In parallel to our legal topics, we want to present the Nordic business organizations in the Valley. Their goal and purposes may differ slightly but their main purpose is to assist Nordic entrepreneurs and companies to succeed with their U.S. market entry. A few weeks ago, we talked to Katja Kotala at Nordic Innovation House www.uslawfornordics.com. This week we interviewed Mayra Mateos, at Business Sweden in San Francisco to further understand Business Sweden’s role in the Valley, but equally to get her insights from helping companies establish a business in the U.S. market.
First, Mayra tell us a bit more about yourself and your role within Business Sweden.
I have been part of Business Sweden since 2010, working with teams across Latin America, Eastern Africa and now the U.S. At Business Sweden we help Swedish companies grow global sales and international companies invest and expand in Sweden. My core competencies are within market entry strategies to the Americas. Today, I am responsible for our San Francisco operations and I lead our Information and Communication Technologies Practice. I have a special interest in following the latest trends and the next things coming for ICT.
On a daily basis, we help companies with their business strategy on the U.S. market. Among our clients you find startups looking for investments and established companies setting up business or branches in the U.S. The industries we see the highest demand for are in retail, clean-tech, and healthcare.
Business Sweden has over the past years conducted a survey among Swedish companies who were asked about their expectations before entering the U.S. market and what they experienced once established in the country. What were the main findings?
In 2016 we did a survey among clients of ours entering the U.S. market in various sectors. What we found was that companies mainly enter the market due to one or several of the following reasons:
- show commitment to partners and clients
- access larger customer bases
- to be closer to the customer base
Not surprisingly it is easier to be available to your customers and partners when you are in the same time zone and country. You are closer to potential business opportunities and decisions are faster.
We equally see that once established on the market most companies meet challenging legal issues, underestimated competition, and trouble finding staff. The U.S market is very different in its structure, and that is one of the reasons we are here to help.
Mayra, you see a lot of new companies entering the U.S. market every year. What are the main areas a company need to consider when entering the U.S. market?
We have been looking a lot on these questions lately to be able to explain the situation as far as possible to our Swedish companies. I see four main considerations when entering the U.S. market:
- Focus your resources. The 50 U.S. states are so different in their structure that they are to be considered as countries. It is not realistic to enter the whole U.S at once. Each state is a potential market. Once you have decided which market to enter, get to know your market, its structure, and the segments. Which is the easiest segment to enter, with the largest opportunities? You need to be in control of your future business. Try to get as good understandings as possible of your costs. The U.S. market is complex, there is always competition and they have an advantage of local experience and expertise, measure yourself against the most successful. Reflect, is my strategy successful, will I succeed, can I differentiate myself away from my competition and still gain opportunities.
- Adapt to local market conditions. It is easy to say and still, we see people miss out on this repeatedly. The U.S. market is different, you have cultural differences and market differences, marketing and sales work differently. In Sweden we are averse to risk, there is a language of caution, here there is a language of certainty, it is a culture more risk and action-oriented. In Sweden we like to talk about the features and technical excellence of the product, the Americans will focus on the solution for the client. I often refer to Björn Jeffery, CEO, Toca Boca “I grew up listening to American music and indulging in American pop culture. I didn’t think it would be hard moving here. It’s been a humbling experience because I was completely wrong. The cultural differences in America and in Silicon Valley are massive.” His interview in Fast Company points out several relevant cultural differences that are more of a social soft character. http://www.fastcompany.com/
- Use local expertise and legal advice. This goes for HR, accounting, taxes, marketing and legal advice. There can be specific regulations for your product, that you are liable for. If you cannot figure everything out by yourself, use consultants to get a second opinion. Get help to understand the things you do not know you do not know.
- Choose your partner wisely and take control over your process. 60-70% of Swedish companies enter the U.S. market with partners, we often see Swedish companies getting contacted by a U.S. partner. This can be a great success, but it does not mean that you can leave everything to your future partner. When you evaluate a partner make sure you know how important your brand will be for them in numbers, be careful with exclusivity, if they ask for exclusivity limit it as far as possible, geographically, timely, in accordance with revenue. Make sure you own the contract writing and that you get legal help from someone that protect your interest. Often contracts provided by potential partners will be written in their favor.
”I have a story from a Dental floss company who gave a partner exclusive rights to the U.S. market, after 5 years in the contract they did not see any increase in sales. During that time, 4 competitors entered the market, and instead of being the first-mover on the market they finally entered a saturated market.”
With all above said, when do you think a company should enter the U.S. market?
You should start to think about the U.S. market when you have room for large investments in your budget. When you can spare resources internally to enter a new market. You equally need to afford the risk. This applies when you are a mature company. If you are a startup you need capital, a proven solution and be ready to scale up.
I have seen many startups coming here too early, not prepared for the situation they will meet. To be successful you need to have a revolutionary solution for your market. You not only need to be the best on your market, you equally need to be driven and hungry.
Finally, In your opinion, what is the greatest advantage of talking to Business Sweden before entering the U.S. market?
We strive to be the first point of contact for companies going international, we can help you to set expectations on the market. Through our services, we can help you shorten your time to market, find new revenue streams and minimize the risk. You can be sure that we have your business and best interest as our priority and that we are a trustworthy partner.
