7 Common Mistakes in US Expansion

When entering the US market, it is essential to treat it as if you are launching an entirely new company. This approach requires an active commitment from the company’s Founder. The Founder should personally lead initial US sales engagements, build relationships with key partners, select the right state and city for the US HQ location, and oversee the recruitment and hiring of the US team. Assuming that someone other than the Founder can effectively lead the US launch is a critical error. Such an assumption will hinder identification of product-market fit signals, delay closing sales with crucial initial US customers, and result in hiring decisions that do not align with the company’s culture.

Hiring a senior executive to lead the launch of your US company is a common and classic mistake. While it may appear appealing to hire a seasoned executive with experience and connections in your industry vertical, it’s almost a certainty that this executive has never started a new company before in their life. They most likely have no idea how to identify the early and critical product market fit signals.  It’s also very common this person will not know how to successfully operate in an environment without a large staff and budget to support them. Senior executive hires are typically very expensive, prone to failure, and can often set a successful US market launch back by months or even years after you must ultimately replace them.

There are few things in the world of business as painful and expensive as scaling up a sales organization before solid product-market signals and a repeatable sales process are established. Assuming that product-market fit and repeatable sales motions in the US will be identical to those in your home country is a critical mistake. Similarly, hiring five salespeople on the first day of your company’s launch would have been premature, as would hiring sales staff immediately after launching your US company. Ideally, the Founder should personally lead the initial sales engagements and close the first several accounts in the US. Only after closing these initial sales and identifying solid product-market fit signals in the US market does it make sense to begin scaling a sales organization.

There is a common misperception that salespeople in the US possess magical abilities and can sell ‘anything to anyone.’ However, their true expertise lies in selling themselves. Following an initial interview, you might assume that once you hire such an individual, they will automatically generate millions of dollars in annual licenses for your product. In reality, the US market is highly competitive, and selling—even for great products—can be challenging. The best salespeople excel at guiding qualified leads through the sales process to successful closures. These top performers are typically bolstered by a consistent stream of inbound leads generated through demand generation campaigns and pre-qualification efforts by sales development representatives. Failing to provide salespeople in the US market with a steady lead flow is a critical mistake. Hiring and retaining sales professionals in the US can be costly if they are not achieving sales and earning commissions. Proper planning and budgeting for lead generation are essential for successful selling in the US market.

One commonly overlooked mistake in US expansion is locating your company’s US headquarters in an area that is either outside the Eastern time zone or has extremely high operating costs. Silicon Valley serves as a prime example—a favoured destination for international tech companies—despite being situated in a challenging time zone (especially for UK and EU companies) and having exorbitant operating expenses. Underestimating the importance of overlapping operating hours with the parent company can hinder successful US expansion. By establishing your US headquarters in the Eastern time zone, both your US company and the parent company will benefit from several hours of overlapping work time each day. This becomes critical if you want your US operations to keep pace with the speed of business in the American market. Conversely, if your parent company is located in the UK or EU and your US company HQ is in the Pacific time zone, your US team may often face delays of a day or more in obtaining answers related to product inquiries, pricing, support, contracts, and other critical matters. Such delays put them at a significant disadvantage in the competitive US market.

Similarly, many international companies fail to recognize the substantial variation in operating costs across different states and cities within the US market. Costs related to employees, benefits, rent, insurance, services, and taxes can vary significantly. Despite this, many international companies set up operations in some of the highest-cost locations in the US, such as Silicon Valley, Boston, or New York City, when completely viable and more cost-effective alternatives exist.

See Us Expansion Partners free interactive US site selection tool here: https://www.usexpansionpartners.com/site-selection/

Doing business in the US can be more expensive than many international tech companies realise when expanding to the US market. Common mistakes include underestimating costs accurately and overly optimistic revenue forecasts. Unfortunately, some companies fall into both traps—under-budgeting expenses and over-forecasting revenue. This critical error often leads to failed US expansion strategies. For detailed insights on budgeting for US expansion, this blog covers typical one-time, annual, and monthly expenses for companies entering the US market. Additionally, ensure you’ve identified solid product-market fit signals before scaling up a US salesforce. Don’t assume their Annual Sales Productivity (ASP) will initially mirror that of salespeople in your home territory when forecasting revenue from the US market.

One common mistake in a US expansion strategy is taking the “Do It Yourself” (DIY) approach when expanding into the US market. The US Expansion partners team has identified over 50 steps in the launch-to-revenue US expansion lifecycle. Trying to understand and master these numerous steps from thousands of miles away will almost always take longer than planned, cost more than budgeted, and ultimately delay the market and revenue opportunity your company is seeking in the US.