Spreadshirt’s CEO, Philip Rooke, outlines three pitfalls to avoid when expanding into the US
Once a business starts to be successful in its own country, or nearest market, the board starts to look around for new opportunities. They seek a bigger market where they can replicate their success.
For online retailers in the UK & Europe, this usually means the USA. But if you want to grow in the States, it’s not enough just to ship there, you have to get on a plane and have a physical presence in the country.
As a veteran of the transatlantic business relationship, we’ve seen the pitfalls that companies face when expanding into the USA. Spreadshirt is a self-expression ecommerce company, with an HQ in Leipzig, Germany.
After fifteen years in business, we’re now the European market-leader in on-demand printing on clothing and accessories and a major player in North America. So we’ve seen some of the pitfalls that companies face when expanding to the US and think they can be overcome by visiting, listening and engaging.
Get on a plane and visit
Don’t think you can do it all from your desk in the UK. Time and distance kills relationships. So if you’re going to make it work you need to get on a plane regularly.
It sounds obvious but our Las Vegas factory is just starting work when the German HQ has just gone home; emails, system tickets and a few late night calls do not build a relationship. Even the best, most dedicated management will find themselves feeling alienated by distance.
Distrust and demotivation soon set in and small problems can build up into the idea that HQ does not care about the local business. For Spreadshirt, this equally applies to the geographical gap between our production facilities, which are in Greensburg and Las Vegas, and the Boston office, even though they have less of a time difference.
So, when expanding into the US, never underestimate the effect of turning up in person. And make sure your other business functions do the same. I often get objections that it will not be worth it for certain functions, or there is not enough to do when the person gets there.
But I can instantly tell the level of trust is higher for the departments that have visited and it improves future co-operation, which saves money and increases motivation because you made the effort, and this shows you care.
Listen to what they have to say
Don’t think that because the language is the same, the culture will be the same too. It’s not the same place and you need to understand the local challenges. You are going to have to trust your US colleagues to handle things differently from the way you would.
There are obvious business differences:
Americans are far more effusive and always offer a big discount. The UK tends to downplay things and is more modest in the language it uses for marketing.
Negotiation in the US starts further apart, often at what we might consider unreasonable ends of spectrum, to get to a middle fair ground. In the UK we start in a fairer place.
Employment rights, work-life balance and a host of business practices are different. They sound the same but the attitude behind them is different.
There are huge differences in the language of marketing and selling between the UK and the USA.
These are all deep rooted cultural differences expressed through business – neither approach is right or wrong – they are just part of our national identity. We can even see the differences in the sports we play, where despite the language similarities, there is a level of cultural dissonance.
Americans don’t play cricket for example. Rather than the British game of methodical KPI performance, they place baseball, a game of glorious, individualist home runs by stars. We play rugby, a game of retaining the ball and looking for weakness in the competitor; they play American football, a game orientated to gaining ground or market share.
So it should not be surprising that US teams’ marketing is aimed at stellar product-jumps and gaining market share.
Whereas UK teams tend towards, steadily driving KPIs through product improvement, consistent marketing messaging and taking advantage of competitor weaknesses. This is not because the Americans are taught by their sport, but more that the popular sports win because they appeal to the culture.
So, the best way to understand what’s going on and to spot the differences, is to understand the local culture and listen to the insight the local team has.
Engage and share the global deliverable:
The local team in the USA will work extremely hard, be enthusiastic and goal-oriented. But don’t assume the new team will automatically understand the company’s global mindset. You need to take the time to engage them in the company’s global priorities.
Teams at a distance from HQ have their own problems and local issues. They will often need central teams to fix them, but unless you take time to explain global priorities, the local office can be unaware of the issues going on the HQ.
I remember a US Factory Director who was highly frustrated because he needed a logo for the front of the factory, but the brand team didn’t have time to do it. He wasn’t aware that the brand team was focussed on changing all the website branding to match a new look and launching the TV campaign.
Had anyone taken the time to explain this, he would have been fine about it. So now, we publish every teams’ quarterly priorities to make them checkable by everyone, globally.
Even successful international businesses can be lulled into a false sense of security as they look to expand into new markets. Surely the achievements in your first market can be easily replicated elsewhere? This is when growing businesses can succumb to common pitfalls.
Don’t let the fact that the spoken language is different, or not, determine how you view a country culturally. Spreadshirt is head-quartered in Leipzig and I’ve watched many people come to Germany and instantly approach business differently because the language is different.
If you imagined your US teams were speaking Chinese, you’d probably approach business with them very differently.
We’ve come across all these difficulties in the past and discovered they can be avoided by visiting, listening and engaging; share your priorities with your local teams, listen to their market insight and get on plane. Go visit!
Philip Rooke is CEO of Spreadshirt.
If You Want To Grow In The USA, Get On A Plane