders.
All in all, Miami has all of the ingredients to take your company to new levels. Business-friendly incentives, low taxes, an incredible human talent pool, and a vast entrepreneurial ecosystem, are the factors that make the city a promising Tech Hub. It’s a place that is still being built, and for an entrepreneur, there’s nothing more exciting than jumping early into a project that could change their lives.
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Too many businesses are only focused on lead generation. Last year, just in the U.S. lead generation advertising spending was around $2.6 billion. Huge, right?
But that doesn't mean that all of those who spend on it have a big ROI. In fact, a lot of them don't and that's because they don't use demand generation or they’re doing it the wrong way.
Some assume that lead and demand generation are the same thing and to others “demand generation” is vague or simply unknown.
In this post, we’ll cover the difference between these strategies and how you can use demand generation effectively.
Lead generation is the process of attracting prospects to give you their personal information in exchange for something valuable.
Prospects are attracted by a lead magnet (a content offer), and they’re required to fill up a form before being able to see the content. Once this is done, they become “leads”.
Demand generation is a strategy that has to be seen as a whole because it involves the use of different tactics whose primary focus is to build and increase awareness about your product or service and even about your industry.
The possibility to develop a more organic approach and to build an authentic relationship are some of the benefits you get from it.
With demand generation you're basically putting yourself in front of your target audience and kindly introducing yourself saying “Hey! I understand that your pain point is this and I have the solution, here's how I can help you” but you’re just educating them and not making a sales offer at this point because you're talking from the top of the funnel.
Both work and can deliver great results if that’s what you’re asking yourself, but before implementing either of them you need to have your priorities clear.
One thing you should keep in mind is that lead generation may come from demand generation, but not all demand generation will have as an end goal lead generation.
Well, one of the best and most used tactics of lead and demand gen is content creation and when you’re creating content it’s important that it includes a Call To Action (CTA).
If you’re focused on demand generation you will include a CTA but it won't take your audience to gated content. This means that they won't have to fill a form that collects their data to have access.
Instead, that CTA can encourage your audience to follow you on social media, read/watch more related content or take the next steps to get in touch with you.
For example, if you’re looking to expand your business to a new market, demand generation will be the best option for you.
Why? First of all, because it’s more time and cost-effective. To make that first approach you have to communicate something and you won't be able to do it without speaking the same language that your target audience. Otherwise, you’d be wasting your time and money.
Also because if you go all-in to a new market without building awareness and taking for granted that there’s already demand, then there’s a huge chance that things might not work out in the best way possible.
If you just want to get your prospects’ information to contact them later for X or Y purpose, then lead generation would be the route to go.
To create a good demand generation strategy these are some tips you should consider:
That awareness you want to build depends greatly on a well-defined ideal customer profile. This is what will let you know what pain points your audience has and what are the best resources you can provide to address them.
Set short and long term goals that are aligned with your sales and marketing team and that will help you with your overall business goal, such as the revenue.
Focus on quality over quantity and also make sure that you promote the content through all the channels your target audience has access to.
Keep track of all the strategies you’re using to know what performs better and what you need to improve. For this, you can do A/B testing, set KPI’s and use automation and analytics tools.
Demand generation allows your prospects to make the purchase decision by themselves because you’ve taken a customer-centric approach by answering freely and directly to their questions, so they get to choose if your solution is a good fit for them.
With lead generation, on the other hand, the approach is more seller-centric and prospects are more likely to feel forced or pushed to go into a sales funnel just for the fact that they gave their info in exchange for something that might not even be what they expected.
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Miami is currently the best place for Latin American startups. Not only because of its rapidly growing startup scene and its deep connection to the Latin American community, but it’s also experiencing an investment boom without precedents. According to Biz2Credit’s annual ranking of 2019, it’s the #1 city for small businesses to grow.
The knee-jerk reaction for most entrepreneurs for many years was “Silicon Valley,” and with good reason. However, as we have explored previously, there are a number of increasing factors that are not making this not as straightforward decision as it once was.
What Miami can give to your business shines above the rest. It offers a plethora of business-friendly incentives, such as low taxes, affordable talent, cheaper cost of living and a vast entrepreneurial ecosystem for your startup to grow and expand into a robust organization.
Throughout the years, Miami has been known for being an idyllic beach destination, but that image is ever changing. Miami is slowly consolidating itself as a fantastic place for entrepreneurs to invest. In fact, the Knight Foundation has invested more than $30 million in spaces, accelerators, and events as big as eMerge Americas; all of this since it marked the city as the center of their entrepreneur program back in 2012.
The land that was once ruled by realtors, lawyers, and doctors is now experiencing an immense amount of investments and is currently the #1 city in startup activity in the US (Kauffman Index) and the #3 top emerging tech hub (Mashable).
If you’re a Latin American entrepreneur on the search for the ideal place to build your business, then look no further. Here are five reasons that make Miami the perfect city for Latin American companies and startups:
Miami has strong connections to the Latin American community. This connection is so powerful that Miami has become the media capital of Spanish language broadcasting in the US, but not only that. Thanks to its geographical location, it serves as a Gateway for importers and exporters of all Latin America, which works as an amazing opportunity for commerce and business.
