Almost every software as a service technology company in New Zealand has ambitions to expand into North America - capturing the lucrative American consumer and dollar. Entering this market and succeeding provides significant benefits - revenue, growth, name recognition, and a significant increase in company valuation. However, a notable list of New Zealand companies have been unsuccessful in doing so, especially some of our best known and brightest organisations - Xero, Wynyard Group, to start.
After a decade on the New Zealand tech scene working in both overseas enablement and product roles, I've been a first hand witness to North American expansions, successes, and failures. Over this time, I've seen a few common traits between companies that do well and don't.The biggest contributor to success in North America is what I coin "Eat Apple Pie". In a similar vein of listening to your customers, you actually need to show up and live and work with Americans - eat apple pie with them. This is what will give you the right product market fit to succeed. Although both New Zealand and the United States / Canada are liberal western democracies, our cultures change a lot as you cross the Pacific Ocean. I appreciate it may sound ridiculous to call your wavering prospect and ask if you can join them at the dinner table with their family, but trust me on this one - worst case you get to eat a great homemade apple pie for dessert.
Eating apple pie taught me quite a few things - your learnings will be different based on the market you are entering. In the travel and aviation sector, which is typicall quite standardised, I learned that although at face value things may appear to be similar, the underlying thoughts about software and product can be vastly different. For example, I found my customers in the United States valued face-to-face interaction a lot more, wanted someone they could call at any time, and there was a greater emphasis on locally sourced tech. The New Zealand made brand may work in dairy and physical exports, but you start to realise for American businesses - it can also be a risk when there's locally made alternatives. I also discovered that price is actually not a key concern (like it is for many NZ businesses). In general American businesses look at value a lot more. Lastly and most importantly, Americans have a different perspective to work and life to Kiwis. They work hard. The concept of taking three weeks off for the summer is just unfathomable for most American businesses where there's only two weeks of "PTO" (Annual Leave) and the pendelum of at-will employment laws hanging over most employees. It's the little things like this that can easily sway a deal.
For eligible New Zealand citizens, The Visa Waiver Programme (VWP) permits New Zealand citizens to enter the USA for business and tourism purposes for up to 90 days without a visa - the best investment you could make into your North American expansion strategy is to station your brightest, most observant, and ambitious employees into the target American cities adjacent to your prospects, give them some travel and living budgets, and let them eat apple pie. You'll realise the dividends in due course.
The biggest detractor I've seen is the immediate hiring of a North American salesforce to start winning deals in North America, which spearheads "North American expansion strategy". Doing so can look great and sexy on the annual report or board papers, and certainly sounds far better than saying you're sending a few people that volunteered to taste test apple pies for three months, but the problem with this is sales people work differently - especially in North America. I've been in sales, we're coin operated machines. First place is a Cadillac, second place is steak knives, and third place you're fired. What I've seen is most NZ companies don't immediately have product market fit when they hire an overseas salesforce. These salespeople then sell less to the market, and lobby more internally - they're incentivised by deals and bonuses remember. They need to do it for survival, as they need to ensure you're not firing them for your bad product. The North American salesperson is typically far more driven than a New Zealand due to the carrot and stick concept - you pay a lot more in bonuses when a deal is signed, and they're churned out a lot faster when deals aren't signed (remember at will employment?).
Save everyone the misery, conflict, and hard conversations. Send your staff to the United States with a notebook and a gym membership, go eat apple pie, listen to your customers, build a product that fits the market, then start hiring the salesforce to sell. You can thank me with a Portland craft beers on your super-yacht when you succeed.