US Connect founder Ian Smith explains why he has a burning desire to help exporters on both sides of the Tasman break into the United States, and offers his ten tips for success.
>>NZB: What made you decide to set up US Connect?
Ian: After I returned from the United States in 2011 and set up a company called Access USA with my business partner, Randall Tosh, we were fielding two to three calls per week from companies wanting to do business in the States but not knowing where to start, what to do or who they could trust. Having identified a gap in the market we decided to bring our extensive real world US experience online and developed a one-stop-shop to provide the information, advice and contacts companies need to succeed in the US.
>> NZB: What can your platform do to help a Kiwi export firm break into the US?
Ian: For Kiwi companies looking to export to the US for the first time it can appear daunting. We’ve developed an easy to use website that has everything they need to do business in the States. United States Connect provides members with the ability to source up-to-date market intelligence, find reliable service providers, network with peers and seek advice from US specialists. We’ve even included a “US Success Checklist” which ensures that companies tick all of the boxes they need to enter the States – from distribution and regulatory approvals to pricing and marketing.
>> NZB: Considering the fierce rivalry that exists between New Zealand and Australia – why did you decide to offer/promote your service on both sides of the Tasman?
Ian: Yes, there is indeed fierce rivalry between New Zealand and Australia, particularly on the rugby field! That said, both countries punch well above their weight on the international stage due to the passion and entrepreneurial spirit of their exporters. We also share common challenges when doing business overseas, particularly in highly competitive markets like the US; which is why we developed United States Connect to be equally applicable on both sides of the ditch.
>> NZB: Why do Kiwi firms struggle to gain a foothold in the US?
Ian: Over the past decade I’ve worked with hundreds of companies trying to crack the world’s largest market and seen first-hand what makes a successful entry strategy.
If I had a dollar for every time a company said to me “If we only get one percent of the US market we’ll have it made” I would be a rich man. All companies, Kiwi or Australian, make the same mistakes and this is generally centred on underestimating the time and effort required to be successful. Anecdotally, most companies will take between five to seven years to be profitable in the US and therefore need to allocate sufficient resources up front.
>> NZB: What are your top ten tips for Kiwi export firms looking to succeed in the US?
Ian: Number one: the US is one nation, or is it?
A common mistake Kiwis make is thinking of the States as one market. It is, in fact, made up of many significant markets and companies may need to segment by geography, industry or demographics depending on their product or service.
Number two: tall poppies are welcome.
Modesty is not a virtue in the US and will not win you business! Not only are you expected to say that your widget is the best in the world but also have five reasons why. Know your competitive advantage and convey it in a succinct and confident way. Practice your “elevator pitch” when you meet new people – US taxi drivers are always up for a chat!
Number three: patience and persistence pay.
Business in the US is all about face-to-face contact so be prepared to spend a large amount of time in the market even if you have established distribution. With so many competing priorities in the US, email is usually ignored and voicemail is used to screen calls. When calling a prospect a good rule of thumb is to ring until you feel uncomfortable and then ring ten more times!
Number four: do as the Romans do.
With over 500,000 lawyers in the US it is not hard to see why it is one of the world’s most litigious countries. Seeking legal advice is just part of doing business there and getting it right from the start can save you a lot of time and money. Ideally you should consider seeking legal advice on things like contracts and agreements, IP, product liability, immigration and establishing a US office.
Number five: ask for a biscuit, get a scone when you really wanted a cookie!
Just because you grew up on American sitcoms doesn’t mean you’ll necessarily be understood, particularly not in a boardroom. Make sure all of your marketing materials use US spelling, grammar and measurements and never use Kiwi slang.
Number six: leave your sarcasm at the door.
I’ll admit I’m not all that funny but never have I experienced so many lead balloons as in the US and what’s worse you can (and will) offend potential clients if you persist!
Number seven: business is king.
In such a competitive environment potential partners do not want to hear about the weather or how the All Blacks smashed the Wallabies. It goes without saying that you need to have your A game on or you don’t stand a chance. Know your value proposition as it relates specifically to their business, prepare your elevator pitch and hit them between the eyes with it!
Number eight: absence does not make the heart grow fonder:
Business in the US is all about face-to-face contact. Most successful exporters I know have either set up shop over there or have their country manager spend at least six months a year Stateside to support distributors/reps and generate new sales.
Number nine: If you don’t ask, you won’t get and it’s your loss, literally!
Most companies enter the US thinking they can do it all themselves, only to find they waste a lot of time, money and energy. Organizations like NZTE are a fantastic resource and have staff on-the-ground in major business centres ready to help.
Number ten: it’s not what you know, but who you know.
The Old Boys (and Girls) Club is alive and well in the US. Where possible, surround yourself with key advisers who are well connected in your target industries and geographies. Join industry associations and attend trade shows. Networking is not an optional extracurricular activity!
>> NZB: In 2015 what will be the key challenges facing exporters wanting to access the US? How will the TPP agreement, if passed, have an impact?
Ian: In many ways 2015 should be less challenging. The US economy continues its resurgence, if slower than expected, and the exchange rate should make Kiwi products more price competitive. That said, freight costs remain high and in some sectors there is a major push for customers to ‘Buy American’. The growth of e-commerce has disrupted US retail but presents a major opportunity for new market entrants, with the Internet forecast to account for 20 percent of total retail sales within the next decade.
The TPP agreement aims to level the playing field for business, workers and farmers across the region, which can only be a good thing. It will build on existing free trade agreements with New Zealand’s key trading partners and aim to reduce the majority of tariffs to zero for developed nations. This is a long wish list and if achieved will be of major benefit to Kiwi exporters. But the proof will be in the pudding.