Taxes can be a heavy financial burden in some places and can slow or even cripple your ability to grow and expand. Luckily, Miami has several Free Trade Zones (FTZs), which are areas under US Customs supervision. Companies that operate and move merchandise in an FTZ are not subject to US duty and excise tax. Through its Opportunity Zones, Florida also offers incentives awards to businesses located in urban core/inner city areas that affect the community’s economic viability.
Miami is one of the cities in the US that are looking to transform their economies away from their traditional industries. Just in 2016, Miami attracted $1.3 billion in venture capital.
“Miami is a city that is being planned, considering entrepreneurs. Many resources and networks of people are being focused on making the entrepreneurial ecosystem inclusive to all. We want entrepreneurs to know that these resources are available for them,” - Michelle Abbs, Director of Win LAB Miami Babson College.
Most people in Miami came from somewhere else, so there’s a sense of belonging, and recognition for the recent arrivals and the support that’s required. They say it takes a village, Miami is a committed community to create success stories, and this is something entrepreneurs can benefit from.
The efforts of academic institutions, the rise of professional training, and the attraction of companies and startups in the area are allowing the talent in South Florida to grow to new levels. For example, Wyncode, a renowned coding academy based in Miami, graduates individuals with highly placed skills in startups and high growth companies.
Financing is essential in a startup. Luckily, Miami has plenty of reliable banks and institutions that can offer many opportunities for several types of industries. Manuel Chinea, COO of Popular Bank, said that “small business customers in the Miami area are leveraging their growth opportunities by investing in expansion, talent and operational needs.” Proper financing will allow any company to reach and discover new opportunities.
J J Desai, COO of Johnson & Johnson Innovation JLABS, said that Miami is the “perfect setup to harness and have access to a global economy that naturally wants to be here. There are folks from San Francisco, Boston, Europe, and South America that are moving here because they see the spark of what is going on”.
There’s no doubt that the city will play a critical role in the future of business by embracing hungry and determined entrepreneurs who want to drive their companies to new levels.
We are pleased to announce that Jonathan Fichman has joined Base Miami as a Partner. With more than 25 years of international leadership experience spanning investment banking, corporate strategy, finance, entrepreneurship, product marketing and financial modelling, Jonathan will be a welcome addition to the team.
His role will bring a new dimension and further strengthen our client related activities for US Market Entry.
“Jonathan has a proven track record of success. He not only understands how to find the next venture, but he importantly mentors founders to thrive with his strategic advice,” said Charly Esnal, Co-Founder of Base Miami. “We’re extremely excited to have him on board and can’t wait to share his expertise, enthusiasm and passion with our clients.”
Jonathan is a global entrepreneur, having advised, founded, exited and/or managed over 60 startups. He has developed a proven deal flow of success in many sectors including: Wall Street, wealth management, banking, consulting, FinTech, EdTech, HealthTech, consumer staples, government, and non-profits.
Among his many accomplishments, during a decade at Bank of America/Merrill Lynch, he successfully led many international corporate initiatives, diversifying its global wealth portfolio and increasing corporate profitability while working closely with international regulatory matters.
“I've spent a large portion of my career working in the corporate and government sides but, for the last 10 years, I’ve worked as a venture advisor and mentor for startups,” said Jonathan Fichman. “I love to build businesses by leveraging my knowledge and imagination. There are so many global startups around the world having amazing products but need funding support and help with their operational and go-to-market strategies if they are to be successful in the US.”
“It’s great joining the Base Miami team, it is a diverse team of cultures and skill sets, who operate with such integrity and passion. They truly understand how to take a company global and how to scale a business. I look forward to assisting with many great companies and working along-side the Base Miami team.”
Jonathan will focus a major part of his talents on strategic advice for clients in business go-to-market, planning development, financial modelling and investment growth for our clients.
We are excited to share that Base España is launching operations in Madrid & Barcelona!
It's been around 6 months since we started working on this concept of exporting our methodologies to other markets and being able to offer different market expansion destinations for our clients and we are proud to share that it is now a reality.
Just as Miami has long been a key gateway for Latin American startups to launch their U.S. operations. Spain also provides those startups unique advantages to launch and grow their ventures in Europe.
The Base España launch team will be headed up by Agustin Kelly, Sandra Di Lucca & Jorge Araujo Muller. With more than 20 years of international experience working in the US, Europe and Latin America, they bring a diverse skill set that will be valuable to any entrepreneur looking at expansion.
"Whilst the US Market is the largest in the world, as a team with our Latin American roots we understand that many of our clients feel more comfortable with expansion into the European market via Spain due to the comforts of language and close ties to the region. There are some many amazing startups in Latam that we want to bring to the world." - said Agustin Kelly, Co-Founder of Base España.
Spain, especially Madrid and Barcelona, are the space chosen by the many of the most innovative and diverse companies in the world. They offer great access to talent, productivity and economic activity. Barcelona is fast building a reputation as being the European epicentre for business creation with the local government establishing a stable and business friendly framework for action that enhances economic growth.
We will work with the Base España team to create happy clients and successful Market Entry to the EU.
In a recently published ebook on The 7 Deadly Sins of US Market Entry, we called out Team as the seventh and last of the Seven Deadly Sins. In this article, we will elaborate further:
“Companies cannot outsource the job of figuring out the market and getting to a repeatable, profitable and scalable sales model. This will usually require the presence of one or two founders in country. “Hiring a sales guy” before you figure out the market almost always goes wrong. The right people to figure out the market and the sales strategy are the founders. Sales guys - and channel partners - come later. They execute on a proven strategy.”
