5 Signs That Your Startup Is Ready to Expand to The US
Expanding to the US is a big step for any startup -- and a big risk. Many startups fail to make this jump for a number of reasons: failure to find their target market, lack of resources, lack of investors, etc. For companies who have yet to make the leap, you have the opportunity to learn from your past, failed competitors and the time to properly evaluate your company to see if you're ready for the big move. Here are some ways to know that your startup is ready to launch in the US.
1. Your Target Market In The US
The attraction to the US is understandable, but why is it necessary for your company? When making this decision to expand, it’s best to try to take the ego out of it. Expansion for expansion’s sake isn’t reason enough. Outline your goals and why these can’t be met in your local markets. What does the US market have that is vital to your business plan? Why the US and not China or South Korea? Global distribution channels make it possible for companies to make a big name for themselves within their local market. So the ultimate question becomes: is there a target market for your company in the US?
For entrepreneurs trying to gauge this properly, a method that can help is listing your product’s core advantages and offerings and then drawing out connections to types consumers that would find the product appealing. Think of the US market as a multi-staged funnel and create filters based on demographics such as age, gender, personal interests, socio-economic class, etc. As you continually create these filters, you will better identify a small, focused target market for your offering. You can mix and match combinations of these filters to discover multiple focused target markets that would be interested in your product. Your ultimate goal will be to find a number of golden combinations of groups that fall under the categories "highly interested parties" and "able to buy."
2. You’ve Done Your Homework On US Companies With Similar Product Offerings
If similar product offerings can be found in the US, use this to your advantage and studyi these companies extensively. Extensive research will help your company identify how large and how monetarily successful your company could be. Investigate your competitors' campaigns year-round to note high seasons and low seasons, popular products, and the demographics buying their offering. This will assist your startup’s launch strategy on multiple levels, not to mention it help align the timing of your expansion to hit peak season for your product.
You must also offer something that your competition does not; otherwise, there is no reason to launch in a market they have already saturated. If you don’t have a competitive advantage, then you’re not quite ready to go into the US market.
3. You Set and Continually Meet Your Goals
It shows a healthy mindset not to dwell on goals that were not met in the last quarter. A company will always take a few steps forward and a few steps back. But when you’re ready to expand, it means that those goals were not only met, but also met faster than you thought. Set up an objective for your startup this quarter -- a slightly ambitious goal. For example, capturing 100,000 users and retaining them for three consecutive months. These objectives can help build team momentum, and when you surpass your objective for that quarter, it builds internal and external confidence in your company's capability for expansion. Not to mention, it gives you a successful growth story that will excite investors.
This also prepares your team for an expansion -- which is stressful for every person in your company. If you can handle big hurdles like this, then you’re closer to launching internationally.
4. You’ve Maintained First Mover Advantage
When competitors appear in your market space, it’s time to move quickly. Your startup has most likely done this race once or twice before. Successfully maintaining that first mover advantage is a sign that your company is ready for a larger arena as it displays that your company can evaluate its ability to scale quickly, set reasonable goals, and understand their market space.
5. You Have A Sufficient Capital To Start You Off
The US market is expensive terrain for any startup. As most know, it’s common practice, during a company expansion, to wait at least four months to see a return on investments. During this time, you'll be using your capital to carry your company financially, which will include new hefty expenses: US visas, training programs, US-based employees, office spaces, etc. Hiring your US-based staff will be the first elemental phase to help ease this transition. The next phase will be bringing VCs to the table, who will not only impart cash but also their guidance and experience as well. For this reason, US VCs are widely known to be hesitant to invest in early stage non-US companies without a founder within a reasonable proximity to the VCs location. Your company will need to have a founder willing to relocate in the very early stages of the expansion. The founder along with a US-based team will build these networks and seal deals with VCs before the company begins the full process of expansion.
If your startup has met these objectives, then your company may be ready to start preparing for a US expansion. This is when marketing companies like Launchway Media can come into play. We are a marketing company that helps LATAM startups find their audience in the US, encourage that audience to connect with the brand, and build relationships for the company — from users to reporters to investors — to help the startup successfully launch on a global scale.