Expanding to the US is a major step for any Kiwi startup. Many of our portfolio companies have taken the leap—some have succeeded, and all have learned valuable (and sometimes expensive) lessons.

To help the next generation of founders navigate this journey, I set out to interview six of our portfolio companies about their experiences expanding into the US. While there are common themes, each story offers its own unique insights.

Over the coming weeks, I’ll be publishing anonymised stories from these companies, sharing real-world lessons on strategy, hiring, market validation, and execution. At the end of the series, I’ll post a summary capturing the most common learnings and pitfalls founders should be aware of when entering the US market.

Story 1 is of a company that has the following situation:

• Team in NZ: ~90
• Team in US: ~12
• Time in market: ~2 years
• Revenue: $30m USD (total company)

Here are the key lessons and thoughts written in the first person for easy reading.

Strategy:

Initially, we didn’t think the US market was a big opportunity for us. A few conversations with some potential customers in the wrong market segment put us off several years earlier. We thought our product wouldn’t work for the US market. We were wrong.

There is no replacement for time on the ground engaging with the market. Research reports and market research from afar can be misleading. After spending time on the ground, we realised the US was a big opportunity. We tried to validate the market without having expensive resource on the ground and paying too much for flights. This was a fool's errand. We had to spend some money on time and people in market to work out there was something there to go after.

We didn’t forecast big growth from the region initially. I asked the board to hold me accountable to a budget of market exploration, not a revenue target for the first few years. This put the pressure on the right areas and meant we didn’t race to make shortcuts around sales. We didn’t want to move too fast at the start. We are going slow to be able to go fast later. We want to lay the right foundations.

We have chosen a small group of beta customers and we want to make them absolutely love the product. We take these customers on a journey. It’s important to tell them that they are beta customers, we say; “We can’t promise you that everything is going to work perfectly initially, but we can promise you we’ll work as fast as possible to fix any issues you have”. These customers will talk. They’ll say good or bad things depending on the experience we deliver for them.They still pay, but at a discounted rate. If it’s free they’ll treat it like a free product and not care to engage.

There is always nuance in the product that needs to be considered when moving to a new market. The product isn’t going to work out of the box right away. It’s important that this is budgeted into any plans of time developing in market.

We have more demand for our product right now than we are accepting in new customers. We are very careful not to take on more customers than we can deliver brilliantly for. Burning customers early on creates a real headwind for future growth. Start small and strong is our approach.

Having said that, the beta customers we have brought on are still getting an 80% ready product. We are not holding back from pushing growth and learning, but we are controlling the exposure of any potential challenges for the team to manage.

We didn’t go after the highest profile customers first - although we were tempted to. We wanted to go after the customers that are the best quality for us, meaning they are likely to have the most profound impact from our product. These create the best testimonials.

Every state is a country. We are in 6 states right now. That’s more than we should have done initially. The product needs to differ a bit state by state.

We’ve made a strategic decision to go wider than what we may have otherwise. There is a US local competitor we are up against and the product is sticky, so once customers are set up it’s harder to win them.

People and Culture:

From a people perspective, we have resourced the team to ensure there is lots of customer support. Customer love is the most important leading indicator.

We’ve create a mix of local talent and exporting the NZ stars to seed the culture. A product person, a sales person and a customer success person.

Regular communication is critical between NZ and the US. The worst is assumed otherwise. The NZ sales team will quickly start to think that the product team are prioritising the US needs or vice versa if there isn’t sufficient communication. We are trying to build one team.

Americans are good at storytelling and Kiwis are trusting. If there aren’t Kiwis there to monitor the culture and progress, you’ll only hear good stories from the US office. The team is 13 now and it’s led by a US local hire.

We don’t use recruiters. We hire in person and we find talent from the industry we are in. We want people from the industry or from SaaS or both.

Key Takeaways:

• We spend the time to hire good people, we should listen to them: I’ve learned that we should listen to the people we’ve put in place. What can sound like lessons we’ve learned before is actually different. It’s easy to dismiss things and say “oh yes, other customers have told us that before and we’ve solved for that.” but the reality is in a lot of cases that it’s different or nuanced.
• Clarity is king: We can quickly get into hot water if we assume too much, both on what customers are saying and what the team is saying.
• Influencing the product from the US can be difficult: This is a challenge.
• Market validation requires boots on the ground: Remote research and assumptions can be misleading - meaningful market validation only comes from having people physically present in the target market.
• Start small but deliver excellence: Focus on a limited number of beta customers and deliver exceptional results, as early customer experiences will significantly impact future growth through word-of-mouth.
• Balance local and exported talent: Successful US expansion requires both local US hires for market knowledge and exported NZ team members to maintain company culture and ensure accurate progress reporting.

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