With a population of over 327 million people, the largest economy in the world, and a market that is distinctly English-speaking, the United States is a lucrative market for Australian startups.
However, it is not as simple as wanting to expand an Aussie company to America — there are a lot of inside lessons that my partner and I are constantly gathering, as we continue to expand Designerex to the USA. Here are a few essentials to help pave your way to world domination.
Apply for programs that will expedite/ease the transition
There are a number of organisations that specifically support Australian and other international companies’ transitions to the American market.
For Designerex, we were very fortunate to be selected by Austrade as part of their USA landing pads program, which assisted us greatly with our expansion. Even if you do not apply for this program, you can still reach out to Austrade for assistance.
If you don’t happen to have any connections in the USA, then speaking to Austrade first means that you don’t have to start at ground zero.
Ensure you’re prepared if you’re raising
If you’re seeking to raise capital, USA investors typically prefer to invest in a US entity instead of an existing Australian company, so I definitely suggest setting up a USA C-Corp entity, which is the most common type preferred by VC’s.
Please note however, that you don’t have to do an actual ‘flip-up’ of shareholding, from your Australian entity into your new USA entity, until your start-up is actually part of a USA investment round.
Otherwise, you are opening up your Company for unnecessary costs and tax complications, when it is not yet necessary to do so.
Try to blend into the American business landscape as seamlessly as possible
One of the most obvious ways to blend into the American business landscape begins with the company website.
Ensure you have a .com domain, but not only for your main start-up URL, but also for your email address.
The .au is foreign to Americans and you should be aiming to blend in to the local start-up ecosystem in as many ways possible. This also includes having a USA mobile number, instead of an Australian number.
Do your research!
On the whole, the USA is a lot more fragmented compared to Australia.
As a result, researching and scrutinizing how you execute your go-to-market strategy is imperative to American corporate success. In the USA, different states and cities may and do have completely different ways of doing things, different consumer behaviours, and varying culture dynamics.
For example, the laid-back and relaxed lifestyle that is advertised as foundational to west-coast states in America varies utterly from the fast-paced and hectic tendencies of the east-coast.
In Australia, we may have our slight differences between the states, but the market differences geographically typically aren’t as notable as they are in the USA.
Australia tends to be a more cohesive market as a whole, and it is important that these distinctions are accepted and properly acknowledged before attempting to tackle American commercialism.
Accept challenges as part of the process and remain determined
Challenges are inevitable any time a company as new and fragile as a start-up attempts to expand. Couple this fact with the reality that the USA is an especially complex market system, and you can guarantee that there will be obstacles.
For us, the biggest challenge we found was navigating through the complex USA sales tax system. There are over 14,000 different sales taxes in the USA, compared to just the main one being GST in Australia. Even if this is not your challenge, you will inevitably have a different one, and that is okay.
Every company experiences roadblocks; continue to persevere, believe in your company, and stay on the creative road in order to find innovative solutions.
Remember to celebrate the victories of the process experienced along the way
With the inevitable adversity you will experience, it can be easy to become consumed with these failures and not appreciate all of the successes you have had. But keeping these successes in mind is critical for both yourself and your employees — you can feel great about making major milestones in a competitive world, and that feeling will help you keep pushing forward in this growth period.
For me, the most rewarding part of the journey has been launching Designerex in the USA with over 1600 dress listings.
To put that into perspective, in Australia we had launched with 200 listings. Having a very successful USA launch was a very important milestone for us to achieve, and helped us to focus on our rise, instead of the challenges it took to get there.
- Costa Koulis is the co-founder of Designerex, the world’s largest peer-to-peer designer dress sharing platform. Costa’s co-founder, Kirsten Kore, will be speaking at the Online Retailer Expo and Conference on July 24-25 at the ICC Sydney.