Planning a US Expansion? An Experienced Partner Can Help

• Date: 23 October 2013

If you're planning an expansion into the US market for your Singapore-based tech company, you're not alone: with more than 300 million people and the world's largest economy, the US is an extremely important market for any business hoping to go global. Many tech startups stake their first internationalisation plans on making a splash in the US.

But while the potential rewards are high, many do not go beyond staying afloat. A recent National Venture Capital Association study found that fewer than 5% of overseas companies that expand into the US are successful in generating revenue and market share in their first year.

As Centre Director of IDA's US office in San Francisco, I've worked with a number of Singapore-based start-ups taking their fledgling steps in the US market. Singapore's startup scene is vibrant, and we have world class IT expertise and the market conditions for local start-ups to thrive. So far, we've seen DS3, a security start-up acquired by international digital security company Gemalto. Food blog app Burpple has also made inroads overseas. There is no reason why Singapore could not produce the next Twitter or Dropbox.

In my four years here working with start-ups, I've learnt many lessons about how to achieve success in the US. Here are four of them.

How to succeed in the US

Tell My Friends, a social music store startup at the South by Southwest Interactive Festival 2013 held in Austin, Texas.

1. Focus on a single market segment . Since the US market is large and diverse, companies with limited resources should carefully target a specific sector. After choosing an industry vertical, geographic region or key demographic and achieving success within that segment, the company can leverage its foothold to expand to other segments.

2. Define your unique value proposition . The competition in the US market is fierce, and to succeed, you'll need to find a way to stand out in a crowded field including existing US competitors. The first step is to analyse competitors and identify the unique value your product or service can deliver. Then you'll need to build a compelling story and get the word out. If you've already done business with a large US brand customer, playing it up builds credibility.

3. Understand the challenges . To succeed in the US market, it's important to understand the scale of the challenge and make a commitment to apply the necessary resources. It generally takes six months to a year from initial market entry to revenue. Make sure your firm has the resources it needs before you commit to market entry.

4. Kick-start your launch with US channel partners . An alliance with a company that understands US market dynamics and has influence with key decision-makers can be a great way to assess product or service viability and gain credibility with potential customers. A US alliance can provide a sales channel that promotes launch success.

How can IDA help you?

If you're planning a US expansion, IDA's San Francisco office can help with a robust suite of market exploration and expansion resources. We offer local expertise, trade mission events and access to Silicon Valley startup programmes that have helped other companies successfully compete in the US. Our office in Redwood city provides hot desking facilities and a corporate address for start-ups who have not yet set up a physical office in the US.

Currently, our new initiative, a private edition of TechResources.US, will allow Singapore tech companies who wish to expand to the US to search specifically for tech investors, thought leaders, communities and conferences.  The portal is an online directory of over 1,500 US-based people, events, organisations and industry verticals in tech that is trusted in the market.  Do contact us for an access code to this complementary portal at [email protected] .

We offer start-ups opportunities to make market access trips annually.  We’ve recently completed our first ever mission trip to the MobileBeat conference , where eight of our start-ups spanning various fields were able to do demos of their mobile applications to Silicon Valley venture capitalists and media such as Bloomberg. One has even been selected for a prestigious accelerator programme. It’s such stories that really excite us, to know that somehow, such exposure may one day provide the tipping point for our start-ups to take over the world, or in this case, the US. There are many fledgling start-ups out there in Singapore, so we do recognise the need for continuity in our activities. We’ll soon be calling for applicants for our 2014 iSTART@Silicon Valley programme and for South by Southwest in Austin, Texas, which is one of the largest interactive festivals of its kind around. So watch for it!

Before then, if you've any questions about connecting with partners or mentors in Silicon Valley, your US journey starts with us at [email protected] . Welcome on board.

Mr Steven Tong
Centre Director
IDA US Office in San Francisco

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