New book takes a common-sense approach to the many hidden pitfalls behind setting up a successful shop in the US high-tech market "TO be a successful foreign company in the US high-tech sector you have to be able to blend in and stand out."
The statement may sound paradoxical, but Ms Mary Cryan, who has been working as a consultant to start-up technology companies for the last 15 years, insists there are a number of anomalies to making it in the US.
Her latest book, The New Pioneers (Oak Tree Press, £65 or €83), hits the bookshelves today. Described as a guide to "Building a winning company in the US high-tech market", Ms Cryan draws on the experiences of 12 to 15 Irish indigenous technology companies that made the crossover to the US market.
Simply written, and intuitively laid out, the book takes a common sense approach to the many hidden pitfalls behind establishing a presence in the US. Among the most useful insights is a simple checklist early on of the types of companies that need not consider entering the US market.
These include companies lacking unique technology, with "metoo" products, and companies with technology that is pioneered from non-US markets, like wireless communications, smartcards and medical and banking applications.
Similarly, companies that are not prepared to send out their best people, i.e. founders or senior vice-presidents, or commit substantial budgets are more likely to encounter difficulties cracking the US market.
The New Pioneers is generously studded with interesting insights on conducting business the Silicon Valley way. Ms Cryan draws contrasts between traditional marketing models and the Valley marketing model.
She describes the Valley model as one born of the "frontier spirit", in particular the gold rush. It only features aggressive growth companies seeking rapid market dominance, usually culminating in a public listing.
"It's a young man's game, not suited to people with baggage. It's a 24-hour-a-day commitment. If you can't offer this yourself, delegate," Ms Cryan says.
Once a company commits to going about things the Valley way - and incidentally, the Valley model can be applied anywhere in the US, not just California - it needs to start looking and feeling like a Valley company.
As one executive featured in the book puts it: "For a place that prides itself on individuality there is a tremendous pressure to conform. If you don't fit the standard stereotype then you aren't a member of the club."
This means having the right location, the right people, the right stock-option plan, the right venture capital, the right PR company, the right advisory board, the right non-executive directors, and, as Ms Cryan concludes, the right attitude.
Apparently an indicator to US investors that your company has limited growth potential is if your offices are leased. Somehow it puts a ceiling on expansion and gives the impression of being inflexible.
Bringing products directly to the customer base is also key. This is generally why a senior member of the company, preferably one there from the outset, must lead the US charge to reassure customers of commitment to the US market.
Naturally enough, a well-wired office and strong use of the Internet reassure investors and customers they are dealing with professionals. As one senior executive of an Internet consultancy put it: "If you're not on the Web you do not exist, you are not rated. It's like running a restaurant but not having a menu, nobody knows what you offer." A .com address with the relevant domain name is the stock menu in the US.
And apparently it's just plain weird to have real people at the end of the phone in Silicon Valley. Voicemail is the norm. Another uniquely Valley trend is outsourcing everything that is not part of the core business. This includes payroll management, even if the payroll administration is conducted from the Republic. Unless it is outsourced locally in the US, it raises suspicions.
Stock options are more valuable than salaries, and the major draw for senior executives, venture capital and public relations companies. In an almost chicken-and-egg scenario, Ms Cryan advises offering stock options early on, the rest will fall into place as the brightest and best from each sector look to buy in early.
Central to success is getting the right venture capital on board. The value of a brand-name backer should not be underestimated, and can add a lot of value to the company at board level. There are now a number of big alliance funds aimed at exploiting bigger opportunities, and Ms Cryan particularly recommends raising capital from a big player in the IT industry. For example the venture arms of Deutsche Bank, HP, Intel, Nokia and Ericsson all serve as resounding product endorsements compared with backing from unknown individuals.
The pressure constantly to sell the company, and in some ways, almost hype the products, is evident throughout the book. A good public-relations company has more to do than issue press releases, Ms Cryan says, it is about "winning heart and minds". Targeted campaigns involve identifying who looks at your product area and courting them.
Ms Cryan says: "We don't understand the power of the analyst over here. If Lehman Brothers don't put your product in a listing, you are dead. The market is so big, the major players rely heavily on analysts for information."
Ten pearls of wisdom at the end of the book offer a simple, common-sense checklist for anyone planning to take the plunge, and even those who already have. The final chapter also draws on the experiences of three of the Republic's most successful software CEOs. Dr Chris Horn of Iona Technologies, Mr Eamonn McGuinness of Aimware, and Mr Fran Rooney of Baltimore Technologies relate first hand their experiences of entering the US market, making it essential reading for any Irish companies hoping to emulate their success.
For Irish firms to succeed in the US, it is safe enough to assume expertise and money are available in large quantities. Both resources are on the increase in the Republic, but if your product's growth is US driven, this book and a lot of luck are critical to securing skills and money, Valley style.
