How to Enter the US Market Without Burning Your First 18 Months

The United States is the most attractive market in the world for a foreign company with real ambition. It is also the most reliably humbling one.

I have seen in the past European companies (very well-funded, very strong in operation, with excellent products and senior teams) coming to the US with momentum, and 18 months later they have less money in the bank, a reorganized team and many lessons of what they did not get right at the start.

But I have also seen companies successfully enter the US market. In many cases they did better than they anticipated and the US revenue became a stable source of income for them and triggered their rapid growth.

As someone who works with clients from both the European and American markets, as well as companies at different stages of development, I have been able to see first-hand the mistakes that companies make when entering the US market and what companies are doing right.

"Foreign companies entering the US market are not rewarded for being bold but rather for being prepared."

Cyril Moreau, Founder & CEO

Mistake #1: Treating the US as a Bigger Version of Your Home Market

In terms of errors to be avoided, it is essential to recognize the fundamental differences of the US commercial environment compared to the majority of European countries and to not only base the planning of a market entry on the size of the new market but also to take into account the differences of the individual countries in terms of buyer behavior, in terms of the respective sales processes as well as the competition. In addition, the speed of decision making as well as the time required to establish relationships with customers and potential customers in the US is considerably faster than in many other countries.

Many buyers in B2B business are willing to start a pilot project with a vendor before fully committing to the purchase of the promised value. They test the value of the solution in a small environment before deciding whether they want to deploy it in their whole organization. Therefore, Salespeople in the US must be able to develop relationships and create value very fast to close deals. They must be very clear in their communication as to what they are selling (value proposition), their pricing and the return on the investment that their customers can expect from purchasing their product or service.

Furthermore, many companies fail to realize that when entering the US market, a shift must occur in the way they communicate with their clients. When selling in Europe, some companies have a particular style and cadence in their sales conversations with clients, which is perfectly adequate when doing business in, for example, Paris or Frankfurt.

However, in the US, in many instances, meetings with clients are very short. In addition, follow-up meetings and communications with clients are fast-paced and transaction-oriented. Often, when selling to clients in the US, it is essential to specify every detail of the value that a company brings to its clients, and present a solid business case.

None of the challenges are insurmountable but a more thoughtful and planned approach is needed than simply translating local copy.

Ask yourself:

· Have you mapped the differences in buyer behavior, sales process, and competitive dynamics between your home market and the US?
· Is your value proposition and business case built for a US buyer, or is it a translation of what works at home?
· Does your sales approach match the pace and style of US commercial conversations?

Mistake #2: Hiring the Wrong First Person on the Ground for the U.S. Market

The first person you send to the US is perhaps the highest stakes hiring decision you can make as a foreign company. And, sadly, most companies get this hiring decision wrong.

Foreign companies make this mistake for a variety of reasons. The most common reason is that foreign companies are used to hiring senior experienced folks with great Rolodexes. They assume that this person will "get the market" as they call it. While this is true, the first person you hire in a foreign market is an operator. This person is going to build out the commercial function from scratch. This person is going to help define the ICP for the US market. This person is going to test and refine the value proposition with early customers. This person is going to develop the sales process for the US market. This person is going to help the company figure out how to position the product in the US market. An operator is not a senior sales leader.

A senior sales leader is someone who leads a sales team. A senior sales leader is someone who hits a number. A senior sales leader is not someone who can build out commercial function from scratch. A senior sales leader is not someone who can define ICP, test and refine value proposition, develop sales process, and help a company figure out how to position a product in a new market.

The typical senior sales leader is used to leading a team of salespeople who are already set up to succeed. They can lead them to hit their numbers or to miss them, but that is about the extent of their capabilities. They are not operators, and do not have the ability to set up a motion from scratch and then scale it. That is why they get bored quickly in a new market entry situation and start looking for a new job.

Almost every company I've seen attempt to enter the US market for commercial reasons related to growth has sent the very first person to the US (the "First Person on the Ground" as outlined above) as a senior sales leader from within the company (e.g. VP of Sales for Europe or Country Manager for Germany). That senior leader then flies out to the US for a few weeks to set up an office, spend time with existing customers to 'open doors' for the company and then, before long, others from within the company follow to complete a healthy sized sales team covering the entire US.

What fails to dawn on these companies is that the first person on the ground for a new market entry is an operator (not a senior sales leader). As outlined above, this individual will set up the sales infrastructure for the new market from scratch, define and validate the ICP for the market, test the value proposition with real customers to refine it as needed, define the sales process to best drive to the close of deals and position the offering within the broader market for buyers to consider.

