How to Expand into the U.S. Market
The CEO of an Israeli software explains strategies and best-practice techniques for successfully establishing a foreign software company in the U.S.
By Avinoam Nowogrodski, Clarizen
Sep. 08, 2008
We launched Clarizen, now a global provider of on-demand project management software, in Israel in 2005. In December 2006, we secured $7 million in first-round funding from Benchmark Capital and Carmel Ventures. The two General Partners of both firms also joined Clarizen's Board of Directors. From the beginning, the plan was to go global to expand our growth options. With Benchmark Capital, we determined we should establish a presence as soon as possible in North America - our largest target market.
Obviously, there are cultural and language differences, as well as other variations from country to country as to how business should be conducted. These differences are risks that can become hindrances to success in establishing a company in a foreign market within the necessary timeline and budget. So the decision to go international must be made carefully. Yet, it need not be intimidating.
Having set the strategic direction for our company, we forged ahead and successfully established our North American headquarters in Menlo Park, California, after having been in business in Israel for 1.5 years. The following points represent the best-practice techniques we employed to reduce the time and effort to bring a company into the U.S. market and mitigate the risks of navigating cultural business variations.
1. Create Market Presence Before Moving to the U.S.
A well-proven business mantra is that timing is everything, and that was true in Clarizen's case. A key to success is to make preparations with respect to the market before setting up shop there. Don't wait to come to the U.S. before getting acquainted with and developing relationships with customers, since this will impact your timeline and budget.
Understand where your market really is. I came to the U.S. several times before we opened our sales and marketing presence here. Every two months we held one-day meetings attended by our board and potential customers. An American executive connected with our company helped me in this effort. The meetings were invaluable, as it helped us understand where our market really was and how should we sell into the market.
Generate demand and identify customer issues. Mitigating the risk of wasting money involves ensuring you don't move until there is some demand for your product(s). During my trips to the U.S., one technique for establishing market presence was giving potential customers a better version of our product than the beta version. This strategy helped to generate demand for our product. But even more important, their evaluation helped us understand the level at which customers were making purchasing decisions and identified their concerns regarding our product and business model.
Become part of the various circles of influence in the business community. It's also important to become part of the American business community by participating in events and forums. We found this was especially key in the Bay area. Becoming a part of the community not only helps to market your company but, more importantly, helps in understanding the American culture. We participated in events that were relevant to our business, such as SaaS and Office 2.0 events, Microsoft sponsored events, and Interop/Software 2008 where I gave a presentation. Such forums also helped us establish a presence in the second circle of influence - the analyst community.
-
Obviously, there are cultural and language differences, as well as other variations from country to country as to how business should be conducted. These differences are risks that can become hindrances to success in establishing a company in a foreign market within the necessary timeline and budget. So the decision to go international must be made carefully. Yet, it need not be intimidating.
Having set the strategic direction for our company, we forged ahead and successfully established our North American headquarters in Menlo Park, California, after having been in business in Israel for 1.5 years. The following points represent the best-practice techniques we employed to reduce the time and effort to bring a company into the U.S. market and mitigate the risks of navigating cultural business variations.
1. Create Market Presence Before Moving to the U.S.
A well-proven business mantra is that timing is everything, and that was true in Clarizen's case. A key to success is to make preparations with respect to the market before setting up shop there. Don't wait to come to the U.S. before getting acquainted with and developing relationships with customers, since this will impact your timeline and budget.
Understand where your market really is. I came to the U.S. several times before we opened our sales and marketing presence here. Every two months we held one-day meetings attended by our board and potential customers. An American executive connected with our company helped me in this effort. The meetings were invaluable, as it helped us understand where our market really was and how should we sell into the market.
Generate demand and identify customer issues. Mitigating the risk of wasting money involves ensuring you don't move until there is some demand for your product(s). During my trips to the U.S., one technique for establishing market presence was giving potential customers a better version of our product than the beta version. This strategy helped to generate demand for our product. But even more important, their evaluation helped us understand the level at which customers were making purchasing decisions and identified their concerns regarding our product and business model.
Become part of the various circles of influence in the business community. It's also important to become part of the American business community by participating in events and forums. We found this was especially key in the Bay area. Becoming a part of the community not only helps to market your company but, more importantly, helps in understanding the American culture. We participated in events that were relevant to our business, such as SaaS and Office 2.0 events, Microsoft sponsored events, and Interop/Software 2008 where I gave a presentation. Such forums also helped us establish a presence in the second circle of influence - the analyst community.
-