Venture capital is a blessing – it let’s you do things faster. And venture capital is a curse – it let’s you do things faster. Faster than you are ready to.
One of the worst things you can do with venture capital is to build a team before you have figured out what game you're playing. As an international company, when you set out to enter the US market, you will have to revisit some of the territory you may already have completed in your home market. Lets recap on the phases you need to plan for a B2B Startup.
1. The Search for Product Market Fit
What is the problem you are solving, does it actually work, and will someone pay? You already did this at home, but unfortunately, now you have to do it again. Because it may be different. Product Market Fit means finding one customer, one use case, one value proposition that will work over and over again.
Most companies we have worked with have not done this. Not even in their home market. Even companies doing two or three million dollars in annual recurring revenue have not done this. In the US, it is crucial.
2. The Search for a Sales Model.
What sales model will enable you to find that one kind of customer prospect over and over again and take that prospect through a consistent set of steps (sales funnel) that will yield a predictable result (happy customer).
3. Scaling the Model
How can you scale that model to get many happy customers?
Too many companies think they can stay in their home country and outsource phases (1) and (2) above to “a sales guy”, “a partner”, “a distributor”, “an agency” or similar, and leave it to them to solve the customer and sales riddle. That doesn’t work.
Before you bring in someone from the outside to sell, you need to figure out the fundamentals above: Who is the customer, what is the value proposition, how much will the customer pay and what is the repeatable process that will turn the right kind of prospects into the right kind of customers. This is what is mean by “Figuring Out the Game”.
If you don’t know the game, there is a huge risk that you will recruit the wrong players – no matter how talented. LeBron James is an amazing basketball player. Given the rules of basketball, no one does it better. That doesn’t mean he would be the ideal guy for your ice hockey team. Coming to the US, you are likely to “pivot” in the early stages. Each time you pivot, the “game changes”. The founders need to figure it out.
“Figuring Out the Game” is a challenging process. It takes time, it is painful, and for a long time, it offers few or no rewards. That is a job description for “owners”, not players. The founders need to figure out the rules before they can determine who to hire. When you hire a sales team before “Figuring Out the Game”, bad things happen.
Unfortunately, I am the owner of some personal battle scars I got while learning this lesson. At one of my startups, we had successfully raised venture capital. We were rapidly spending that capital to build a product no one really needed. We were not aware of that fact at the time. As the product was nearing beta, we proceeded to the next step: hiring a sales team to sell it.
We recruited a “hired gun” sales VP from a bigger company, and that VP went ahead and did what sales VPs do. He hired more sales guys. With a team of sales guys to sell a product no one really needed, we proceeded to burn through a ton of cash. We had recruited the team before figuring out the game. That was an expensive mistake.
Remember. Figure out the game. Then hire the players
Download our FREE ebook “7 Deadly Sins to Avoid When Entering the US Market.” DOWNLOAD NOW
In a recently published ebook on The 7 Deadly Sins of US Market Entry, we called out being undercapitalized as the sixth of the Seven Deadly Sins. In this article, we will elaborate further:
“Most international companies are undercapitalized compared to their US peers. Many entrepreneurs think venture funding is just around the corner when they come to the US. The reality is that it will take 18 - 24 months from the time you set up business here until you have achieved the milestones required to raise a venture round from US investors. That means you need to find the capital at home to fund your US market entry - at least for the first couple of years.”
The US has the magic ingredients for rapid growth: Market, Capital and Talent. Comparing venture capital around the world underscores the relative imbalance:
“… according to the European Investment Fund, VC investment in startups has grown four times to €23bn in the last five years. While this is encouraging news, Europe is still tiny in comparison to its two neighbors: the U.S. and China. According to research from Atomico, an investment fund, Europe invested around €23bn in venture capital in 2018, whereas the US invested $130bn and China $92bn.” - (Forbes, May 31st, 2019, Raising Venture Funding In Europe Vs. The U.S.)
That makes the US something a “promised land” in the minds of many international entrepreneurs. There is a huge mass of VC and an accessible market with no significant legal, cultural or linguistic barriers to entry. If only they bring their company here they can tap into that wealth of venture capital. Unfortunately it’s not that simple.
To raise a so-called “A-Round”, you need to gain significant customer traction. To get significant customer traction, you need to be in the US, figure out a go-to-market and use trial and error to see what works. That takes time. Usually a year and a half or two. That costs money. But money was what you wanted to raise here? That’s what’s known as a “Catch 22” situation.
Essentially what that means is that you have to raise money to raise money. That is not a tautology. You need to raise money in your home market region to fund the time and effort it will take to raise a follow-on round in the US. So US funding is almost never a source of capital to get started in the US. And any home market traction is rarely considered substantial evidence to get you a US venture round. You have to do it here.
Now back to the question of “bringing a knife to a gun fight”. Even if you raise money at home and use it to fund your US market, you may be funded, but you might still be underfunded. Good ideas are usually pursued in more than one place.
Often we have seen companies from abroad facing US competitors with more than 10X the capital. This is for the simple reason that they have been in the US the whole time. So they have had more time to grow the business here and they have raised US venture rounds. These are generally bigger than non-US venture rounds.
