Growth

US expansion: The ultimate test of founder resilience?

  • Growth
  • Article
  • 5 minutes read

As a founder it is crucial to take your business to new markets in person – a complex, demanding ask. This article aims to explore the realities facing founders when expanding to the US.

  1. It is essential for founders to be on the ground, building relationships and shaping the team in person.
  2. Do not underestimate the personal toll this move may take: being away from supportive friends and family is draining.
  3. There are culture nuances and differences that can make it more difficult to build rapport, and relationships.
  4. Working with experienced experts can make an uncomfortable and unforgiving process easier.

Drawn to the vast investment and market opportunity, expanding to the US is a goal that many UK tech founders share. For many, it has become a question of “when” rather than “if”; a milestone pencilled in from day one. 

From the outside it looks a glamorous move – a founder packing their bags and travelling to lands unknown to claim their fortune.

However, the reality can be an unglamorous, uncomfortable experience. No matter how brilliant the business, and resilient the founder, moving to a new country with limited contacts, weighty expectations and pressure is not a move to be made lightly.

If you are weighing up the pros and cons of expanding your business into the US, it’s crucial to reflect and decide if you, as a human first and a founder second, understand the personal commitment required to making the move work.

Flying the flag: The founder’s role in international expansion

Before we dive into the challenges that you may face when trying to expand and establish a business in the US, it’s valuable to emphasise what’s expected of founders.

It may be tempting to think that the founders’ role is relatively light touch; that sales at home translate to instant interest abroad. The truth is that the founder needs to be on the ground, essentially building a new business from scratch.

As David Rose, CEO of US Expansion Partners, writes:

“The founder should personally lead initial US sales engagements, build relationships with key partners, select the right state and city for the US headquarters, and oversee the recruitment and hiring of the US team.”

It’s a sentiment that’s echoed by his colleague, Matt Oxley, who has successfully scaled his business Opal into the US.

“I believe that the first feet on the street need to be founder feet. If you want to go after a generational opportunity and really make it happen, you have to be ready and be prepared to give it everything. The context behind this is that no one can replicate the passion, energy, knowledge and true brilliance of a founder and believe it or not, people buy into that.”

Clearly, being on the ground to build again in a new market is a must – but what does that commitment really involve?

US expansion: A new beginning

"It can be lonely, it's extremely hard - really it's the hardest thing you could ever do as a founder. So, if you see the future of your business in the US, make sure you're ready for everything that entails and try and embrace this chapter of your business’ journey."

Matt Oxley, Managing Director, US Expansion Partners

The move to a new market can feel like a marker of success, it's a challenge to start again – and can be far from glamorous despite local market traction.

For Matt, the move called for him to “sell everything I had, move to the US and live out of two suitcases for nine months”. Having likely already spent considerable time putting your own comfort aside to get your business going locally, doing it again can be demoralising.

Then there’s the question of family responsibility. You are going into build mode again, but this time, without whatever local support you may have at home. Instead of being able to lean on friends and family, you’re likely entering a scenario where you will feel even more isolated. This is a huge consideration.

Matt sums up the importance of carefully considering the human side:

“The other point I'm really passionate about is the human side of all this. If you're a founder, you might be taking your partner and your immediate family over there, and that change creates a lot of human pressures. You could be leaving your wider family and friendship groups behind. It's really hard, and that can sometimes get overlooked.

In addition to the emotional side, there are also practical considerations at play, particularly for your family or partner. Again, Matt stresses the importance of these factors:

“You might have a visa, but what about your spouse or partner? Can they work? Have they left their entire social network behind? How does all this impact your mental health, not to mention your ability to do your best work for the business?”

Understanding the repercussions for yourself and your family is even more important given the cultural differences you’re likely to encounter in the US.

Culture shock: Navigating a different way of doing things

The ability to cultivate business relationships is universal, and they’re even more important when you’re trying to gain traction in an unfamiliar market with a limited network.

However, building meaningful relationships takes time, and is more difficult without shared cultural experiences – commodities in short supply for founders exploring new markets. This is not just about limited boardroom banter, either – cultural nuances can have a direct impact on your influence. As Matt points out:

“... social and cultural elements are important, and without them you're losing a lot of your influence in sales meetings, because the appeal of a British accent wears off pretty quickly. It can get you in the door, but then you've got to build those deeper relationships.”

Even if you’ve got impressive proof of product market fit locally, you are essentially asking investors to invest in you – likely an unknown – and a team that’s still being formed. In those conditions, your ability to instil confidence in person is crucial.

All the more reason to spend time engaging expert partners so you can pinpoint the right investors with a shared vision and invest your energy and time where it matters most: building a new network.

Founders: Make sure you “learn American”

 

"The founder’s active involvement is crucial for US expansion. From identifying product-market fit to building partnerships, leading sales, selecting the HQ site, recruiting the team, and fostering investor relations, the Founder ensures alignment with the company’s vision and goals."

David Rose, CEO and Founder, US Expansion Partners

The US is always calling for ambitious founders, but before making the choice to brave a new market, it is crucial that founders reflect on the immense personal challenge ahead.

Remember that, although the opportunity is vast, the streets are not paved with gold. Expanding to the US is best thought of as building a business from scratch – but this time, you’re doing it in unchartered territory. You’ll also have to balance building in a new market while growing in the other, which can put teams under immense strain.

There are also vast cultural differences to consider that can make the process less intuitive; but you can engage experienced founders and people at events to better your understanding of how business is done in the US.

However, if the founder commits to being on the ground, and works with supportive, experienced international partners to help navigate the entire process of a complex market, it is possible to develop the rich relationships needed to scale successfully.

Any opinions expressed are merely opinions and not facts. All information in this document is for general informational purposes and not to be construed as professional advice or to create a professional relationship and the information is not intended as a substitute for professional advice. Nothing in this document takes into account your company’s individual circumstances. HSBC Innovation Banking does not make any representations or warranties with respect to the accuracy, applicability, fitness or completeness of this document and the material may not reflect the most current legal or regulatory developments. HSBC Innovation Banking disclaims all liability in respect to actions taken or not taken based on any or all of the contents in this document to the fullest extent permitted by law. Nothing relating to this material should be construed as a solicitation or offer, or recommendation, to acquire or dispose of any investment or to engage in any other transaction.