As I travelled around California and Arizona last month I was yet again reminded why I am such a strong advocate of the United States as an export market for New Zealand and Australian technology companies.
The United States is huge. It has in excess of 300 million people, a GDP of 14.7 Trillion dollars and is the worlds largest importer and consumer of global goods.
So often I encounter technology businesses reluctant to focus on and target the U.S marketplace. They cite cultural differences, distance, competitiveness and exchange rate fluctuations as reasons for deferring entry to or ignoring this market altogether.
In many cases I believe that these businesses are wasting both time and opportunity.
America has scale. It has a contiguous, willing market that will consume competitive products and services at a pace unrivalled anywhere in the developed world. It is English speaking, culturally aligned, technology literate and wealthy.
Regardless of where, most local technology companies need foreign markets to scale and grow. And irrespective of size or geography, the time, effort and risk of establishing that first export market is going to be relatively similar.
If you see your end goal as being the U.S, then I say that’s the first market you should focus on. As soon as you have validated the problem your product or solution solves you should be focusing on scaling and growing your business in your true target market.
Its fine to test a product idea or business model locally, but don’t fall into the trap of scaling that business locally if local is not your goal. All that time, money and energy spent building an unsustainable local market may well be better spent building relationships, learnings and customers elsewhere.
That’s harder and riskier you say? Well tough, business is hard and it is risky. It also requires us to think bigger, smarter and have loftier long term goals.
There has also never been a better time to enter the U.S market.
Sure, the exchange rate is unfavourable to exporters, but so what. If your business model is built from the get-go to be profitable at parity to the U.S dollar then anything more is a bonus. You are going to the U.S because of the size and scale of the market, not because of a favourable exchange rate, right?
Also, its never been cheaper to do business in America. With a weak dollar and high unemployment, the cost of establishing your business in the U.S is at an all time low. There is an over supply of experienced people and companies willing to work for very competitive rates and a stagnant economy means that new products and services that increase competitiveness or reduce costs are highly sought after.
I would encourage you to critically examine your companies business strategy to see if the U.S should replace your local market as your primary driver for growth; now and not some time in the future.