Hailo vs Uber who we mentioned in a previous article was a prime example of this. By 2014 Hailo had raised around $100M USD. By comparison, Uber, at the same period in time had raised around $3B USD. (Fortune, October 14, 2014, “Why a taxi app with $100 million in funding failed in the U.S.”)
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In our ebook on The 7 Deadly Sins of US Market Entry, we called out the failure to think through industry ecosystem as the fifth of the Seven Deadly Sins. In this article, we will elaborate further. Sin #5 was defined as follows:
“In many industries, you may find the whole industry ecosystem is different. The healthcare industry in the US for instance includes healthcare providers, insurance companies, the federal government, state and local government, patients, and businesses. It is different, more heterogeneous and more complex than healthcare systems in most other industrialized countries. The healthcare ecosystem will affect many elements of the business and distribution model for health tech and life science companies. Regulatory differences will compound the challenges.”
Some years ago, we were working with a company from Scandinavia who offered a “customer experience management” solution. Their best customer segment in their home market of Scandinavia was the (non-life) insurance industry.
They wanted to replicate this success in the US. Early in the project we determined this was a “no go”. Why? Because the industry ecosystem in the US was fundamentally different from what their product was built for. In their home market, almost all customer interaction took place directly with the insurance company.
Customers mostly engaged with the insurance company’s own corporate contact center. Our client’s product “sat” between the customer and the contact center and helped the insurance companies improve the experience that customers had when contacting the insurance company.
In the US, the ecosystem was fundamentally different. For the most insurance companies there was a nationwide network of independent brokers operating as “middlemen” between customer and insurance company. These middlemen handled almost all aspects of customer interaction. The customer called or emailed the broker. The broker followed up with the insurance company. The broker got back to the customer. Our client’s product, and their sales model, were based on working with a single large corporate entity as their customer and not a nationwide network of small independent brokers.
We quickly “disqualified” the insurance industry as a target and refocused the company on the banking industry. (Note: whenever possible we advise clients to change the target, not the product).
Another example of a fundamentally different industry ecosystem is health care. The US system is unlike the systems of Europe and most other countries. In the US, healthcare service providers like doctors, clinics and hospitals are mostly but not entirely paid by insurance companies.
Insurance companies are paid by a mix of federal government, state government, employers and individuals (patients). Patients also make residual payments to healthcare service providers reflecting the “deductibles” and “copays” required under their insurance policy. Prices are set in the private sector but subsidized by the public sector.
Another key difference: driven mostly by changes in employment, patients change insurance companies fairly frequently. This affects the incentives of insurance companies. Innovations that improve the health of the patient for the long term are not necessarily attractive to insurance companies.
As an example, insurance companies were reluctant to embrace coronary CAT scans for early detection of heart disease. In most cases, the benefits to the patient were more than 5 years out, at which time a company’s existing patients would already have moved on to another insurance company. So “not worth the investment”.
For reasons like these, when companies explore US market entry, it is crucial to get a clear understanding of the industry ecosystem and regulatory framework within which they will be operating. This can have a huge impact on the business model including selection of target customer, value proposition and customer acquisition strategy.
In our ebook on The 7 Deadly Sins of US Market Entry, we called out we called out the failure to think through customer acquisition as the fourth of the Seven Deadly Sins.
“Most companies think they can enter the US by “partnering” their way to sales. This is almost never true - at least not in the beginning. The one who needs to figure out how to sell your product here is YOU. Once you have “cracked the code”, and only then, you might be able to find partners to sell it. .”
Thousands of companies have made this mistake. And it is an easy one to make.
Mature companies, with well-established product categories can often find partners to represent them in new markets. Especially if they have a “faster, better, cheaper” version of a product that already has significant and proven market demand in the new market.
Such partners will often “localize” the product, which might include preparing local language marketing, approval and other details of taking the product to market.
For startups, this is mostly not a viable go-to-market. Startups enter markets not with established product categories but with new and disruptive solutions. That is the opposite of a mature category with “significant and proven market demand”.
Even if you have sales in one country, that is no guarantee that your product will achieve market fit in the US. Uber vs. Hailo was a classic example of this.
So many things that can go wrong. Distribution partners sell things for which there is proven demand. Even if you have 100 business customers in your home market, that’s not you.
The sad truth is, you will need to re-prove your value hypothesis and market fit, in the US, before you can get someone to take on your product and amplify your efforts to get it to market.
As an entrepreneur with sales in your home market, that may sound like “starting over”, and in some sense it is. Once again you will need to “hack” the fundamentals around customer problem, solution fit, pricing, channels and other aspects of the business model. As Yogi Berra put it, “It’s déjà vu all over again”.
To get partners in the US, you need market insight. You need to understand the market. You need to understand WHO will buy your product, WHY they will buy your product and HOW they will buy your product. And how you best reach them. Gaining true market insight is hard. And it takes time.
Partnering comes later. To get partners in the US, you need market proof. What kind of proof is that? The best proof you can get is happy customers. Preferably a bunch. That means you will need to sell directly to customers first. At least until you have some solid reference accounts.
