Cracking the US market is an exciting opportunity for start-ups to grow dramatically and increase credibility. German companies that succeed enjoy major opportunities in terms of funding and customer acquisition. Tech start-ups are appreciated in the US – the tech sector contributed 10.5 percent to the US economy in 2020. The majority of consumers and US companies also have a strong interest in innovation and the implementation of new solutions. “We have observed a lot of openness for our solution and received much interest from US users so far,” says Anna Bojic from Miss Moneypenny Technologies who attended this year’s SXSW to pitch at the German Pavilion. “It’s different to Europe, people in the US tend to be much faster and very hungry for new digital solutions.” Indeed, the US start-up scene acts fast and might even seem excessive to outsiders.
The speed of clients and investors is not the only distinction German founders observed. US-Americans have a strong sales approach and tend to oversell rather than adopting a more modest approach. This is often reflected in bigger funding rounds. On top of this comes an “all or nothing” attitude. If you fail, then fail fast and move on quickly. Goals in the US for start-ups are fast growth and the rapid capture of market shares – first in the US and then worldwide. Storytelling is expected when pitching, but US investors also appreciate German attention to detail. As the US is a convenience country and people tend to have a shorter attention span there is less focus on technicalities but more on the picture overall. The easier something is the better. Also on the product side, there are valuable insights for our start-ups. Urs Merkel from soft.fact mentions: “From the conversations we had so far, we saw a high awareness for psychological aspects and how to improve team dynamics in the work environment.” Soft.fact who works with our Hub Nürnberg/ Erlangen focuses on a software-driven solution to visualize and use psychological team dynamics.
Austin becomes the new tech Hub
“Knowing the landscape and the area you are playing in is very important for German founders who are looking to enter into the US,” says Leigh Christie, CEO at Beam & Beam Angel Network in Austin. The region to become active in doesn’t always only have to be the east or west coasts. Leigh explains: “Texas is business-friendly, but you can also raise capital and with the time zones you can easily work with the two coasts.” Austin indeed has seen high growth rates in recent years, with an immense migration of tech workers and major investments by Tesla and Oracle.
The growth of SXSW to become one of the most important tech conferences has also contributed to that growth. Born as music festival in 1987, SXSW has become one of the biggest events in the scene and has attracted up to 25,000 visitors in recent years. This year’s event registered 4,000 attendees – around 1,700 of these passed the stand of the Digital Hub Initiative at the German Pavilion where 22 start-ups were present. Anna Bojic of Miss Moneypenny Technologies is satisfied with the presence at SXSW: “Seeing so many start-ups pitching here and collecting impressions is very valuable for us.”
The German Accelerator offers introductions to contacts
After testing the water at a convention such as SXSW, one next step of US market entry can be joining a German Accelerator program. Faaren, a software provider for car subscriptions from the Mobility Hub Munich, joined the Market Access Program US and received important contacts in the Silicon Valley. Faaren has now progressed so far that it will start operating in the second half of 2022. Receiving support with market entry, contacts and know-how from government initiatives has also proven invaluable for Faaren.