The allure of the US market is undeniable for businesses looking to expand internationally. Its size and diversity offers immense growth potential, however scaling in the US also presents its own set of challenges and opportunities.
At the 2024 Growth Summit, a panel hosted by ECI’s North America Growth Specialist, Brett Pentz, featured the team at ECI portfolio companies Moneypenny and Peoplesafe, who shared their insights in unlocking growth in the US.
In this article, we’ll explore key takeaways from the panel discussion, focusing on strategies for market entry, differences between the UK and US markets, and how businesses can adapt their approach to achieve sustainable growth across the Atlantic.
Entering the US market: Organic growth vs acquisition
One of the first strategic decisions businesses face when entering the US market is whether to opt for organic growth or pursue acquisitions. Prior to their investment from ECI, Moneypenny decided to expand organically as it didn’t create such a big cash demand on the business. They set up a small office in Charleston, South Carolina in 2015, with a couple of employees and a lean digital-first strategy. The early days were challenging, but the company’s decision to focus on organic growth allowed them to test the market and refine their approach as they grew.
With a couple of desks from IKEA and crossed fingers, Moneypenny’s entry was resourceful. Despite the early hurdles, their US presence has flourished, and the proof of concept meant they were well placed to go on and make subsequent North American acquisitions. Moneypenny now employs 250 people in Atlanta and serves 5,000 clients, thanks to a mix of organic growth and acquisitions.
By contrast, Peoplesafe, the world’s largest workforce safety solutions provider, took an acquisition-driven approach to entering North America. After defining their strategy, the company’s acquired a North American business just over a year ago, giving them a strategic foothold in the market.
Differences in market dynamics: UK vs US
One of the biggest challenges of operating in North America is understanding its scale and complexity. In reality, it’s like dealing with 50 different countries, with each state operating under its own set of regulations and market dynamics. For businesses, this means that a one-size-fits-all approach is unlikely to work.
One key lesson for Moneypenny was the importance of targeted marketing. In the UK, a sector-focused approach had served the company well, but in the US, the vastness of the market meant that they had to be more precise in selecting regions and industries. Initially, they made the mistake of spreading themselves too thin at first, with the company’s early marketing strategies not localised enough to capture the nuances of different US markets.
For Peoplesafe, it was important to understand the different use cases and local pieces of regulation and legislation that would support the adoption of its solution. ECI’s Brett Pentz supported Peoplesafe’s North American team to identify the most attractive verticals and states to enter organically.
Building the right team and company culture
Expanding into the US also requires building a strong team and effectively blending company cultures. Hiring locally while maintaining the core values of a UK-based business is vital. For Moneypenny, a critical turning point was when they hired a CEO of North America, who helped them navigate the cultural differences between the UK and US offices. However, the small details matter. Moneypenny had to adjust everything, from their dress code to the way they engaged with our US team. It’s not possible to simply transplant UK culture into the US.
The same sentiment was echoed at Peoplesafe, but with the added insight that building trust with remote teams is crucial. Virtual meetings alone are not enough to create a strong sense of connection. Teams need to be present as face-to-face interactions help smooth relations and build a much-needed personal rapport in leadership transitions.
Finding an investor who can help
ECI’s US presence played a key role in North American expansion for Peoplesafe and Moneypenny. From identifying M&A opportunities to providing strategic support, having an investor with an understanding of the market and boots on the ground can make a big difference. For Peoplesafe, ECI’s data-driven approach to market research helped guide their decisions on which states and sectors to target, with detailed research and analysis. For Moneypenny, our network and expertise enabled Moneypenny to secure off-market deals that significantly boosted their US presence.
Final thoughts: Lessons learned
Being prepared for a learning curve is a recurring theme when discussing entering the North American market. The approach can’t be rushed, with time and resource needed to fully understand the market and a mindset that’s willing to adapt. Businesses should not underestimate the value of trust – whether it’s with customers, employees, or acquisition targets, and building strong relationships is key. Especially in a market as vast and competitive as the US.
While the US market offers significant growth potential, success requires a thoughtful approach that combines local expertise with the right strategic support. For businesses considering expansion into the US, the experiences of Moneypenny and Peoplesafe provide valuable lessons on how to unlock this growth potential while avoiding common pitfalls.