Unfortunately, there is no shortcut to doing that. There is no one to outsource it to. No one else fit for the job. Distribution partners will not do it. Sales people for hire cannot do it. It is a job for the founders. Just like when you proved the business the first time in your home market. It’s a job for… YOU.
That said, there is a role for distribution partners. Later. Much later. It’s best to think of distribution partners as a multiplier. Partner channels are a way of expanding on a sales formula that is already working. Not a way of figuring out what works. Once the founders have figured out how to sell, you can recruit sales people inside and outside the company to scale your efforts.
Before that, to get your product into the US market and get to a repeatable sales model, you need to plan on one or more founders coming to the US and doing 1 – 2 years of solid groundwork.
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As a company with a base in Miami and personal roots in Europe and Latam, we are very aware that international entrepreneurs are innovative, creative and talented.
With an abundance of talent and lower costs than Silicon Valley, many international locations are fantastic places to start a technology company. That said, it is more challenging to scale a high impact technology company in Latam or Europe than in the United States. You can grow there, but it takes longer, and in many cases you can only get so far.
When heading to the US for the first time the knee-jerk reaction for most entrepreneurs for many years was to head straight to the “Silicon Valley,” and with good reason. However, today it is not so obvious. In the last year or two, there has been something of an exodus out of the area. California has a net loss of residents to other states each year, and more than 53 percent of Californians and 63 percent of millennials express a desire to leave.
One of the more prominent VC “exits” from the San Francisco Bay Area was Peter Thiel, who recently moved to LA. Why did he leave? He talked about a lack of diversity of opinion, a monolithic political culture and an exorbitant cost of living.
When he is not sleeping on the Tesla Factory floor in Fremont, Elon Musk is likewise ex-Silicon Valley, living just north of LA, in Bel Air. Tim Ferriss, of “4-Hour Work Week” fame, left San Francisco about a year ago for Austin Texas. He attributed his move to a sense of Bay Area “fatigue” resulting from “a suffocating smugness”, “mono conversation” and a high-stress “culture of cortisol.”
And then there’s me. I have personally been part of the Silicon Valley exodus. When I co-founded my first startup in 1996 there was never any doubt about moving it to Silicon Valley. But after 20 years in the Valley, I recently relocated to the Miami area. There’s a rapidly growing, high-energy startup scene here and a thriving business ecosystem with connections deep into the rest of the US as well as Latin America. I quickly realized that Miami could just be the perfect place to call home for many international companies looking for an alternative to Silicon Valley.
Miami shares all the general US advantages for entrepreneurs, but it offers some additional advantages that are unique:
In spite of the many “exits” - and not the kind of Silicon Valley usually talks about - the rumors of the Valley’s demise seem premature. But the relevant question is not even whether Silicon Valley is shrinking. It’s not. The bigger question for entrepreneurs is:
My venture friend in Austin put it well: “If your number one customer or channel is Google, or Facebook, or some other Silicon Valley powerhouse, the Bay Area may still be your best bet.”
But if you are looking for a US beachhead to access the market, recruit affordable talent, enjoy a reasonable cost of living, and raise additional capital at some point, then Miami could be a better bet.
In our ebook on The 7 Deadly Sins of US Market Entry, we called out ignorance of competition as the third of the deadly sins. In this post, I will elaborate further. The sin was defined as follows:
“Most good ideas are being pursued by more than one company. In many cases there will be a US competitors who are better funded and have been in the market longer than new entrants from abroad. Companies need to understand the competitive landscape and find the right position in the market to succeed. Underestimate this challenge at your peril.”
Thousands of companies have made this mistake. And it is an easy one to make.
In a relatively small home market, you might well be the only company offering a new innovative product or service. You might have the whole market to yourself. As the sole innovator in your space, it might be easier, than in a “noisy” market, to get meetings with potential customers, get pilots and close deals.
But if you bring your company to the US, you will find that most good ideas have more than one company pursuing them. In the US, there might be several other companies doing what you are doing. They will most likely have been doing it longer since, unlike you, this is their original home market. They will almost surely be better funded, because funding rounds are bigger in the US than most other markets.
First of all, figure out the “lay of the land”. What competitors are there, who are they targeting, and how far along are they. Since they are most likely privately held companies, you will not be able to get information on their revenue levels. However, you can get information on what funding round they are at and how much they have raised.
If they have raised a B round for example they are probably pretty far along on their growth path. You can get information on how much they have raised, when and from who on Crunchbase.
What do you do if you have serious competitors with lots of money? It means you need to think harder about how and where you can find market fit in the US. You will need to “niche” the market in a way that differentiates you. If you are a security company and your competitor is targeting biotech, maybe you target some other vertical with high security requirements.
Or should you avoid the US altogether? Actually, that seldom works. In most cases, a really successful, really well-funded competitor will get to your backyard sooner or later. Consider the global reach of Uber, or Netflix, or Amazon. At one time they operated only in the US.
While home-grown US companies may get to their first $100MM in revenue in the US alone, eventually they will turn to other geographies for expansion. As a company operating alone in your home market, you can run, but you can’t hide. Better to find your specialization and differentiate your company sooner rather than later.
The worst thing you can do is the “ostrich strategy”. Burying your head in the sand doesn’t work. It is just waiting for the inevitable to happen.
