How to win at US customer development
By Amber Atherton, Partner at Patron
Closing U.S. customers is hard, especially if you’re a start-up founder coming from abroad without a network in the U.S. Back in 2018, I took my seed-funded UK software start-up through Y Combinator, leaving a few team members in the UK and bringing a few to Palo Alto. During the three-month program, we achieved close to $1 million in booked sales. Having spent my life as an outsider, I’ve learned how to turn that perspective into an advantage – especially when it comes to sales in new markets. Outsider founders can succeed at U.S. customer development in several ways.
Here are my top tips:
Get start-ups on your side then sell to bigger customers
Customers will want proof that your product works through testimonials from existing customers. An effective way to gather testimonials early on is by identifying other hot start-ups in a relevant vertical and selling to them. These start-ups should already be on the radar of larger companies—for example, Dollar Shave Club was on Unilever’s radar. Reach out to the founders of these smaller companies and sell to them. You might agree to a free trial or a heavily discounted rate to get them on board. This approach provides you with compelling proof that resonates with the much larger customers you aim to close. Ultimately, you position yourself as the “secret sauce” that fast-growing start-ups rely on to win the next generation of consumers.
Be physically in the US
People buy from people, and building a relationship in person makes it much easier to close a deal. As part of our outbound strategy, we often identified potential customers in, say, Portland. To secure a meeting, we’d let them know I’d be in the city that day meeting with [name-drop name of other local target customers] and ask if they’d be available for a coffee. Once they committed, we’d book the flight.
Convert to a Delaware c-corp and bill in USD
US customers will be more inclined to do business with you if you have a registered US office address and bank details. Don’t let this be a reason they delay replying or closing. Make sure all your pricing on the website or in sales materials is in USD.
Founder Led Sales
Most customers will want to buy from and speak to the founder early on. If you’re not good at sales, get a coach and practice. If you’ve done that and it’s still not working out, then consider bringing on a salesperson who can be by your side in these meetings to close deals.
Keep your sales reps in the UK
If you already have a network and process in your original country- don’t shut it down. Focus on acquiring customers in local markets that have a US presence or would be relevant case studies for target US customers.
If you want to hire someone in the U.S, hire a junior sales person, not a head of sales
Senior salespeople generally want to manage other salespeople, set strategy, and focus on bigger clients. As a start-up, you need an always-on sales machine—someone who can help you validate leads and handle initial calls before you, as the founder, close them. Until you’ve developed a process or reached a certain revenue level, hold off on hiring senior salespeople. They are expensive and often unwilling to do the grunt work required at the seed stage.
However, if you decide to hire salespeople, make sure to ask them two important questions:
Which customers would they bring over on day one? (All salespeople have a rolodex of relationships, and ideally, they should have 3–5 potential customers they could bring in immediately.)
Which other sales reps, if they could, would they want to bring over with them?
If you can transport existing sales team relationships, you’ll fast-track your way to building a well-oiled sales function.
Leverage your angel investors or VC investor for customer intros
Your cap table should be as strategic as possible. You not only want a great brand with great partners by your side, but ones that have the most relevant operating experience. Look at your target VC’s portfolio and identify potential customers or collaborators. Today as a partner at Patron, I want to give founders that type of day 1 value with go-to-market and community building expertise.
Amber Atherton is a Partner at Patron, an early-stage venture capital firm investing in the next generation of consumer.
It was great analysis for non USA founders thanks