Ask yourself:

· Is your first US hire a builder and operator, or a manager of an existing motion?
· Does this person have the ability to define ICP, test value proposition, and build a sales process from scratch?
· Are you hiring for where you are now, or for where you think you'll be in 12 months?

Mistake #3: Underestimating the Cost and the Timeline

The US is an expensive country and so are its commercial environments. Office space, compensation, employment structure, health insurance, legal and compliance expenditures all are significantly higher in the US than in European countries. A company planning to enter the US market with a plan based on the cost of doing business in Europe will very quickly run into serious trouble. Undercapitalization of a US market entry is a frequent problem of foreign companies entering the US market.

Another critical mistake foreign companies make when entering the US market is underestimating how long it will take to achieve self-sustaining revenue in the market. Companies plan for a very short period to reach breakeven point and typically fail to bring in sufficient capital to cover the higher costs of running a business in the US. Thus, they are unable to reach breakeven within the time frame they had originally anticipated. This leads to some very difficult conversations with the company's board of directors and a very urgent attempt to rapidly scale to achieve required levels of revenue.

Planning for the true cost and the true time to market for a market entry is not negative; it is necessary to make smart, informed decisions along the way. To have the correct milestones and the right resources for the work at hand, one must first plan for reality.

Ask yourself:

· Is your US budget built on European cost assumptions or true US market costs?
· How long can you sustain operations before reaching breakeven, and is that runway realistic?
· Have you stress-tested your timeline to profitability against what the market actually requires?

What the Successful Entries Have in Common

The companies that successfully enter the US market share certain characteristics.

First, they validate their approach to enter the US market prior to scaling up. They 'run customer discovery, test messaging, talk to customers and prospective buyers to understand how their product/solution fits or doesn't fit in the local market'.

Localizing the value proposition for the US Market not just the copy for the web. Many foreign companies entering the US market make the mistake of developing a local value proposition (LVP) for the web. Even though they are selling the very same product as they do in their home country, they will need to tell the story of that product in the US market to customers in a way that is relevant to their needs, problems, etc. This often requires a complete repositioning of the product in the local market, even if the core product itself does not change.

Build necessary commercial and sales infrastructure before bringing in many salespeople. Large numbers of underperforming salespeople is one of the fastest ways to undermine a growing company. Those who build the necessary sales infrastructure first will simply scale their inefficiency.

They bring in cross-border operational expertise. This is the most common failure mode when it comes to US market entries: a leadership team that is very knowledgeable about their home market and they think they can just scale it in the US with more resources. Wrong. They almost always need to bring in someone who has previously crossed markets and can help them to set up the appropriate structures and procedures for cross-border operations.

Ask yourself:

· Have you validated your US approach with real customers before scaling?
· Is your value proposition truly localized for the US market, or just translated?
· Do you have cross-border operational expertise on your team or advising it?

Final Thoughts: The US Market Rewards Preparation

There is one way to launch into the US market: It's very exciting to announce to your board of directors and your teams but very painful to execute. The other way is to launch into the US market in a more modest and methodical way. It does not grab as much attention at the start but 12 to 36 months later it will have delivered so much better results.

Foreign companies entering the US market are not rewarded for being "bold" but rather for being "prepared". Understanding the local environment, building the right foundation to grow from and making the right decisions based on the reality of the market (as opposed to the initial plan) are all crucial elements.

Enter the US market and grab a huge growth opportunity for your B2B company with a differentiating product. And yes, as a foreign company, you can do it and grow to very large size in the US market, provided you put in the work of true localization. So entering the US market is for you a strategic build and not a sales deployment, and you will have something of lasting value on the other side.

Cyril Moreau is the Founder & CEO of International Executive Consulting (IEC), a fractional C-suite and management consulting firm helping European and international companies enter and scale in the US market. IEC brings cross-border operational expertise across commercial strategy, market entry, and fractional C-suite leadership.

Many of them fail. Why? Cyril Moreau, CEO of International Executive Consulting (IEC), a management and C-Level consulting company, supports European and global companies in their expansion to the US, in a 30-minutes call he outlines the biggest 3 mistakes and why you should plan to enter the US market with a strategic build of a commercial operation rather than just bringing in some sales people.

Plan to enter the US market and want to avoid the biggest mistakes of foreign companies? Let's have a direct conversation about what the path actually looks like.

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