“Me too” companies will not succeed in the US market. The market is highly competitive, and not a good place for “generalists”. Your spreadsheet may say that all you need is 2% of a multi-billion dollar market to succeed, but that is not how the market works.
“Me-too” companies will struggle to gain traction and eventually get shut out and shut down. If you are “me-too” with your current strategy, you need to “niche yourself” and find a specialization where you can excel. Sooner is better than later. If you can successfully niche your market, and dominate your new subspecialty, you will create value in your company and have complementary value to companies dominating other niches.
Companies are often told to “think big”. In fact, this is one of the cliches of Silicon Valley life. But companies who succeed are the ones who find a space they can dominate. They are looking for 70% of a market, not 2%. It is OK if that market is initially a small one, as long as it leads to a big one. Facebook started with Harvard, then Ivy League schools, then other schools, then …
Most other successful companies followed a similar pattern. Amazon with books, Tesla with roadsters.
So when you look at your bigger, better funded competitors, think small. That will help you to eventually win big.
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Growing up we learned the Golden Rule. “Do unto others as you would have others do unto you”.
Do you like email spam? Irrelevant, unwanted offers for things you don’t need piling up in your inbox? Or how do you feel about Robocalls? Do you experience that feeling of excitement when your phone rings and “Scam Likely” flashes on your screen? Do you feel exhilaration when real estate agents continue to call you months after you’ve already sold your home. How about the hard-selling condo salesperson who wants to hold you hostage until you buy a vacation property? While you are trying to enjoy your vacation in Cancun.
These things happen to us every day. And if you ask a room full of people how many value any of these experiences, most likely no hands will go up. If you ask the follow-up question, how many people actually make purchases based on this kind of marketing, you won’t see many hands go up in response to that one either.
Recently, I have seen more and more spam moving to LinkedIn as well. Recently I got a connection request from someone I never heard of with no explanation of why connecting might be a good idea. I connected to see what would happen next.
The next day I got a LinkedIn message offering me “comprehensive estate and financial planning, asset protection, wealth accumulation, and family security planning”. The odds that I would engage someone to that based on this kind of marketing are just south of absolute zero. But people continue to pollute the waters of LinkedIn with this kind of debris.
Not only is it annoying and a waste of time for the recipient, it also just plain doesn’t work. People buy from people they know, like and trust. The bigger and more important the thing you are buying, the more important this is. Even for smaller things, like a new gadget, we rarely go for the “hard sell” or believe what the ad tells us. No. We Google search, read the reviews on Amazon, CNET, Gizmodo, Engadget or other trusted sources. For most people online advertising has the credibility of a politician running for re-election in a tight race.
The “Know, like and trust” rule is just as true on LinkedIn as it is out in the physical world. Connecting with me one day and asking for a meeting the next day is not the way you cultivate “know, like and trust”. A relationship needs to be built on LinkedIn just as it does in the “real” world. That takes time and requires substance.
And that’s where the idea of “Golden Rule Marketing” comes in. If you yourself would not respond well to a marketing initiative, the person you are reaching out to probably won’t either.
So “market unto others as you would have others market unto you”. That simple rule will get you more leads and make the world a cleaner place.
In a recently published article on The 7 Deadly Sins of US Market Entry, I called out lack of “Customer Problem Fit” as the second of the deadly sins. In this article, I will elaborate further. The sin was defined as follows:
“Often the problem companies solve in their home market doesn’t exist in the US, or exists in a much different way. Hailo from the UK learned this the hard way when it brought its ride hailing app from the UK to NY. It left the US again a few years and many millions of dollars later.”
Thousands of companies have made this mistake. And it is an easy one to make. You are selling in your home market with several million dollars in annual recurring revenue and hundreds or even thousands of customers.
Validating the customer problem and the solution happened a long time ago for you and your company. You identified a real problem in your home market. You built a solution. Your target customer was and is willing to pay for it and you have been growing ever since. It is easy to assume that this will work the same way when you come to the US. But it often doesn’t. There are many examples of this.
A company we worked with a few years ago had developed a unique scheduling optimizer it was selling to home health agencies in its local market. The software enabled really effective matching of patients and caregivers taking into consideration specific caregiver skill sets, language, culture, location considerations and more.
But in the US it turned out that scheduling was not the main problem. A bigger problem than scheduling caregiver resources was FINDING them. There were too few people available agencies were more concerned with being able to fill the required time slots than anything else. They were in pitched battle with one another for resources and they were constant afraid that their employees and contractors would leave to work for someone else. This required a so-called “pivot”, which the company was able to make in advance of market entry.
A better known case is the ride hailing company Hailo. The consensus is that this UK based company failed in the US because what worked in London didn’t apply in NY. In NY, finding passengers was not a big problem for drivers. Anyone who has ever tried to get a cab in NY has learned this the hard way. But this was the core of the value Hailo offered drivers in London.
In NY, the problem Hailo solved in London was not important. The problem in NY was finding a RIDE. That was not a problem for drivers. That was a problem for passengers. Uber solved that problem by bringing a previously untapped “army” of cars and drivers into the market. This solved the real problem in NY and many other US cities, and Hailo and its taxi-centric solution eventually exited the market.
Coming to the US, the inclination of most international founders is to assume the problem they solve exists in the same way. This is a dangerous assumption. As the Hailo / Uber war shows, even the dynamics of a market as ubiquitous as taxis don’t work the same way everywhere. Heavily regulated markets like healthcare, financial services and education are even more likely to have significant differences that can that can require major adjustments to business models.
