As a professional investor and partner in a venture fund, and a Kiwi with long standing involvement in export development, I am often amazed at both the ability of NZ companies to punch above their weight but also dismayed by the naiveté often on display. Here are some ideas based on over 10 years building and investing in businesses as well as working with NZ companies.
Still the World’s largest economy – the sheer scale, wealth and complexity of the US market poses both daunting challenges and also unparalleled opportunity for NZ businesses contemplating how they can hook their piece of the American dream. This is also the world’s epicenter of innovation investment and attracts Talent from all corners of the Globe. Kiwi companies, facing obvious challenges of distance and jurisdiction but more subtle ones of culture need to be on their A game to prosper and win in this shark tank.
Image courtesy of Porbital at FreeDigitalPhotos.net
California remains the gateway for most NZ companies considering exporting into the US market, and with an economy that is the 8th largest in the world topping $2 Trillion GDP in 2013. Technology investment dollars draw Talent from around the world – California attracts over 65% of the world’s venture and seed capital clustered around Silicon Valley (and the West Coast more generally) with NZ companies and entrepreneurs among the diaspora from around the Globe looking to tap into the ecosystem that spawned Google, Facebook and thousands more start ups.
However the opportunities are myriad and not just limited to those sectors that grab the headlines – California is also the largest Agricultural producer State in the US generating over $100B in economic activity and is also the largest dairy producer with many opportunities for tech and services companies in this sector that is fundamental to NZ exports. The impact of technology and reshaping of traditional supply chains, investment and business models creates a pace of evolution that is unparalleled and is also turning traditional concepts of “exporting” and “investment” on their heads. It may be never have been better for NZ exporters to break into this market.
In this environment the critical task for any exporter is to get ‘connected’. Being able to playlike a local but bring a unique personality and flavor to your business network can be key to standing out in the crowd. So, how can you do this effectively?
• Get a specialized corporate law firm that can help you traverse regulations, human resources, insurance and liability issues or establishing a presence. They are expensive so use judiciously, but they are also negotiable so be prepared to ask for some investment in the relationship
• Finding conference events targeted on your sector; these can be incredible and concentrated ways to find customers, partners or ‘translators’ who will help you make sense of the signal among all the white noise
• Interact with investors – beyond VC and Angel networks, we are seeing the rise of “Crowd funding” enabled by changes to securities laws this year are seeing companies from start ups to those seeking growth capital opening up new avenues to fund their plans. California also has great Accelerators like Y-Combinator to help groom and progress new businesses; we are about to launch our own collaboration effort focused on Agritech
• Find your “home base” – there is an Art to determining where in this massive market your product, company and personality will find resonance. Kiwis do well at blending in and the can do attitude is appreciated here
• No short cuts to glory – while everyone recognizes you learn more from failure than easy success (!) thorough research, planning and yes, networking will help you avoid classic pitfalls.
• Tap into US government resources – if you have a legal entity here, you may be eligible for the many non dilutive funding programs supporting US businesses. The SBIR programs run by agencies like DARPA, DOE, USDA and NIH among others is focused on commercialization and invests millions every year
• Remember you’re not at home – California is increasingly bi-lingual, and there are many distinct cultural differences in business among many other aspects of life. States pass their own laws, regulations operate at county and city levels, in other words its complicated and much more diverse than NZ companies often realize – and thats just one State.
Notwithstanding all this, as they say in California, The Juice is worth the Squeeze!