A couple of business fundamentals to keep in mind during the market entry: The hardest go-to-market problem in B2C is - distribution. The hardest problem in B2B is - sales. A B2C consumer company often succeeds to grow rapidly because it has mortal locks on distribution. A B2B company may succeed because it delivers quantified and differentiated ROI, and has succeeded in closing its first marquee corporate customer - and THEN other enterprise customers take notice.
So, with that metric in mind, if you are a B2B Tech company attempting the US market entry, the first thing you must focus on is: SALES. For you the question is NOT: “What’s the right U.S. incubator for us, where I could find office space and local mentors and network?” No, the right question is: “Am I, personally, as the company Founder or executive, after arriving in the USA, ready to start selling? Am I ready to start calling the U.S. enterprise buyers 100x times each week, to convince them that they have a problem and I have the best solution on earth? Mentors will not do that for you. Incubator organizers will not pick up the phone for you. It’s all about you, you have to do the sales.
What Type of Accelerator is Right?
A B2B tech company attempting the US market entry would ideally be further along in its business in its home country - beyond the MVP to preferably $500k…$1M ARR - before it starts planning for the international expansion. This is simply because if you have not already found the product-market-fit in your home country, it can be an expensive learning experience to attempt that first time in the USA.
Therefore, for the US market entry purposes, you would not like to apply to an accelerator that is organized around 90-day program to build MVP for the Demo Day. Instead, there are also some later/growth-stage accelerators, that would make more sense. Here’s one example: https://elementalexcelerator.com/latest/articles/means-growth-stage-accelerator
Accelerators are no Silver Bullets
At the same time, research studies do not seem to validate that startups would be more successful if they come out of an incubator: The Kauffman Foundation study few years back found that despite the hype around incubators about the help they give startups, they may not be doing any better at launching successful businesses than entrepreneurs outside of incubators. As Yas Motoyama, director of research and policy at Kauffman and his research assistant, Emily Fetsch, explains in this interview by Forbes.
I am a mentor and coach myself in multiple U.S. programs, at MIT Mentor Smart, Harvard Extension School, MassChallenge, 1776, etc. In these ecosystems we have several altruistic mentors. They genuinely want to help founders. Nevertheless, in the absence of a structured contracts or deliverables, their relationship with their mentees tends to either remain superficial or short-lived. It is also quite typical that U.S. accelerators do not allow mentors to accept equity or cash compensation. Which is OK in many ways, but it also reduces mentors’ willingness to take the risk in investing his social capital and making industry introductions – which is the exact type of help that you as the B2B executive would need.
Both Prospecting and Inbound Marketing do Matter
If finding the new prospects and selling is the #1 challenge in the B2B market entry, then you may ask: what happened to inbound marketing? Doesn’t that make it so much easier?
I am a huge fan of inbound marketing and would go even so far to say that without a proper inbound content strategy no company can today succeed for the long term. BUT, in the beginning, when nobody knows about your fantastic product or your company, there needs to be someone who goes out and gets market feedback from actual enterprise contacts, human beings – to understand what type of inbound content will work, and to fine tune your story and business model to fit the market. Because: every new market is different. And because deal-making and especially so in B2B, is about relationships.
Incubators promise a lot of resources to startups, like events, networking, assistance connecting startup founders to investors, help with presentations and many other services, but as Emily Fetsch notes: “The average incubator actually has less than two full-time staff and 25 businesses. That’s a lot of service to provide for two people. So, are they really providing all the services they say? It seems unlikely,” she says. And it is very unlikely that they close any sales for you.
What's the Alternative to Accelerators?
What does this all mean in terms of using U.S. Accelerators as the launch pad for the US market entry? It means that, unless you have a long experience already living in the USA and operating in the U.S. industry domain that is on your focus, you need to find an U.S. accelerator that:
(c) …. supports you in closing of the first customers as the #1 priority, and not just try rushing you to the Demo Day in the hopes of closing the U.S. venture funding (which, really, does not happen in the
B2B world without closing the first U.S. customer, anyway).
If you cannot find such accelerator that can support these needs, then skip it. Instead, hire a U.S. based experienced consultant with domain-specific experience. He is already networked in the right playing field, he can call the industry contacts, he will research the market for product-market-fit, and eventually he will close that first referenceable deal. Then, after that initial business model validation and success, now you can now move to the USA yourself, or hire the first U.S. employee, and start repeating and scaling the business.
And after all this if you , as the B2B tech company owner, still choose to go on and apply to get in the US accelerator: remember, it is all about Sales and about YOU finding that first deal. Everything else is secondary.
Antti Korhonen is the Founder of Takehill Partners LLC, a Boston based consulting firm. He has helped several European companies entering the US market, and as CEO has built two successful B2B Technology companies with global operations between Silicon Valley, Washington DC, Boston and Helsinki. He lives in Concord, MA, and after spending 12 years in USA he is a dual citizen of USA and Finland.