- location, marketing, start-up, US growth, US strategy
Speakers from NKT Photonics and Vipp gave us great input on how they developed their US strategies and went to market
At this strategy event, held Nov. 10 and kindly run jointly with BDO, we learned how two successful companies began their US journey.
First up was Michael Stanley from NKT Photonics, who talked about creating the market for their laser and light technologies for the medical sector. Since no one thought this technology could be used in the medical sector, the first challenge was to create awareness, and the strategy was to get to know academics from important US universities who could play with the technology in their research labs and become lead users.
These academics publish their research, and gradually the products become known. New applications begin to evolve as academics experiment, and awareness increases.
That awareness attracted OEM companies, and NKT Photonics was able to offer exclusivity for a short period of time to a few OEM partners while they invested in further development programs, always taking care to keep costs aligned with revenue expectations. Using their Dream/Design/Deliver framework, and talking to customers in-depth about requirements in terms of size, usability, costs etc., the company was able to develop products that closely met market needs.
Another key to success was investing in a good CRM system, which allowed them to segment customers. As for their initial set-up, they started by sending a very passionate headquarter NKT Photonics employee to the US, who really exhibited the company values and had the energy and deep understanding of the product. This natural passion made him an excellent salesperson to the university professors. It wasn’t until 5 years later that the company hired its first American Sales Director, and Michael agrees it is a challenge to find the right people for your first US hires.
In terms of location, NKT Photonics is in Portland Oregon because it acquired a company and people who were located there, and it is working well, but he advises similar industries to think about Boston, which is a great center for Pharma, Medical Devices, top-quality universities and professors.
The other company case speaker was Kasper Egelund, CEO at Vipp. He talked about the family’s journey into the US market just before the 2008 financial crisis. Vipp knew already from trade shows that there was great US demand for its premium trash bins and toilet brushes, so they set up a limited company, got the right visas, established a showroom, warehouse, IT/ERP system (in English!!!) and began to focus on building brand awareness among the 10 largest design retailers in the US market. He described mistakes and risks they took, as they pushed through the economic crisis and started their ecommerce channel to complement the retail channel. He described the need to ship with “arms length principle” from Denmark to the US entity, and to keep costs down as you go, and not be afraid to try what you think is right for the business. Yes you need to invest in legal assistance for set-up, in insurance against lawsuits, etc. but for Vipp these haven’t become major issues. They are just part of what’s needed in a US set-up.
As for location, for design and architecture it IS New York – but if your product has LA style, of course you should be there instead. New York is indeed expensive, but for his industry it’s the best place to be.
In terms of marketing channels, Vipp relies on Instagram a lot, and likes to build on its own base – eg owned not paid media. Its 2017 strategy is to focus on ecommerce, and direct from own showroom, since margins through other customers are too high given the available channels today.
He ended his talk with a reference to the new Vipp Shelter, which you can see here, and is hoping to establish it on a rooftop in New York City very soon! As Kasper says, in one sentence, the shelter is “5 star camping”!
See the original event agenda here. Hope you didn’t miss it! Participants received the presentations, but the real learnings were in the networking with the speakers and other participants during breaks and lovely lunch pause offered by BDO. You also missed an excellent presentation on the legal issues surrounding starting up in US, and a unique round table session with the legal expert following lunch.