A saner approach when entering the market is to assume that the target customer, the customer problem and the required solution will vary from what you have seen in your home country. Revalidating the customer problem and the solution fit is an important step to take before you go all-in on sales and marketing.
In fact, you should not assume that any of the elements of your “business model canvas” will be the same. When working with companies, entering the US from other markets, we usually start things off with a step-by-step process to re-test the entire business model. We use the lean canvas to do this, but you can use other models as well. The main thing is you need to do it! . If there are significant differences in the US market, you will want to figure that out sooner rather than later!
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The short answer to this question is, “It depends.”
For founders who want to enter new markets and “internationalize” their companies, accelerators offer a viable path for some. It is important to understand the offer - and the alternatives - in order to assess the pros and the cons. The two main categories we will consider in this article are accelerators, for example 500 Startups and YC, and specialized market entry consulting firms.
Most of the better-known accelerators are early stage investment firms. They are “Lean VCs” who make a bunch of “small bets” on a cohort of companies two to three times a year. A few of these investments may pan out such that the companies in question receive follow-on investments. The rest will not.
All companies joining at the same time participate in the same program. The program is “one size fits all”, although aspects of the program are individualized. Examples of this are introductions and mentoring.
The companies in the cohort are accelerated through a combination of “Startup School”, mentoring, events, introductions to the accelerator network, fundraising guidance, access to a coworking environment, etc. Most programs conclude with a “Demo Day”, an event where companies pitch to early stage investors for their next round.
Some of the better-known examples of accelerators are Y Combinator, 500 Startups and TechStars. Valuations of all the companies in a cohort are identical.
For instance, 500 Startups invests $150K USD which buys an ownership stake of 6%. The terms of the investment give them the right to invest up to $500K or 20% of the next round, whichever number is bigger. The companies who receive the investment are required to participate in an acceleration program. Tuition for the program is $37.5K of the $150K investment. Travel and living expenses are separate and are the responsibility of each individual company. Y Combinator has a similar model.
The acceleration programs mostly take place in the US, e.g. the San Francisco Bay Area, Austin, Miami. Some accelerators offer “pre-acceleration” programs in international locations. During an accelerator program, the founders need to be physically present at the accelerator location for key program events. Participants are generally allowed to spend time elsewhere between key program events.
To get maximum value however it is best to be at the accelerator location for the full program. This allows founders to actively build network during the program. The programs are time-boxed, e.g. 3 months for Y Combinator.
You need to ask yourself a number of questions. Here are some of the most important ones:
If you “do the math”, and an accelerator program is not for you, what are the alternatives? The main alternative source of market entry support is to work with specialized consultants who offer these services.
Some companies are more mature. They have a going business in their home countries. They are doing more than $1MM in annual revenue. Maybe they have raised their first $500K to $1MM USD. They want to explore their opportunities in the US, and they want customized, personalized go-to-market support. If these companies ask themselves the questions above, they might conclude that an accelerator is not the right choice for them.
Where accelerators are cohort based, market entry consulting firms generally work with companies one-on-one. They provide individualized support. Programs are customized around the specific needs of each client.
Where accelerators are investment based, market entry firms are “fee for service”. There is no exchange of equity for dollars. The business model is similar to lawyers, accountants or other professional service firms.
Market entry consultancies do not teach founders “entrepreneurship”. At least not in a “Startup School” format. They work with clients on the big challenges of going to market in the US. This includes validating product-market fit, tuning the business model, and figuring out sales and distribution. Some market entry consultants may also offer a coworking environment and “back office” services. Usually they do not provide accounting or legal but refer companies to trusted partners.
Most consultancies are geographically focused. If they are located in Miami, they work with companies who want to enter the US through Miami. There are several reasons for this.The most important one is they work side-by-side with the entrepreneurs they assist. Also, their networks are mostly in their home city.
There are various flavors of market entry firms. Many are one-man/one-woman operations. Unfortunately, as a founder, there is no simple way to “separate the wheat from the chaff”. It is easy to make a mistake. That said, there are some things to think about when recruiting a firm to work with:
Tier one accelerators like Y Combinator are a terrific solution for companies at the right stage in terms of product, team and funding. For later stage companies primarily focused on internationalization, a specialized market entry consultancy may be a better fit. Either way, you will be working with advisers whose experience can help you grow more rapidly than you could alone.
You will primarily be leveraging their experience, know-how and network. When choosing someone to work with, be especially vigilant that you work with people who not only “talk the talk” but have “walked the walk”.
In a recently published ebook on The 7 Deadly Sins of US Market Entry, I called out “Too Broad A Field of Focus” as the first of the deadly sins. In this article, I will elaborate further. Specifically, the sin was defined as follows:
“In their home markets, which are small compared to the US, companies are forced to diversify across multiple industries, use cases and even product categories to generate sufficient revenue. This is a losing approach in the US where competition forces narrow segmentation. The US is a specialist’s market. “One stop shopping” as a competitive strategy usually doesn’t work here.”
The US market is vast. For most, if not all, international entrepreneurs, their home market is much smaller. This gives rise to the strategy of selling broadly across many segments.
