Sell in the US from India or establish a beachhead abroad?

If you asked me this question five years back, I would have said unequivocally that you have to establish a presence in the US if you want to do business here.  My thoughts on the subject have changed. I believe the answer is, it depends. Let me explain.

Since it is the risk-reward equation that tilts the scales in favor of one vendor over another, we have to start out by thinking about how the buyer perceives you, the vendor. Buyers at this point are very comfortable and familiar with the onsite/offshore model for services. In fact so much so that one can argue it is largely a commodity. In such an environment, it is possible to do business overseas with little to no onsite presence. In other words, if you are a services company, offering services that the client is largely familiar with, you can get traction operating remotely with limited travel. In addition, one can design a low-risk services pilot very easily for the customer to try out a vendor. But what if you are a product company or offer non-traditional services? This is where it gets interesting. 

Is the pain real?  

Founders of companies tend to look at their world through rose-tinted glasses. The solutions that they have created, in their view, are the best thing since sliced bread. While this cheerleading attitude is admirable in a CEO/Founder, it might require a reality check before you launch in a new geography. If the perceived pain for which you are providing a solution is not yet felt, then buyer education is required. Your challenge as a seller is to move the pain from perceived to real. This is hard to do remotely. One of my old clients is a company that has an outstanding solution, the problem they had was the pain that they were addressing was something their buyers in the US really did not perceive as active pain. Despite repeated monthly trips by the CEO and promising leads, a sale did not happen. They needed to create an eco-system, or as my old boss called it, a “web of influencers” in the US BEFORE a sale could even be conceived. Doing that needs time and investment. This is not a message founders and CEOs want to hear, but this is reality. 

Is the buyer educated?

Assuming the problem is well defined and well understood, how informed is your buyer? Do they understand the problem and their options? An informed buyer can be a challenge for remote sellers for the simple reason that they know what their options are and may be willing to settle for a less-than-optimal solution that has local presence and support. On the flip side, if an informed buyer knows that you indeed have the only solution available to him/her, they might take a chance on you, despite all the risks inherent in dealing with an overseas vendor. This has happened to me. In a situation where the product I was selling was not established in the US, the fact that there really was no other solution that came close to what we offered, worked in our favor.

Is there a local substitute available?

If the answer to this question is yes, then don’t even bother doing any remote selling. Even if your product is better, it is only incrementally better. It won’t be worth the risk to a buyer unless you can prove that you are serious about the geography and have invested in it. 

Do you have a proven track record?

Case studies matter. A track record matters. Remember, you are trying to minimize risk for your buyer. With no presence locally, the buyer will want to be assured that you know what you are doing if they buy from you. Prove yourself in geographies where you have a greater chance of success first. Overseas markets are huge and attractive. However, entering them too early is a common error to make and one that is very, very expensive. 

Are you ready to take on a paying customer?

A sale is just the start of a relationship. Whether it is services or products, relationships can be sustained only by careful nurturing, and in the case of products, support. If you are a services company, can you deliver? do you have the necessary manpower to provide support? do they have visas to travel at a moment’s notice? If you are a product company. – can you support the product? do you have the manpower to do enhancements? are they available for support during the customer’s work hours? These are just some of the questions you need to address to give your buyer peace of mind. More than anything else, buyers are looking to minimize risk. Not addressing these concerns makes you high risk and highly undesirable.   

This is by no means an exhaustive list of things to think about. Just something to get you started. To quote an old Hindi proverb – “Door ke dhol suhavne lagte hain” or “The grass appears greener on the other side”.  Overseas markets, especially the US and Europe, are huge and potentially lucrative. But as I have pointed out in other posts, they are not for the faint hearted. Before you venture, you need to be ready for it both financially and on your corporate resume. Everyone of us knows someone in big companies in the US, often in influential positions. You are almost guaranteed an audience with someone of value if you reach out. Just because they will talk to you, does not mean they will buy from you. Too many people make the mistake of confusing the two. Ultimately, buyers are looking for a solution that not only solves their problem but also one that is low-risk. Unless you can minimize vendor risk for your buyer, you have a tough road ahead.

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