Move vs Hire – establishing a beachhead in the US

I have written many posts on what it takes to enter the US market. Most of my past posts have been around sales and marketing. However, there is a much more fundamental, one might say visceral, approach to entering a new market. How committed are you to it? As the famous anecdote goes of the hen laying an egg (the hen is involved) vs the chicken that gets cooked (the chicken is committed). Does the commitment involve time and resources spent in building an overseas organization by remote control i.e. while the founders remain in India or does it involve at least one of the founders moving to the US?

This is a tricky one and a dilemma that many startups deal with. On the one hand, we live in a highly connected world where it should be theoretically possible to build organizations remotely. On the other hand, one really does not get a good flavor for a market unless one is immersed in it. So what is the right model?

In my experience I have see three different models in place. Two work and one mre often that not, doesn’t. The one that is a waste of time and money, in my opinion, is one where the founder travels frequently to the US to try and make a sale and build an organization. I have found that this model takes an immense toll on the individual without actually achieving much since the commitment to the US market is lacking

The two models that seem to work reasonably well are ones in which either one of the founders moves to the US and builds an organization or the founders make a key first hire in the US and get that individual to build out a US organization.

So with that said, should one of the founders be US Employee #1? The answer is a qualified yes. However, there are clearly some things companies should think about before having one of the key executives move.

Known quantities – There is tremendous comfort in knowing who you are working with. If your first hire in the US is somebody you have worked with in the past, then the case for one of the founders moving to establish a beachhead is somewhat diminished.

Established support eco-system – If there is an existing eco-system of individuals in the US that the company has worked with in the past, it is a huge benefit and could outweigh the costs – both in terms of resources and time, of a founder moving to the US. The eco-system can be leveraged for initial growth.

High-touch vs low-touch business – Whatsapp made major inroads into geographies outside of the US and India even though they were not physically present in most of the geographies. If your product is high-touch, complex, high-dollar and requires evangelizing, you need a strong champion in the US – a founder moving to the US is usually a good bet. If not, think hard about it. Can you do it more smartly, remotely?

Business Objectives – This is critical. A company really needs to look at the short-term goals and figure out what is the most effective way of getting to them. If, for instance, a short-term goal includes raising a large sum of money from a Silicon Valley VC, well then one of the founders better high tail it over to the Bay Area sharpish.

Entering a new market is not for the faint-hearted. It takes time, patience and commitment and there is no guarantee of success. However, you can improve your odds being smart about it. So as to whether or not a founder should move to the US – I’d say “Probably, but it depends”.  So what IS the right model for you?

Agree. Disagree. Or have another viewpoint. Would love to hear your thoughts.