Successfully crossing the pond is the ultimate measure of success. If an entrepreneur can flog their wares to the American market, respect and riches beckon
From the likes of popstrel Adele to a London-based software company, successfully leveraging the American market is the ultimate litmus test of staying power. With its status as the world’s number one superpower (for now at least), not to mention its spending power, it’s still perceived to be the pinnacle of success. Get it right and the roads will be paved with gold. But get it wrong and you’ll be limping back to the UK with your tail between your legs.
For Adam Hildreth, CEO and founder of online community management software company Crisp Thinking, there was never a question as to whether the US was a suitable market. “It’s a niche market that uses our technology and most of those companies are based out there,” he says. “It was natural for us to go to the US.” In fact, Crisp Thinking’s first client was American company Sony.
Crisp Thinking is exactly the kind of business that is taking the US market by storm. According to Allyson Stewart-Allen, an American and director at International Marketing Partners, as well as tech companies, media content businesses are doing really well across the pond. “The creative industries sector is phenomenal here; it really is world-class and world-beating,” she says.
But operating in a booming sector does not guarantee success in the States. It costs time and money to expand internationally. “I think any kind of expansion is going to take a lot more money than you expect,” warns Hildreth. But Stewart-Allen says talent is even more important than spare dollars. “The trick is finding the right people, not necessarily throwing cash at it,” she explains. “You need to spend time in the market and find business partners, which means kissing lots of frogs.”
One of the other challenges of expanding to another country is understanding the cultural differences. Speaking on a panel at MADE: the entrepreneur festival, Stewart-Allen pointed out that just because there is no language barrier, there may still be misunderstandings. “SMEs find it especially challenging because there’s an assumption we speak the same version of English – which we don’t – and that the business culture is quite similar to the UK so not much is needed to adapt. But actually it’s quite different in terms of how we do business.”
This presents management challenges, too, as there is a very different working culture in the US to the UK. “It’s an interesting dynamic when you’ve got US and UK employees working together on projects,” explains Hildreth. “The guy in the US may ask why his UK counterpart isn’t in the office to find out it’s actually a bank holiday in Britain.”
Although the cultures may appear to be conflicting, it is possible to create a harmonious working environment as long as it’s seen to be fair, says Stewart-Allen. “I don’t think it’s easy,” she admits. “I think Americans envy the European business culture where you get to go home at 6 o’clock or you’re not expected to be on a conference call at 10 o’clock at night because it’s interrupting your family time. Therefore often the best thing to do is to apply the British rules,” she suggests.
Not everyone manages to get the balance right. M&S is an example of a brilliant British brand that failed spectacularly at the task of breaking the States. Speaking at MADE, Stewart-Allen gave her perspective on the UK stalwart’s disappointing performance in the US. “I think one of the things about M&S’s US foray was there wasn’t a readiness at management level to adapt. Regardless of how big or small the organisation is – you could be a one person start-up or a mega corporate – you need to be listening. And M&S wasn’t listening.”
But there are success stories too. Last month’s one to watch here in Elite Business was Hailo, the taxi app company that began its days in East London and is now taking the States by storm. At Ella’s Kitchen, whose CEO Paul Lindley is this month’s cover star, exports accounted for 44% of sales last year. And at Crisp Thinking a whopping 60-70% of revenues come from US sales. One thing’s for certain: get it right and a slice of American pie is more than worth the hassle.
Survive in America
Allyson Stewart-Allen, director at International Marketing Partners
Focus on business first. Americans are transaction- rather than relationship-based. We do deals and then build the relationship.
Educate Americans, don’t just assume they’re being arrogant. We’re very insular in the US and are therefore slightly suspicious of approaches to business we’re not familiar with.
Quantify wherever possible. We speak in numbers.
Be precise and don’t speak in innuendo. We’re really explicit communicators. For example, if an American asks you a question and you reply, “I couldn’t possibly comment”, in Britain that might be taken as a subtle “yes”. To an American it means you’ve signed a non-disclosure agreement and aren’t allowed to comment.
Do it now. Don’t deliberate. We’re very action-oriented in the States. We don’t sit around debating the merits of something, we just do it.