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 v Startups
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.
Startups needs to re-prove their value hypothesis
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”.
What are the US market entry steps you need to take?
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.
Interested to learn more?
Download our FREE ebook “7 Deadly Sins to Avoid When Entering the US Market.” DOWNLOAD NOW
