As part of our ECI Unlocked programme connecting business leaders across the ECI portfolio, we recently welcomed Gurman Hundal, Co-Founder of MiQ, and Mark Finlay, CCO of Moneypenny, for a webinar discussing their secrets to a successful US growth strategy.
Both are fantastic examples of US success within the ECI portfolio. In 2020, Moneypenny extended its services in the US with the acquisition of VoiceNation and Ninja Number, growing its international revenues from 5% to 35% of Group revenues. And since our investment in 2017, MiQ has developed and executed an ambitious North American growth strategy, opening four new US offices and with US revenues now accounting for 66% of Group revenues.
Here were their top five secrets to a successful US growth strategy:
1. Consider acquisition versus organic carefully
The first question when considering your US route to market is usually whether you can enter organically, or if an acquisition is preferable to develop the requisite scale, capabilities or brand recognition. For Moneypenny, Mark described how they initially chose an organic route to market but saw an opportunity to supplement this with acquisitive growth, which drove a step-change in scale and brought some talented managers who knew the US market into the business. Their acquisition of VoiceNation and Ninja Number gave them new capabilities, particularly in the SME market, which gave them a clear roadmap for North American growth.
Gurman discussed how MiQ elected for the lower cost organic route; as they already had the tech and systems in place, they could offer clients – many of whom already had a US presence – the same or similar service from their new base. For them the big question was around finding the right people to deliver that service.
There is no ‘right route’ but selecting the most effective strategy for your business from the start will make a big difference in the pace of your US expansion strategy.
2. Move people over
A key part of MiQ’s success was leadership commitment to move over to the US – indeed Gurman and his family moved over for four years, and that meant he could hire and train people the MiQ way and get a better first-hand understanding of the workings of the US market. Working in the weeds in the US, he saw, for example, the difference in US and UK sales cycles. Whereas US buyers might have more process such as RFPs, pitch decks, the people they wanted to meet etc, they were also more likely to commit and sign up for longer terms than their UK equivalents. Not only can you learn how the US sales engine operates, you can also learn from their best practices, with Gurman noting how much better they were at the high level pitch rather than getting into the detail, something that has now been incorporated across the wider business.
Both Mark and Gurman were clear: if you want to do this, you really must commit. That will likely mean committing personally as well as at a company level. Moneypenny tries to weave integration and culture through regular rotations across both sides of the Atlantic. This isn’t a British invasion, but also bringing US talent back to the UK, bringing the two cultures together and focusing everyone on the same initiatives.
3. Consider your base carefully
There are some key determining factors when thinking about your ideal base in the US, such as is the location a big tech centre, is it a tax-friendly environment, is there a strong talent pool? It’s important to remember, it’s not all about New York or L.A. MiQ initially launched in New York but really broke into the US and found success winning clients through a regional rollout to other US cities, serving customers regionally and targeting key customer bases in that region, such as political advertising in locations like Washington D.C. This is an example of how choosing to start in one of the most competitive markets for people and pitches may not be optimal for many businesses.
It’s also important to keep your end-customer front of mind. When Moneypenny opened its US HQ in Atlanta, it was identified as a popular area for its existing and potential client base in legal, finance and accounting and medical. Other considerations included ease of access to the UK, with Atlanta a key international flight hub. Lastly, having opened in Charleston and then experienced significant hurricane-related disruptions, they were keen to ensure they had a HQ with minimal disruptions to their critical communication services. It is important to consider all possible criteria to prioritise the right launchpad in the US.
4. Put people at the heart of your strategy
Gurman stated than when they first launched in the US, they had an employee-led strategy, basing key decisions around key talent. They hired their top competitor’s top salesperson, and that helped other colleagues to engage and consider the opportunity. This strategy prioritised ease of entry rather than just size of market. Gurman also stressed that when they first launched in the US, MiQ put their faith in fantastic junior talent taking on more senior positions, and they were more aggressive on variable compensation, bringing people on board to be part of and lead the MiQ story in the US. They promoted from within, and then also brought people over, which was a good combination to create an autonomous leadership team.
Mark and Gurman highlighted that hiring in the US can be challenging. Expectations around pay and benefits are very high, the hiring market is very competitive, and US talent is naturally better at selling itself which can lead to easy missteps. The market is more aggressive so it’s key to commit to paying up and moving quickly for the good people who you can trust to lead your US operation.
5. Don’t give up
If there is one bit of advice that Gurman and Mark both wanted to stress, it was not to lose your nerve. The first years in the US were hard for both Moneypenny and MiQ, and there were times when they were considering if it might not work, but both stuck with it and got there eventually. It requires commitment and investment, but then when it happens, the rewards are significant. Gurman’s best advice for other business leaders considering the US as a target market: “If you have a potential play in the US, don’t give up, you will get through when you get through, and then you will scale quickly.”