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Chris Gill President & CEO

SVASE Silicon Valley Association of Startup Entrepreneurs

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Source: World Bank, www.DoingBusiness.org Spain Rank: 39

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Starting a company

Employment

Source: World Bank, www.DoingBusiness.org

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Common approaches to entering the USA market….

We have no competitors

We just need a partner

Our techno- logy sells

itself

We will send our best engineer

We can sell to most verticals

Just put a sales person on the

ground

We will just hire more

staff

We only need 5% of the

market

We will manage US customers

from home

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….Resulting Track Record

•  Most companies fail to gain traction •  Tactical sales instead of strategic business •  Wrong personnel •  Unfamiliar with local legal, business,

customer needs,culture •  Little/No planning – no market analysis, no

localization of products & purchasing options, mismatched sales channels

•  Insufficient funding

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Observed Factors for Success

•  Strategic imperative for the business •  Development of Strategic Plan •  Commitment of resources & time •  Evaluation, recognition & understanding of

local market conditions •  Best people in most important market

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Understand the market and how to segment it

Customers Want Competition

Scalable Business Model

Resources Required

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LEVEL 1

LEVEL 3

LEVEL 2

LEVEL 4

Where you start

Where You’d like to be

Understanding where you fit in the value chain

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Integration

Application development

Nondiscretionary programming/Application maintenance Clients now

Solution

IT consulting, Strategy

Clients 9 - 12 months

from now

Value chain example from Offshore Software Development

Clients 2 - 4 years

from now

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Example from Wireless Games

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Direct Sales

Early Adopters

System Integrators

OEM/VAR

Electronic/Web

Retail

Distributors

Innovators

Early Majority

Pragmatists

Late Majority

Conservatives Laggards

Sales Channels over Product Lifecycle

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Customer Type

Target Market Opportunity

Competitors

Technology Adoption Profile

Marketing Strategy

Communications

Promotion

Profit

Product

Supplier Strategy

Introduction Lead Users/Early

Adopters

Lead Users: 3-5%; 1-3 years

Early Adopters: 5-12%; 2-4 years

Minimal/NA

Strategic advantage motivation

Hi-risk tolerance Competitive

advantage Reference accounts

Build awareness/Gain acceptance

Heavy

Negligible or none (Investing in new market)

Technical Support- intensive

Open to “unknowns”

Growth Early Majority

Early Majority: 15-30%; 2-4

years

Rising/many

Productivity improvement

Balanced risk

Reference accounts (in-industry)

Penetration/Build preference

Branding/Credibility

Leadership Heavy

Highest (price elasticity and growth)

Improvement of market “fit” (Stabilized support)

Tolerates “unknowns”

Maturity Late Majority

20-35%; 3 –5 years

Shakeout/consolidate

Price & ROI aware Risk mitigation Competitive

mandate

Cut cost/max. efficiencies

Customer loyalty defend position/

Cash cow

Reinforcement of brand

Moderate High (volume-

driven economies)

Maximize differentiation

Prefer a “known”

Decline Laggards

Falling numbers Price sensitive Risk averse

Niche ownership/exit strategy

Relationship-driven (predominantly Sales)

Minimum

Minimum

Falling

Workhorse model/line

extension/ Price cuts

Don’t care

Lifecycle evolution and marketing mix

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How long is your sales cycle?

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What we’ve seen fail

•  “Shortcuts” – consultants, distributors, commission only reps

•  “Budget” approach – send over an engineer for 6 months, expect sales

•  Trying to sell existing product/service, without local market analysis

•  Recruitment of uncommitted local talent

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What we’ve seen work

•  Committed local as part of founding/early team

•  Treat as Startup not sales expansion •  Detailed, hands on market evaluation •  Identification of key reference customers •  Localization of product & positioning •  Investment in time & resources to acquire

target reference customers

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Example - Transitive •  Transfer of Applications across Platforms •  Founded in 2000 •  US market seen as Strategic Imperative •  Initial funding from Pond Ventures •  Creation of HQ in Silicon Valley 2001/2002 •  Follow on funding from Crescendo & Accel •  Acquired Apple as first customer 2005 •  Silicon Graphics & IBM now incorporating

Transit into their product offerings •  Wrike, Ephox, others, similar

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What if looking for funding too?

•  Need to establish US based HQ – no ifs, ands, or buts……

•  Lots of local competition – over 6,000 business plans at any one time

•  Are you really fundable?