This is not something entrepreneurs do because they are foolish; it is something they do to survive. A “niche” segmentation in their home market would result in too limited a market and doom their initiative from the start.
When they come to the US, the natural inclination of most international founders is to continue the “sell broad” strategy they started out with. This is a poor strategy.
A Nordic company that offers a cloud platform for producing customer testimonials identified their Ideal Client Profile as “pretty much everyone”. By everyone, they meant any company of a certain size that has a marketing organization and can benefit from testimonials. They explained that the solution is “horizontal”.
Another company, out of central Europe, offered a Customer Journey SaaS platform. They entered the US selling to multiple use cases across multiple verticals. Customer Journey was also “horizontal”. Both companies struggled to get to a repeatable sales model.
The problem is, when you try to be so general that you offer something to everyone, you are not really offering anything compelling to anyone. A perfect fit is compelling. Not a “one size fits all”. One ideal customer profile, one value proposition, one use case.
For me and the team I work with, it is fairly unusual that we see a “perfect fit” approach. Recently we did though, and we were immediately impressed. A diagnostic lab testing company from Latam were narrowly targeting late-stage cancer patients and a limited number of cancers. They had gained 85% market share in their home market. By focusing narrowly, they had succeeded in completely dominating their market.
A narrow focus is the key to market domination, and it’s the path to investors’ hearts. Think big, yes. But bite off a piece you can chew. And chew it thoroughly. As was pointed out almost 20 years ago in Crossing the Chasm, each market niche is a “bowling pin” on the road to market mastery. Facebook started with Harvard. PayPal started with supersellers on eBay. Tesla started with the roadster. And so on.
There are many synergies that come from a narrow focus:
The end result of these synergies is that the sales process becomes repeatable and selling becomes more and more predictable over time. It gets easier with time because each sale builds on the foundation of previous sales.
Let me finish off with a story. Many years ago, commenting on my company at the time, one of my venture investors remarked to me that “1 x 50 <> 50 x 1”. I thought that was kind of odd. Was he a “commutative-property-of-multiplication” denier? But then he went on to explain.
From his perspective as an investor, having 1 customer in 50 industries was not the same as having 50 customers in 1 industry. The latter was far more valuable. It showed that you had figured out how to sell in a repeatable way. “1 x 50” on the other hand showed you had done 50 different things to sell to 1 customer instead of 1 thing to sell to 50 customers.
Bonus: you don’t even need to choose THE very best segment to sell to. The simple act of limiting your focus to a single value proposition for a single Ideal Client Profile will put you ahead of most of the companies out there.
Download our FREE ebook “7 Deadly Sins to Avoid When Entering the US Market.” Download Now
With its geographical proximity, the US - and Miami in particular - offers an ideal destination for Latam companies to land and expand.
So if Miami is an ideal beachhead for Latam companies coming to the US, what could go wrong? The short answer is “everything”.
The team at Base Miami has seen it happen many times over the years. Companies come and spend a year or two trying to figure out the market and get customers. Time goes by, everything costs more and takes longer to succeed.
In their home markets, which are small compared to the US, companies are forced to diversify across multiple industries, use cases and even product categories to generate sufficient revenue.
This is a losing approach in the US where competition forces narrow segmentation. The US is a specialist’s market. “One stop shopping” as a competitive strategy usually doesn’t work here.
Often the problem companies solve in their home market doesn’t exist in the US, or exists in a much different way. Hailo from the UK learned this the hard way when it brought its ride hailing app from the UK to NY. It left the US again a few years and many millions of dollars later.
Most good ideas are being pursued by more than one company. In many cases there will be US competitors who are better funded and have been in the market longer than new entrants from abroad.
Companies need to understand the competitive landscape and find the right position in the market to succeed. Underestimate this challenge at your peril.
Most companies think they can “partner” their way to a sales model. This is almost never true - at least not in the beginning. YOU need to figure out how to sell your product here first. Once you have “cracked the code”, only then might you be able to find partners to sell it.
In the US, you can’t recruit partners to “figure out the market” for you. Partners sell stuff that already sells. Figuring out the market is your job. You need to plan for that and fundraise for that.
In many industries, the ecosystem is different. The healthcare industry in the US for instance includes healthcare providers, insurance companies, the federal government, state and local government, patients, and businesses.
It is much different from healthcare systems in most other countries. The healthcare ecosystem will affect many elements of the business and distribution model for health-tech and life science companies. Regulatory differences compound the challenge.
Most international companies are undercapitalized compared to their US peers. Many entrepreneurs think venture funding is just around the corner when they come to the US.
The reality is that it will take 18 - 24 months from the time you set up business here until you have achieved the milestones required to raise a venture round from US investors. That means you need to find the capital at home to fund your US market entry - at least for the first couple of years.
Companies cannot outsource the job of figuring out the market and getting to a repeatable, profitable and scalable sales model. This will usually require the presence of one or two founders. “Hiring a sales guy” before you figure out the market almost always goes wrong.
There are great entrepreneurs, investors and accelerators everywhere. While local accelerators may do a fantastic job taking their companies through “Demo Day”, we believe entrepreneurs in most ecosystems are operating at a distinct disadvantage once it is time to scale.
Download our FREE ebook “7 Deadly Sins to Avoid When Entering the US Market.” Download Now
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