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SEBN Together We Connect, Engage and Grow

SEBN Together We Connect, Engage and Grow

SEBN News: Successful US Market Entry

By Karin Hollerbach, Taku Group, and Soody Tronson, STLGip Tech Law Firm

Many local companies have eyed the US market as a key destination and part of their global growth strategy.  It is obviously one of the largest markets. Less obvious are some of the key differences between Australia and the US.  Understanding those differences and planning accordingly can make the difference between success and failure.  We discussed several of them in our recent visit to and roundtable discussion at SEBN.

Successful market entry in the US typically requires substantial marketing efforts and unique differentiation of the product (or service) offering. How are you really different from your competitors? Don’t just tell me about your technology or key features – how do you really solve my (your customer’s) problem?

How you market may also differ tremendously from what you’re used to at home – and must be tailored to the specific segment you are targeting. Furthermore, the US should not be considered a single market – culturally, legally, and in other important ways, there are state-by-state, regional, even local variations. It is wise to follow the motto: “Think Globally, Act Locally.”

What about local presence in the US? Do US customers care?  In many cases, they do. It is far easier to service US customers from within the US – whether that is through your own company or a US-based partner.  The question is less whether to have a US presence and more how to go about it:  You might consider a subsidiary, opening a US office, signing up a distributor, or forging some other kind of strategic partnership in the US. The structural aspects of implementing each approach are easy – but each has pros and cons and important downstream consequences to be considered.

For example, if you are seeking VC funding in the US, you must set up a US company (specifically, a Delaware-based C-corp).  But while US financing may prove to be a necessity, it is not the end goal, and should be carefully crafted as part of the growth strategy. If you are not seeking US financing, you have many more options.

As a parting word, it is critical to integrate the various actions into a well defined, but flexible strategy that takes into account marketing, sales, regulatory, legal, and tax strategies.   Much of this should be done well before expending valuable resources, including time, and moving to the US, to avoid unnecessary expenses, delays, legal mishaps and lost opportunities.