Over the years, the managing partner of the many times I have heard from startup founders the request to give money to open business in the USA and hiring in America qualified vendors to those engaged in the sale of the Russian product. And every time I had to explain that it did not work. How to operate the founder, wanting to put their company on the foreign market?
previous topic: Where to look for ideas for starting a business
the Founder must be ready to move to another country. If he won’t do that because they do not fully believe in your product, the product neither will the investor. Investors it is important to ensure that founders are ready to bite and burn the bridges that they are obsessed with their ideas. It is the founder will have to do marketing: initially hired sales employees will not provide (often because the product is not quite ready, does not meet the requirements of the global b2b market, etc.), and the kinds of sales do not have enough money.
before moving it is necessary to perform the overseas market, the segment in which the company expects to operate. Make a database of potential clients, write to them. To sell something by correspondence will not work, but it’s a good way to start a dialogue to prepare the ground for work abroad. This communication will also allow to assess how attractive the idea for the consumer. If your proposal will not cause any response, this is a serious negative signal. And on the contrary, if the reaction is positive, do you need to buy a ticket, make appointments and go.
After arriving we must look for investors and first customers. Meet with potential customers and identify their real needs. You don’t have to do everything to the max. For example, if you plan to sell products via the SaaS model, but have not had time to complete testing, certification, etc., offer customers what they are ready to buy now – exampleR, its product as the “box”. At the initial stage the main goal of the founder is to find the first customers willing to pay the money and do it quickly, while not out of funds.
Communicate only with those companies where the chances of quick success are great. Don’t bet on one big customer. Do not let yourself to be involved in the long process of pre-sale preparation in pilot projects (especially the free ones) and costly rework of product by a single customer. You will not have no developer, no money, no time, and to a brighter future your company may not survive. Remember that the objectives of the corporate client often does not coincide with yours, perhaps he only wants to lure your engineers to fulfill own KPIs or just hunting for ideas. Give the gift of nothing ‒ try to earn on each project.
Picking up a pool of customers, optimize your product and business model – it should be flexible and scalable. Immediately produce a finished product is not possible: the pairs of pilot projects is not enough – you need dozens of clients. You should not chase the investor which will Finance a deep revision of the product. Most likely, the company will have to constantly interact with customers in search of livelihood, continuously collect customer feedback and develop the technology. But in the end you’ll develop a good client base and create a marketable product that solves specific tasks of customers. And later, under such a product would be much easier to find a strategic investor.
Rationally distribute time. Right to spend 70% of time on sales and product, and 30% on communication with potential investors. To the founder it is important not to waste time and as soon as possible to assess the chances of success by circumstantial evidence. For example, if you start poorly explainable nitpicking to the secondary figures, most likely, the deal will never happen, especially in the early stage start-UPS. In the beginning it is better to turn to business angels get a little money for the first time and focus on your business. Search for business angels among customers, consultants, industry representatives are among those who knows the market and is able to evaluate the advantages of the product. Such investor does not just give money, but will help with advice and connections.
you don’t have to strive in Silicon valley. Many people still believe that all technology companies have to start business there. This is not so. In new York, for example, the ecosystem of innovations and investments is not worse. From there it is easier to communicate with the Russian office, with Europe and the proximity to potential customers the same. About the West coast it is worth considering at a later stage, when we are talking about bringing the really big money from major foundations of Silicon valley.
Must become to some extent the American. Immigrants in America are generally good, but to casual visitors – wary. Show that you are in America on a short business trip and not as a tourist, and for a long time. And learn to communicate American. Even the little things: the ability to maintain a conversation on the topic of baseball, manner of dress, possession of the local slang and figures of speech.
previous topic: Every fifth entrepreneur is ready to return to work for hire
At the same time try to convince foreign partners that the Russian background is your advantage. For example, point out that in the sphere where you work, this is Russian technology lead. Tell us what you had to overcome much more difficulties, managed to find a more effective and inexpensive ways to market that you are much stronger and more interested team than most other startups at the same stage of development.