Scaling

How to expand your startup to the US

Everything you need to know about expanding your startups international from Europe to the U.S., knowledge shared by German Accelerator.
5
Min Read
May 20, 2021

Expanding into the U.S. market can be a lengthy and complicated process for international business. But there are also plenty of reasons that you should go straight to the U.S. To name two: 


  • The U.S. is the largest homogeneous market in the Western world. The U.S. SaaS market and consumer market is respectively approx. Five times and 2-3 times larger than Europe. 
  • You don’t have to consider problems like languages, different local rules and diverse local dealers what you could often experience with small European countries. So it is easier to scale quickly in the U.S.
As Frank Sinatra said, “If you can make it there, you can make it anywhere.”

As you can imagine, you may face many difficulties along with your expansion. Here we collected five hints suggested by our partner German Accelerator, which empowers German startups to scale their business abroad within their programs, at Wayra Funding Cocktail 2020.


1. Select the place that fit your business

Silicon Valley might be the first place that comes into mind for most technology startups.

It is a great place and the innovation epicentre, but you’re also competing there with everyone and their grandmother. It’s a costly place and is also very difficult to work with the Germans or Europeans from a 9-hour time difference. Collaborations is a factor here which you shouldn’t ignore in your landscape. In this case, New York on the east coast would be a logical choice. If you are looking for less expensive places and where you have less competition density, then Atlanta, Pittsburgh, Miami are all exciting places to look at. Besides, if you are in manufacturing and life science, Chicago and Boston would be the places you have to consider. 


2. Build your relationship rightly.

Building a relationship is tricky. It is recommended that one or two founders ideally move to the U.S. and spend time there hustling and meeting people. The U.S. is very founder-friendly, and they like talking to the original folks to come up with the idea. It may not work if you fly in from time to time and hope to get a couple of meetings while you are there. The people want to know that you’re physically there, and people want to do business with you only if you’re there. Meanwhile, don’t be the person who only emails someone every three years when they look for a new job. Stay in touch and be relevant. 


3. Consider your business fit for investment.

American investors value U.S. revenue more highly. For the most part, want to invest in companies that are doing business in the U.S. If you’re making payment there, ideally six figures a month, you have a chance of getting money. If you have some cutting edge, A.I., Fintech, climate or something scorching right now, then you may be able to raise funds from a U.S. fund before you go over there. But it’s not very frequent. It usually will take 1-2 years from the start of your U.S. journey to get interested from U.S. investors. 


4. Consider your Buy-in.

You need buy-in from the people around you —your co-founders, your team, your investor, your family etc. Try to be aligned before you expand your business in the U.S. some companies come over and find out later that their board or their families don’t want them to be there, which lead to conflict. Suppose you and the other founders can’t be physically there. In that case, you should commit to senior resources with relevant industry experience for your business in the U.S. and avoid sending interns or junior managers you just hired. 


5. Be metric-driven Focus on your business and understand your metrics.

U.S. investors and increasingly other investors are eager to know your conversion rate, the sales success metrics, etc. Imagine that you run into an investor as an enterprise software business founder, and you don’t know what your net revenue retention is, then you should go back and then find out. So build up a metrics-driven business, try to take emotions out of it. After all, it is your decision! Whether and how to start your expansion journey from the comfort of your home. We believe that to stay competitive, it is still essential to identify new markets and opportunities for expansion but execute when the timing and funding are right. It is never too early to start building your future. 

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Written by
Christian Busch

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