Using Business Incubators to Expand into the US Market

Copyright 2014,Strodtbeck & Co. All rights reserved. www.strodtbeck.co.uk

Expanding into the US Market

Presented by:

Tom Strodtbeck

Founder and CEO

Strodtbeck & Co.

Senior Director,

International Programs

National Business Incubation

Association (USA)


The obligatory Steve Jobs quote…

You can't connect the dots looking forward; you can only connect them looking backwards


Followed by a Paul Graham quote….

The most important task at first is to build something people want.


Followed by a quote by me…

When it comes to entering the US, it is better to think of it as 50 smaller countries trading with each other, and each with different tax, regulatory and incentive schemes.


What I do


What NBIA does

.

Thought Leadership

Professional DevelopmentNetworking


What NBIA does


What business incubators do

Incubatorsshrink the risk box…

…fill in the the knowledge gaps

…and assist firms with this.


What business incubators do

EntrepreneurTraining

Access to Funding

Specialized space and equipment

Technical assistance

Mentors

Advisors


Our Network – Soft Landings http://www.nbia.org/member_services/soft_landings/

http://www.nbia.org/member_services/soft_landings/




Our Network – Soft Landings http://www.nbia.org/member_services/soft_landings/





What SL incubators do

• Hot desks• Market intelligence• Contacts• Relocation strategies• Funding• Cultural advice• Licenses, fees and visas (if

necessary)• Legal structure (LLC, etc.)• Need deal flow prior to

being an SL incubator


The why question. Why go to the US?

• Founder focus and motivation• Diversity among managers;

immigrant status• Expand market

• Particularly true in small home markets

• Increased profitability• Take advantage of supply chains;

lower costs• Access to materials

• Manufacturing hubs• Access to talent

• Innovators, clusters• Ability to collaborate/invest

• Co-development, acquisition• Ability to raise capital/be acquired

US companies have exported about 16 billion (USD) worth of goods and services to the UK.

Conversely, UK companies sell 17 billion (USD) worth of goods and services to the US.

The UK is America’s 7th largest trading partner.


What companies do


Connections


Bridges to cross

Psychic Distanc

e

Market

Product

Money


Bridges to cross

PsychicDistance

“Entrepreneurs underestimate how long this

takes”

Training on business culture

Engagement with other

entrepreneurs

Engagement with expat groups or diaspora network


Bridges to cross

Psychic distance

Psychic and cultural distance

• Building partnerships and relationships is as important in the US as in any other country.

• Establish partnerships – don’t try to do it alone. Local partners can help you find resources, make introductions to investors and customers, and acclimate you to the local business culture. They can accelerate your entry time significantly.

For more information: www.executiveplanet.com

/index.php?title=United_States.

http://www.executiveplanet.com/index.php?title=United_States

http://www.executiveplanet.com/index.php?title=United_States


Bridges to cross

Market“US businesses are relationship

driven….”

Alpha-beta customers/distri

butors?

Market intelligence –

analysis- feedback

Time in country to build

relationships.

How big is it really?


Bridges to cross

Market

• Learn before you burn.

• Need to know:

• The size of the accessible market

• Who are your competitors• Your distribution plans• Your service plans• Often, firms need to

interrogate their business model.

• Who are your alpha and beta customers? Evangelists?

For more information:

http://www.clustermapping.us

http://www.sizeup.com

www.zoomprospector.com

www.researchandmarkets.com

http://www.clustermapping.us/



http://www.sizeup.com/

http://www.sizeup.com/

http://www.zoomprospector.com/

http://www.researchandmarkets.com/


Bridges to cross

Magic“No one

cares about 32 bit”

What problem is

being solved?

What is it in customer

terms?

How will you make money

with it?

“This is not to say they need a solid business at home first…they don’t. They

just need a clear idea on who the customer is, and how they will make

money.”


Bridges to cross

Magic• This is not to say they need a solid

business at home first…they don’t. They just need a clear idea on who the customer is, and how they will make money.

• That said, customer validation is an important concept for startup and young firms…your ability to demonstrate a market for your product is paramount.

• The relevance of your product to the new market is also important…do Americans get it?

• IP strategy gets addressed here.


http://www.sba.gov/content/intellectual-property-

law

www.nolo.com/legal-encyclopedia/patent-copyright-

trademark

http://www.sba.gov/content/intellectual-property-law



http://www.nolo.com/legal-encyclopedia/patent-copyright-trademark





Bridges to cross

Money

“Funders care about sales, not

about you”

Remittance?

Cash flow?

Equity/Debt/Other?


Bridges to cross

Money

• The vast majority of American firms bootstrap

• State incentives are more important than Federal incentives

• Cash flow management as important as cash

• Remittance, taxes and exchange rates are ALL important

• “You cannot get funded sounding like that.”

• Local representation for angel and VC.


http://selectusa.commerce.gov

http://selectusa.commerce.gov/

http://selectusa.commerce.gov/


For example…the Rutgers Food Innovation Center and Graze

Graze• Founded in 2008• Raised £2 million from

Octopus, others• Acquired by Carlyle (US)

in 2012 (est. £50 mil)• Entered US market in

2013; 100,000 subscribers in first four months

• £41 million sales (2013)


For example…the Rutgers Food Innovation Center and Graze

Rutgers FIC provided• Focus group testing• Labeling• FDA regulations• Market assessment• Fulfillment/processing• New product

development


Thank you!

Tom Strodtbeck

Founder and CEO

Strodtbeck & Co, Liverpool

Senior Director

International Programs

National Business Incubation Association (USA)

[email protected]

[email protected]

www.nbia.org

mailto:[email protected]

mailto:[email protected]

http://www.nbia.org/


See also…

• Bell, et all; “Small Firm Internationalization and Business Strategy” International Small Business Journal, 2004

• Freeman, et al; “How Smaller Born-Global Firms Use Networks and Alliances to Overcome Constraints to Rapid Internationalization”, The Journal of International Marketing, 2006

• Fuest, Sasha “Global Marketing Strategy: The Case of a Born Global Software Firm in Columbia”, Revista Ciencias Estratégicas, 2010

• Isenberg, Daniel “the Global Entrepreneur” Harvard Business Review, December 2008

• Kudina, et al “Born Global”Business Strategy Review, 2008

• “Weaving The World Together” The Economist, November 19, 2011

Small Business & Entrepreneurship

Using Business Incubators to Expand into the US Market