The 7 Deadly Sins of US Market Entry

Author: Jeff Snider

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With its geographical proximity, the US - and Miami in particular - offers an ideal destination for Latam companies to land and expand.

So if Miami is an ideal beachhead for Latam companies coming to the US, what could go wrong? The short answer is “everything”.

The team at Base Miami has seen it happen many times over the years. Companies come and spend a year or two trying to figure out the market and get customers. Time goes by, everything costs more and takes longer to succeed.

What are the “7 deadly sins” of US market entry we have seen over the years?

1) Field of Focus is Too Broad

In their home markets, which are small compared to the US, companies are forced to diversify across multiple industries, use cases and even product categories to generate sufficient revenue.

This is a losing approach in the US where competition forces narrow segmentation. The US is a specialist’s market. “One stop shopping” as a competitive strategy usually doesn’t work here.


2) Customer Problem Fit

Often the problem companies solve in their home market doesn’t exist in the US, or exists in a much different way. Hailo from the UK learned this the hard way when it brought its ride hailing app from the UK to NY. It left the US again a few years and many millions of dollars later.


The most successful B2B expansions are the ones where the companies tested the international demand. Photo by  Adeolu Eletu  on  Unsplash

The most successful B2B expansions are the ones where the companies tested the international demand. Photo by Adeolu Eletu on Unsplash

3) Competition

Most good ideas are being pursued by more than one company. In many cases there will be US competitors who are better funded and have been in the market longer than new entrants from abroad.

Companies need to understand the competitive landscape and find the right position in the market to succeed. Underestimate this challenge at your peril.


4) Sales Model & Distribution

Most companies think they can “partner” their way to a sales model. This is almost never true - at least not in the beginning. YOU need to figure out how to sell your product here first. Once you have “cracked the code”, only then might you be able to find partners to sell it.

In the US, you can’t recruit partners to “figure out the market” for you. Partners sell stuff that already sells. Figuring out the market is your job. You need to plan for that and fundraise for that.


5) Ecosystem Adaptation

In many industries, the ecosystem is different. The healthcare industry in the US for instance includes healthcare providers, insurance companies, the federal government, state and local government, patients, and businesses. 

It is much different from healthcare systems in most other countries. The healthcare ecosystem will affect many elements of the business and distribution model for health-tech and life science companies. Regulatory differences compound the challenge.


Global expansion is a long-term investment, not a get rich quick scheme. Photo by  Dylan Gillis  on  Unsplash

Global expansion is a long-term investment, not a get rich quick scheme. Photo by Dylan Gillis on Unsplash

6) Capital

Most international companies are undercapitalized compared to their US peers. Many entrepreneurs think venture funding is just around the corner when they come to the US.

The reality is that it will take 18 - 24 months from the time you set up business here until you have achieved the milestones required to raise a venture round from US investors. That means you need to find the capital at home to fund your US market entry - at least for the first couple of years.


7) Team

Companies cannot outsource the job of figuring out the market and getting to a repeatable, profitable and scalable sales model. This will usually require the presence of one or two founders. “Hiring a sales guy” before you figure out the market almost always goes wrong.

There are great entrepreneurs, investors and accelerators everywhere. While local accelerators may do a fantastic job taking their companies through “Demo Day”, we believe entrepreneurs in most ecosystems are operating at a distinct disadvantage once it is time to scale.


Interested to learn more?

Download our FREE ebook “7 Deadly Sins to Avoid When Entering the US Market.”