New Zealand is a trading nation; we pay our way in the world by exporting our smarts and our wares to other nations.
Our exporting history can be divided into 3 stages of maturity:
- We began by shipping agricultural commodities to importers who then processed them and onsold those products to consumers.
- Then as we began to mature, some exporters began to develop brands of our own, understanding that to get the best value for our products, we had to develop our own presence in international markets. Some of our national champions – for instance, Zespri – have had incredible success with this model, and have built global consumer brands.
- The third stage has been the development of knowledge exports. These ‘knowledge’ exports are services and technology that are usually sold directly to customers and enterprise customers don’t want to deal with a ‘man in the middle’ anyway. To work directly with customers in their locations we have to build our own independent businesses in the market to allow us to service and sell directly.
In 200 years we have matured from selling produce off the dock to establishing our own in-market businesses.
This provides New Zealand companies with some huge opportunities – but also with some significant downsides if we are not careful. To win we need to become global companies, able to reach and service a company in the middle of the USA as easily as if they were in the Manawatu. We must build companies complete with development, marketing, sales and operations.
Starting a business in your home market is hard, doing it in another country is harder, and unfortunately, we are not always successful.
In this series of articles, I am going to focus on what I know best – the United States. I lived in the New York area for nearly 20 years working in the technology industry. There are 320 million consumers in the US – and another 40 million in Canada and 120 million in Mexico. The US is dynamic, the people are friendly and want to do business. If you have a business that exports services, technology or products, then you should probably be focusing on how to win in North America.
Breaking into North American Markets is not easy – and we tend to make it harder by repeating some simple but costly mistakes. The biggest being a failure to create and execute a winning strategy:
- We enter the market opportunistically on the back of a single customer and then become beholden to that customer.
- We fail to focus on a market that we can win and that our resources can support, and instead, we waste our meagre capital chasing rainbows.
- We waste time in the Australian market because it is closer and more familiar, but this is deceptive and we use up brainpower and treasure there when we should be going straight for the big prize in North America.
- We say yes when we should say no; at its core, strategy is about when to say no.
- We don’t plan to build a business that can be sold – and therefore we get lower exit prices than we should when that time comes.
- And, most costly of all, we regularly fail to identify and hire the right people to represent us in those markets.
In this blog I’m going to address each of these challenges and give my views on how to do it the right way. My opinions are my own, and they aren’t always popular, but they do represent more then 25 years of experience in the tech industry in the US.
I now live in Auckland and my business is helping Kiwi businesses create the right strategy for growing their business in North America and helping them define their strategy for exiting the business along the way. What follows is a discussion about what Kiwi businesses are doing right and wrong in the US, and how we can avoid making mistakes.
To make mistakes is understandable, to make mistakes that others have already made without learning their lessons is unforgivable.
Hoboken Consulting 